In this episode of Ecommerce Experts Talk, Marc Bishop interviewed Albert VIta, the man who is the inventor of an online hardware shopping store. Albert reveals how he got inspired, what were the initial challenges he faced and how he uses his digital marketing strategies to upkeep his Ecommerce business. Watch now for some profound insights.
Well, hello to everybody. Hello, Marc. And hello, everyone, tuning in from Atlanta, Georgia. We’re doing well. This summer is finally starting to cool down a little bit, but we’re doing awesome. Thank you for having me today.
Sure. So keeping in mind, you know, the focus of your podcast is for the audience. So my background is in management consulting with McKinsey and IBM and Deloitte Retail in particular was the industry sector that I’ve spent most of my career. And about eight years ago I started with Home Depot and started as a director of merchandizing strategies and omnichannel strategy and emerging technology. And so the role that I had at Home Depot certainly was thinking through about not only retail, but home improvement specifically, and certainly thinking through about digital, the digital experience. How does that marry up with our physical stores? Right. And as you know, Home Depot, it’s a national brand with 2300 stores across the country. It’s $151 billion company. It’s Fortune 20. Right. And yet there are so many unique e-commerce dynamics to home improvement, everything from just cube size. We’re talking about big items, refrigerators, countertops, water heaters. So we’re not shipping sweaters and belts, you know. So there’s some unique dynamics for cube size. And then even by product customer segmentation, like within the home improvement world. Marc, there’s two primary customer segments, the homeowner or what we would call the DIY and then as well as the professional contractor.
The pro and so are sometimes I referred to as B to B or A, B to C. But either way, each customer segment certainly has different retail buying habits and certainly that translates to online ecommerce buying habits. And really the third sort of influence here are just the product categories, right? You know, if you take a company like a Lowe’s or a depot with 15 or so major merchandizing departments across lumber, plumbing, appliances, garden. And the reality is, is that each one of these product segments is different. And so certainly that has to translate into a digital experience as well. You don’t buy a refrigerator or shop for refrigerators the same way that you shop for lawn fertilizer or online or shop or paint online or lumber online. So I’m certainly some product differences right there, but I’m excited to get into it today.
Yeah, you know, I think it always is going to start with a passion for just some basics. You know, like I have a passion for retail overall. Right. And so as I mentioned before, even before home improvement, I spent 15 years as a consultant for companies like Walmart, Target and CVS and Macy’s. And as a consultant, you get in deep with really the omni channel aspects of retail. And then so certainly what I got to Home Depot, you know, a lot of that retail background carried over. And so now when I left Home Depot within the past year or so, it was really thinking through around how are we going to solve for friction? Friction that is in the existing customer journey. Right. And then also to I mean, as a startup, you don’t have infinite funding or, you know, you don’t have infinite resources. And so you have to kind of be strategic around where you’re going to place your bets in terms of the money and time and energy and focus that you have. So certainly for me, I wake up every day passionate about that intersection of improvement, retail and an emerging technology. And really, for me, my definition of digital goes even beyond e-commerce. You know, as you start to think through what are some of the impacts of the AI and the metaverse, but certainly how do you improve the digital experience overall, but really staying firmly grounded in and just the pain points? I just call it friction, right? But at the end of the day, this is an industry that’s just ripe for improvement, ripe for disruption. And so that’s where I live right now.
So, you know, I mean.
Yeah, sure. I would love an informal survey of your audience of who knows who Bob Vila even is. Correct. So I’ll be curious. I you know, it looks.
Hahaha, and so there’s no question, right. As I mentioned before you, even before you get to the technology, e-commerce or digital or disruption, I’m firmly grounded on pain points and really that customer experience and let’s be honest, right, like as I mentioned before, there’s two primary customer segments, the homeowner and the professional contractor. You know, the reality is the professional contractor, right? They know what they’re doing. They’re experts. They know where to go, they know what to buy or the quantities that they need. And really, the number one point for a pro is really quantity on hand, right. And speed and efficiency. But really, when it comes to the homeowner side, it’s a whole different type of friction. The friction that I’ve seen certainly in my experience with Home Depot. But, you know, even today, education. Right. It is daunting. Right. Like, if you think about the accelerated home purchase pattern for millennials, that was really accelerated because of COVID. Right. There was just a startling article in USA Today earlier this year where the headline just floored me and made me stop in my tracks. The headline read 84% of new first-time young homebuyers regret the purchase of buying a new home. And I thought 84%. Now that’s a lot. So I was reading through the article and the number one regret or the number one concern for these young homeowners is underestimating the cost and the intensity of what it takes to do home maintenance. And so really enter in ecommerce, right? So then you start with that pain point and then how could e-commerce or digital or mobile solve for that pain point? Right. And so and look, there even, you know, again, coming from big box, you know, I know maybe that this isn’t entirely unbiased, but if you take a step back, right. And for those listening, imagine your local Lowe’s or your local Home Depot or your Menards, depending where you are in the country. You know, these are working warehouse stores, 140,000 under 50,000 square feet. I mean, that’s.
Exactly right. I mean, that’s about three football fields, three NFL football fields. And so as a customer and you’re looking around for this widget, right? I don’t even know what this widgets called. Right. But I know it fell off of my faucet. So look, the at the end of the day, there’s a an important need for education and there’s a certain the needs of a a younger a first time homeowner. It’s a lot different than an experienced DIY or certainly certainly pro. But my philosophy, Mark, always is, is start with the customer, start with the friction and the we start with the data. Right. And really it’s always around how can technology help solve for that? And so at the end of the day, I’m much more passionate about customer problems and solving friction than I ever am about the specific technology or platforms or payment methods or any of the specific disruptive tech that’s out there. Certainly that has a role to play, but it’s just my philosophy. I’m just firmly grounded in that human side. Before we get to the tech side.
You know, at the end of the day, it’s as I mentioned before, there are different levels of knowledge within home improvement as well. Right. So what? If I could just take a moment and you’ve tapped into a really key point that I think e-commerce is uniquely helpful with, which is education, right. And what’s happened in home improvement today is just what I call this exponential explosion of decisions that a customer has to make. Right. So even when you take a simple concept like paint, so let’s say, for example, I’m looking behind you, that’s a mirror behind me. Let’s say that a homeowner wants to paint their office or their living if they want to paint something. Right. You get to the home improvement store. Right. And it turns out right that first of all, just selecting color is a big point of friction. Right. Because just.
Exactly. So once you select the color, which brand of paint is thinking Valspar or Peachy or Bear, right. Or Benjamin Moore. Right. Or sure. I don’t know the differences. Right. And then. Okay, well, let’s say I want to bear paint. Well, then the next decision you have is sheen. There’s about ten different sheens, flat, matte, eggshell. Right. You know, and then what? I don’t know. What’s the right sheen?
About this excellent explosion of decisions that a customer has to make. It’s not easy. That’s why the average number of trips to a hardware store when you’re working on a paint project is six I mean, six trips to the store. When you’re doing a paint project, you go to the first one to pick your color, you go to the second one, finalize the color, and maybe get a sample. The third trip is to buy your paint before chip. You forgot your rollers or whatever it is to run out your spackle.
And, you know, it’s.
All of the top stuff. Right. And so that, you know, the reality is, is that like six trips to the store, that’s what I would call friction. Right. And so, again, thinking through subscription models of thinking through, hey, is there an opportunity here to really just like I said before, work start with the customer pain point and work backwards and say, hey, you know, like let us do some of the thinking for you. Let us tell you what you need, right? Even though you think you don’t need masking tape and tarp. Right? You know, you think you don’t need four types of brushes. Trust me, you do. Right. Whether it’s trim a brush or a roller brush or a ceiling brush. Just let us know.
Yeah. You know, and, and like I said before, you know, my vision for where e-commerce and digital transformation is going, I mean, there is a long runway for this entire industry. Right. And let’s go beyond that. But really what we’ve been talking about now is e-commerce as a means to deliver products. Right. But let’s take a step back and say how can e-commerce really deliver ten X the value to the customer beyond just delivering the product? Right. Because obviously it’s tablespoons, right? Okay. Like the old ablaze in order of getting to the house, I get it right. But that’s basics, right. But what are the other ways that we can create value through e-commerce, through technology, and even on top of delivery of a product? So you start thinking about other value adding strategies from education as well as potentially thinking through about how you might be able save or even ongoing maintenance. Right. Because the average home in the U.S. today is 37 years old, some 40 years old. The average home. Right. So in these homes, Marc, they need help. I mean, just like anything else, there’s TLC needed externally to the home, internally in front of the walls, behind the walls. There’s just a lot of maintenance. And I and I just I really think that this is an environment it’s ripe with. Friction with problems, with opportunities for technology to come in and reinvent or better hope.
Exactly. Exactly right. But was. Yeah. I mean, home improvement overall. I mean, like, if you take a step broader and you start thinking about some of the other disruptive technology trends that are happening now, things like, you know, I and how that might be able to assist you with home maintenance as a homeowner and helping you manage some of that data and certainly the growing trend of smart home. Right. Like everyone’s got like Alexa’s and Googles and doorbells and stuff that we’re the tip of the iceberg. Marc In terms of IoT. And so really you start to think about like when everything in your home starts to get connected and that data that it generates. Right. And then how can technology, commerce even come into play that way? So and there’s certainly a long runway of emerging technology. And we’ll talk about the metaverse already and what that’s going to mean AR VR, though. So and then, of course, the home improvement retailers have to adapt accordingly, right? The Loses and then the Bose and Acer and Neighborhood all have to adapt accordingly as well.
Oh, my gosh. Well, I’m going to I’m going to lean into my camera, Mark, and I’m going to tell you and your audience as like just the truth. I would say that supply chain concerns, increasing freight is my number one issue. And I mean, like for me, products and the industry knowledge, I mean, that’s the easy part. That’s my comfort zone. But really, how do you navigate the supply chain and the increasing costs right now? Originally it was like thinking buy versus build. So eventually in a shop that I created was on Shopify, which until itself has a few discounts for supply chain. But even with any kind of discounts that that platform provides, I mean, just straight up UPS or FedEx or yeah, just the increased cost. I mean, it’s so margin.
I mean, like the increasing supply chain costs are so margin destructive. I mean, it’s true, right? I mean, like there’s just a famous quote by the CFO of home. Well, Richard McFarland. And he talked about it and he said, you know, the online order for Home Depot was roughly 70% more profitable when Home Depot can ship its order to a store and then have the customer like buy online, pick it up in the store. Right versus HomeDepot.com shipping directly to your house. Right. You know, and that makes complete sense, right? Because from a retailer perspective, you’re driving to your stores everyday anyway. So to add a bonus order, there’s like minimal, cost, you know, to get it to the store that way and especially if the customer picks it up. Right. But that that door to door and just the classic last mile, I mean, it’s it’s in my opinion, it has not yet been solved. Right. And to me that when even industry wise, when you see large e-commerce companies, whether it’s a depot or an Amazon or a Lowe’s, and they’re spending billions on shipping containers and their own air transportation and really building out their own supply chain. It makes complete sense to me, right. Because, you know, now, you know, with all due respect to the existing, you know, like supplies and sort of like logistics and even just like a yes or a FedEx, with all due respect, it’s just so margin destructive. So now that being said, like we said that then you throw in the unique characteristics of home improvement, right? Have the large cube are types of items, right? And you can’t a lot of the times, you know, you as much as you can. And even with being like strategic about supply chain class, I just there’s an questionably the number one sort of headwind for growth that I would say for e-commerce brands and sort of is certainly around supply chain. Right. And I would I would argue that most founders of e-commerce brands are like me, where there’s, hey, look, the, you know, apparel or makeup or helm improvement. I mean, that’s the comfort zone. And you’re easy, you know, easy talking about vision, you know what I mean? And where are we going and work and. Become. But the devil’s in the details. And one of those details is just the increasing supply chain costs. It’s just certainly, for me, the most sobering lesson that I’ve learned, you know, certainly in a B2C entrepreneurial journey is around supply chain and how critical it is that you cannot be an afterthought. Right. So many red hots.
So I know I prefer.
Well, you know, at the end of the day, like I said before, you know, my vision for anything entrepreneurial that I’m doing is really thinking about the industry overall. Right. Because like I said before, I really do believe that getting a customer, the product right customer placed in order ends up at their front door. That’s table six. Right? So at the end of the day, the benchmark when I’m thinking about is and really the question that I wake up thinking about is how do we create Anixter value digitally, right? Or through disruptive technology or emerging technology on top of just delivering product. Right? And so that’s why for me, the vision here is, is certainly starting off with the sort of door-to-door sort of product, but really thinking through where, where and how can we create more value for this industry and the manufacturers and the retailers and the customers in this industry above and beyond delivery of the product.
Well, yes, but that’s table stakes, right? You know, reality is it’s infinite. I mean, it’s infinite that you can get you know, anyone can buy a you know, like a garden gloves and, you know, fertilizer and shovels anywhere. Right. But I’m saying that. So, obviously, offering a product at the lowest price. And again, financial benefits. Right. I guess at the end of the day, I would define value in four or five different ways, certainly economic value. And so like, hey, we’re going to offer it at a competitive price. So just that’s value, but time, energy. Right, effort. Right, right.
Well, the reality is, is that home minutes, you know, is a year round activity. It’s not a one and done. Right. So, I mean, you know, springtime, there’s specific needs around, hey, like thinning out gutters or maybe doing some weather stripping summer rolls around. You have to be thinking about some pest control and some h that right fall rolls around. You start thinking about maybe some give or take, you know, and maybe some flooring in and then winter rolls around, right? Then you start thinking about as well. They’re just unique needs from a from a home a year round. And so decision fatigue, you know, certainly from a homeowner perspective is not just for home improvement, but as a customer. Right. And so the big I’ll remember, like how many, you know Marc, do you happen to know what size of air filter your H five uses right now. Right over for example like when was going to take it.
Your water filter in your fridge, you know. Right. You know.
Before creating value for the customer, solving for friction. Right. And we define value in a lot of ways beyond price and then but certainly thinking also longer term, right. Because look, the reality is, is that the homes are getting smarter. Right. And beyond your ring doorbell and Alexa Speaker. Right. When what happens when your front door is smart. You know, when your lawnmowers can text you your oven’s like even right now, right? Your barbecue will text you. Right. Hey, Albert, your hamburger is precisely the medium rare temperature that you want. You know what I mean? Like, your barbecue grills will text you, and.
All exactly right. Oh, no, I have no idea. Kroger or Publix or do I need orange juice? I could have. There’s internal cameras into your fridge, right. I can show you inside. I’m like, Oh, I think I’m at the grocery store. I could look inside my fridge. That’s the truth. So I just think that as products are innovating certainly within the home, and I just think that it just increases that exponential complexity for home maintenance and home improvement. And so homeowners have to evolve, retailers have to evolve, distributors and manufacturers all have to evolve. And yet what’s really interesting is I saw a recent study from McKinsey where they looked at all industries from entertainment and banking and insurance and fintech, and it was just sort of oil and gas and sort of building materials, you know, sort of home construction was the least digitally penetrated industry on a list of maybe 30 different industries. And it makes total sense, right? Because, you know, most people don’t think about how their installation impacts, you know, one of the digital impacts of their insulation or, hey, my tile flooring or my sod on my front yard, right? So a lot of the times, digital transformation, digital adoption, even in this entire industry, has actually been slower than other industries, just as sort of a norm. I mean, just again, compared to like fintech or oil and gas banking and all the other types of industries out there, it’s just home improvement and building materials and construction has actually has a slower adoption curve for digital than overall.
Yeah, you know, and it’s also I’ve given this a lot of thought, you know, and certainly in the past year that I’ve left corporate America and started my own entrepreneurial journey. I mean, really, there’s three sort of key lessons, certainly, that really stand out for me. Number one is the importance of knowing when to pivot right. It’s sort of within the entrepreneur sort of world. You know, it’s a the pivot is just, you know, it’s not staying married to the original vision of the business. Right. Like, I think that knowing when to pivot and knowing when to transform your operating model, your business model as needed. Right. And so I think that there’s a certain amount of when you’re locked into sort of an overall vision and one of the values that your startup represents. But then and maybe not being flexible on those and like, hey, integrity and value, those are things that I’m never going to go away with. But how I deliver that, oh, my gosh, it’s changing radically. Right. Even to the point where everything is fair game for reinvention. So lesson number one is be ready to pivot. Number two, we talked about it already, which is just the devil’s in the details. And for me, supply chain cost and logistics were a huge wake up call. You know, like I was just I spent months on packaging, design and thinking through that customer experience. And I’m telling you now, I left sort of supply chain and delivery just as an afterthought, and it was just a huge, huge wake up call. And I would say that to other startup founders, lean into your discomfort, right? Meaning that like we as professionals all have strengths and weaknesses. And for me it was always around merchandizing, products, strategy, right? Pricing, just the traditional retail world. That’s just my strength. But certainly getting into some of the financial aspects, calculating margin and service supply chain are not my strengths, right? So I think that as a founder, I stayed with my comfort zone. I would just say, lean into your discomfort. Because for me, by the time I got around to, you know, facing some of those less strength areas of mine, it blew out my model. Like I had no model because it was just incredibly and disruptive that again, I would do that differently. Right? So number one, pivot number two, leading to your discomfort, you know, and for me, the example is around supply chain really number three, right, is the one thing that I would mention, certainly right, is there’s such a rich ecosystem of resources that like I didn’t know existed, right? Like so I spent my entire 25 year corporate America career really in that sort of corporate America world. I never knew how many resources from local universities to local startup organizations to just VCs in my area that might be willing to have conversations with me or even other founders. Right. There is a rich. Support structure, and a lot of it doesn’t cost anything, right? You just have to reach out, you know, and certainly founders that have reached out to me, let’s just talk shop. Right. And then just sort of like I would just certainly say that that was.
Yeah, that was just like a positive wake up call, right? For me, it was just that because I think that startup founders want to help, man, it’s like they know how they do it. They do it, you know, obviously you can’t spend like 5 hours, but like, hey, quick, 5 minutes and just sort of like, what did you do when that happened? Or just a quick word of encouragement or if you ever need anything, you know. Sure. Or something. But I’m just saying that, like tap into that as quickly as you can.
Podcast is a great example, right? Look at this wonderful information and this library you’ve created for free, right? You know, so.
Well, thank you for having me. And certainly, you know, reached out to me on LinkedIn. Anyone listening and I’m happy to be part of your support structure as well. And certainly if anyone has any questions about home improvement.
Yeah. No, it’s certainly LinkedIn is a great way to reach out as well.
Yeah, Marc. Thank you for having me. All the best for you and your team as well.
Take care, friends.