Episode Summary
What can the dietary supplements and consumer healthcare industry at-large learn from big retailers, like Wayfair? Engaging customers is the tip of the iceberg. Join Wayfair’s Head of Product Development, Matt Phillips during the newest episode of CHPA Chat as he explores consumer engagement and how dietary supplements companies can help provide online services that build brand loyalty and keep people coming back.
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Speaker 1: Welcome to CHPA Chat, conversations in the consumer healthcare industry with Anita Brikman.
Anita Brikman: Thanks for joining us for this episode where we're talking about big online retailers, and what they can teach the dietary supplements industry. Engaging customers is the tip of the iceberg. Join Wayfair's head of product development, Matt Phillips, and John Troup, as they explore consumer engagement and how dietary supplements companies can help provide online services that build brand loyalty and keep people coming back. And here's John Troup.
John Troup: Thanks, Anita. And thanks to all of our listeners who's joining today. We have really a great topic that's really of great interest in the healthcare industry, and particularly in the dietary supplement industry. And that really boils down to trying to understand consumer behavior and how they've shifted their interests in both in how they acquire information and how they look for and purchase products. Today with us, I'm really excited to talk to Matt Phillips, who's a senior technical product manager in the e-commerce industry that specializes particularly in home and lifestyle products. Matt, thanks for joining us.
Matt Phillips: Thanks, John.
John Troup: So I'm curious, Matt, in the last 12 months, COVID-19 has changed the world. And probably the biggest place it's changed, or at least accelerated the world, has been in people's comfort level of how they acquire information, and where they go to get their products. And so I'm curious on what have you seen across your industry that maybe even shocked you, let alone changed the way you guys do things in consumer product packaged goods?
Matt Phillips: Yeah. Yeah, it's interesting. The shift to online within e-commerce has always been expected. And I think COVID introduced an acceleration to that trend where, depending upon who you read, there's debates of was it a five year acceleration? Was it a three year acceleration? Are malls truly completely dead? I tend not to think so much there. But I think that what was really fascinating to observe, so I work for a large e-commerce company that sells home products. I worked in the core funnel for a really long time. That's kind of homepage through checkout piece. I owned one of the pages and was optimizing that funnel to make sure people were passing through, and adding to cart as often as possible. And now I work in the content space, building platforms for delivery of personalized customer content and sourced articles across our site.
And I think one of the things that we learned early on is there are products that customers feel pretty comfortable purchasing online as a baseline, right? And I think a lot of this has to do with Amazon and the way that Amazon has shaped our thinking around e-commerce. Where typically it's pretty transactional. It's products you know, they're branded, you understand what you're going to get, and you can buy with confidence, right? If I go on Amazon right now, and I see a book that I want to get, or some cleaning products, or dog food for my dog, those are things that I know that they're the same thing that I can get in the store. They're branded. And the customer relationship there is really just help me find this very specific thing that I need.
What was interesting about COVID is, early on, the shopping trends were kind of just more of that transactional behavior. It was, oh, I'm afraid to go to the store, or I can't go to the store. And so let me go online to buy the things that I otherwise would've purchased in the store, that I feel pretty comfortable buying online, right? Still commodity products, still branded products. And then, because I work in the home space, I had this kind of unique view into how customer purchasing behavior was changing over time. Where we saw more purchases of the things that you'd expect as folks transitioned into accepting full-time work from home. Office furniture was sold out day after day. And that was up at one point last April, I think 1000% year over year, which tells you people were still looking for those transactional products, and they were still looking for those... It's I need to find a thing. Do you have a good price? Are you trustworthy?
But as we built those relationships on those really transactional products, and we accumulated the customer trust, and crucially for what I do, gathered customer data, there's a flywheel that starts spinning. And I think what really happened with e-commerce over the last year is that flywheel just moves a lot faster because we were able to build relationships that we wouldn't have been able to build until a year, two years, three years down the road, because that person never would've came to us.
John Troup: Oh yeah. So that's interesting. But I'm curious too, though, so that as people decided, hey, I got to make a purchase. I can imagine, we're all sitting at home, we're kind of tired of doing Zoom meetings, and we're tired of looking at the screen for a while. So you get up and walk around. You sit down and all of a sudden you realize, hey, you know what? I think I'm going to remodel this room. Or I don't like that desk. But at what point did they make the transition to, I got to find out something that I think I'd like to have. I don't know what it is yet. And how did you capture that interest? So I'm guessing you probably have a loyal customer base that came in, and then started to try to find information to then make a decision. And that's kind of relevant in healthcare. But how did you guys address that flow and that transition of consumer engagement?
Matt Phillips: Yeah. Yeah. Every e-commerce company has some customer framing way of bucketing their customers. The one that I like to use, and this isn't the one that we use globally at my company, but just I find really useful is hunters versus browsers, right? You have someone that comes in, they're super committed. They progress through the funnel really quickly. Maybe they look at three or four products. They make that choice. They move on. And then you have your browsers who are going to take a bunch of sessions. They're going to shop across multiple sites. They're going to have a much longer consideration cycle. And those are the customers where, interestingly, if you can get them telling you a little bit more about themselves and you can glean that from their browsing behavior, you can glean that from the types of products that they're viewing, you can really leverage personalization to build that trust with them.
I think one thing that I'm super interested in within the space is what's the role that company's can play in producing content that wins those customers faster, right? Search is a massive channel. Most people are coming to sites, not by typing in a URL, but going to Google and searching for a thing that they need. And if you hit an established retailer that establishes that trust early on, and if you hit someone that maybe isn't as established, but they're winning SEO game through either paid ads or through just really goosing that Google algorithm in ways that are super interesting, how do you create a story about your brand and your products that is compelling enough to them to keep them around?
John Troup: Yeah. So that's really interesting. So the internet's been around well a long time, even before Al Gore invented it, right? But what happened to the original concept that got everybody excited was becoming really great at SEO, search engine optimization? That's got to be old technology now. And so I'm curious, when people are looking for content, how do you capture them to get their attention? So kind of what's the new SEO, I guess, is what my question is. But carry that into then how do you use that then to design great content that kind of creates a push pull, again, kind of to use a marketing explanation, or on online activity? How do you connect the tools, the metrics, and then the call to action through content?
Matt Phillips: Yeah. SEO's, I mean, still a critical driver of traffic for most e-commerce companies. I think, to your content question, one company that I'd point to that's doing a really good job within the home space is Lowe's. So Lowe's has this section of their site. I think it's called DIY, or home ideas. I'm blanking on the exact name. Yeah. And what's really great about it is the content's really good. It's super task driven. So if I search on Google, how do I install a new sink? One of the results is going to be Lowe's with a DIY article that walks me through with super rich visuals, rich media. Lots of videos, lots of photos, lots of good step by step instructions walking me through how to do that. And then at the end, well, of course, now I'm introduced to Lowe's. I feel really confident. And I can go, and they've given me a hook that takes me into a page where I can view a bunch of sinks, and make the right choice based on the article that they just gave me.
The other part of it, so that content, it's awesome. It's great. Winning search is super important. And introducing your customers to your brand in that really productive, less transactional way is super important. What Lowe's does, that I think a lot of companies could learn from, is that that experience is on an island. It doesn't exist for Google bots. It doesn't exist for Google users. It exists for Lowe's customers. It is integrated into the site tree.
So if you go to Lowe's right now, and very few people in home are doing this, and I think more could really benefit, and I think more e-commerce in general could benefit from integrating your brand storytelling into your site. Often, it's an introduction that then never gets followed up on. Whereas Lowe's is pitching that throughout the customer journey and leveraging that content in multiple places. So the platform that they built is super sophisticated. The content that they have is really great. And they're using it across multiple touchpoints, making it really easy to access, and making it really easy to instill customer confidence and strengthen that brand relationship.
I think when I think about dietary supplements, and knowing a little bit about the use of SEO in that industry, and just the little that I know, I think that's a storytelling piece that could really... Integrating that storytelling more completely into the customer journey, leveraging every touch point you have with that customer to tell a little bit more of a story about yourself, a little bit more of a story about your brand and your products, could be really impactful.
John Troup: Yeah. If we look back at the, let's call it, the consumer healthcare industry in the last say 25 years, it's been interesting, right? It was brick and mortar, retail driven, obviously. And point of purchase decision making was as important as end destination shopping. And probably point of decision making was maybe even greater than in destination. And then the internet came, COVID came. And people would read things about, oh, vitamin D. I got to take vitamin D. I got to support my immune system. They could go online through a Google search and find a site, and then buy vitamin D.
But I think even in the last, say, six months or the last 12 months, that that's become much more sophisticated where people are trying to learn what else is out there? If I'm taking vitamin D, and I felt better after taking that, or I somehow felt stronger and protected, I got to learn more. And I think that's the opportunity because online today is as much about, not only the DTC, direct to consumer, but it's as much of end destination shopping with a twist influence by content. I mean, so is that part of the secret sauce of how to capture a customer and then engage them so they look at other product options on your site? Kind of what's that dynamic? And is there a secret to that engagement piece, say, beyond content that you guys leverage in the industry?
Matt Phillips: Yeah. So I guess what you're getting at is, once you've acquired someone, how do you make sure that you continue to give them relevant offerings that keep them coming back?
John Troup: Yeah. Or even increase their basket size? Well, they bought vitamin D, but here are three other products we wish you'd buy because they're synergistic to vitamin D.
Matt Phillips: Yeah. Yeah. So I think on the onsite experience, if you have someone that you know is interested in a particular supplement, there's kind of two schools that I've observed. There's curation, which is generally if you have a smaller catalog, and you don't need the scale that algorithms afford and you want to keep things a little bit more tightly related, right? So I think the catalogs for a lot of supplement companies are probably smaller than the catalog that we're talking about for an Amazon, where everything's algorithmically powered.
And so maybe you create meaningful relationships between products, and you have touch points. Basically wait until the customer has expressed an interest in a particular product before trying to sell them more stuff. So don't, on the search page, say, "Oh, if you like this, you're going to love these three other things." But once they've made it to the product page, and they've indicated an interest in something, that's a great place to introduce the other offerings and to start to explain why those offerings relate.
I think the flip side of that, if you're larger, the benefit of curation, human selected, these things actually go well together and are certified to go well together, if you can't do that because of scale reasons, algorithmic curation is really the way to do it. Which is more or less let's look at what customers viewed. Let's look at what they bought. And let's just have a machine pick a list of products that says here's what we think is best for you. I think that can erode customer trust when done badly.
A couple things that I've observed just in my experience, the names we give to recommendations are really important. If you go to a large e-commerce company, you will find that the phrase compare similar items is really frequently used. And I've heard through user interviews and I've seen just AB testing literally not changing the products displayed, but changing just the name, customers have said, "That feels like a machine picked it for me. It feels like it's you telling me what I should buy? And it doesn't show that you know anything about me or that you know anything about this product."
More affirmative names, things that actually suggest an action and a path forward, think frequently bought together. Or more you'll love. The company I work for really likes to play on the idea of falling in love with the product. And so we try and thread that throughout. But think about how transactional some of the words that you're using are, think about how transactional the experiences that they're using are. And one other sort of as you think about displaying a product catalog, scale is overwhelming and it often makes things feel depersonalized and less relevant.
John Troup: Yeah, yeah. Yeah. What do you do, and I'm guessing that this is done across your industry is, the customer footprint, right? I mean you, as I understand it, or as I think I understand it, is you know when a customer comes back and you know where they go and how they flow. And I guess my first question, is that true? And then what do you do with that information to push them toward a view of a certain category or a product, and then the decision to purchase?
Matt Phillips: Yeah. So through a variety of tracking methodologies, we can develop customer in-market scores for particular products or particular services. And that's pretty common. Some folks are way better at it than others. But if you look up things pixel, right? If you're using a modern web browser and you're clicking on ads, we're targeting things to you. I think that kind of goes to the offsite piece as much to the onsite piece. So with the onsite piece, it's leverage what you know to show things that you think are going to be appealing.
The offsite piece, I think can get really interesting. It's things like Instagram ads. Anyone who's ever visited a website to look at products, I was on Everlane looking for t-shirts. And then I went to Instagram and immediately saw an ad for Everlane t-shirts. They're just passing that token back and forth and trying to remind me hey, you liked this thing once, you'll like it again. That's effective, I think. And then it provides me a way that I can click on their Instagram. I can start following them and I can see some of the storytelling about their brand. It also creates the opportunity for other offsite touchpoints.
I continue to think email is, despite the power of Gmail to make sure I never have to read an email that I'm not interested in, really is a super great way, if you can create good content, not an email newsletter that goes out every day at noon and says here are our daily sales. But imagine an email that, "Hey, it looks you're looking to bolster your immune system. Here are some tips." And pair that, what you know about that customer's interest and what they're looking for, with an approach that isn't just let me sell you more, but let me integrate you into the customer experience that we're trying to create with our product line and with our mission as a company.
John Troup: So that sounds like a little bit of a customization, which can be applicable to healthcare, self-care choices on product. What do you guys call what you just described? Is that customization for... You know the habits and the footprint of your customer-
Matt Phillips: Are you talking about personalization? Yeah.
John Troup: Well, so yeah, so personalization is a hot topic, especially in the dietary supplement world, right? So there are a number of direct to consumer sites now. If you go on, you have an option to take a personal assessment. You get a personal assessment, and then boom, you get some kind of a health configuration based off of your answers. And then here are the three products that you need to get. But that's kind of one dimensional, if I can describe it that way. But how do you expand that engagement, and take advantage of some of the tools that you've been describing for us? Is there a way to do that, or is there a way to enhance the engagement once they do that?
Matt Phillips: I think your example of the health quiz is a good one. I have a little bit of experience working on products this. I built style quizzes. People like to it tell you about themselves. What's the story about the software engineer who built a simulated therapist that just repeated back what you typed into the computer. And people didn't want to leave the computer terminal because they liked talking to it so much.
John Troup: Really?
Matt Phillips: Right. Yeah. And this is, I think, at essence, that's a really sticky experience. And it can be really fun. Even big brands that don't do immersive content super well have had some success here. I think there's making that core value prop super, super fun and super shareable is good. Those quizzes and things are really, they have three goals. It's introduce you to the product catalog, win your trust by showing that, well, you gave us this little bit of information about you, and look at all that we were able to do with it.
But is there a key to keep the customer engaged in between visits that is being employed these days by the category?Within the personalization lane, or just generally?
John Troup: Yeah, or both. Both really. And then personalization is you sign up for it. Okay. I'm going to get an email every other day. But if they don't sign up for it, are there tools that you've seen to be effective? Like you recently came online and looked at this faucet. And then three days later you get, "Hey, you want to buy that faucet now?"
Matt Phillips: Yeah. Yeah, definitely. Yeah. I think, like I said, email retargeting can be really a powerful tool to remind the customer, and then display retargeting. We all think it's a little creepy when you look at a pair of shoes, and then the next three websites you visit, there's a banner ad for those shoes. But that is an effective way of keeping the brand's presence and product line in mind with the customer. You want to, especially if you're trying to form that relationship, having as many touch points with the customer as possible, and just staying present with them throughout the rest of their search can be a really impactful tool.
I think the more that you can learn in that first visit, and I think a lot of that gets accomplished. We don't give enough credit to creating great UX that makes people want to explore a website. I think that personalization is a tool, and it's a really powerful and effective tool. But in order to effectively personalize, you need people to tell you a little bit about themselves. You can do that through explicit signals, like the quiz thing that we talked about. But you can do it through implicit signals as well. Which is if I create a really beautiful homepage that has great imagery and it's super immersive. And maybe it does that cool thing where it animates as you scroll on the page so that it's fun and you want to keep going. That's a chance to show someone more of your site and of your experience and learn what catches their interest.
If you show someone three messages and they click on one of them, clearly, that wasn't a quiz, that wasn't an immersive experience that you had to build, it was just that they told you something really, really important about themselves, which is what they're interested in. And I think the more that you can marry excellent web experiences that are fun and easy to use and really immersive and don't feel transactional to that more transactional, let's harness a lot of customer data, the more that you'll be able to get good inputs and good data to power the experiences.
John Troup: I think of this as kind of the digitization of healthcare, or the digitization of America. And so, so all of our habits and interactions are changing so rapidly. But I'm curious, some of the stuff early at the start of this podcast, you had talked about some things that people are listening, that, ah, that's online 101. But if you look at where it's come from, and what you've just been describing to us in the last 15 minutes or so, it's incredible.
It's like what do we learn about how healthcare and online digitization for my Google Vault. Google Vault, and then I think even Apple had some type of database that they were trying to get people to put their data in. Nobody used it. And most of those things failed because nobody cared that somebody could store my data. They wanted you to interpret their data to say this is what you should do. How much of that you seeing in, even in kind of the CPG world of, here, I'm going to help you decide what you're going to buy. I'm going to tell you that you need to have this. Is that a tool of engagement or interactions that's being used at all, or could be used?
Matt Phillips: Yeah. I think that comes down to the curation versus algorithmic driven recommendation that I was talking about a little earlier. And if you have a smaller product line, you understand the relationships between the products and you can map customer identities to those different products. And then you can, in a data driven way, say to the customer, hey, we saw that you're a modern shopper, or we saw that you are an outdoorsy person. And so we have this awesome product line. And then you can really say we think you're going to love this.
And then the more algorithm-driven, I think, is what we observe more commonly, which is if you like this, you'll like this. Amazon does a really good job of that late in the funnel. You already added two or three things to your cart. You're on your way to your cart. And then they hit you in the cart. I was buying dog toys the other day. And it was some extra chewy balls or something. And it's like that, they know that about me. They're leveraging it really well. And they're using their authority and everything that they learned about to say, "Hey, don't forget this." And that nudge is super effective.
And I think the key piece of that that I think that keeps it from feeling creepy is the brand relationship. I have a super transactional relationship with Amazon. But when I order something from them, it arrives on time. It's in the condition that I expect it. I can track my whole purchase. And I think making sure that when you're using that type of personalization, or you're trying to forge those customer relationships, all of that is undergirded by trust. We've all had weird display retargeting ads where you see the thing that you were just looking at, and it feels weird because that brand doesn't have a good enough relationship with you. And you kind of gloss over it and maybe it leaves a bad taste in your mouth. I think we've gotten really good at personalization. And I think the next phase of that is how do we use the entire infrastructure that we've built, and the data pipelines that we have to actually help customers feel great when shopping?
John Troup: Yeah. So what do you see kind of in the future? Probably three years ago, online sales, e-commerce, was kind of a convenient factor. And then through probably the mid to late stages of COVID, it became more of an interaction and engagement, but still convenience. But what do you see the future? And do you see the trend in the huge percentage of growth with online engagement continuing, or is it going to reach a plateau? How do you continue to facilitate the growth, or just engagement for repeat to go well?
Matt Phillips: That's really interesting. I think that there's definitely more room for online to consume physical sales. And I think that this was all going to happen, and it's just COVID accelerated it. I think that the thing that I've come out of the shift online over the last year believing is that customers are more willing to buy something online they otherwise would've thought to be an in-store purchase. And I think that there's two parts to that. It just never would've occurred to them that you could buy something online. Think about a pizza oven, right? You can find one of those online and buy it. It sounds like a thing that you would need to go to a specialty store for. And the fact that those stores exist and you can purchase from them online are great.
I think that the other part of that is just people got more comfortable saying I'm going to try this thing. And I think a out of that goes to ease of shipping, ease of return. Online clothing companies. That's incredibly hard because things fit differently, and no one's really nailed the experience of can I expect that this will fit the way that I need it too when I get it. So they had to really rely on great return policies in order to continue their growth. I'm interested as things reopen what the shift to physical retail looks like. It's interesting.
I think a trend that I wish I understood a little bit better is all of these online D2C companies, especially clothing companies, opening flagship stores. And I can remember two summers ago, I was in SoHo, and there was an Everlane store and there was a Thursday Boots store. And there were all of these companies that started online selling their things. They never had physical presence. And the first physical presence they buy is in the most expensive rental market in the country. And I wonder if we're going to move more towards showrooms, than stores where you'll necessarily have the whole product catalog. So if you go to a D2C company that spins up a furniture popup, there were a few of these in Boston last year, and it's maybe one or two looks. And then there are iPads around. It familiarizes you with the brand. It lets you establish their quality. It lets you establish a presence, and for them to develop that relationship with you in the offline way.
There are a few places where I think that could be really effective. And I think that if you're an e-commerce company that doesn't have a physical presence, or you're a physical retailer whose growth has been accelerated by all of this and the shift to online, like a Lowe's or a Home Depot, how can you pivot the operations of your stores to maximize that real estate and still retain customers? Malls are a bad use of space. They're hard to navigate. The stores aren't that great. If you could use your physical retail store more as a customer acquisition channel, that would really change how people think about physical retail.
John Troup: Well Matt, this is a really informative and interesting discussion. We've been talking to Matt Phillips about the whole concept of using and leveraging what the e-commerce world of home and lifestyle industry has taught Americans about how feel comfortable online, and how we might take some of those insights and use them in healthcare practices, and particularly the selection of self-care and personalized product decision making and purchase. Matt, thanks very much for joining us. It's been really great. I think our listeners have gotten a lot out of this, insight, and I think we'll all get better. Get beyond telemedicine and thinking about telemedicine and online engages as thinking that that's only digitization. It's really the fine art now of creating customer or patient engagement and interaction. And then making it stick. Matt, thanks for your time. Great talking to you.
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