In this follow up interview with Zx Ventures eRetail Director for Europe, Vladimir Sushko, we gain further insight on the topic and learn how his team is collaborating with partners to deliver mutually valuable customer experiences.
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Vladimir, can you describe your role within the Zx Ventures team?
I look after our partnership with retailers selling beer online across Europe. Our team’s focus is accelerating online growth by empowering our partners with tools and resources in ways that are beneficial and profitable for everyone.
What are the main current challenges as you see them for the beer category online ?
Profitability is definitely one of big constraints both for online grocery in general and beer in specific. Margins can be slim overall as there is lot to explore and implement for the online grocery industry to operate in the most efficient way. For categories where goods are quite heavy and bulky this may be even more challenging. But in a way it’s a healthy conflict, because in contrast, consumers really want bulky goods delivered to their home.
Overall there are three key challenges to profitability online. There’s the cost of consumer acquisition compared to lifetime customer value across all channels that one needs to manage tightly over time. Then there’s the product mix challenge we touched upon, with the logistical challenges that come with the heavier items. And possibly the biggest challenges are the costs that come with last mile delivery.
We heard from our panelists in Brussels, how the modern challenge is to refine all the data they can capture but a lot of organisations don’t really know where to begin. What are you learning around this in your team?
There’s a lot of data in the world and you have to be clear on your focus and objectives. In eRetail we are working with aggregated anonymized data that we receive from our retail partners as we don’t have direct interaction with shopper because actual purchases happen at partner web-sites. As such our first step is being clear with these partners on why we need the data, which data we need and most importantly the value for them in sharing it with us.
We also need to accumulate and synthesise lots of different data sources from our partners, and their own various partners, to be able to meaningfully work with it. And in doing that we could be working with some really advanced platforms, or equally receiving files via email so we’re learning lots there on how to build efficiency into the process.
And we’re always exploring how we actually connect different sources of data, for example how we compare sales data with the online execution metrics, such as share of search, image compliance etc. Or how we might benchmark it against aggregated behavioural data such asclicks, and adds to basket.
Data literacy must be becoming one of the most important competencies for any marketing-led organisation. Do you do much to educate your partners around it?
First of all, everyone, us including, is learning how to use at as data available and tools to work with it are constantly changing. Levels of competency can vary across our partners, but all agree on the importance of it. For me the question is less about whether everyone is up to speed, but rather what value they can get from sharing it with us. So our conversations with them are often focused on showing them how they can benefit from sharing different types of data with us and how we can help them with the analysis of data they have.
What are some good examples of the kinds of data you’re most interested in, and where’s its coming from collaboratively?
Given our mission for eRetail in Europe is accelerating online growth, we’re really keen to understand the sales progression not only for AB InBev sales but for category overall, so we can recommend improvements when we need to. So this kind of sales data from partners is the base level we need.
Then there are insights that we can get out of matching this data with other sources, for example, for some of our partners we combined sales data and some of the consumer mission insights, that we have from separate online beer shopper studies that we run, to advise on specific promotional mechanics which are showing quite positive results for us and partners which is the definitely the goal for partnerships.
Another thing that we are asking partners to share with us is a certain aggregated behavioural data. For example, then we are able to see the list of the search requests for the category and conversions for those requests we are able to recommend to add some changes in search results to accommodate common mis-spells, provide right products for broader category requests such as the “Mexican beer” or even drive sales by recommending to add more best sellers on category level. Also, some of our key partners are sharing with us anonymous customer segments, that we can use for offsite retargeting to be able to increase the conversions for them.
How quick is this test and learn cycle typically within these partnerships?
It can vary. If it is something simple, like finding a correlation between a couple of metrics (something like price per liter versus projected sales) then this is something that we can in hours rather than in days.
Then there are some longer term projects. For example, with one of our partners, we’ve been refreshing the online craft beer category using the data we have on craft beer preferences and profiles in the UK, as well as some consumer behaviour data the partner shared with us. As it is impacted site taxonomy and resulted in some other UX changes this project took a few months to fully implement.
Our philosophy is to build something scrappy as quickly as possible that we can then iterate from, and increase the scale and impact of what we see working.
Are you finding that is there a change in the mindset and willingness from partners when it comes to sharing data?
This is definitely changes but it’s a gradual process, not a fast one. Once the benefits of sharing are seen, you’re more open to sharing more. So it’s in small steps.
One mistake that we are trying to avoid in our business, is asking partners to share everything immediately with us. We’re trying to show that there should be purpose and objectives behind sharing, and with clear customer benefits. Not sharing for the sake of sharing.
Is there anything that you’re finding interesting at the minute about the way your customers are behaving?
I think specifically for the online e-com channel what we’re seeing a massive move from desktop to mobile which considerably changes the touch points and where the ‘adds to basket’ happens.
And in the broader context, the expectation for convenience just keeps increasing. While on one hand some people are quite cautious about sharing data, on the other they expect what they want to be delivered to them at a very high standard. The shopper missions are becoming so fluid and numerous too, based on a huge variety of different situations.
For example, some people are embracing the convenience of the home delivery, however some people expect to make the delivery more personalized, they want to have local produce in a big hypermarket’s general assortment. Some people want a super fast delivery, they don’t want to go to the convenience store anymore, they want the beer delivered to them as fast as it would take them to walk to that convenience store.
And the future Vladimir. Where is it all going?
It’s hard to predict the end game, but I believe we should come to the point of balance between retailers, manufacturers and customers interests.
And while it’s hard to say how exactly that balance would be achieved, I think that the key to success is innovative solutions that would make the online channel overall more commercially effective so that there is more value to be shared between retailers, manufactures and shoppers.
Obviously some retailers may try to explain to shoppers the value they get from online shopping so they accept that this value comes at a cost. But, honestly, looking at all the trends and all the developments and highly competitive environment that we see, I would rather bet on the technological breakthrough rather than the moving costs to shopper.