#828: How to Scale Your Retail Business Without Creating More Chaos

Welcome to the Boutique Chat Podcast, where we're gonna help you build a profitable, sustainable business without you having to sacrifice your profitability, your family, or your sanity. Each week we're gonna dive into real conversations with retailers who have been exactly where you are and industry experts so you can learn and know exactly what to do next, all in community over competition. Whether you're just getting started or you're growing past an 8-figure business, you're in the right spot. So let's get into it. Welcome to this week's episode. Hey guys, welcome back to the podcast this week. I'm so happy to have you here. Justin, I just saw you at the summit not too long ago. I'm happy to have you on the podcast. Thanks for being here.

Yeah, it feels like a different world. I saw you in person. Now I see you on my computer monitor. So I'm not sure if summit was a week ago or 2 weeks ago. It's been a whirlwind trip, but we love being in Dallas. It was fantastic.

Oh, well, thank you for being there and getting to meet so many people and share your story. And I'm excited to take it a little bit deeper because I know Summit was new for you. Being in the Boutique Hub has been newer for you, but I'm excited about the solutions that you bring to the table for so many of our members. So for those of you who are listening today, if you are a larger retailer, multiple channels, multiple locations, or we have so many members that are doing wholesale and retail and you have a more complex system, this is going to be a really good conversation for you. So Justin, as we dig into it, do you wanna kind of gimme the backstory of how you guys came together to solve this problem?

Yeah, perfect. And again, thanks for having us. Like you mentioned, we're new to The Hub, new partnership with The Hub. Very, very excited about it. So far, so amazing. You know, we joined a little bit earlier this year. What we do is an operating system, a multichannel commerce operating system that, as you said, helps larger retailers, helps those wholesalers People are doing multiple channels. We're enthusiastic about the retail and wholesale space. Our founder, Peterson Zhu, spent 30 years, 30 very successful years doing wholesale apparel and was selling in thousands of boutiques all across the country, selling on multiple channels. Still has an apparel store, sells on 30 channels right now. It does dropship with all the major department stores everywhere. Revolve Shop, Nordstrom, Macy's, JCPenney, et cetera, and founded DigiBridge because he realized the value of having technology that was accessible for small businesses. Good technology is just absolutely imperative these days and it can be very expensive. So he wanted to find a system, found a system that could be accessible for people that they could use to optimize their operations. And again, be at a price point that would be valuable for them and they could find value in the product. So that's what we built here at DigiBridge. We really, really help people on the wholesale side, people who do multichannel absolutely can help boutiques too. Can tend to do a little bit better with people who are a little bit more upmarket, a little bit bigger, a little bit more complex operations. People who are doing multichannel selling. I know a lot about the great boss that Boutique Hub has developed to help those boutique stores with their operations, their inventory, using AI to help with strategic planning. You guys are doing HR. We don't do HR. You guys are doing all the things that boutiques can help. We're very, very similar. Whereas we help people with their inventory, etc. But particularly valuable if they're using lots of different systems. So as companies continue to grow, they get a system to help with inventory management. They get a system to help with this. They get a system to help with shipping, which is fine. Then the systems don't speak to each other and it causes a little bit more of a headache. So the bridge and DigiBridge talks about bridging all those different technologies together so you can have one central flow that everything operates from. Everything communicates with each other. You're completely optimized and ready to do that scaling up that you wanna do.

I think it's a huge opportunity because this has been a gap in the market for a long time. And I'll speak specifically to, we're gonna be coming to LA soon. Many of the apparel brands in LA, wholesale brands in LA for so long have struggled with being on multichannels and having, you know, kind of outdated technology over here and then trying to connect with Shopify over here and just all of the moving pieces and And same with larger stores too that are on some outdated systems and it's hard to bring all of your technology and inventory management together. I'm curious, so when you meet new clients, what are the biggest problems that you're hearing from them that you're like, okay, this is what we can solve?

Absolutely. And we look forward to seeing you in LA. We're based out of LA, so we look forward to seeing you guys back out there when you're out here later next month. The biggest problem we hear, and we're here in LA and there's obviously a huge wholesale and retail ecosystem out here in LA, so we see a lot of the problems that people are having. I think the biggest problem is they're just not quite ready for the way commerce is done today. A big term we use around here a lot is modern commerce, and the way people are doing business today is very different from the way they were doing it definitely 20 years ago and 10 years ago, but even 2 years ago.

Yeah.

And all the different ways people are selling. I know live selling is huge right now, especially for the Hub community, but any kind of social commerce, even wholesale has gone more digital. People are doing dropshipping. We really, really help on the dropshipping side. There's just so many different ways to sell now. And most of them, if not all of them, require technology to really get the most value and ROI out of your efforts. And people either have technology that wasn't built for today's world of modern commerce. A lot of them have no technology. A lot of them have a server room with a server-based system that they need an IT staff to service. And that's not built for all the real-time data that needs to be pushed back and forth, not just making sure you have good inventory across different channels, but just being able to sell on these channels. Just live selling alone is its own tech stack. And it's so overwhelming and so prevalent these days. Then start layering in your DTC side that you spend so much money marketing towards to drive traffic, whether it's a Shopify or a WooCommerce or a Squarespace. And we integrate with all the major DTC channels. That's no problem. But then you factor in your in-store. Maybe you want to start selling on Etsy. Maybe you're going to sell on TikTok. You need technology to do all that. And just a lot of people don't have that updated technology yet for modern commerce.

That totally makes sense. So if I could step back and again, we'll just kind of label what it is. It's an operating system that's connecting all of your, all of your commerce outlets and helping you streamline all of your operations, your shipping. And I'm assuming when you get in and start to work with brands and retailers, one of the first things you probably look at is what's the ROI? How much money are you losing in your daily operations?

Absolutely.

I'm sure you've got case studies or stories you can tell me, but I'm curious, like, what does it look like when you start to work with a business and you find all the money that they're losing and they don't even know they're losing?

That's exactly right. You know, a lot of it is on effort and time spent. So we spend a lot of time in the early days in the onboarding and learning. Every business is different. That's something we pride ourselves on is taking time upfront to understand what people's businesses look like, what their challenges are, what their goals are. It's hard to give service like ours just off the rack because technology, people use it in different ways. And again, they have different goals and different setups. And even just the workflows of the way people sell or fulfill, everybody has their nuances, the way they want their sales orders looking, the branding of it. We spend so much time developing our branding and our look. We want that to be reflected in all parts of our business. So we definitely spend a lot of time upfront to understand what people's businesses are. what their challenges are and what they want to get out of the future. A lot of that ends up uncovering areas where they could be a little bit more efficient. You know, we do do an operational audit. A lot of it is just manual work that could be automated. You take great pride in our ability to automate the manual processes using technology, using AI, a lot of the stuff that your amazing Boss System is doing to help them on an operational scale. Things that are manual don't need to be anymore. So we can help understand that and help build those for us. A lot of those are already native to our system, but if there's special custom work that we need to do, we're happy to do that because it's an important part of the business. Once we automate those things and understand where there could be some more efficiencies, then the staffing that you're using, the headcount that you have on your team, can be deployed on other things. Every business has a laundry list of to-dos that they've been dying to get to, just have not been able to find the bandwidth or the resource to do that. We'll help free up some of that time again by automating a lot of those manual tasks, which gives your current team time to focus on other things that you've been wanting to do.

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Yeah, you know, we're having so many AI conversations these days, as you can imagine, and a lot of it are people who, are a little bit knowledgeable about it, but so many people are just AI curious. They're hearing about it so much. They understand it's something they need to leverage, not just in their professional lives, but their personal lives. And we find that most people are using it in some form or fashion, especially in their personal life. You know, they're using some of these LLMs to get recommendations on things and things of the sort, getting answers to questions. But they're realizing that there's so much more to it than just being a conversational tool. And so, from a professional and business standpoint, we're trying to incorporate those AI tools into the system where they can leverage more of the optimizations. One thing I keep referring to that great podcast you had with Jim because I learned so much about your bosses, Stu. You guys spoke a lot about data and the importance of the data, and that's so important. I gave a talk somewhere recently where we talked about I kind of equated it to what we do on a marketing standpoint and everything we do from marketing. We need to feed the algorithm so that people can find you. When people search for a red and white floral dress in Tallahassee, Florida, you want your boutique store in Tallahassee, Florida to pop up as being a place where they can pop in and buy red and white floral dresses. So we're feeding the algorithm with AI. It's very similar if we want AI to really optimize our business. Our data needs to feed AI with the correct data and information for it to actually work. And if the data is incorrect, then the AI is going to be incorrect. And every time it goes to look on the data, it's just going to produce answers based on what it's feeding you. So one thing we really focus on here is making sure the data is correct from the beginning.

Yeah.

A lot of that comes into our core premise of unified commerce, unified data. If you're any operation, I shouldn't say just a larger operation, even smaller operations or more early-stage operations operate in different kinds of data silos. They have spreadsheets for this and a spreadsheet for that and handwritten notes for this and a POS that tracks that. And all this data is living in different places and not speaking to each other. So, the first thing we focus on is bringing all that data in one unified source So that the AI can really do its magic in terms of using the right data to optimize those workflows.

I think that is whether you're a small brand new retailer and you're listening to this, I think that's a big mistake that when you're getting started, people make is not having the data set up and categorized correctly, whether it's product categories or the tagging systems in Shopify or just, you know, like having everything in one reliable source and flow and then flowing into QuickBooks and everywhere else that it needs to go. And then as you grow and you add more channels, I mean, if you're dropshipping, live selling, like you said, all these different things, the data gets messy so fast. And I think something I'm most excited about the future of AI and what you guys have built, and also what we built in Boss, 2 very different systems, is being able to take all the data no matter where it's at and then allow it to tell us a story.

That's exciting.

Like we just have to make it information and something we can actually do with the data. And most business owners are creative minds anyway, who Don't wanna think about the data and what the data's telling them, but now there's an opportunity to be smart about it. So.

That's right.

Yeah. I, I think that if, if you looked across your customer base, large retailers, small retailers, brands, what do you think those who are most successful on your platform have in common? Is it a mindset? Is it a system? Or what is the thing that you think defines success for them?

Yeah, obviously I don't wanna say an appreciation for technology. We have people on different levels of sophistication with the technology. Most of our customers are amazing at product, they're amazing at sales, they're super creative. Very few of our customers are natively technology, you know, super savvy or anything like that. They came into this business because they had a certain skill set that lent itself towards either manufacturing or production again, or sales or design, entrepreneurship, et cetera. And so, But they do understand how technology can really help optimize their operation. I think one core tenet of all of our customers is an understanding on the importance of being more multichannel. You know, it's difficult these days with a few exceptions, of course, for people to be very singular in their sales strategy. It used to be that a lot of, I'll talk about boutique owners, would have a store. And when we were at Summit recently, so many people were— most people had a D2C site as well. And I believe that's changed. They understand that they have to have some sort of online presence to supplement that in-person store. The in-person store might still be 70%, 80%, 90% of their business, 95% of their business, but they have to have that online presence, not only because it's expected from customers these days to keep your customers happy, But you also need to have those different diversification within your selling strategy. And people who want to go more multichannel is a great, great customer for us and somebody we can really help with. We find that the biggest challenge with going multichannel is the operational piece. You know, it's not for a lack of competence or a lack of effort or a lack of skill. It's very time-consuming. It's very manual. You have to create content for all these different channels that can be the listings, the photos, whatever it is. You have to manage operational flows across different channels. You want to make sure the inventory speaks to each other. I spoke to a lovely lady at Summit who was talking about how her POS system doesn't sync with her Shopify site. And what that means is when she has 10 dresses, she's afraid to put 10 in her POS and 10 on her Shopify site. Because they don't speak to each other. So she puts 4, 5, 6 on one channel, 4, 5, 6 on the other channel. And her exact words were, I know I'm costing myself sales, but I'm terrified to oversell on either channel.

Oh.

A great example and a great use case of why connecting systems and bridging that unified data together is important. And then imagine layering on multiple channels. Imagine layering on not just your POS and your in-store and your Shopify side, But layering on a live selling channel, layering on a TikTok channel, layering on an Etsy channel, it becomes very, very challenging. But we can help with that. That's why we help. That's where our value is.

Talk to me about, I mean, so the channels, I love that you mentioned all the integrations because I mean, as you grow digitally, obviously you want to expand. Like if you've got the system down pat, you might as well scale it and expand as much as you can. Do you also help on You said the shipping side. I'm curious, just streamlining that, and are you finding that you're helping save people money in their shipping along the way because it's all streamlined through one singular system?

Perfect question. Yes, that is usually the number one technology that people can eliminate once they use DigiBridge. So a lot of people are using different shipping solutions. There's 100 on the market. 80% of them begin with the word ship. They're easy to find. And so—

Good idea.

Yeah, they're using these shipping solutions to ship. Great. But with DigiBridge, there's no need for that. We're an all-in-one model. So everything I've talked about before is built into our system. Everything's accessible. There's no upcharges, there's no upselling. People have access to everything. And then our shipping solution, we think, obviously, we think it's great. I'm biased. But one great advantage we have is we're connected to 300 sales channels. I have mentioned some before. over and over again, Etsy, Live Selling, et cetera, but all the major department stores, all the major marketplaces we connect with. And then since we connect with them, we can do the shipping, the packing slips for all of those companies. If you sell on a department store, you need custom packing slips for those department stores. You need to have a technology that supports that. We do that. We produce all the shipping labels wherever you're shipping. We integrate with all the major carriers, of course. And then we can produce the shipping labels. And then we can also prioritize the packing and shipping across all the different channels. So if you're selling on 5 channels and Channel A had 2 customers that requested priority shipping and Channel C had 3 people that requested customized shipping, priority shipping, we can prioritize that for you. So you know exactly which orders to fulfill first and just making it as optimal as possible across all the channels. So we love when people use our shipping solution. Most people do just for the optimization. We get you the best rates integrating with all the major channels. If you have a FedEx account and a UPS account and a USPS account and you're shipping something to Raleigh, North Carolina, we'll tell you which provider provides the best shipping rates. And it might save you $0.20, it might save you $0.50. It might not feel like a lot of the time, But multiply that across 100 orders, 200 orders, however much it is during the month. We're clamoring for every penny we can get these days in retail. Margins are tight these days. So if we can save $0.35 on shipping, we're happy to do that for people.

It adds up. I think it's something that you overlook as you're starting and beginning to grow in scale. And then at scale, that's a lot of money over time. I'm sure you've probably seen this study that Delta Airlines did. This is many years ago. Delta Airlines did this study of if they added $0.99 to every ticket that they sold, which doesn't seem like it's $0.99 on a $300 ticket, but the data showed, I mean, it was like millions of dollars that they recaptured through this one little change. Oh, that's absolutely true. So I think it matters. It goes without saying. Justin, are there other commonly asked questions that you get or things that you want people to know that I haven't already asked you?

Yeah, commonly asked questions. You know, people are wanting to know how to optimize for modern commerce and how to scale up more. I've talked about that, so I won't repeat myself too much, but it's going to continue to change. You know, one thing we've talked a lot about is the evolution of commerce. People need to have some sort of digital transformation, especially for businesses that have been in business a long time, 10 years, 15 years, 20 years. They were used to doing things in a way where technology wasn't as prevalent. And it's hard to change. It's hard to adopt a new system. I long equated it to, I have an iPhone and most people have an iPhone. And there's always a joke about people who have different types of cell phones. Nobody switches their cell phone, right? If you're an iPhone user, you're an iPhone user. If you're an Android user, you're an Android user. You're probably never going to change.

Yeah.

And people don't want to change because they're like, I know my phone. I know how to use it. I like it. How long would it take us to learn a new phone system? 5 minutes? 10 minutes? It would take no time.

Exactly.

But just the sound of switching sounds so overwhelming. It sounds so exhausting. I won't know where to find my apps. And it would take us 5 or 10 minutes just to switch phone solution. Layer that into an operating system for your business, something that touches every aspect of your operations, your inventory, your fulfillment, your sales, It's overwhelming for people. And so people who have not been able to catch up with new technology don't want to change the way their business is done. Obviously, if the business has been operational for so long, you're doing something right. Absolutely. You're doing well. You're making money. You've been going for 10, 20 years. It's almost like if it's not broke, why fix it?

Yeah.

But we do believe something important is changing in the industry where you need to have those technological Uh, infrastructure, uh, to support long-term success moving forward.

Uh, it's such a good analogy, such a good example. Um, all right, well, Justin, I have a couple lightning round questions for you. Are you good with that?

I'm, I'm good with that. I dunno if I was prepared, but I'm good with it. Let's do it.

Okay. Well, the point is not to be prepared. The point is to answer quickly.

Yeah.

Um, I'll ask you these questions and you can answer these either like from your own point of view, or you can answer these from your clients' points of view and what you've seen, um, happen for them in their business. So, I'll just start with this. What has been the hardest lesson in business you've had to learn?

Oh, great question. The hardest lesson in business. That's great. You know, for me, I'll answer with a little story. I interviewed somebody for a job once at a previous technological company that I worked with, and he had moved here from San Jose. I'm gonna have to tell him I told him this story. You'll get at least one new viewer. He's gonna like that I told this story on a on a platform for him. And he had moved from San Jose to LA, no job, and he just moved. A very smart young guy, very ambitious guy. And I asked him why, and he said he was just on a journey to make himself be more uncomfortable. And he was very comfortable in San Jose. He had grown up there his whole life, and he just wanted to take a risk. And if you ever met this guy, not his typical personality, not the kind of person you think would do that. And I was just so impressed by that. The best job interview answer I've ever heard by far. And that's a hard thing in business. And I think about that a lot. You know, it's very easy to do things that are very comfortable for us. You know, one thing we talk a lot about here at DigiBridge sometimes is healthy tension. It's nice to disagree sometimes. It's nice to put yourself out there and voice different strategic thoughts, different opinions. It's tough, you know, especially when you work with people and it's a family and everybody gets along great. But it's nice to have some healthy tension and it's nice to feel uncomfortable. And I think the more we put ourselves out there and challenge ourselves to be more— maybe you're a very sweet and lovely person, very nice person, you're not very confrontational. We all need some sort of— I won't use the word confrontation, but healthy tension in our lives where we're challenging ourselves to step out of the zone, push a little harder. Maybe we're not getting the results we're getting. That needs to be vocalized. Give feedback to our employees. That can be hard. It's hard to give feedback to employees on ways they can be better, that constructive criticism. But being a little bit more stepping out of your comfort zone is something I aspire for on a more frequent basis and a good business lesson to answer your question.

It's a good one. What do they say? Your comfort zone is where dreams go to die.

I love that.

Let me write that down.

I like that. I'm going to start incorporating that into my thing.

There you go. There you go.

I think it's a good story.

I hope I can say that one. Okay. What do you think? And this is interesting given this company. So what do you think is the unsexiest process in business that drives the most impact?

Don't trust him. Of course, I'm going to answer with a technology answer.

The—

for us, the unsexiest thing is the fulfillment part, you know, and I know this because I've done it. Our CEO still owns his apparel company and I said, let me learn our system. So, I went to the apparel company and I learned how to fulfill and that was hard, right? And I learned it in 10 minutes, which is great. You know, our system is set up that way and again, a very manual process and I can see how it's challenging. And, you know, he has a big warehouse, multiple thousands of square foot warehouse with inventory all over the place. And, you know, we can help people find, we do location management, make it super easy to find stuff. Obviously that's important. You know, some of our customers, you know, we talk about warehouse, some, for some of them, a warehouse might be a second bedroom or a storage unit.

Yeah.

Or the trunk of their car, to be honest. So we support all those different things. But that's just an example of something that's very manual. You know, trying to go find the good, put in an envelope, et cetera. We can completely optimize that part. That's the first thing that jumped up to unsexy because that's something I've never done before. So that was a new experience for me.

It's a sweaty process.

Sweaty.

Okay.

I may have taken the word unsexy too seriously when we talked about the hot warehouse and the manual labor. Literally. The first place my mind went.

What is one unpopular opinion that you live by?

Wow, what a good question. One unpopular opinion that I live by. Great question. I don't know if it's unpopular, but again, the first place I went for, you know, I always encourage our team to dream bigger than they think. You know, I think we work in tech, you know, we're always trying to do maximum stuff. You know, when we were at Summit, funnily enough, you know, there was a book for book club and it talked about how 10x is easier than 2x.

Okay.

And, you know, we all want to grow our businesses and then we make these plans on how we can do that. But I always think we can dream a little bigger. And I'm very practical by nature. This might be a good example of me stepping out of my comfort zone. I'm very practical, very pragmatic person, especially in my personal life. But professionally, you want to dream big. And, you know, things that we think are possible, I have no doubt that even greater things are possible. And I learned this a lot at Summit. You know, we spoke with so many amazing entrepreneurs. It was very inspirational, actually. People who— there were so many stories, very diverse set of stories, but a lot of stories around, I just can't believe this is my life. I never thought I could do it. You know, it's just something I'd always thought about and I just took a risk. It's grown so much more than I ever could have imagined. I mean, fantastic. It was really, really inspirational. A mix of people who are there to be part of a community. You know, I haven't bitten the bullet yet, but I'm just trying to learn more so I can take the leap, etc. And all of those stories have goals in mind, but I think we can always just push further past those. That should always be our goal, to be even bigger than we could even expect of ourselves.

I think that's so true. And I love hearing those. That's probably one of my favorite parts about this opportunity is to hear those stories of people doing things that they never thought were possible and just proving everyone else wrong along the way. I think it's great. It's very cool.

It's a very hard thing to do. It ties in well into the— I didn't do this on purpose— stepping out of your comfort zone. It's hard. It's hard to be entrepreneurial. It's hard to take a risk. Yeah. But very, very, very impressive.

I thought you were going to say that you went to the Denim and Diamonds party at Summit and like rode the saddle or, you know, did something really obnoxious, but you didn't.

So there's no photos. There might be a photo of that. I'm not sure. We don't remember and we can't say on this podcast.

Your secret's safe with me. It's all good. All right, last question. What's been the best business advice you've ever received that always sticks with you?

That's great. You know, I always believe in authenticity. Every company I've worked at, We, you know, we have company values and every company I've worked at, especially ones where I've had the opportunity to direct our values and company culture, the word authenticity is always present in some form or fashion and usually very prevalent as being a stated value of the company. Just being ourselves, I think, is super important. It sounds a little cheesy, but nothing could be more true. You know, the best. You know, whether you're a retailer or a wholesaler, you're doing business with people. And it's just people like to do business that they like. That's plain and simple. This is not rocket science here. Like, people like to work with people who they like speaking to, who they like hanging out with. I really believe people's truest self is what's taken them to the places that they've achieved, places they've arrived. And so staying authentic to the true self is important. And then that's even more reason why when we're our true selves, there's this opportunity to challenge ourselves some more where we're not— I already forgot the very cool thing you said. Comfort is a place where dreams die. What did you say?

Yeah, your comfort zone is the place dreams go to die.

Your comfort zone is the place that dreams die. So it's balancing being your authentic self with challenging yourself a little bit. But being authentic, being my true self, you know, we always think we have to be different versions of ourselves sometimes to achieve different things. I was taught at a very early age the importance of staying true to myself.

That's good advice. Good advice for everybody listening in all aspects. I think that's the thing that makes one business different from the next. And like you said, people want to do business with people.

That's right.

And it's because it's the people that make you feel good. That's who you want to surround yourself with. So I love it. Justin, this has been such a great conversation. Thanks for coming on the podcast today and, you know, giving us the lay of the land, the behind the scenes. I think what you guys have built is an incredible opportunity. I can think of so many businesses right now And a lot of them that are, again, both wholesale, retail, or they just have a bigger complex system and they're trying to grow and scale on multiple channels. This is a really great solution that has not existed before. So thanks for being a part of the community and, and thanks for sharing the story today. I appreciate it.

Yeah, the pleasure's mine. Thanks for having me on. We look forward to seeing everybody in Los Angeles. Welcome to Los Angeles. We'll see you in a few weeks.

Sounds good. Thanks so much, Justin.

Take care.

Hey guys, thanks so much for listening to this week's episode. If you found it helpful, please share it with a friend or feel free to subscribe. And I would always love it if you would leave a rating and review. Hey, if you want more tools, education, and just support, head on over to theboutiquehub.com. Or if you have feedback or episode ideas, DM me personally, AJ Alderson, on Instagram. Thanks so much for being here and listening to this week's episode. I'll see you next week.