Episode 344: Too Fast to Ship with Joel Freet (Cutter & Buck)

What if improving your customer's buying experience didn't just reduce friction, it actually doubled their sales with you? And what happens when your fulfillment system is so fast you have to slow it down? Well, on today's show, we're exploring how Cutter and Buck is using both digital and physical automation plus AI to scale smarter and faster. Welcome to the SkewCast, the podcast for innovators and maverick thinkers in the promotional products space. My name is Bobby LeHew. I'm glad you're here. Our guest today, Joel Fried, started as an intern in the tournament division back in 1999 and became the CEO in 2014 to lead Cutter and Buck to become one of the industry's leading suppliers. Today, we talk with Joel about the compounding impact of EPO adoption across their customer base, how AI is being used for everything from inventory forecasting to product content refreshes, And Joel shares a story about how they had to slow down their fulfillment time because it was too fast. Today's episode is brought to you courtesy of us at Commenscue. Over 900 distributors powering $1.8 billion in network volume rely on Commenscue's connected workflow. Process more orders, connect your team, and dramatically grow your sales. To learn more, visit commenscue.com. Now here's my chat with Cutter and Bucks. Joel Fried.

Welcome to the Skewcast. I am so glad you are back, my friend.

Yeah, thanks for having me again. It's great to be back. Great to be seen. I'm still here. We don't see you as much, but I know you're out there a lot. So glad to have you back. Yeah, thank you.

I know you don't do this a lot, so this is fun to do. And we're going to catch up with a lot of things. But before— maybe there's some new listeners, and for those that are new, can you explain briefly the corporate and retail side of Cutter and Buck?

Sure. The basic thing is we do both. We do both corporate and retail. Cutter and Buck was founded as a retail company making super high-quality sportswear in 1989. We've been doing that ever since. We've been in the corporate space since the late '90s, and we just love it. It's just an awesome space for us in corporate, allows us to get our brand out there for a lot more fans. That's really what it is. And the retail business, no matter what we do— I think I told you this last time, Bobby— but it stays true no matter what we do. They both grow together and we just kind of never break through 50/50. It's 51/49 or 48/52 or back to 50/50. It really, they really grow in lockstep. And so far this year, corporate's really strong. Retail's a little softer. We're making a little bit more ground in corporate, but the holiday season is upon us. Is a right around the corner.

It's coming.

And who knows? Like, they will slap back into 50/50. So, Yeah. So yeah, we do both businesses and lots of different channels in each.

I love how last time we were talking, you said the intelligence from each side also helps each other as well. Like, one of the things that's really surprised me, 'cause you're the first person ever to say this, you're actually getting trending insights from the corporate side.

Sure.

Whereas we're always used to that coming from retail. So that was real fascinating. How has digital transformation impacted how you've seen both now program business or corporate business? Yeah. And consumer business running parallel, and you're big in tech. And automation. So how have you scaled those simultaneously?

Really, we've invested in the core infrastructure, the core infrastructure for order fulfillment and order processing. We just keep investing in that, try to be best in the world at that, to be the best sportswear supplier that we can be. Since we talked last, we opened a really huge improvement to our fulfillment center here in Seattle with a big investment with AutoStore, where we invested in a fulfillment engine that just delivers products directly to our people it makes it really easy to pick orders. And so we just, we've gone from really a couple hours or maybe a couple of days of work in process that we have to now down to minutes. And so our work in process is really small now so that orders that are placed online through cbcorporate.com or from an EDI partner or a connected partner through common SKU or promo standards, they just they're ready to go out the door like in minutes. And so we're picking and packing orders really fast. If they're going into decoration, they're getting into decoration really fast and it enables us to schedule our orders really well. So we're able to get more and more efficiency with decorated orders. So that's enabled us to take a tool or a business that we've really grown in retail the last several years. Last time we talked, I was like, hey, when is corporate gonna kind of wake up to this thing? So now it's enabled us to have this intense speed so that we can do single unit orders bulked together or batched together, as we might say, and deliver it out to end users or to, to company employees that are in their own homes or whatever location they're at. So really it's taking that dropship capability that we have in retail and just putting that right into the corporate space and the distributors and partners who are aligned with that, they're just killing it. They're just absolutely crushing it now. Like in retail where we have this, really it's, it comes down to even the retailers having a hard time, like figuring out how to account for it. Here we have, they're just getting profit. Yeah. They never have to touch the goods. Wow. Something that our distributor's a little bit more used to of just, hey, it's just going direct from the supplier. But that's been really potent for us. So our capability to do it has been there for several years, but now our efficiency of doing it is at the world-class level. And so we're really proud of what we've been able to build and it's going great.

That's amazing. I want to talk about the digital side and the physical side, but first on the digital side, we just at CommonsCue, we just reported this morning, we just had our biggest month of EPOs ever.

Wow.

So to see that kind of traction in the business is pretty astounding. And obviously now Cutter and Buck is a Connected Plus supplier. How do you see that even changing? Like, like where you were to where you are now has really changed the speed. How do you see this even changing further down the road?

You know, it just opens up the resources to, to have us all stop working on order processing, You know, baloney and getting to adding value in the value chain, are chasing down paper, making corrections on POs, all of those things that add up, you know, checking stock and, oh, the stock's not here because it was sent in in a non-integrated way, whatever that might be. We just, it's freeing up our brains to be like, okay, now we're not doing that anymore. Now how can we help our customers really thrive? And that's where That's where the change is, that it really just takes away the easy but hard work that gets to be a distraction and allows us to really focus. Like you, we're— every month is our best integrated month ever. Every month. And it's been like, I don't know, 75 straight months or something. Every single month our business keeps increasing in some form of integrated orders. PromoStandards has been huge. CB Corporate, lots of EDI-connected customers as well. Just every month it keeps distorting. And what we're finding, and I think you guys are seeing the same on your EPOs and how you're seeing it, is that whatever the number of engaged customers is, the number of orders coming from them is about double that percentage. This is what we're seeing. If we have 5% more customers placing orders through a digital path, we're getting 10% more orders. So it's, so it's, the leverage is there. So that just keeps signaling to us that The less time you spend on just the shuffling of the paper, the more time people spend doing business. And so you get more orders. Everybody wins.

It's, it's so amazing. The math checks out. What, what is also interesting to me is how in just the intangible part, the halo effect around the relationship between the distributor and supplier just gets better. Even just that. I mean, we can all measure the tactical things and that's a huge gain in efficiencies and profit and where you can focus your energy, but just the emotional gain. Being able to work with your customer on a different level, on a creative level, more so than just a tactical level, is fantastic. Catherine and Dave visited your facility and they were really blown away by your robotic system. We have some video we'll play for those that are tuning into the video. What role does this play in your fulfillment process? We talked about digital automation. So what have you done at Cutter and Buck with the robotics?

It's enabled our people just to be much more efficient. It's safer. The people, you know, everyone doesn't have to basically— this is gonna be an exaggeration, but run around so much. You know, people are, are at these nice stations where they're just packing orders or they're sending orders over to embroidery. It's very calm. It's super quiet. It's peaceful. There's just really, it just enables the automation gain that we've had in that operation side has just enabled a better work experience for our folks. And they're just, they're processing orders. So much faster without feeling like you're working harder. Isn't that the dream of automation is that you're going faster without, while feeling like it's easier. And so that again, just enables us to keep that work in process really short so that we can use our space wisely. The rent is very high where we are up here in, in Seattle. It's an expensive place to do business. Yeah. So we like to be nice and dense. So just not having even as much as not having to have as much you know, work-in-process materials, it just makes our decoration operations from there run a whole lot smoother. In fact, Bobby, this is maybe a trick that the team heard here was that we actually have to slow down a little bit because oftentimes people have some kind of order change or something. They're like, hey, oh shoot, I, I entered the, I did 24 larges instead of 24 extra larges, whatever. And it's, oh shoot, sorry, it's already in the truck. And then it's a great problem. It can't be in the truck. 'Cause I just entered it. It's like, yeah, it's in the truck. So those things, we do throttle it a little bit because it just enables our packages and everything just to move through quite quickly. So yeah, we had a timing set where it went from 6 minutes from order entry to in the truck, and we just found out it was like too fast. People were like, this is, it's jarring. It's jarring to have this happen so quickly.

Wow.

That's amazing.

What a, what a change. And you have distributions all over. You're also expanding some of your decoration capabilities, if I understand it right.

Yep. Yeah, we've added, we've added more heat transfer. That's been a big one. But the really big change has been partnering with share ship, what we call share ship, or with a network of really strong decorators across the country from our multiple distribution points. That's been what's, that's been a huge leverage point for us is to find great decorators that have all the business already. Maybe they're doing program business or what have you. And that's just where it, it feels like it's decorated from us, but it's just because it's just so smooth and that's, you know, we're getting the orders out to them daily. From here in Seattle or in Cincinnati where we have our other distribution operation. And it's just getting to those houses so fast and then ready to, ready to ship.

Moving from efficiencies to brands, you've expanded brand categories. So what kind of brands are really performing well for you right now under Cutter and Buck?

It, like I, like we talked about a minute ago, 75 months straight of growth in digital orders or integrated orders. Cutter and Buck has just been on a really hot streak for a long time. So I've been with Cutter and Buck for 26 years. If you can, if you can believe it. I can hardly believe it, but I've been, but this is our, this is a really long growth streak for us. So we just committed to modern great sportswear several years ago and just really committed to categories like polos and layering knits and outerwear and just things that feel like athleisure and feel things that feel like they're really ready for your all-day active lifestyle. And it's just worked great. It just really has worked great. Even as we have during that growth period, we have even dialed back in like more traditional categories like sweaters and woven shirts. Those just got dialed back really through supply chain challenges that I'm sure we can get to in a few minutes. Even with that, we've had tremendous growth, even if we've got categories that are smaller than they used to be. Yeah, layers, things that people can wear over and over again for their work lifestyle as well as for their active lifestyle. Those are things in the Cutter Buck brand that have really thrived and the growth has been tremendous in that. Yeah. And then we've, we, our KLICK brand has gone really well as well. It's more in the everyday affordable essentials for promo and otherwise. That one, we've launched a lot of more premium outerwear into the space, into that. And so that's been good. All right. Premium isn't exactly right. It's more like better outerwear because the pricing is insanely good. So we're really in, in a great position. With the Cutter Buck brand as well as with the KLICK brand. And then coming in 2026, we're actually gonna be launching more brands into the US market. So we have the Swedish outdoor brand called Tensen, which is a really gorgeous collection of— now that's premium outerwear. That is truly awesome. Premium outerwear. And then also from the Nordics, the really like the, this is gonna be the cheapest, quickest elevator pitch, the Nike of the Nordics, which is Kraft. Kraft's Sportswear is a huge sports brand that is part of our New Wave Group family of brands. It has become a juggernaut of a brand in the Nordic and across the European countries. And we're going to be partnering with them to, to bring Kraft into the US market in 2026 as well. So we're really thrilled to— so then we'll have really performance sports. We'll have the active, we'll have the athleisure, we'll have the premium outerwear, we'll have the— then we'll have the everyday essentials with Clix. So we'll really fill out a really strong brand portfolio over the course of—

that's amazing. Congratulations on those big brand launches. We'll see.

Big deal. That's where all the hard work is, right?

Right.

Yeah, yeah.

Well, the other thing is outdoor lifestyle, like premium wear. And like, so I was following someone that I follow a lot of, an influencer, and who was at the Milan Fashion Show. Oh, and he's walking through the Milan Fashion Show, right, on video, and, and he said the most exciting thing happening is in outdoor apparel. And I thought that was kind of an interesting take, right? The outdoor apparel is where some of the most exciting things are happening. So that's become huge growth categories for you, obviously.

What do you—

what is resonating the most with corporate buyers specifically? What are you seeing resonate with them?

What we're seeing the most is really in like mid layers where we're like taking from an outdoor influence, taking from an active lifestyle influence that kind of goes into outdoor, that mid layer. You could even include like vests, like wearing vests, kind of the quilted vest or things like that. Just, yeah, that's what's just continuing to flow really well because people just wear it. And when we're talking about promotional apparel, you want people to wear it. And it's, these are just the categories that people are wearing for their, for their lifestyle. And it really translates back and forth to work and to date night and to all these things. People, I see people in Seattle all the time out on, I want to just quote unquote call them dates, but out in the social life with our promo wear on. I see it. I see it every day. You know, you see somebody in a great Rainier vest and it's got their, you know, you name the company logo here and they're at a great restaurant. They're jumping onto their boat, they're doing their thing. It's like you see it all the time. So isn't that the dream of, isn't that the dream of the business that we're all in is getting your product onto the backs of people who are proud to represent it and proud to incorporate it into their lifestyle. So that's not going away. That's, you know, so it's just different flavors of it now.

Now coming. That's so true. Let's talk a little bit about the topic that's been on everybody's mind all year long. And, you know, the scale of Cutter and Buck is significant. So you've got some interesting insight on this. How are current tariffs— current tariffs now as we record this in basically the first week of July— how is that impacting business, particularly with such a large footprint like you have?

Sure. Yeah, we've been— we've just been attuned to global trade you know, global trade from our founding, and we've been paying attention to the way the wind is blowing for a long time. Yeah, it's— there's been some surprises this year. The level of surprise to us has been something that we're prepared for. We crack open the playbook and say, okay, where's our next move here and otherwise? I had a challenge this year because I thought we had settled in on tariffs and I committed to holding pricing, and then we just got walloped. And I was like, oh geez. So I had an embarrassing kind of a moment that felt like we were well protected and then we weren't. And there was some surprises there. So we've been very optimistic about our positioning now moving forward that we're well positioned with a lot of diversity in our supply chain. We work with, we're picky about suppliers, so we work with really great suppliers from all over the world. In the areas that have had the heaviest kind of tariff focus, we've been, you know, lucky, good, or otherwise enough to not be very concentrated there. So that's helped us. The global, the larger or kind of the broader tariffs, that's gonna affect all of us. So if we, we're still in the branded, you know, production model where we, you know, design, market, and otherwise, but we do use contract manufacturing. So that, that does call that into kind of question overall. But, but I see that the supply chain just keeps moving. It keeps adapting to new labor markets and such. And certainly in, in China per se, like the economy has moved upwards. It's out of really a lot of like apparel production., and they're, they're working on producing electric cars and, you know, and laptops and cell phones and those things. And so the market has shifted into other areas as well. And that's, that's, yeah, honestly, that's as old as America.

That's been happening for a long time. Yeah, for sure. We're heading into the, one of the biggest selling seasons, particularly in some of the categories that you sell into in late third and in fourth quarter. How are you feeling about that with the tariff trade winds and the uncertainty around it? How are you feeling heading into, into third and fourth quarter?

I feel really great. We've spent the last couple of years really working to shore up our inventory levels and just be really certain that we have, we're able to fulfill as many orders as we possibly can for the holiday. So we've been shoring that up. So again, like good, you know, it's an old-fashioned saying, but good clean living. We've been planning on serving our customers better and better across all channels. So we currently have our highest inventory we've had ever. That's been again like 75 straight months. But we've, we have our highest inventory ever. We are still getting more inventory in for the rest of the year. Just to share, our peak starts on August 15th. That's like when all tons of back-to-school business starts to happening. NFL really gets cranking, college football just, and then everyone comes back from vacation on the same, at the same time in the corporate world. So we go from like August 15th until December 15th is our peak. And so we will be fully loaded for that time period in all of our best, all of our best products, which is really like all of our products now. So we're feeling very good about it. So we're very optimistic. Again, the corporate has remained strong. Um, so that's been very good. And then, you know, what little dips and dabs we see in retail, those get so quickly overcome with, again, back-to-school business and just as the, as the holiday period gets upon us, corporate gifting, all of those things really get going.

Yeah.

You know, we're still not a big enough player to say, oh, the market share is out. It's no, we, there's tons of business out there. And so we, you know, when we have the full scale in products, we're ready to go. And I would just mention, this is the first time we've ever been able to use enough intelligence and really starting to use AI. Maybe we go there and starting to use machine learning and stuff to say, look, we have products now that we can sell 10x. Of the, uh, of its little brother and sister products. And you don't quite know that in more traditional planning methods until you really let the machine learning come in and say, look, you could, if you look at these signals closely enough, you could sell 100,000 of these if you have 'em versus 3 or 4,000 of something, of something else. So if you have the color, a navy blue one, you could sell 100,000 of 'em next to a cardinal red is, oh, you're only gonna sell 6,000 of them. And so the— it's really like exponential, which has been really— which is really exciting. So we have the first time ever, we have a lot of styles that have— or a lot of style colors, we call them materials— style colors that have 30, 40, 50,000 units on the shelf.

Wow. We were going to talk about AI next. And so is that one area where you're seeing AI? So you had an amazing statement last time we talked and you said whatever your last best experience was is now your minimum expectation, right? So That's the customer's experience. That's customer experience in a nutshell. How do you, you just mentioned AI is really informing your intelligence in terms of inventory, sounded like inventory buying and decision-making. How else is it impacting the work you're already doing at Cutterbuck?

I think for us it's a lot of work that almost goes undone because we can't get to it. But if you wanna redo all of your product content, it's okay, we've got some new insights. Let's look, let's refresh. And it's, oh my gosh, how many SKUs do we have out there? How many, How many syndicated products do we have out there? So some of these things within the digital world, they feel overwhelming because they're such heavy lifts. If you want to say, like a good example is changing your product content. Like, how do you do that? If you install some AI tools to that, it's fast. You can give it an instruction set and you can, in the course of hours, days, weeks, you can have all of your product content updated with the latest things, latest insights that you want. That used to be like a, okay, next year let's plan in our, you know what I mean? So that is super exciting that you just like, you get better. So your last best is okay, as soon as we see like a great product description or a great way that's really resonating with our customers, let's have that influence a lot of our, and it, you just don't have to wait in that. Like you can just install that work and like, For us, that's where we are. There's lots of companies looking at super exciting things utilizing AI. I think that there's a way that AI can really help our customers, Wick, with suggestions and all of that. We've, we already had some tools in for that, but we're working behind the scenes looking on that. But I think it's about the work that goes undone that you can just really get into continuous improvement mode and really be serious about it and not have, again, months to years go by. Like, oh, how come we never— Yeah, right, right.

Because you just can't get around to it. Yeah, yeah. We— you can imagine we are so bullish on AI and you can— and we both have these massive datasets from customer, customer purchasing trends, all kinds of things like that. It's phenomenal what can be done today. Mapping AI to our— do you see— how do you see AI really impacting the industry in the future? Is it in this data intel side? Do you see it impacting the sales side? How do you see it moving the needle the most?

Yeah, I think data Intelligence first, like we talk about inventory, really planning for how the business is collecting all of these different signals, which we can't all listen to. Just getting that, I think that's huge. In the service side, just getting people the information they need really fast. Like it's just 3 rings on the phone seems like an eternity now. Waiting 4 minutes for an email reply back just feels like an eternity now. So there are some things in there that are really, really plausible. So just again, reducing friction is a big one. And then out there selling, I don't know, maybe, maybe just giving more opportunities for more companies to run integrated programs. Like I think it's like, that's the one. How many times has, has a client, a corporation in our space said, I don't want to reset my program. I just spent last year. How about when we can just say, oh, it's no problem. Just give us a couple of indicators and we'll We'll use an AI tool to reset it for you. Like, yeah. So, so to help the sales, right? So that then we've got companies out there with their company stores refreshed and just, or just maintained fresh all the time. And like, without friction, that feels like an opportunity that we haven't had before, or at least it has felt like a while since the first, you know, online catalog started to be quote unquote easier than a print catalog. So just imagine that, that online catalog, maybe it takes weeks to months to update. Now that takes minutes to hours to update. That's an opportunity for selling that, uh, sure, we have it for sure.

We've got 1 minute left. I wanna ask you this. Now, if I remember right, you came into the business as an intern. Yeah. Is that right?

Yeah. Yeah.

And, and see, and, and you have been running Cutter and Buck. That's an amazing story. So we'll link to that old story in case you wanna hear Joel's story again, cuz it's a phenomenal phenomenal story about your personal growth in this business. But to wrap, what are you reading, listening to? The audio community loves to ask, to know what it is you've read lately that's moved you or what's altering your thinking.

Well, like I've most prepared for that question from having these other things, but when just as things were changing over the winter and the tariffs started to be whispered about and some other changes, we went back to some Jim Collins for us, which I'm a huge fan of The Good to Great. Universe and our, our executive team went through Great by Choice again and just really thinking about leadership and management through more turbulent times of just as things are changing. And so we did 6 weeks of reading and then boom, we're ready for the tariff. The tariff things start to be discussed in early April and it's, I had several people on my team was like, man, thankfully we just read that again. And so, so just getting to the core of your business. We talked about several changes here with automation, changes with AI, changes with global sourcing and other things, but it's It's always been changing. Just a reminder to everybody out there. That's great. Reminder. Oh, it's always changing all the time. So that book was written, right? You know, really post-9/11 about how things have changed so much. Yeah. So many of us have been through these changes.

That's a great way to end, Joel. Thank you so much. Like that is, if there's one takeaway I've had from talking with many leaders like you, it's that focus on your core. Yeah. Because the volatility and the uncertainty will always be there. It may be bigger, it may be smaller. But it'll always be there. Thank you, Joel, for joining us again. Thank you very much.

As always, thanks for having me. Thanks for having me.