Going Full Ecommerce - from scratch. The Alina Cazacu story. Special Episode hosted by VTEX Romania

Foreign.

Welcome to E Commerce Growth Stories. This is your hostess with the mostest, Juliana Jackson, aka the CLV lady. And also I am the Chief Evangelist for OmniConvert.

And this is Valentin Radu, CEO of OmniConvert.

Thank you for tuning in today for a new episode of E Commerce Growth Stories.

Do you like snooping around? I know I do.

I don't know.

Did you ever wonder what Sony uses to power their e commerce business? Or Coca Cola? Or Motorola? Or other big names in e commerce and retail? Well, today the secret is gonna be revealed and I am talking about Vitex. Vitex is the first and only fully integrated commerce marketplace and OMS solution that offers fastest time to revenue and no upgrades like ever. So if you're an e commerce brand and you're looking to find a software that can really become a powerhouse to your business, providing you the best go to market speed, flexibility, daily updates and reports and overall platform stability and agility. You really have to check these guys out. So make sure you go to visit vtex.com that's vtex.com today and give that ecommerce business the boost. Today I'm taking a very well deserved break. However, we have a special edition of ecommerce growth stories hosted by our sponsor at Vitex. So you have Alex and Christy from Vitex hosting an amazing episode today. Having as a guest Alina Kazaku. She's the founder of Digital Kitchen and she has more than 15 years of experience in launching e commerce businesses from scratch. So she's coming today talking to Alex and Christy about how you you can start your business from scratch. What are some things that you should be focusing on in order to become successful with your online business? Make sure you tune in, check it out, let me know your thoughts and please do not let Alex do my job because he was such an amazing host.

I'm Alex Wagner and I'm happy to be the moderator of this episode. Juliana Jackson, your usual host, took a very well deserved break but she'll definitely be back for episode 11. Today we're having two of the most experienced specialists in the e commerce industry in Central and Eastern Europe. Let me present you Alina Kazaku. Hi Alina.

Hi, can you hear me?

Hi. She's the co founder of Digital kitchen. It's a 360 degrees digital consultancy company and we're also having Christi Movillo who is the growth leader for Vitex Central and Eastern Europe. Hi Christi.

Hi Alex. Hello everyone.

Hi. Having these two great experienced people today Is a great opportunity to talk about almost everything and anything commerce. So I structured a plan to touch on plenty of aspects that influence an E commerce business. My job would be pretty easy because of the knowledge these guys possess. My first question for you guys would be how many coffees do you drink per day and what is the acceptable hour in the evening when it's still okay to drink the last cup? I don't know if you guys know if you can see, but it's evening here and I'm still drinking coffee.

So I just, I just had one. From, from my point of view there is no. I don't know the. There is no late time for coffee. For having a coffee it can. It's also the same thing with everything that keeps you focused, right. It doesn't matter if it is coffee, tea or whatever. So you kind of. In this fast moving world, you need to be focused at any time. So I would say that coming to your question, I would say that is the most important thing is to be focused all the time. When you need to be focused, right. When you need to relax and when you need to enjoy, I don't know, off road, right. Like I will do the day after tomorrow. You can live without coffee, without anything that. Without any stimulants, let's say.

So let's focus on commerce right now. Let's start with the first steps, the business plan and business modeling. And I'm inviting Alina on this one as well. How do you create a business plan, how do you follow it and at what type of investments and or costs are we looking at the first steps of.

So you left Christy with the coffee and I have to talk about the business.

Well.

You are an expert as well on the coffee and on the other.

Side of commerce it's okay.

Usually I have six coffees a day and after I can start talking also about the business plan and business strategy. What you refer to is one of the things that we are putting actually the most emphasized at the beginning. So with all our clients either if are in a moment of migrating their business to a new platform, either they are just enhancing their business for us is really important to understand what's their strategy. And strategy doesn't mean only the product and the development of the product, but also the cost structure. Most of the cases the businesses even if are pretty big. They don't have all the time a very developed plan on which they rely. They look quarterly basis what is my cost structure, where I should invest, where I should decrease my cost and all the rest of this is a very important thing for us. We look at the cost structure, but not only in terms of what your marketing budget, but what your budget for investment, for the platform, for technology, for anything that might impact your your business.

Christy, what's your take on this one?

I remember that I used to have a very nice presentation regarding planning for Black Friday. I was kind of a, I kind of am a master of Black Fridays. I started the next year after Emac, the following year after imac started in Romania doing Black Fridays. And I kind of stopped in 2019 when I was in Rivo in the tax office. Then was that was the point that when I stopped doing Black Fridays in retailers. So I remember that I used to divide planning into three parts, what you plan to not change. So you need to have a plan on some things and not change that plan, no matter what will happen. For example, I don't know, you will not change the layout of your campaign during Black Friday because it's 24 hours and you'll need to keep the customers focused on that what you plan.

To.

Be able to change. So for example, you plan the load on your call center. So you plan from the beginning things that you are going to change during the, during the process and during those things and what you don't plan and you plan only after you receive some input. So it's very important to be very flexible during everything that you are doing in business. Especially for example, I had a discussion today with a very big hypermarket and we are looking on things that are unpredictable. So now more than ever, if you do waterfall planning is the most risky thing that you can do for your business. Because when you finish planning everything and all the, all the things that you planned for can be changed radically and can be changed and can be a very different thing that goes also to basically everything that you are doing. So it depends on, on the, on the business and it depends on the things. But usually you can divide planning and creating this business plan. You can divide into those three things. I'm having kind of a typical approach. So I'm not going towards, I don't know, having a classical approach. I'm going towards having looking more to an overview on how things are needs to happen and how things are needs to be planned. Especially because you would think that everything can be based on past experiences. But that's not the case because all the time things are changing. And even during a process, even during a campaign or even during the lifetime of a business, you will need to be very flexible and very Fast adapting and do a lot of things still.

As far as I know, at least some very big companies are doing plans for the next five years, for example, four or three years in advance.

That's perfect. And you will need, for example, to have a great goal, let's say, or a mission. So even if it is 10 years from now, and then when you start planning, you can plan those 10 years divided into two big chapters. So five years and five years. Then those five years you can divide in five chapters and then you will reach the level when you have the planning for, I don't know, the next year or the next five years and when looking forward to the next 10 years. But you can adapt and you can very fast interact. Interact. But in order to reach the goal. So it doesn't matter how you arrive to that goal. So you don't have to be fixed, you don't have to be very rigid, let's say. But it's very important to follow the goal and it's very important to have a mission and to look on that mission. Of course, the most important part is to have a goal, to have a mission, to have a scope. Because you cannot work like not thinking of those things.

So in your opinion, guys, is it better to have a goal stretched so far as to five years ahead of us or only one year, step by step, you know, one year, two years, like 20, 22, 2023 or so. Alina or Christy?

I think, I think that this depends a lot of the business that you are, you are managing. Because if you are a mono brand and you'd like to transform your business into a multi brand, for sure that it's important to have a five year planning, but nowadays it's really important to stick to the moment and to the next one. So quarterly forecast and not to forget about what you might head to, so to have a target, but to focus on the present. Because if, for instance, if we take last year, beginning of March, many businesses were assuming that they will do very good in April or May. And many things change for themselves for some of them in good terms, for some of them in bad. And they had to reshift completely. So it's important to see the goal, but it's also very, very important to stick to the present.

I'm always supporting businesses and partners to not only have a goal, but also have the necessary means in order to be flexible. For example, nowadays everyone is talking about marketplace, about collaborative commerce, about things like that. And by having a marketplace model, not a fixed e commerce model for Example, when lockdown happened, right? What happened? There was a lot of categories that exploded. Fitness, food, home, appliance, all of those things. So if you have a traditional business model, for example, traditional E commerce, and this happened, what you will have to do, you will have to buy. You'll have to basically to hire people that can be able to buy products, right? Or can be able to open discussions with suppliers. Then you'll have to talk with suppliers, then you'll have to know what things to buy, then you'll have to have the necessary logistics, then you will have to list those products, you'll have to get the know how of for those products. But if you have a marketplace model or if you have this approach on being flexible, on being able to adapt very fast, then you can literally adapt very fast. But not having those means it's going to be impossible for you to respond very fast. So not only it's important to have a goal. For example, I want to be a store selling 1 billion, I want to be an online store selling 1 billion in the following five years, right? I can reach that level by being steady on my feet and doing what I do best, or I can reach this by opening my horizon and looking on things that are not necessary in my yard, let's say. So to be able to very fast address a need, that's what I'm saying. Not necessarily to only have a long term goal, but also your goal always needs to be to be able to adapt.

So after, after you have your business plan, your business modeling.

We should talk.

About strategy and the development of your business. You have to figure out the market, you have to figure out the competition and your clients, who do you sell to? You know, what are the best practices in order to tick all of these boxes in your opinion, like studies or.

Okay, one thing that I learned.

Competition.

Exactly. Exactly. One thing that I've learned when I, when I opened the business in Czech Republic was, and also I created like a plan with Valentin. I remember it was, I don't know, five years ago or something like that. We, we are looking not only on the market and did the market analysis, the analysis of competitors, all of those things that the business regularly usually does. But also we are looking, on testing our products and our services and our assortment and everything that we are doing in that market. Because even though I'm trying to do a market analysis, even though I'm getting all the know how from the market, until you actually put your foot in that market, or your finger, let's say, to test that Market, you won't have the feeling and you won't have the sense, a real sense of those.

So you should go, you perhaps maybe a good idea is to go on a marketplace, on a local marketplace.

Right, exactly. So what we did was we planned to have a couple of thousands of orders so to have a couple of thousands of customers to speak with to understand why they came to us, the ones that didn't came anymore, to understand why they, they are not buying from us anymore. So, so to try to understand all of those things, then also to list the products on marketplaces because that's another channel for, for, for generating revenue. It was another stream for revenue. And also try to, to under to. To get as much local knowledge as possible so you can find all the information, you can find it. So it's only a matter of looking and it's only a matter of knowing where to look and knowing whom to ask. Because for example, if you want to, I don't know, to have knowledge on how to sell auto parts, you can find some groups of people, you can find some entrepreneurs that did that and did an exit or something like that. So you can find people that have the necessary knowledge and the necessary means to teach or to tell you or to guide you to the in your way, in your path to succeed. So I wouldn't say that is nothing is impossible. It's only a matter of focusing and it's only a matter of choosing your battles and knowing where to look to.

I don't know, there are some things which are impossible, like entering North Korea or something like that, you know, that.

Should prove quite difficult for me. I'd say that's a market of huge potential, man, especially for that reason. So like selling ice is impossible. Exactly, exactly, exactly.

Alina, what's your take on this one? Share, share, share with us some knowledge.

This is something that I thought about, but this is how to say Christy has the right point because we are all the time thinking that if you would like to enter a new business, like for instance, I have an offline shop and I would like to make an online one, I will make just the online shop and I will sell like crazy if I invest the right amount of money. But he's right, because if you go first of all on a marketplace and you see what's the feeling of the customers of the market, who's your competition? You have a better view on what you can do after. So you can start a very basic online business on a very cheap, cheap platform. Doesn't have to be Rocket science. But you should distribute and you should have multi channels in order to see and to know your customer for sure that the customer doesn't belong to you because belongs to the main partner that has the marketplace. But in the end, you know who's buying from you and you know, if our women is the demographic split, it's towards your products or it's completely different. And he's totally right on this.

So after you've tested the market, let's say put a finger in the water or what expression did you use, Christy? Let's say you have success on that market and that you already sold 10,000 products or whatever was the platform you wanted to reach. You need to find the right platform to use, develop the front and backends. Should it be custom or not? Should you go to one company or the other or I don't know, Magento, Shopify or Vitex or whatever, integrating with ERP and CRM. If it's the case, how do you find the right platform to use? What do you look at?

You know, in the past I was annoyed by the answer, it depends. But now I'm using it more and more. So I'm not, I'm trying not to use this. So I wouldn't, I wouldn't, I wouldn't annoy people. So what you have to look in the very beginning, you have to look on your plans as we talked. That's why even your, your storytelling into this episode was first about the plan, then about the market and now about the means, about the way you go to that market. Because if you have a closer look to your plan, you can identify what you can do. You can identify if you can go with a platform for entrepreneurs, with a platform that is very fast to market, but very simple, with basic functionalities that can serve your needs on the short term, like a Shopify or platforms that are like for entrepreneurs. And then to advance a bit more towards. If your plan is to, for example, to open physical stores, to move towards multiple marketplaces, to move towards a model of you yourself becoming a marketplace, then you would have to look more towards a platform that can become a marketplace, towards a platform that can serve multiple inventory, multiple warehouses, multiple shipping strategies, multiple channels, multiple sales channels, different payment methods, different logistics in different countries, in different counties and things like that, that for some platforms are impossible. So if your plans are to do that, or at least your medium to long term vision is to do that, then you would have to adapt and to have a look on platforms that can address those needs and Also, it's not the case of choosing a platform and you need to absolutely choose the right platform. I am a software engineer by education, so I know the pain behind changing a platform. But I also know the benefits behind choosing the right platform for the right time in your business. So you don't need to be afraid of changing a platform because at the end of the day it will come with downsides but also with, with advantages that you can use. So you don't have to stick to your, I don't know, to your chosen one for your lifetime. Even people divorce, right? Even you divorce from your love of the life of your life. I'm quite surprised to have this approach.

I'm quite surprised to see that even small or smaller entrepreneurs are still trying to build custom based stores. When should you take into account building them?

Yeah, people take into account doing that when they don't understand what's behind the platform. Imagine competing with R and D of hundreds of millions and billions. You must, you have to be out of this world completely to do that. No offense, but you have to be that or you have to don't. It means that you don't understand the concept of frameworks, the concept of local platforms, local development platforms where you have access to the infrastructure and you can build on top of that everything. You, you have no concept of headless approach of things like that. So again, it's something that for me is crazy.

This is a trap. Because I've been in this trap in several occasions. We all the time think that we have to have this platform or this website or this front end in most of the cases. Even if It's a basic WordPress, this offers you multiple for free teams. You run around all those free teams and you say this is not for me, this is not for me, this is not for me. But in the end everything could be good for you because you are in the best asset that belongs to you as a business are your customers, the database of customers and the ones that subscribe to you as a business. Either if they are newsletter subscribers or they are following you on Instagram or Facebook or other marketing channels. And if you are doing this very carefully in terms of I'm all the time looking and testing, I have a WordPress and I'm all the time seeing in analytics or I have a basic heat map implemented and I see that my customers, my visitors are rather on the home page, on the menu rather than on the footer in the moment. I would like to go further and to change the platform Tower. It's a bigger one. I would know all this and I would put on, on a business requirement document and that I'm saying that it's a trap because we are all the time aiming for something that we actually don't really need and we are rather in the position of knowing like all the time saying we know marketing and football and everybody has an opinion. They're all the time saying that I want to have this but actually we don't know need this. And what Christy was saying is that the basis, most of the platform are offering the basis and there are multiple framework that for the beginning you actually don't really need all those. And it's important the type of the business that you are heading to and you are aiming to if you have a very complex architecture for sure that the front end should sustain its architecture. If you have 100 products, it's important to have very nicely done designing and very good quality photos. 360 degrees and a very good checkout. And that's it.

This is a question out of my, you know, it's, it's not on the list of the questions I have in my mind right now, but how do you guys see the future of E commerce? The future of the. Especially the front end? You know, let's, let's leave the back end behind. You know, in the back. Let's talk about the front end of the stores. What do people want to see nowadays and what will they want to see in the near future?

Let's do an exercise because I discussed this during the past days and I wanted to have it recorded so I can have a look 10, 10 years from now. So my take on this is that exactly how the fashion giants are very few in the market. So there are five companies that lead the world and have all the brands, the fashion brands in the world. Right. And all of them are looking to headless commerce. So they would have. They will get rid of the pain of building the infrastructure, maintaining, having payments, having order management system, having all the services that can be provided by a headless platform platform. And they are looking more towards providing to the customer the best in class experience in front end. So they are looking on adapting, on doing crazy things on all the things that they can imagine and headless commerce can allow you to do that. And they invest heavily because they understand that by having the online as their main channel. What happened for example with Gap they declared more than 45% of their entire business came from online. So now is their main channel by far. Right. Because it's from a single source. Right. Although they have 55 from physical stories, from multiple channels, I would say.

So.

Because you have that, then you would become a company that will be focused on technology like Amazon. Right. So when you become, when those giants will become focused on technology, they won't become focused on building the actual platform, the actual ecosystem. They'll become focused on building experiences for the customers. So what will happen is that those giants will subscribe, will buy, will purchase services from a headless company, from a headless commerce and then they will build on top of those things. But to have at the end of the day, to have the same backend or to have the same infrastructure or to be able to replicate things without the pain of replicating things. So what's happening now is that giants of fashion of any industry worldwide have multiple instances of multiple platforms. Even though they try to unify around the world, it's almost impossible to do it with the traditional platforms. So what's happening is that they move towards this approach. So I want to have this recorded that I'll have a look ten years from now.

Alina, what do you want to have recorded in regards to the front end?

We are working together and we can share the recording.

This is great. So we have the business plan and business modeling, we have the strategy and development. We have figured out the market, let's say the Czech Republic, because you mentioned it earlier, Christy, we have the tech, the we've developed the front and back end of the store. We have chosen the right platform to use now the kind the time comes to figure out the team and the process flow in that team so that all the operational aspects are followed. Let's talk about the people which are required to run a store. In the beginnings, like how many people are needed, what kind of people at the start of the project, but also during the growth of the e commerce business. How do you pick the right people, how do you choose them and what departments should you look at?

Okay, I guess as the most important asset of the shop actually is the product. The core of each shop is the product. I guess it's really, really important. The best people should be in product brand management because they fit the product, they come with the suppliers and the rest is marketing and platform. So I guess if we take the basis, it's really important to have the right amount of people and the right skills on the product side. The marketing side can be internally or outsourced completely. And another thing which comes near the product is the platform, the technology behind. Because if you have A very good product but you don't have a very steady environment where to be put it and to be placed. It's really hard. I don't think that's at the beginning of launching a shop or after let's say one year. It's really important to have a huge team. It's important to have the right skills as said marketing products. The technology behind is usually outsourced and you are renting either using as a software, as a service and with the time to have the right approach in acquisition. And I don't know if this kind of stuff that actually for me are really important. Customer support is really important because this is actually the. The part which keeps the people inside. But this is also a quite tricky part because in most of the cases in online customer support is done fully online. In southeastern Europe, in Balkan we are used to put the hand on the phone and to talk to a real person and to be helped with our problems. So I would not say that this is not important. I would say that it's really really important. But it depends of the. The how. How large is the business and really important I think it's also the operational part. So you have to be really good in terms of operational excellence. So to. To be very careful looking at the right figures. So the figures are offering you the right amount of information that you had have to build your. Your future, your plans, your strategy and all the rest.

When you do hire E commerce specialists, what are your some of your favorite questions you're asking the potential employee of yours or what are you looking at in that process of hiring him or her?

I personally look at the people I have the tendency of asking more personal questions in order to see if it's fit it with like how many coffees are you drinking on a daily basis?

Like do you love cats more than dogs? And stuff like that. I know, I don't know if this is relevant in some way.

I guess the relevance comes from the personality because if you have the right person in front of you that doesn't have necessarily the right experience but has the mindset and proactive and wants to to learn this can be very exactly the drive can be a very good asset. So I would rather hire a person who is saying let's try comparing to a person who says I don't think we should be very careful on this or on that. So this doer attitude for me is really important. It used to be also when I was having a team in my former jobs, my previous jobs and even now if we are hiring for a client or for ourselves. For us it's really important to see the person behind and the drive of course cv, it's important all this kind of stuff. But I don't rely on case studies and on this kind of multiple interviews.

In order to Alex to go to the both parts of your question. I remember that all the business people that I've discussed with and I remember all the actions that I had also in the past was in, in the beginning to identify your core values, your core features from the business. So the core of your business, if the core of your business is to provide best in class services, then you would have to have impeccable customer service team. If your core is to have best in class products, then you'll need to focus a lot on acquisition. If you deliver the fastest, if you are like all the time delivering in 30 minutes and things like that, then you'd have to have very well designed logistics team and things like that. And then things that are out of your core you can externalize and you can work with teams from out of the company until that can become one of your core features. And then coming to the second question, I remember one interesting question that I always had for people that were coming to marketing positions. How do you create a campaign of, I don't know, communicating, selling products, A campaign like Black Friday? Not like Black Friday, but the campaign, let's say outside of Black Friday, but without giving a benefit, a price benefit to your customers. So you can't give a voucher, you can give a discount, you can't give anything like a gift or something for the next purchase. How do you do that?

So like be original.

Exactly. So then you see and then you understand if people know, if that person knows marketing or knows how to sell in discount and knows how to do discount campaigns. So things like that can be. And also when it comes to E Commerce manager, right. It's a matter of understanding what's behind E commerce. So when you ask, okay, what's behind an E commerce platform? If they say the platform, logistics acquisition, customer service and picking, packing and all of those things, they will understand. If they say okay, it's a website and marketing campaigns, they understand specifically those things. So it's also a matter of understanding the whole picture. Only part of the picture, the whole picture with the entire home around it. And.

Speaking of good employees and good brands, good companies, what were some of the more recent great experiences you had with E commerce brands? Like what struck you in a positive way while interacting with, with a Store, an online store or omnichannel store.

I can. I just placed an order today. I placed an order today. It was a test order on Assos and they actually wrote back in the order confirmation that look, we know you, you've bought several times from us and we'll keep the promise even if it's Brexit. So this was really nice. Even if was a test order, I wanted to test something on their checkout. I and I put it in the, in the basket. The nice thing, I said I'm gonna keep this because they were really nice. It was of course a template, but the fact and the way of doing this and they knew that I'm from Romania and they, I ordered multiple times. This was really nice because they adapted something which is a market situation, political, economic situation with the process of buying and delivering.

This is great, great tip. Anyway, ASOS is being given as, as an example all over the world. So it's, it's a great brand.

This happened today.

Yeah. I wanted to tell you about my experience in ordering a laptop on Emac. I was looking to be able to be shipped in the same day. So it was a laptop for my mother. I had free to the liberty to choose whatever brand, whatever. So I had a look on several specifications and then purchased it and have it delivered with a last mile delivery service from them. Tas. I placed the order and I think less than half an hour I received a phone call and I was ah, okay. So the order was processed. They were okay. The carrier was in front of my building and was asking, okay sir, I'm in front of your building. What's the number? The number for your interphone is 2, 0. That's like, man, it's impossible. 30 minutes after placing the order and you are in front of my building in Bucharest. That's a crazy to understand traffic jam.

And have you found out how they did it or what was.

Yes, they delivered. They deliver it from a showroom that is close to my home. So they have it and they ordered from that. I wouldn't say it's a coincidence because you can select on the website that you want to buy products that can be delivered with a last mile service in that sector in Bucharest. So you can have this if again you have the free tool or you have the luck to find products that you are looking for that can be delivered. So it was a service similar to Global, to Uber Eats or something like that. So there is a carrier delivering the laptop. But again, the experience and the surprise that I had and this Is something that I call over delivery and almost no one is doing that. So surprise the customer in a good way over deliver. So not only keeping your promise. So if they say that they are delivering the goods in two weeks and you as a customer accept that term and you are placing an order, it means that you accepted to that, to that two weeks term, but you have to respect it. So those guys said, okay, I'm going to deliver the goods in two hours. I was expecting more or less two hours, but after half an hour to receive the product. And this guy calling me, he was very. And. And I'm quite sure that he. He received the same reaction from everyone because he was like very. He was very. If he was playing with the tone of the voice, he was like, hello, hello, do you have the interference to zero and the carrier from Taz, Are you down? Of course, man, I'm down. I'm in front of the building. Of course. And he was like, very funny and trying to do.

We've sidetracked a little, a little bit with these questions from my side. Let's get back on the road. So let's talk about product portfolio and assortment of products on the short and on the long term. At what point should you integrate your store with marketplaces, for example?

At the beginning.

Straight from the beginning, right.

It's another delivery channel. So for example, what I was telling to the part to my partners, they can integrate with marketplaces and they can generate as much revenue from there as possible. Because at the end of the day, it's another channel is like not going with marketplaces is like not going on Facebook, on Google Ads and things like that. So if you go there, there is one single big risk, right. So that marketplace will close the door, will add another, so another competitor will come. And I don't know, there are a lot of things that can happen, right? So what you have to pay attention to is that revenue from the marketplace to not destabilize you as a business. So if tomorrow, if you can live without the revenue from the marketplace, if the marketplace will close, so if that revenue stream will close and you can leave, the business can leave without that, then it means that you are not in danger and you can sell as much as possible.

But if you have a very profit margin.

Exactly. So if your revenue is. If your business is threatened by that, then you have to do everything in order to not be dependent on that, but not close that channel. So I would say go and sell to other marketplaces, to other channels, so not to have your Eggs in a single basket. And if your margin cannot, Cannot comfort you to, to, to. To sell on that marketplace, you, you can have a higher price than the marketplace itself or than any other sellers. And you can sell on out of stock of those other sellers. So maybe they will be, there will be a point when they will be out of stock and you, you can, you can sell your products as well. So it all depends, right at what.

Things do you look at when choosing the perfect market? There are plenty of marketplaces already on, on the markets here in Central and Eastern Europe.

So the marketplace that generates revenue for you. So that's, that's an easy answer. That's the perfect marketplace.

Alina, anything to add?

Just no. And I totally agree with what Chrissy said and not putting all the eggs in the same basket. And it's important also. So if you have the time, the skills and the people to do this, to do a bit of different assortment on channel and another type of assortment, another channel, because the people are having the tendency of, if they find you on a marketplace, they go on your website to see if you have the prices down and if you keep your prices at the same level, but you change the assortment. So I have on, let's say an emag 10 pair of shoes at this price, but on my website I have them at a lower price or on emag I have the higher price and. Or the other way around for my customer. It's important to see that if I'm looking for something, I can buy either from you, either from you, but from the marketplace. So keeping the same assortment on all the platforms and on all the channels at the same price. I guess it's not the right strategy. But again, this depends a lot on the resources that you have. Because for instance, if you lack, if you are short in resources and you don't have the people to do all these operations, you have to stick to what's the best for you.

What if you as a business want to, to become a marketplace for other players, what steps should you take then.

Then it starts.

Let's, let's leave, Alina, because you, you always answer first.

I wanted to, I wanted Christie actually, because he has the platform now when.

I was being a gentleman. Come on.

No, no, no, no. I was just trying to say that then you really start doing business. So then it's a game changer for you. I was looking on a graph from our platform. So how businesses evolve. If they are not a marketplace so they have a steady revenue stream, they double, triple in size. So they evolve like very linear, let's say. And when they open a marketplace in the first year, they have lower revenue in like by statistic than the ones that are focusing on only their business. And then after the second year they explode. So if you have a look and so if you see the graph, it's mind blowing. So it's something like the.

You don't even have to to. To be very, very big in order to, to build a marketplace. You just have to.

Exactly.

To have the right selection of products right. Or the right niche.

It doesn't, it isn't a game of. For example, people have this wrong impression of needing when they will. They are thinking of building a marketplace. They think of, okay, you need to have the resources of Amazon, of I don't know, Alibaba or Imag or whatever. So it isn't about that. If you have a software as a service platform, if you think on starting with an MVP with testing the water. So it's the same as in any other business. If you are selling chairs, for example, if you are the best in class in selling chairs, even if you have all the money in the world and all the people in the world as buyers, the best buyers in the world, you cannot buy all the products in the world. And if you buy them, then you have a huge risk of stock, of logistics, of processing goods, of cash flow and all the things that come with a big buying strategy. If you partner with some guys that maybe they have chairs that are complementary to yours, maybe they have couch, maybe they have offices and they did that for the entire life and they are the best in class of doing that and they are the, they are a desired brand. Then you could address the needs of your customers because what customers are looking to, they are looking to go to have a single destination for shopping. That's why malls were invented. Because all of us, we all want to have a single destination of shopping. So when looking on online as well, that's why Amazon is investing heavily in marketplace. That's why any other business is investing heavily because they cannot buy all the products in the world. And also because it's not only about that, even though you have the money, it's about knowing the products. It's about knowing what to do with the products. It's about knowing how to service those products, how to deliver those products to the customers. Because it's also about storing them in the warehouse. It's about transporting them, it's about picking them, it's about packing all of those goods. So it's about all of those things. When you have a partner that is selling on your marketplace, you can address the needs of your customer. Also this seller can attract customers for their products and customers can buy yours as well. And it's a win, win game if you do it correctly.

Alina, anything to add on logistics specifically because Christy touched a little bit on.

Yeah, I wanted to add something on the marketplace. I guess not every business should open, should transform into a marketplace because I'm selling cherries and I would like to sell maybe tomatoes if it's maybe the right approach. But if my name, like my brand name of the cherry seller is not a very big name and I don't have huge, a huge customer database, I don't know why should I invest into putting money into a platform that would be built on an architecture that would allow to others to sell. Amazon made this because they, they were Amazon, they were selling books, they are selling software. Actually this is not on the B2C market but they didn't know how to source all the other stuff, stuff that actually they are selling now and that's why they've built the platform. But it's, I guess it's not for everybody, it's for the big brands, brand names and for the ones which are having really the power, the marketing power of attracting visitors on the website and in order to diversify the portfolio.

I'm always saying that it's a natural evolution of a business to become a marketplace because when you reach a point for when you understand the needs of your customer, when you understand how to do business, when you understand the power of collaboration, then it's a natural way to evolve. And I saw it multiple, multiple times. So they, it's for example how we built the marketplace platform and marketplace functionalities in Vitex. It was the needs of our customers that were selling, that were E commerce businesses. It wasn't something that we woke up and say okay, we really need to do that. No, it was the needs of our customers. And by doing that, by understanding the needs of your customers and by understanding you as a retailer or e commerce the needs of your customers, you will understand that you cannot address all of those needs. Agree you should find the right period in time when doing that. But again, it's not something that it's untouchable, it's something that you shouldn't think of. Because I found out that there are a lot of big, big companies that think that they cannot sustain a business model like that, that it's almost impossible, that it's something but it comes from the lack of knowledge. It doesn't come from knowing what's behind it. Because if they know what's behind it, then then they will understand that they can become themselves. And coming to, to the question, to your question regarding logistics, Alex, I'd say that there are a lot of things that are specific to logistics. I remember when I started in the online world in 2007, it was a totally different landscape. So you had no idea how to, at least in Romania, you had no idea how to pack products, how to, how to deliver. If you would need to have multiple carriers. What about same day delivery? In how many days the carrier were delivering? I don't know, all sorts of things that now seems natural for us. Informing the customer where the package is. Even for example, now there are a lot of brands that connect the carrier with the person that is receiving the goods. So they are putting in contact. For example, we have a lot of examples in Latin America and we even acquired the company last year that did this service for companies that were delivering with their fleet of cars. So imagine that I'm selling furniture and I'm having my own fleet of cars. So I'm going to Alex home to deliver a couch and he's not answering, but still I'm going there because maybe it's the wrong phone number and I don't know if there is any other issue, but I'm not encountering Alex. So I lose a lot of time, I lose a lot of guests, I lose a lot of time in traffic. So when this company that we acquired started to communicate and put the, put the driver in contact with Alex, so Alex would know where is the driver, so he can plan in advance when to arrive at home. And also the driver would know that Alex is at home or not and can read out then brands saved a lot of money. So those type of things were out of the discussion in 2007. So things evolved a lot. And now we are talking about drone deliveries or. I don't know, do you believe in.

Drone deliveries for sure now? I mean, isn't it a marketing stunt in your opinion?

Maybe for the moment, yes. But I saw a lot of examples, for example, in Africa, where they don't have that many cables in the cities because it unfortunately the evolution of the economical evolution started a bit late. So all the cables are underground. So they are delivering, for example, all sorts of goods that are necessary for people, maybe people that are ill, maybe things like. Like that. So they are delivering by drones. So it doesn't necessarily have to Be a.

But not a mass. I don't know.

I don't know if it is something that can be mass market. But if you are thinking on streets, why not having drones and having streets. So we. We kind of need to be crazy in order to think that a street can accommodate all the drivers and not the sky. You.

You know why? Because there will be young people with slingshots shooting the drones. I tell you why that is. Why give us some, some some best practices examples on. On logistics. Anything from packaging to surprise in in the boxes to. To bonuses to anything, you know, to speed up delivery.

I guess the addition what on what Christy said is also something which is really nice nowadays. It's what is so called drop shipment because this is part of the logistics story and also the marketplace story. You can enrich your portfolio just by working with multiple suppliers link to your platform and the logistics should be either on your side, either on their side. And the customer is receiving not necessarily one package but multiple packages and you in instantly you can fit several needs that he might have. And I guess you asked me on something related package.

Yeah, for packaging. But let's touch on one of the. The pain points of the companies in E commerce. Refunds, refunds and returns. This is unpleasant. But. But they're real.

It depends. For fashion it's an assumed thing that you will have a lot of returns because fashion market is quite a volatile market. You like something today it's on a discount, tomorrow it's emotional connect. It's everything that you do. On buying something related to fashion, 80% it's emotional connected. Can you hear me? I guess it was yes. In Zalando 10 years ago. They were assuming a rate of return when they launched 90 because they said if you don't.

If you have some issues on the.

Microphone, I think now it's better.

Yes.

In Zalando they were assuming a 90% return rate when they launched because they said okay, even if my customer would buy something from my side, I will offer the possibility of changing. And this is something that not many businesses are doing currently. But the change part is. Is really a nice feature that you can. You can emphasize the return rate in Romania. In fashion, I guess it's pretty steady. I know that the average is around 40% but this is something that is all the time, most of the times in favor of the customer. Because if I'm buying a pair of shoes, I'm buying in multiple sizes and I'm returning one and I'm keeping the other. The other thing it's something that for a business like, I don't know, Altex or Emag or an ITC business would be bankruptcy because 40% is not something that they would afford. But the ITNC products are not volatile products. The decision of buying something you take in a longer period of time and that's why the return rate is quite lower there because the men's are buying the ITNC and not the women.

Christy, if you want to touch on this, on refunds and returns especially.

I would say that the most important thing is to make the life easy for the customer. So you have to have a very simple flow of returning the products, a very easy to anticipate way of giving them the money back. Very simple way for them to deliver the goods so to be able to send the carrier for them so they will not need to call the carrier themselves. So to allow them the possibility to drop the returns to some fixed points on their way so they will not be dependent on when the carrier is coming. Especially because if you are doing that and you are encouraging those things, then the customer can return, can return to your store, not can return your products. So if they are able to return their products, the products that they purchased and they don't need it, then they will come back to your store. If they are not able or you block them or you make their life a hell when returning products, then they will not come back to your store and you are going to lose them. And for what? For 5% that will be the cost from the value of the product, the cost for you to facilitate the return for them. So it's a stupid thing that most of the companies are doing. But still again it's very very important to make it easy for customers to return the products. Yeah.

So one last subject I wanted to touch with you guys. It's a very important one. It's like one of the hottest topics in e commerce industry. Let's talk about customer support now and in the future an up to date customer support. Let's talk about online, offline, different channels, live chat. Let's touch on the best practices call reasons. Perhaps what are the most often reasons people are calling the companies the commerce companies. And also let's touch on average hold time. There's plenty of things here.

I guess the most used thing to call the shop is to return or to ask where my order is. I guess these are the all the most of the 90% of the cases. That's why the customers are calling. And what we were touching a bit earlier is that in most of the cases, if the online shop is pretty end to end online based, they are not offering quite a lot of customer support. Online customer support. Everything is done fully automated and everything related to your order. You can find what Christy was saying. You know where your order is, you can track, you can see where the courier and when is coming and you have all sorts of information. In Romania, as already said, we are quite used of calling and asking where my order is. But this depends quite a lot also on the age that you are, the range of the age that you are. People are having the tendency of young people of not putting the hand on the phone or rather on WhatsApp on Facebook. And that's why I guess most of the businesses should enhance and should enable these channels because they are the most most used for the generation that started to buy more and more.

My two cents here is that I'm seeing more and more businesses investing a lot in Q and A. So a lot of the needs of the customers can be addressed through Q and A. Because what are customers asking for? Information on product, information on return, information on orders, information on whatever. So if you have a very good order management system that you are always informing the customer or they can easily access the status of their orders, then they will not call you. If you have a very good Q and A and people and customers can find answers in advance to their questions without calling you, they don't want to call you, don't want to think that they want to call you. So they, they don't never. So if you put the information there, then they are very happy. If they are getting used to ask questions and there are other customers that are answering, then you would have those customers that advocates and us like working for you. Right? Because they are answering the questions to other customers instead of you answering the question. And also by providing support and by providing a live interaction with the customers. For example, is this great, is this big trend right now of live purchases of life support and anything that is related to live shopping, then you would answer to a lot of the questions that the customer have because even though you add all those information on the product page, in the footer, in the return policy warranty and everything that is happening, if you do a live shopping session, then you'd have a lot of customers asking the questions and you giving the answer to everyone. So you have a couple of people asking some questions and you are answering in front of everyone so you wouldn't have to repeat the same thing. What's happening now in call center is that you are repeating over and over almost the same thing. I build call center teams, I build those type of protocols ivrs for calls for the call center hub and all of those, let's say protocols. And all the time what people were doing either taking some information from a system and telling them you would have to remove that because that's not a job a human should do either. Giving the same information over and over, that's like is insane. It's not possible to give the same information over and over.

There are bots already so they can answer through chat, live chat.

So there's no yes, but it's exactly of course and they will serve some needs but without having this human touch. So I'm betting more towards and I'm moving more towards Q and A and towards having a live interaction with multiple customers at once than to have a bot to answer in the same way to all the customers. So I'm more towards that.

So guys, we could talk like days to no end about commerce and e commerce and the future and everything like that. But I don't want to end it abruptly. I have another question on top of of my mind right now. If you were to start. If you two guys were to start a commerce business right now, what would you sell? How and where? And they didn't prepare for this question.

I.

Should I?

Sure please.

I just closed one last week.

Why did you learn from that?

I learned that I don't have enough time. I was. I was doing. I was doing some handcrafts for years ago and I was doing for some occasions, seasonal occasion some candles and I was doing also I was preparing to do also some workshops and all the rest. But in 2020 I didn't had enough time. I. I guess I've done only once or two times and I was on Shopify. I built the shop by myself and making photos with the box, the black box here. So everything end to end. I've done completely from making pictures for putting online for building the checkout for translating and all the rest. And I had to close because I. I will keep only the Facebook page and the Instagram and if I will ever want to buy, I never want to open I will open it again. But if I. If I would like to open a new one I would start selling even if it's really hard fruits. So this kind of vegetables I would like to make. I actually I'm still aiming of making. I have a very dear friend that is passionate about agriculture and we want I. I was thinking of helping of putting a Platform that would integrate several suppliers and distributing to end customer the whole package.

Not so you can definitely definitely talk with Vitex on this one as the as your friend will grow the business. And as for your lack of time, this is because Digital Kitchen I believe it's it's. It's gathering more and more clients and trust so you don't have enough time for your own business.

For us e commerce is is booming because of the pandemic time. So it's not something nice for the others. For nice is a is a nice advantage. But I guess this will keep the trend. Even when this thing will will stop people will will still go online and will buy online. And for some of the things for sure it's all the time nice thing to go to shopping center or to a mall. It's a social thing. But for the other stuff like commodity and really fast ghost you'll order online.

If I do it Alex I would encourage everyone to open on a niche on any niche. So it doesn't matter. But if I would do it tomorrow I would go on a niche of food maybe something similar to what Alina said. Mainly because in in the market that we are now in in the entire I would say in the entire Europe not only in Central and Eastern Europe, the online commerce for food is at its early beginning and I would start with food that are that don't need special temperature and special delivery means because you would have to be very careful when you are talking about vegetables, you are talking about fruits, you are talking about grocery and the transportation. The shipping is very delicate let's say. So I would look on niche on specific categories but on food again because maybe something also connected with what Alina said the pandemic brought a lot of new customers in and most of those customers have this need of eating right.

And breathing as well and everything.

Exactly Exactly. So everyone needs to eat. So if you are doing everything right, delivering right presenting the food right doing the call center everything that we talked in this episode. If you are doing everything right and you are bringing people and people stay loyal and stay and you you manage to keep people and you manage to have a very good retention a very good to to have the customer the customer lifetime value to have always of your as your north it will it will bring you very close to it will bring success. So it's that's my bet.

Let's let's end this podcast with this word success. This has been great guys. Hope that all you attendees have found several information that you you could use for your own businesses. Thank you so much for your time and I'll let the lovely Juliana Jackson to take it from here from episode 11 thank you again.

This podcast was brought to you by Vitex. Vitex is the first and only fully integrated e commerce marketplace and OMS solution that offers fastest time to revenue and no upgrades ever. So go ahead check them out. Vtex.com.