A Data-Driven Approach to Building Authentic Relationships

[00:01:01] Kailey: Today's retail market looks totally different than it did a decade ago.

[00:01:04] According to The Economist, department stores have shut down hundreds of locations over the past four years. But obviously, Americans still love to buy stuff. It's basically our national pastime. So how does a legacy department store stay competitive in this new market? In today's episode, I'm speaking with Keri Taub, Vice President of Strategy at Bloomingdale's. We'll dive into how Bloomingdale's drives digital strategy while maintaining, and even growing, its physical stores, and learn why having the right balance between brick and mortar and online can be the difference between delighting your customers and alienating them.

[00:01:42] Keri, thank you for being here today. I really appreciate it. Tell me a little bit more about your position at Bloomingdale's. 

[00:01:49] Keri: Sure I am thrilled to be here, so thank you for having me. So right now I am the Vice President of Strategy, which is a really general term. So, you might have a followup question. I know my parents certainly do, but my history before this was about three and a half years running our loyalty program, credit card, and international marketing.

[00:02:13] Prior to that, I was in business school at Columbia. And before that, my background is really with the customer with engaging them driving loyalty. And now broadening that to kind of 360 business view of the company. 

[00:02:25] Kailey: Did you always have an interest in marketing and the consumer? 

[00:02:28] Keri: So I went to Penn and there's this minor at Penn called consumer psychology, which I found very exciting.

[00:02:36] So you split your time between marketing classes and psychology classes, which was very cool because in the end, every marketing tactic is really about connecting with the customer. So you need to understand how they're thinking about the world. So that was what sparked that interest for me. So I definitely was interested in going into marketing after school, retail, not as much. I think I was open and that's just kind of where I landed.

[00:03:13] Kailey: We talk a lot about personalization. We talk a lot about omni-channel, but I'm curious to hear a little bit about your experience and what you're seeing in terms of trends, especially in the luxury retail space. 

[00:03:23] Keri: Yeah, luxury makes it very interesting. And especially because luxury has had such a boom over the past couple years and, for better or worse, that was really driven by the pandemic because when you couldn't spend on experiences or travel or dining out, you bought stuff for yourself. So that's been great for our business, but when you think about the customer experience and what is expected when it comes to shopping for luxury versus other kinds of things, it really ups the ante. So that's been one major trend that's been on our minds is as the customer has shifted towards luxury and also, luxury brands have been more willing to sell online, more than they ever were, but because of the pandemic and digital really booming, many brands now sell online that didn't before, at least with us. And so you're shopping this really high end expensive handbag online, but should we be giving you the exact same digital experience we're giving you for anything else you're buying?

[00:04:21] So it's just really changed the 360 thinking around every touch point with us and how that needs to connect back to the item that you're browsing, that you're purchasing, because it can't be a one size fits all, I guess. So that's definitely been one shift. I would say another one is related, which is that before the pandemic, I feel like maybe seven or eight years ago, omni-channel was our obsession. And we would just, the amount that we use that word is kind of unbelievable. 

[00:04:50] Kailey: Huge buzzword. Yeah. 

[00:04:52] Keri: And I almost feel like now, we try not to even say the word omni-channel, we haven't come up with a good replacement yet. I think maybe the closest is something like customer journeys or something like that.

[00:05:03] Just because saying omni-channel makes me think that there are these distinct channels and we want to get the customer to shop both versus thinking that we just need this 360 surround that meets the customer where they are in their journey. 

[00:05:20] Kailey: I'm fascinated by the first thing that you said, which is that you're perhaps changing the experience between goods that people are browsing online.

[00:05:28] Can you give me an example of what that might look like if you're looking at a really high end bag versus something that might be a little bit on the lower end? What does that look like? 

[00:05:38] Keri: Sure. So a big term in our space is adjacencies and we're not just a brand, we're a house of brands. So we have other people that have a say in what is going on with the customer experience.

[00:05:49] And so it's very important when you think about when, when I searched for a certain type of handbag, let's say we can't just return every single handbag, one that's $50 next to one that's $4,000, right, that's not what the customer is looking for, but it might be just literally the results of that search. So that's a big piece of personalization is making the site experience different depending on who you are as a shopper and the kind of product that you are looking for.

[00:06:17] So that comes through on the homepage that comes through search, through browse. So that's an example, but another physical example is the way the item is shipped to you, should you be getting the same plastic Bloomingdale's bag, no matter what you buy, or should you be getting a more elevated wrapping and kind of whole unboxing experience, if it's a higher end item.

[00:06:37] So it's really upper funnel digital, but all the way through the moment of receiving the item. 

[00:06:43] Kailey: That is fascinating. And I like that, it seems like you're, there's a ton of data points that you might need to collect on the backend to make sure that when somebody is hitting your homepage, that you know who they are, that, you know, what they like, you know, what their history is and you're making it super personalized to them.

[00:06:58] So walk me through kind of like that journey. I'm imagining there's been a whole digital transformation effort at Bloomingdale's 

[00:07:04] Keri: Yeah, I mean, we're collecting more data than we ever have been. And what's really exciting is that with our media partners, we now can collect data long before you even get to our site.

[00:07:15] But trying to string that through to realize that you seeing this ad on Facebook and you coming to our site and you shopping in our store is all the same you, is very challenging because, oh, one time you put your mom's email in, oh, you have a junk email, you know, all these things, right? There aren't these indicators that are very consistent for everyone.

[00:07:36] The other thing is the why behind the actions you take and the purchases you make, because if one person is shopping for their spouse and they shop for very different things than themselves, we now think you like those things, but that was just because it was their birthday or, you know, whatever it is.

[00:07:53] And that's the really hard thing because in-store, we're much more likely to know that it was your partner's birthday. Online, we have literally no idea. So I think those are the kinds of data points that we're trying to work towards to be able to personalize in a way that feels relevant to you, because I think personalization can really backfire if we go super narrow for you and it's stuff that makes zero sense to see that I almost think is worse than just showing you kind of a general homepage, let's say, for example. So it's a risky endeavor, I think. 

[00:08:26] Kailey: The bringing in, you know, different people into your household and making sure that you understand the nuances of who to actually like, market to in an appropriate way, I also think is one of the most fascinating challenges. How are you thinking about solving that? What does that look like? 

[00:08:41] Keri: Well, so, I mean the biggest theme that I'm going to say this a hundred times, I'm sure is the blending of humanity and technology, and a really exciting trend that we've seen as the industry realized that we need stores. Right? Like another thing when omni-channel was rising was, you know, death of the store and all these things. And now Amazon just opened Amazon Style out in California, Glossier high stores, Warby Parker store. So we feel confident. Stores were the right thing. I think the next layer to that is the value of the data that we're gathering from the people on the front lines.

[00:09:16] And yes, it gets a very low scalability score, but a very high accuracy score. And so if you are shopping with someone in-store, You can find out everything about those purchases. And so, I mean, you asked me how we're doing it. I wouldn't say we're at A+ yet. We have a CRM system where we're tracking that information, but the question is how do we feed that through, into our data science?

[00:09:41] And that's really hard. I'd say that's the nut we're trying to crack right now. 

[00:09:46] Kailey: So Keri, I'm curious, because especially during COVID, we've seen a huge trend for retailers closing down stores, and you just mentioned that stores are a vital piece of Bloomingdale's strategy and that you made the right call by making sure that you're investing in them.

[00:10:03] So are you keeping all of your stores open? What does the footprint look like for Bloomingdale's in actual retail space? 

[00:10:12] Keri: It's a really interesting time right now in terms of stores, because you'll definitely, you know, read in the news about stores closing. They're going to continue to close, but I think we're just getting smarter about, you have to be a good store to stay open, I guess is what I would say.

[00:10:28] And it seems silly, but, years of old, we could, we could balance kind of that bloat in terms of not, we Bloomingdale's, we, the industry in terms of stores that could be open malls were very big. There was a lot of real estate, whereas now I think the consumer is being more discerning about, you need to make it worth my while to, you know, get out of my home where frequently they work from and go shopping. And so thankfully for us, Bloomingdale's actually, isn't, we have a fairly lean fleet of stores, low thirties. And so we're very purposeful and thoughtful about where and when we have stores and we've actually been opening stores. So we opened two stores right before the pandemic.

[00:11:12] We opened our new small store concept called Bloomies in August of 21. And we are opening a second Bloomies November of this year. And this small store concept is kind of getting at my point, which is we can't just keep doing what we've been doing forever. We need to be smarter and think about what does the customer really want from the store these days.

[00:11:32] And that comes back to personalization and localization that we spoke about. So. It's more of a small store concept in the community, right? Feeling it's like their neighborhood store. And that's where it also comes back to the data, right? We're not making, every one of these small stores look the same.

[00:11:52] We're really getting to know the community and how that customer shops buy what they're buying with us online from those zip codes. That's a great example of one that's been hugely impactful, connecting physical and digital. 

[00:12:05] Kailey: I had no idea that you were opening new stores. And I think one of the things that maybe this is kind of hinting towards as well is clienteling and making sure that you are bringing that real-time experience into the store and making sure that, you know, you are blending that customer experience with what’s been happening online, and it can be really fluid, right?

[00:12:26] The difference between marketing and customer experience and who owns what, those definitions. How is that defined at Bloomingdale's? Where does marketing begin and end? 

[00:12:36] Keri: It's a really good question. I mean, technically we define marketing with a lot of the more upper funnel kinds of things, right? So media, email, SEO, SCM loyalty sits there, influencers, social, that kind of thing.

[00:12:53] This has really been on our minds a lot because in the end, if I'm the customer, I'm seeing the journey all the way through, I'm not just, you know, stopping once I get to checkout or stopping once I walk into the store. So things like our visual installations in store, the look and feel of our website, the clienteling, the selling.

[00:13:13] All of those are really important points of customer communication. So it's something that's been really on our mind. And I can, I can tell you something that we've been going through right now. We've been coming together across all of our different non-merchant functions to share out our strategy for the upcoming season.

[00:13:34] And the first time we tried to do this, I made a shared file and we kind of put the core topics we wanted to talk about and all these different teams had to go into the file and put what they were doing to support that key thing. So let's say it could be luxury. It could be luxury, you know, any of these topics and what was so crazy was all of these teams were not working together on these things.

[00:13:56] They were putting what they were doing to drive these priorities. And it's no fault of anyone's. That was kind of how I set it up. But this time around, I literally had meetings on this today. The teams are all working together to build a communication toolkit. Start to finish, to share how we want to talk about and engage with the customer on these important topics for us.

[00:14:21] So we keep saying, we accidentally keep saying marketing toolkit, and then we have to correct ourselves and say communication toolkit, because what's been really wonderful is that now, instead of just the marketing team, figuring out what they're doing, and then it just kind of lingers and doesn't have a clean bridge to the other teams, we now are involving, you know, the rest of the site team, the visual team, the selling strategy team, which are really important parts of the rest of that journey. And so it's funny you bring that up because it's been very relevant to us. 

[00:14:54] Kailey: It's one of the things that we hear all the time is that customer data and what you're kind of getting from every single different team is so critical and making sure that you are getting that 360 and it's one of those trends that I think that, over the past few years has really been growing is customer experience. And you're seeing like Chief Customer Officers maybe for the first time and making sure that everybody is kind of marching to the same drum beat. So I do think it's fascinating that you are now orienting and making sure that everybody's speaking the same language, making sure that everybody is on the same page about this, because you're right. Oftentimes it feels like silos. 

[00:15:32] Keri: Yeah. Yeah. We're, we're good partners to each other, but I, yeah, it's, it's earlier on, it's kind of reacting to each other, being, having a holistic view and you know, I think another thing that's tough about it is there's a timing challenge, right?

[00:15:47] I don't think it's one to be solved. I don't think it's a problem that we want to solve because the creative team and the marketing assets and the marketing plan is built way further in advance than these special events that are going to be happening in store or the plan for how to outreach to customers.

[00:16:06] And I don't think those groups necessarily need to be planning. At the same time as the more traditional marketing channels. So that's also been a piece of it just coming to terms with the fact that it's okay for there to be a flow or for there to be kind of these phases and handoffs. But we just want to, you know, be purposeful about it.

[00:16:24] Kailey: You've talked a little bit about some of the challenges that you know you're facing. What is the biggest challenge on the journey to customer engagement? 

[00:16:32] Keri: Yeah, I think as you said, what we've spoken about already can definitely be challenging. I think something new I'll throw into the mix is that I found a specialty in my prior role in customer loyalty that, data really breaks down when you get to a smaller group of people. So at scale, you can have, you know, whatever 95% accuracy, that sounds pretty good. And at scale, that feels pretty good. But when you start thinking about your best customers are your most engaged customers. And you start going to that top 1% or even 0.1%.

[00:17:04] I've really seen that data can break down. And whether it's the wrong email address, the wrong actual address, thinking they bought something for their husband that we thought was for them, whatever it is, it can really be, lead to egregious mistakes and offend people. 

[00:17:20] Kailey: Do you have any examples? It feels like you might be sitting on an example?

[00:17:23] Keri: No. I mean, I have many examples. Like this was a big part of my prior role, which was, it was very cool. It was like, I worked with the masses in terms of the loyalty program, but also the top, top, top, because a disproportionate amount of your business comes from these people and they expect that you know everything about them and at the store level, their sellers do, we're using, you know, our, our broad data to communicate with these people and the sellers are like, we know they don't live there. We know they don't do this.

[00:17:54] Kailey: Do you have an answer to when you go manual and when you automate, have you found that balance? 

[00:18:00] Keri: I mean, I think it connects back to when you get towards the top is when you need to take more of that time. And I, I'm not trying to play favorites or anything, but when you have these people that make up such a big part of your business, a) you don't want to risk losing the business, but b) they are the ones talking about you to all of their network who likely are very, you know, impactful people. So I think that's where you want to be a little bit extra careful because you have the most data points about them.But also that means that you need to have the highest standards in terms of how you use those data points. 

[00:18:34] Kailey: Yeah, you have to be really careful with advocates because they are your biggest tool set, absolutely, to learn about what's going right. Learn about what's going wrong. And of course they're driving probably more business pound for pound than anything else in the entire business.

[00:19:01] Kailey: What would you say is the most important piece of collected data that you use in your role to drive customer engagement? 

[00:19:07] Keri: I can think of a couple places where we've just had really valuable progress based on strong data collection. So one place has been in email marketing. Like for example, we now use send time personalization.

[00:19:21] So you get the email when you're most likely to open it. We have plenty of trigger marketing where that could be connected to a purchase you made or, or even a return or a big life moment that you've had. So I feel confident we are getting you that email at the best, most relevant moment. And then also what's in the email.

[00:19:39] We've, been measuring how you're engaging with the content in the email. And that's a nice connection between kind of the qualitative creative side, because we're a fashion company, right? It's it's not just text in there. There's imagery, there's money. There's time spent on what is the right thing to be showing our customer and furthering or fashion credibility. And so we've been using an asset library that optimizes what you see based on who you are when in your journey with us, you want to see that kind of thing. So it's extended the lifetime of our assets because it's easy to kind of send it to everyone and then be done with this one asset versus parsing it out over time, more effectively, you know, maximize relevancy.

[00:20:19] So that I would say that's an area where we've just really leveraged strong, reliable data. To make strides in our program. 

[00:20:27] Kailey: I am fascinated by the first example of, of time personalization, because as somebody who sent in a lot of emails in my day as a marketer, I always used to say, oh, you need to send an email at Tuesday at 2:00 PM or something.

[00:20:42] They always had like these graphs that told you exactly when the most people were going to open it. But you're telling me that you can on an individual basis identify when that person is going to open. 

[00:20:53] Keri: Yes, because we're all different. I mean, it just, if you're working from home, you're at the office, if you commute, you don't commute.

[00:20:59] And if we catch you at that second, it really, it makes it so much more effective. And it's really, that's a perfect example of leveraging data very reliably because you can't fool us. Right. We know the time that you open the email. And so if that one feels like a, win-win like, it's not invasive information we're collecting about you and we're just sending you something at the time that it's most convenient for you.

[00:21:24] Kailey: My mind for my email marketing team is just going in a million different directions. And I absolutely love it. Obviously, the volume that you send emails is going to be a bit higher than ours. I'm sure. What I'm really curious about is how this has affected lifetime value. I know you're like building all these personalized experiences, making sure that context is fully built in hitting people with the right message and the right place at the right time.

[00:21:46] How has that impacted your customers and how you're retaining them and how you're actually growing your relationship with them? 

[00:21:54] Keri: I think it's just a tiny slice of it, honestly, because every time we send you an email, I would say it's a slow build over a really long time. And planting the seed in the customer's mind that this is content I like to read, it leads me to a place that I find inspiring. It brings me great value. So, I mean, I think it's important, but I think it's one small building block of getting us to have that relationship with you. It's one slice of a tool in that toolkit. 

[00:22:25] Kailey: I had no idea that you could send me an email at 12:02 and I, Kailey, was more likely to open it at 12:02 than I was at 10:43.

[00:22:33] What are the changes that you're seeing in retail and luxury specifically in the next six to 12 months? Because you are blowing my mind with all sorts of stats right now, Keri, I'm going to be very honest. 

[00:22:42] Keri: I have two in mind, they're both kind of in opposite directions. One obviously is web 3.0, the NFTs, the AR, the VR

[00:22:52] Kailey: What do you really think about it?

[00:22:54] Keri: The, all the, all the things personally, I've been trying to wrap my brain around. You know, the use case and putting myself in that person's shoes. It's always tough to, to understand what is just going to be early adopters and stay there, like a Google glass kind of thing, or driverless cars. 

[00:22:54] Kailey: Remember those?

[00:23:14] I do, but, but at the time it was, this is the future. So it's really hard to parse through what will just be kind of that bleeding edge of tech enthusiast versus what will be the masses. Now that we've kind of had our, at least, I feel like I've had my eye on this. Six to 12 months, the past six to 12 months, it feels like it's getting mainstream.

[00:23:35] And so, especially as I see brands, like I think Gucci and the North Face had their products in Pokemon Go. And I mean, Macy's had NFTs at the Thanksgiving day parade that they auctioned off. So like we're already dabbling there. So it's definitely a place that we're going to dip our toe in the water and see how it progresses.

[00:23:55] But we're trying to find a balance, right? You don't want to put all your eggs in that basket because we have a very diverse customer base and 90% of them are what are making that umbrella. This is not for them, right. We're an of-the-moment retailer, so we always want to be out there checking out what's cool and very central to the zeitgeists right now, but we can't alienate the core of our customer base either.

[00:24:18] So that's why we're, we're always kind of, balanced in our approach. The second thing that came to mind that I've been very excited about, as I said, my background is with the customer, is I feel like over the past five to seven years or so companies were moving more towards trying to use data science. So leveraging a lot more, but transactional data to find trends and patterns and predict what customers will do.

[00:24:45] And I mean, have you heard the example how like Target knew that, was it target or Walmart, knew the person was pregnant before they were pregnant? I feel like that, that story, I don't know if I should call it like a folklore, a real story, 

[00:24:58] Kailey: Is it folklore? I don't know.

[00:25:01] Keri: I don't know. That's what I'm saying, but anyway, that to me feels like what we were all trying to achieve.

[00:25:05] If we mine and study the data enough, we can know everything about somebody and I don't disagree that quantitative data is incredibly important, but where my mind has been at in terms of kind of the near future and where the industry is going is that I could see the same exact set of facts about two people, but the underlying motivations could be incredibly different.

[00:25:29] And in an industry that's very creative and connected to life events and an emotion and, you know, feelings. It's not enough to just have the surface level facts, even if we have a million data points on them. And for example, if you think about a psychographic segmentation, I could add two customers that buy all the same luxury brands and they love, they love to dress up, and high price point, one of them could be fashion forward, cutting edge, picking everything out themselves, all over the runway. The other one could be a real estate agent who shops with a personal shopper and just needs to look great for their job, but they don't know anything about it and they don't care about it, they just have to have it. I'm going to send the two of them very different marketing. But if I just mined the data, I would never know that about the two of them. And so, I mean, maybe, maybe, maybe Target would. I don't know, since they have a crystal ball over there, but. I guess that's my point is it's the, there's this arc that's kind of bending back a bit.

[00:26:34] I would say that's weaving in some of that qualitative data to pair it with the really intense kind of science of data, which I find very, I find that much more exciting than NFTs personally, because that is kind of where my background is and thinking about the customer and why they do what they do, but both important.

[00:26:55] Kailey: No, I mean, I think that predictive analytics is a massive, massive topic that, uh, is, we're just kind of at the cusp of what we can do with it right now. But one of the things that I find fascinating that you've kind of brought back a couple of times is obviously qualitative data being the highest quality, you know, you're in person, you can really know this person.

[00:27:13] You can understand their motivations behind everything. And I guess, where do you store that? Are you also storing on the same CRM? How are you making sure your pairing your quant, your qual data in the same place so that everybody is kind of like firing on all systems and you can be fully engaged. 

[00:27:31] Keri: I would say that is what we are working at now. So we have a robust CRM system that we've had for a long time. And then the next frontier is having a seamless bridge between that CRM system and store and what we have digitally. And I would say like, you asked me about the next six to 12 months. I think that's a massive focus of ours. 

[00:27:56] Kailey: What's the best example of a company that you think is doing it right?

[00:28:01] Keri: I have a really clear answer for this one and it is Disney and it really connects to everything we've been talking about because so much of their experience. And, and when I think about Disney, I'm really thinking of Disney World or Disney Land. Is physical, it's physical, but they've digitized it.

[00:28:21] I don't know the right names, you know, the, the wristband that they use and the chips that it's, it's unbelievable. And -- 

[00:28:28] Kailey: So you're not a Disney adult. 

[00:28:29] Keri: I'm not a Disney adult, but a dear friend of mine is one. So I'm, I'm a friend, I'm an ally of the Disney adults. But so I really am inspired by them. They've really found a way to learn and make the physical experience smart and blend that human data back to the digital that you just asked me about.

[00:28:52] And I think the other thing that's so inspiring about them is they very clearly though, don't just invest in technology. They also very clearly invest in their physical assets in the customer experience. Right. I was just reading an article that had a photo of some structure they had an Epcot. And when you look at the photo, you realize that the sky behind the building is a different color from the actual sky above it.

[00:29:18] And it turns out that they're under construction tarps. They physically print on them. The look of what is under it when it will be done. So that way in all your photos and when you're walking by, you don't really even realize it. So that level of detail and investment in the customer experience is just so motivating and exciting to see because, you know, that's the first step to go, right? When you're thinking about how to reallocate. And it's just really cool to see they're, they're making it work and thriving in both digital technology, as well as kind of those physical moments, which I think is very cool. 

[00:29:55] Kailey: That's fascinating as somebody who lives in New York and has to walk by terrible scaffolding on a daily basis. Yeah. I certainly appreciate the fact that the devil's in the details. 

[00:30:05] Keri: It is. Connecting to kind of our common theme here when we can gather a piece of data that is not obvious to the customer, right? So there's all these table stakes pieces of data out there, and yes, we want to nail those, but when we can gather something like, it's your daughter's graduation coming up or whatever these things are and have those surprise and delight moments with the customer. We just had somebody, it was the 10th anniversary of their mother passing away, and we had that factoid documented and we had a denim jacket made with embroidery on the back that had like the mom's initials and, I'm telling you that customer will be telling that story forever. And so I just think that all of the send time personalization as cool as that can be the, I almost view that as table-stakes and it's these moments, it's almost like Disney-esque right, I would imagine they would do something like that, that we can capture about the customer, those random factoids and bring them back and make good on it.

[00:31:06] Costing us whatever, less than a hundred or whatever it is, but it goes miles and miles in terms of customer retention. 

[00:31:14] Kailey: The real human moments, the moments that matter, the moments that you remember are the ones that you would do with a friend or a family member. If a brand is doing it to you, of course, that's super meaningful and memorable.

[00:31:24] Keri: Right. And I mean, I think ideally we want to be the customer's best friend. Like that's the role Bloomingdale's wants to play in their lives. 

[00:31:32] Kailey: What's your best piece of advice for somebody who's trying to build their company’s customer engagement? 

[00:31:37] Keri: I think that stepping back from the data, not losing the forest through the trees and finding those moments.

[00:31:45] I like the question you asked me, which is when is it the right time to be all in on the data science, just letting the machine do its thing, and when is the right time to step back and say, no, we really need to use, you know, like kid gloves on this cause we, we need to get it right. I think that's invaluable. And finding that balance is, is how you nail it from a customer experience standpoint. 

[00:32:10] Kailey: I love that. We're going to end on that. The balance of qualitative, quantitative, and making sure you remember that you're interacting with humans and that you can surprise and delight them and that they will endure as a customer if you continue to do that. Thanks Keri. 

[00:32:28] Keri: Well said. Thank you.