Podcast: The Power of Integrating Physical and Digital Retail Experiences

Episode Summary

This week on the Free to Grow CFO podcast, host Jon Blair is joined by Matt Ezyk, Director of eCommerce at Pet Supermarket. They delve into hybrid physical and digital retail strategies, focusing on AI integration to optimize profits for DTC brands. Matt shares insights from his extensive experience, including successful strategies like Buy Online Pick Up In-Store (BOPIS) and ship-from-store models. The conversation also explores valuable AI tools for smaller DTC brands, emphasizing the importance of personalization, ad optimization, and leveraging customer data. Tune in for an insightful conversation filled with practical tips and strategies to help you scale your DTC brand with a profit-focused mindset. Whether you’re just starting or looking to optimize your existing operations, this episode is packed with valuable takeaways.

Meet Matt Ezyk

Matt Ezyk has decades of experience building, scaling and leading digital commerce product, operations and strategy at some of the most innovative companies in the world. Prior to joining Pet Supermarket, he served as Director of Functional Architecture and Director of PMO at RafterOne (f/k/a PixelMedia) with operational oversight of teams working with iconic brands like Skechers and LL Bean. Matt also served in progressive leadership roles at Accenture, Merkle (f/k/a LiveArea) and several startups working with hundreds of global brands like Uniqlo, Disney, Revlon, Tapestry and many more. Matt brings to Pet Supermarket a deep expertise in developing and implementing diverse end-to-end commerce strategies.

Episode Links

Jon Blair - https://www.linkedin.com/in/jonathon-albert-blair/

Matt Ezyk - https://www.linkedin.com/in/mezyk/

Free to Grow CFO - https://freetogrowcfo.com/

Pet Supermarket - https://www.petsupermarket.com/

Transcript

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00:00 Welcome to the Free to Grow CFO Podcast

00:28 Guest Introduction: Matt Ezyk’s Background and Role at Pet Supermarket

04:22 Strategies for Hybrid Physical and Digital Retail

05:06 Implementing BOPIS and Ship-from-Store Tactics

07:03 Challenges and Solutions in Inventory Management

16:51 Expanding Geographical Reach Through E-commerce

19:29 Leveraging AI for DTC Brands

26:33 Challenges in Implementing AI

30:13 Overcoming AI Implementation Hurdles

35:02 Generative AI: A Continuous Journey

42:04 Balancing Personal and Professional Life

47:12 Final Thoughts

[00:00:00] Jon Blair: All right. What's happening, everyone. Welcome back to another episode of the Free to Grow CFO podcast, where we dive deep into conversations with brand founders and industry experts about scaling a DTC brand with a profit focused mindset, I'm your host, Jon Blair, founder of Free to Grow CFO. We're an outsourced finance firm that specializes in fractional CFO and bookkeeping services for growing DTC brands.

Okay, so what are we talking about today and why should you care? I've got my buddy Matt Ezyk on board with us today. He has some really interesting experience around the use of hybrid physical and digital retail strategies and leveraging AI. Here's the thing. The reason why we're talking about this today.

It's because some of the things that Matt does working for a larger retailer can feel like it's out of reach for a DTC brand in the lower to middle market, which is the size brands that free to grow is usually working with typically 5 million to 65 million a year in revenue. The thing is Matt Matt's experience, um, is actually applicable.

in many ways to what you're doing in the lower and middle market as a five to 65 million DTC brand. You probably just don't hear about these things a lot. They're not probably not talked about a lot in your ecosystem. And so, you know, from my perspective, bringing Matt out of kind of like more of an enterprise level environment into the world that we live in every day in Free to Grow CFO.

And I think you're going to find a lot of really helpful advice. You never realized before actually can be applied to your brand on a day to day basis. So Matt, thanks for joining us. I'm super stoked to have you on today. How you doing, man? I'm doing great. Happy to be here. So as director of e commerce at pet supermarket convention at the beginning of the episode, you've got a lot of really interesting experience at this kind of like marriage of enterprise Uh, level brick and mortar retail and e com, which is the, the, the, you know, division of the business that you run.

We're going to dive into dive into some of your experience deep today, but I want to start with a high level background of you personally and professionally and how you ended up at pet supermarket running their, their e commerce. Yeah. 

[00:02:14] Matt Ezyk: So, uh, so pet supermarkets, a little bit about the business where, uh, One of the largest small format pet retailers in the United States.

We operate over 200 stores and we're mostly located in the Southeast, mainly in Florida. We're headquartered in Florida. Um, I lead their digital business. So that's the e commerce business and then our marketplaces that we operate in. So like Instacart and DoorDash, for example. Uh, I've been here for a little over two years.

And my role has evolved here. I came in on the technology side, and I actually founded our our e commerce business here, then shifted my role to what it is today as a director of e commerce. Most of my background has been in the agency world, and I've worked with Salesforce Commerce cloud and marketing cloud most of my career.

So I've done strategy work. I've done, um, Project management, leading teams, uh, on the operation side and the technical side. And I've worked with brands like Uniqlo and Disney and tapestry, uh, over a hundred brands in my career. So I've always wanted to go to the brand or retail side to take what I've learned in the agency side and apply it and do a lot of tests and learn.

And it's been really fun being on the side. So I've been in the industry just about, uh, or just shy of 15 years. 

[00:03:32] Jon Blair: Awesome. Awesome. Uh, for those of you that don't know, I actually met. Matt, um, on the, uh, other side of the pond in Ireland at a, at an e commerce event about six months ago, we really hit it off chatting about different tactics and strategies that he's used at pet supermarket.

And candidly, a lot of these were things that I've never been exposed to, because again, I've been in the lower to middle market of, of digitally native or DTC brands for most of my career. And it was just kind of mind blowing some of the things that Matt has tried and actually things that didn't work, things that have worked, um, as he's built up the e commerce business at pet supermarket, again, with this, um, brick and mortar retail network at his disposal that most of us in the DTC world don't have.

And so what I want to get into to start is to chat about some of the, um, just strategies that you've deployed. And what I'm calling We're talking about before we hit record, a lot of people like to call it Omnichannel. I think that's a little bit too, uh, generic for this conversation. I'm calling it hybrid physical retail slash digital retail.

And meaning, how do you smash together digital advertising tactics? And a physical, uh, retail network, right. Um, to maximize profitable, uh, scale or new customer acquisition. Can you, can you walk through some of the strategies and tactics that you've used that have worked well, um, by kind of bringing those two worlds together?

[00:05:06] Matt Ezyk: Yeah, when I started here, um, we weren't using our best asset, which is our stores, you know, we have, uh, I think today we have 228 stores. Uh, if you've never been to one of our stores, they're, they're super cool. You go in, there's just a great vibe to them. Um, there's, you know, cats that you can adopt.

There's all sorts of animals you can buy. There's birds, there's lizards, uh, there's music playing. Um, So how do you replicate that digitally? And then also, how do you marry those two experiences together was really what I was targeting, right? Because the modern customer is in all different channels. We see them sometimes 3 or 4 different channels and it's fluid, right?

They go in between them. So. My goal was really to figure out what can we do with this great asset that we have to expand that experience for our customers. So immediately, the first thing was Bopus, buy online, pick up and store any retailer our size should have that. So I started with our design agency, and we all got in a room and said, What do we like as customers?

Let's put our customer hat on and say, you know, where did you shop recently? What was an experience you had? That was great. Uh, I'm a firm believer that you don't need to reinvent the wheel. Uh, you can get inspiration from all different places and then just apply it and test it and see if it works. So we did that and, you know, we talked about Best Buy and Home Depot and Target, uh, couple others.

Right. So. It came, what came out of that was a design and the functionality that we're happy with, and we built it. We went live with it a couple of years ago. Our customers immediately gravitated towards that because experience is great. So, uh, that's been really successful and our customers can buy online, pick up in store, they can return store, we're giving them more options to be fluid in between our channels.

Uh, so that was one, uh, strategy that really worked great. Another one was shipped from store. We had to really build out the technology piece to do that. So, uh, what that means is, uh, when a customer buy something on the web, the system in the background is using AI and it's, it's an automated process that decides what store has the inventory to do a ship complete and put everything in the same box.

And then it sends the order to that store. And it's usually the one that's closest to you, uh, that has the inventory. So. There's two mechanisms, right? There's the speed to delivery and then there's profitability. Uh, we need to know, like, we want to put everything in the same box. We don't have the shipping rates that an Amazon or a Walmart has.

So, uh, it's not as profitable obviously to send two different packages, but if the customer buys it and that's the only way we can do it, then that's how we do it. So, um, that really helped with inventory optimization too. Uh, same with bogus, right? There's things we sell in the store that we weren't selling online.

So now we have lots of different SKUs that we can add to the site to expose to the customer that they can buy. And this is really all seamless to them. So they go in the cart and they can say, I want this thing delivered because I don't need it right away. But, you know, this food that I need for my dog, I need it today.

I got to go pick it up. Um, we also added same day delivery to that mix too. So you go on our PDP and it shows you the three options. And then it's checking inventory real time to see which ones are available to you. And then you just pick which one it is and try to make it super easy and convenient. 

[00:08:33] Jon Blair: I love that.

I mean, there, there's a lot to unpack there. One is the profitability enhancement of the ship from store, right? And so you're almost kind of. In my mind of likening this back to the DTC world, you're looking at your 200 plus stores and that's like your 3PL fulfillment network, right? And so you're going and looking for the most optimal place where you can get a ship complete.

I love the ship complete because it's like, that's a customer experience thing, right? Like not, I mean, and, and a profitability thing. Yeah, you're, you're, you're making sure that everything's going in a box, but that, that order is getting fulfilled in full. Right. And, um, the other thing is like meeting your customer where their need is, right.

That like, sometimes they can wait for it to get shipped. Sometimes they can't and honestly, I'll even tell you like using a grocery store as an example, like covid forced a lot of people to start doing curbside pickup, right? Grocery stores, obviously, like, you know, really accelerated that for grocers.

When I go into a grocery store now, I actually hate it because I can't remember where everything is. I have a list and like, I end up buying a bunch of stuff that I don't need. And like, it's actually just being a dad of three little kids and having very little time. It's actually a lot easier to just put the order in on the app.

Know exactly what I'm getting, how much I'm spending, what time I'm going to go pick it up. Right. And so like, it is also too, it's not just about profitability. It's also just about streamlining the experience and meeting the customer where they're at. And that's one, like. There's been kind of this theme of several people that I've been talking to for the last few weeks.

One was actually Renee, who you and I both met in Ireland. And we, I've been talking with a few people about retail brick and mortar retail. Cause at some point a DTC brand depends on the product category that you're in. It depends on your goals. There's only so big, there's only so much addressable market, DTC only.

And it varies based on your product category. Some product categories, if you want to grow to a certain size and top line revenue, you do need to get into physical retail sooner rather than later. Others, maybe you can get up to 50, 60, 70 million, but there are very few nine figure DTC only brands, right?

And so, If you have big sales goals, like hear me out on this audience. Like if you have big sales goals, you need to be thinking about some of the things that Matt is talking about. Some of the things we talked about with Renee a couple of weeks ago and talked about with Adam Siskin the week before that, how can you integrate physical retail?

Into your channel mix at some point. What's interesting is Renee talked a couple of weeks ago about like, Hey, look, you don't necessarily have to get in with a retailer like target or Walmart or something like that. You can set up one of your own shops. You can do a pop up shop. You can, you can test out doing a few of your own single brand stores.

And then you've got, you can bring in some of the tactics that Matt is talking about here, right? If you've got yourself a network of single brand stores, you can think about how to seamlessly integrate the, the digital, um, you know, your Shopify store or whatever you use for your DTC, um, storefront with your actual physical, uh, retail storefront.

I, I've got a question for you that kind of came up as you were talking through some of those tactics. What have you found? That was surprising in terms of what products work better in converting digitally versus in store. Like, what are some of the trends that you saw there as you were, as you were testing out, giving people the ability to, like, get them shipped versus pick them up?

Uh, 

[00:12:13] Matt Ezyk: I think the interesting thing was how, how much the, uh, individual cans took, took off, right? Because this is probably typical in any retailer that sells cans and cases, like a You know, like sometimes like a vitamin shop or a GNC selling energy drinks, right? It's the same concept where in the warehouse you're selling the case skew and then in the store you're selling the each's 

[00:12:36] Jon Blair: And yeah, 

[00:12:36] Matt Ezyk: you know, we have that with dog food and cat food Uh, we started to expose the each's Inventory onto the site and that really took off because there's there is no way for a customer to go onto our site And by each is before, um, there's also products that we, at least at this point in 2024, we're not able to ship.

Uh, to a customer, but with DTC and for example, like frozen, um, uh, raw dog food that we sell, uh, goat's milk, like all these things that are fresh and frozen that we sell in our store, wildly popular with customers. But until we figure out how to have cold storage in the mid mile and then deliver last mile, we, we can't sell those.

Right. So we're exposing them, uh, onto the site from an inventory perspective and customers see that. And they want to buy it and they're just looking for ways to buy it. Obviously the grayed out pieces, the ship to home, but you can get it delivered same, same day. You can pick it up in store. So just exposing more of that inventory.

It's interesting to see the customers gravitate towards the different products we can now sell. And those are the two, I think that have been really successful for us that we couldn't sell before. 

[00:13:51] Jon Blair: You know, I'm sure. I don't, we, maybe we talked about this in Ireland or not, maybe I'm having deja vu and it's a real thing or maybe it's not, it's just coming to mind right now, but, um, cross channel bleed over and attribution issues, right?

Like I am certain, especially based on what you're saying, you were just saying you're advertising digitally. Not everyone buys through your. Your, your storefront, your digital storefront. Have you seen any sort of lift in store that you feel like is attributed to, um, what you guys are doing on the e commerce side?

Have you guys talked about that internally? What, what have those discussions look like? 

[00:14:35] Matt Ezyk: Absolutely. I think as an industry standard, you see typically 20 percent of customers that come in to pick up an order. Are buying something else, whether it's at the cash wrap, or they're going into the store and buying something.

So our results are typical to that, right? So I think it's probably the same across most retailers. So, yes, you're driving more traffic into the store, more awareness into the store. In the case of like an Instacart or a DoorDash, we purposely didn't market there because we wanted to see what, uh, what customers are we finding that are finding our brand organically and buying from us that didn't before.

So how many are we gaining without even talking to them from a marketing channel? And it's pretty staggering. Like, it's, it's a significant lift in the customer acquisition and revenue that we're generating from these channels because it's just another way where customers Like if you buy, let's say you're buying a Purina ProPlan bag of dog food, it's the same bag, the same flavor that you get for your dog.

For anyone listening that has a dog, you know changing food and flavor is difficult. Um, if your local store doesn't have it, or grocery, or wherever you get it, you can go on the Instacart app, or DoorDash, or whatever it is. And type in that, uh, you can type the SKU, you can type the name of the food, and if you find it, you're gonna buy it, right?

Like, if you need food for your dog, you need it. So, that's gonna expose you to our brand, where you may have not seen us before. Uh, probably not the case in Florida, because we're everywhere in Florida. We're like the Dunkin Donuts of the Northeast, if you're familiar, on every street corner. Totally, yeah.

We're like that in Florida. So, um, not the case in Florida, but maybe in a Texas or the Carolinas or Tennessee, you may not be familiar with our brand. And, uh, if you're an Instacart user, then you'll, you'll see it pop up. And then if you have a good experience, you'll come back. 

[00:16:33] Jon Blair: That's interesting. That makes me think like, what, what, did you find anything surprising in, you know, because before your physical brick and mortar retailer, right?

So like your TAM is, People that live in those geographic areas where the stores are. Was it surprising at all? Like what kind of geographical reach you guys were able to expand into once you really started humming on the e commerce side? 

[00:17:00] Matt Ezyk: Yes, uh, I think some of the interesting things that at least I found coming into the business was we have pockets of the country that are not only the most or some of the most orders that we get from digital, but they're also our most profitable products, which was which was super interesting.

I, I. Later found out that, uh, you know, we have, uh, uh, a sister company that's owned by our same private equity that, uh, once they bought both of us, they cease their operations in the U S and they only operate in Canada, but it's a pet value and their headquarters were in Pennsylvania. So of course, there's lots of people that are buying our private label food in Pennsylvania.

Uh, didn't make sense to me when I first came in and I was like, we have no stores there. Why is there so many people buying this? But. Um, so we had to figure out a solution to make those orders profitable, because it's really challenging for us. Like, we're an old business. We're like, 51 years old, and we have all of our D.

C. S. and South Florida, which, you know, back in the 70s, I'm sure that was great or the 80s whenever they built them. But in 2024, right? It's not. Not good. So if we're sending a lot of orders to a state like Pennsylvania from Florida, it's very hard to be profitable in those transactions. So now what's happening is our North Northern most stores in North Carolina are servicing those Pennsylvania orders.

So the system sees, okay, you know, Jon Smith is in Pittsburgh, PA, and he ordered this bag of food. This store in Wilmington, North Carolina has it. We'll send the order to them. They pick, pack, and ship it and send it out. 

[00:18:40] Jon Blair: Very cool. Very cool. So to summarize for the audience really quick here, what we're talking about is the seamless integration, right, of physical retail locations and an e commerce advertising and storefront strategy.

There's absolutely a place. for digitally native brands to get into physical retail and think about how to bring those experiences together. The question is, when is the right time? There's nuance to that specific to your brand and your goals and your capital needs and capital structure, but definitely some really cool tips to think about how to marry, marry up those two, um, sales channels.

And use them to drive new customer acquisition. That's also optimized from profitability standpoint. So what I want to now kind of switch our attention to. Talking about AI and although this might seem like kind of a 180 degree turn here, the reason why we're talking about this with Matt is because again, working for a bigger, um, kind of enterprise level retailer.

What I've found is that, uh, a lot of AI tools. AI is this hot topic, right? Um, especially in the marketing world, but a lot of brands in the lower to middle market that we work with are not leveraging AI and I've kind of had this ongoing question of like, why, why is that the case? I, I personally believe that one of the reasons is because, uh, it's really gaining traction with the larger enterprise level, uh, brands out there.

They have. Bigger budgets and they have just really kind of like, and I also think the AI tools are from a go to market perspective are focusing on those, that larger customer base first as well. Um, and, and so, like, I think there's a lot of interesting stuff happening in the AI world that the. The lower to middle market DTC brands are just not getting exposure to right now.

And I had some really interesting conversations with Matt when I was in, uh, Ireland about several different things that he has tried and is trying and that have worked and have not worked for him, um, at pet supermarket. And so, you know, Matt, what I want to ask you next is like, what are some of the specific AI tools or apps that DTC brands that are five to 65 million in revenue, maybe unaware of that you've come across.

[00:21:06] Matt Ezyk: Yeah, it's a good question. There's just so much noise and AI. So, um, I can speak generally about a couple areas where I think you might want to target. So, uh, the first one would be, I would think ad optimization, right? How do you optimize your digital advertising campaigns across multiple platforms like Google and meta?

Uh, I recently saw a tool called a dexed AI that does that. I think pretty well, uh, not something I've used personally, but. I do a lot of research on the, on the topic, obviously. So that was an interesting tool for ad optimization. Uh, my favorite use for AI is personalization and recommendation. And, you know, you see tools like dynamic yield and segment that personalize experiences across the web.

Um, you can use it in mobile, you can use it in email. in store kiosks, uh, which is great for retail fashion, for example. Uh, I really love the tool called Discoverist, which does, uh, AI generated bundles. It learns all sorts of information about you when you go on the site, your clickstream data, what you've ordered, and then it puts together bundles for recommendations on the Uh, on the site.

Super clever. That is really cool, man. 

[00:22:16] Jon Blair: What's it called? Discoverist? Discoverist. Yeah, that is rad. I have not heard of that. I'm gonna have to check that out. 

[00:22:21] Matt Ezyk: Yep. Um, email marketing automation, right? That's a great one. So you can personalize email content based on the user's behavior and preferences. So if, uh, if I know that a customer has bought cat products or is clicking on cat products, Uh, categories, we can reasonably assume that they have a cat and then we can really tailor the communications that we have to cat owners, uh, active campaign is a, I think for SMB is good for that type of thing.

Customer feedback and sentiment analysis is super great. When you're trying to grow or the scale of brand, um, you can really understand your customer feedback and analyze the reviews, the surveys, social media mentions. Um, in the S. M. B. Space, I've not used it, but I've heard that monkey learn is a good tool for that, too, that I've seen out there.

Um, and you know, there's a lot that I'm using with Salesforce that does that. But, uh, pricing optimization is great too for AI. Like you can use pricing optimization tools to set competitive and most importantly, profitable prices based on market data and customer behavior. Uh, so there's companies like black curve and quick lizard that do that.

And then I think lastly, I'd mentioned, uh, a CDP, so a customer data platform. So, something that consolidates and analyzes all of your customer data from all the various sources you have. Uh, there's a company out there called Treasure Data that is really interesting that 

[00:23:52] Jon Blair: does that. Yeah, that's really interesting.

The personalization one is something that I've been really keen on, on thinking about. And I, I think it's a, Personalization is something that I think a lot of D2C brands should pay more attention to. Yes. Because when you think about the dynamics of profitable, uh, customer acquisition, if you're scaling a D2C brand, you've got these two revenue streams, right?

You've got first order acquisition and the profitability on that first customer order, and then you have repeat purchase, and personalization. Has a place in both of those revenue streams in terms of enhancing conversion rate, because you're, you're hopefully more frequently speaking to a customer about you're meeting them where their needs are at that point in time, right?

And, um, yeah, I know back in the day before AI was like, as it was a hot topic, like at Guardian, one thing that we did is. We just did some kind of like manual personalization where we had I believe a post checkout survey Or it was a question in our welcome email Series once post purchase or when you signed up for our email list and it would ask you like Basically what it asks you is that is your kid has your kid ever ridden a bike before?

Have they had their first pedal bike or have they had their second pedal bike? And what those three questions told us was likely, would they be in the market for a balanced bike or a child that would normally maybe need training wheels? Would it be one of our, uh, our. 20 inch bikes or would it be one of our 24 inch bikes?

And the reason why that was important, you would think it's just because we're going to pitch them that specific product. It's not, it's because what tips do, uh, what tips do a parent, does a parent need if their kid has never ridden a pedal bike before tips on how to, how to ride a bike, how to get rid of the training wheels, right?

There's like a certain, there's a certain journey they're on at that point in time. Um, if it's their second pedal bike, it's stuff about. local trails to go ride on, great places to go on family bike rides. Like it's a, it's a different journey that that customer is on at that point in time, and when you are delivering personalized content and which ultimately lead to personalized CTAs.

You're just going to have a much better chance of converting that person at some point. And so, um, so in personalization is a huge one. I haven't personally used any of these AI tools. I can help with that, but I highly recommend brands consider doing some research out there. And like, here's the other thing too.

I want to talk a little bit about like, just, you know, brands getting stuck, blocked, trying to implement AI. We had an AI discussion, um, like a round table discussion when we were on that Ireland trip together. And like, one of the things that really stuck out to me was that you and several other people on that trip were just like, Hey, find your version of just test.

Test learn, right? What, what are some of your, what, what, what's like, where's some of the areas that you see people get stuck or blocked and what's like your advice for just getting started? 

[00:27:09] Matt Ezyk: Yeah, like a quick point on the, what you were just talking about with personalization. Uh, a lot of people shop businesses, especially fashion retail, and they don't know what they want.

And I think everyone listening has probably had an experience with a brand in their life where it's just really fun and cool to shop them, even online, right? You get this, like, excitement of buying something. Um, so, like, fashion's a great vertical for personalization, right? Because, like, let's say, for example, um, I'm Jon Blair and I'm going to a wedding.

And I want to look super cool and sharp, but I don't know what I want. And maybe I want a suit coat, I don't know. And you go on to a site and you look for that coat, and then it shows you a shirt and a pair of pants and a belt and shoes, and you're like, that's awesome, I didn't even know they sold this, I didn't know what goes with that, right, I don't, I don't know what I want, but it's showing me something that I want, and then I buy it, right, so that's really where AI comes into play, and specifically that Discover tool I mentioned is super cool because it does something like that, it's learning what categories you're clicking on, uh, what you've ordered in the past, what other people have ordered, And we've been able to do this in retail and e commerce for a long time with predictive AI, like over 10 years, and it's very powerful.

The generative piece is now it's learning and you're teaching it, and it's giving different results based on what it learns. So it's super cool. So I just wanted to make that point about the personalization. Um, That's pretty cool. And was so 

[00:28:36] Jon Blair: actually funny enough. So, you know, Mark Cuban was an investor in guardian bikes, the brand that I was on the founding team of, and he, um, was really bullish on Netflix when Netflix first, uh, launched and he actually had a sizable stake in Netflix.

If I'm not mistaken, I don't know if he still does, but I believe he did. And he used to talk a lot about why is Netflix going to crush it because people don't know what they want to watch and Netflix is telling people what they want to watch and I actually even think back. I know you'll, you'll kind of like laugh when I say this.

I think it back to when YouTube first started and like everyone our age, like when you're in like junior high, However old we all were when, when that launch I, but I just remember being in junior high and just getting like lost in the next video recommendation on YouTube. Right. Yeah. I mean like, going and talking about it with all your buddies at lunch hour or at recess and being like, dude, did you see that video?

And like, But, I mean, that all was that kind of, you know, predictive recommendation driven, you know, you know, or AI driven recommendations is like, and it just got you hooked, right? And like, you didn't have to search for the next video. You just kept watching the next one that came up, right? And so, like, just a super great example and something that Mark Cuban has always said.

has has always talked about that. Like, hey, man, there are certain some people know what they want, but a lot of people don't know what they want. And so to the extent that you can help them figure out what they want, you're going to convert a lot more sales. So, um, great 

[00:30:13] Matt Ezyk: example. Yeah. And that kind of leads into what the second question that you asked here about.

Like where do customer or uh brands get stuck or get blocked? I mean really the the main thing is like is this going to help your customer or is it going to help you? Be operationally more efficient or more profitable Then yes, then explore it. If not, then why why are you doing it? Right? There's There's so much, I feel like there's so much panic in desperation and AI right now that people are just rushing to do something.

And they lack like a clear strategy and clear goals. Uh, so really just how does this help the customer, right? It's very simple work. Start at the customer and work backwards and then figure out, you know, scale and profitability. Um, I think where people get stuck is the first and foremost, the lack of, Data in the, you know, the, the integration steps, right?

If you're, if your data is poorly, um, put together, the quality is not there. It's fragmented. Your results are going to be very, uh, sparing, right? It's very difficult to implement anything that relies on that if it's not set up correctly. And, you know, I, I've seen this with predictive AI, right? Like I mentioned, I've been using predictive AI for over a decade.

Um, I have that on my site right now. Today. It's it's worked really well where it recommends products and shows products that other people have purchased, right? The, you know, the FOMO factor is real. So customers see that and like, Oh, if someone else bought it, I should buy it. And it, it works really great.

So, um, that's a, that's a big piece of it. Uh, the technical resources in. Uh, expertise to implement it correctly with as little technical debt as possible is super important. Um, we talked about costs, ROI, that type of thing. Um, if you don't know why it's helping your customer, then you need to step back and figure that out.

Uh, change management, organizational buy in, right? Everyone that is in your organization that has a stake in the success of it. Everyone should understand what you're doing and why and when. Um, I think a lot of people, again, they, they see AI is a new shiny thing and they're like, oh, I need to do this.

This isn't this. And they're not taking a step back and figuring out why they're doing it. And then sharing that and getting feedback from the organization, uh, probably more, more of a, uh, uh, an issue for the mid market and enterprise because there's so many stakeholders, but still important for everybody.

I think, um, how does it integrate with existing systems? Um, yeah. Couple other things like, uh, who is understanding and interpreting the outputs of what's happening and how to tweak it. Um, and then you can get into all sorts of things like privacy and ethics and compliance and maintenance. And it's, it's a very complicated thing that I think people take a little bit too lightly.

[00:33:04] Jon Blair: Well, it's funny, you mentioned a couple of things. You actually mentioned several great points that I hadn't necessarily thought of that kind of a light bulb went off and I was like, Oh, I see very clearly why so many brands in the lower to middle market are not getting AI successfully implemented based on what you were just running through.

One of them is like the data storage, right? I mean, almost every brand that we work with has data storage issues. I mean, even to the point where like the transparently free to grow is trying to figure out how we, we can provide a service. To help these brands warehouse their data. And it's just because it's, it's because we need the data as well on the CFO front.

Right. And data that's not stored properly, um, or isn't clean or is fragmented or whatever, um, it makes it hard on several different fronts in terms of reporting and analytics, not just launching AI tools. And I think the other one that you mentioned is like. Having the right technical expertise to implement said tools, right?

And it's funny, I have a good buddy, Justin Mitchell, who's, uh, runs a, uh, a site called CodingForEntrepreneurs. com And, um, we've been talking about, he's been kind of asking me like, Dude, should we get something started where we actually go out there and like, and help brands get AI implemented? And And I, I think there's actually like a real need there.

Cause I think everyone wants to do it. But again, going back to like, they going using the personalization kind of, uh, um, you know, metaphor again, they don't know what AI they want or need. They, they like the concept of it and they, they generally understand how it can help the customer journey and how it can help their business, but they need to be served up right?

A package of like what AI tools are going to work for them as well as a plan for like how to get them implemented. And I think the other thing too, of course, like everyone's talking about chat GBT, I'm not going to talk about chat GBT for, for too long here and just be another person that's. Popping off about that.

But like, I think one thing that I have learned from you just in our conversations is like, You can't just give chatGBT, just get output from generative AI and just go like, okay, perfect. That's, that's the result. I'm going to take it. You have to know how to work with it and to continue to feed it with more and more data so that it gets better and better and better.

So it is not an end. It's a process. It's a journey. And so you almost have to be with generative AI from my perspective. It's like, you gotta be willing to go on the journey. Right. And like not worry about the end and more, more be worried about like, every time you're feeding it more, it's getting better.

You're never going to be there. Right? And quite frankly, that's the whole point of generative AI. You're never there, as long as you're feeding it more, right? And so, like, you almost need to just get, like, excited about being on board with the journey. I talk to a lot of people about content marketing, because that's, um, a big passion of mine at Free2Grow.

And people are always like, dude, content marketing, it just seems like a lot of freaking work. And, like, it doesn't really return that much in sales. And I'm like, it does. But it takes time and you have to be one. You have to get into content because of the journey, because you just want to be helpful because you just want to get information out there that is actually helpful and entertaining to people.

Understanding that sales and like positive economic impact will come, but that's not the reason you're doing it. You're doing it for the journey. Right. And I kind of feel somewhat conceptually the same way about generative AI is that like. Look, you start with like what Matt said, how can you help the customer, right?

And then how can you help your company's efficiency, but get into it with the mindset that it's going to be a journey, right? And not just expect everything to get blown up and. Changed overnight, but to be on the journey with like bringing generative AI into your business, what, what do you think about that?

[00:37:15] Matt Ezyk: Yeah. Just to comment on something you said that I think will put a lot of people listening at ease, especially if they're in the SMB world, I've worked with hundreds of brands and retailers in my career, uh, from the, from the beginning. Five million a year to billions a year that they all have one common problem is that their data is messy Uh, I haven't come across one that had that did not have issues with data some worse than others Um, so I think it's it's normal, but you also have to work to continuously make it better.

So, um That that's a pretty normal thing. So as far as uh talking about Like how to use generative tools and just AI in general. You're absolutely right. Like there's, there's two points that I think are really important. It gets you 80 or 90 percent of the way there. And you need to add a human element to it.

Um, and this is really coming from learning how to write good prompts, right? So if you're talking about, uh, chat GPT, not only learning what to ask it, but also ask it if it understands you. And that was a really great breakthrough for me is that when I was asking questions to chat GPT, and then I would tag it at the end and say, ask me any clarifying questions, if you don't understand.

I would get much better results because of that. And you can apply that to AI tools as well, but it's really, when you're talking about chat GPT, um, that's been, that's been really great. So, um, you can use this tool for all sorts of things. So, but it's important to have the human element so you can do.

Content you can do analysis, uh, with AI, but you need to use the human element for strategy and then for adding your own voice. So, uh, when you're writing, uh, content, you need the right brand voice. You need the right authenticity. You need to measure and iterate what you're doing. And I can see that in LinkedIn, man.

Like, I, I see, like, there was someone respond to me today that I didn't know. And I can tell if it's written by Gen AI. Oh, for sure. So. For sure. I use it for ideation all the time, right? Like, I'll be in a meeting and I'll have a question, but instead of using Google now, I'll type it into chat, GPT, and then have conversations with it.

It took a while to get comfortable with that. And that's another, I think, really great point when you're talking about SMB, DTC, uh, businesses or retail businesses, you need to understand that customers don't know they can use this yet. I mean, even, you know, folks like you and I, who are learning about this all the time, I wouldn't go to a brand and instinctively think that I could use, Something with like generative search or whatever it is, you need to show the customer that they can do it.

And a lot of the ISV companies out there, even the bigger companies like Salesforce, I think fall into that trap where they're like, okay, we did the, the thing with AI and it's awesome. And I look at it and I'm like, my customers are not going to know how to use this, like how to bridge that gap. So yeah, interesting topic.

[00:40:16] Jon Blair: Very cool. I mean, There are several things there, um, you know, that are super applicable to using AI in the lower to middle market. And again, like to recap the whole point of this conversation and why I think it's super useful for DTC brands that are between five and 65 million a year in revenue, which is primarily.

You know, the types of brands that Free to Grow CFO works with merging physical retail and digital advertising. So there's totally a place in this as you scale your brand from a profit focused mindset. AI, hot topic, right? There's lots of ways to leverage it to improve customer experience and ultimately the bottom line impact of the business getting improved as well.

But You don't have to dive in head first, right? It's so many things as is with so many things of scaling a DTC brand. Figure out where it fits into your strategy. Don't start any of these things without a strategy. Figure out where it fits in your strategy and then figure out something small. that you can test and learn with.

Right. And, um, you know, whether we're talking about whether I was talking with Adam Siskin a few weeks ago or Renee Hartman about expanding into retail, we kept talking about what's something small that you can test first, right? Get your feet wet. And, you know, if you get into this, this rhythm of test and learn, test and learn, test and learn in these, these two different areas we've been talking about today, you'll be surprised how, you know, a year from now, two years from now, five years from now.

How much progress you will make in these areas and hopefully what we've talked about here today gave you some tangible like jumping off points of like, Oh, I'm gonna go try that thing that Matt talked about. And it's just it's a place to get started. Right? Um, so before we land the plane on the conversation, I would like to talk about something personal because, um, the balance between personal and work life is a huge guiding principle of Free to Grow CFO.

It is, is that the core of who we are as a business? And so I don't ever want to have one of these episodes without talking, um, to our guests about something personal. I'm going to go a tiny bit off script here. Matt and I have something in common that I don't have in common with. Probably, I'd say most of our guests, we're both musicians and both have been touring musicians before and, um, you know, I still play music to this day.

I think Matt does as well. We don't necessarily do it professionally in the same way. But, you know, Matt being in entrepreneurial, uh, being entrepreneurial in the business world, but also being, I call it being in a band is Pretty damn entrepreneurial. It doesn't get any more entrepreneurial than that. I always say, you're a paid content business, right?

And, um, going on tour, you're not just selling a service, you're actually marketing your business and getting it out there. Hopefully you're selling apparel and paid content being your music, right? Being in the entrepreneur world of both music and business, Um, or retail, what, like, what has that experience meant to you?

And how have you been able to kind of sharpen yourself in those different domains by, um, being kind of a dual entrepreneur? 

[00:43:33] Matt Ezyk: Yeah, interesting question. Um, I mean, what I've learned from music is that there's so many similarities when you're, you're marketing something, right? In this case, it could be, um, whether it's a, you know, a bar band local that plays local, or you're touring, uh, original act and you need to produce content that's, that's creative, engaging, and you're consistent with it.

Uh, you need to have a good product and that's not just the recording that you're putting out. But if you're actually going out and playing live shows, like you need to have the right equipment, the right sound, consistent sound. I mean, I've, you've probably seen this. There's so many bands out there when you go out and you see, and they're, they're too loud or their sound isn't good.

That's the same thing is like any kind of business that you're marketing, you like, get your. Um, you're damaging your product that way. So there's so many correlations to that that are interesting. Uh, I think another point too, that is really interesting when it comes to the business world and when you look at music, especially my role as a, as a bass player, I played professionally and it's so important to, to listen.

To your, your bandmates and everything that's going around and being able to react to it, like whether it's a, a change you didn't expect or a mistake, uh, there's, there's been a lot of times. And for those of you who play music, you know, if, if, uh, if everyone in the band is playing something wrong and you're as a bass player is playing something right, you're perceived as playing it wrong because it's the bottom end of all the sound.

So there's been a lot of times where like, I've been right and everyone else is wrong. But I need to change to make sure everyone else sounds good, right? If it's like you're in a different key or something. So there's so many similarities that you can flip back and forth to the, to the business world. Uh, but I think it's really being, uh, dynamic with your, your marketing and your product and making sure that it's, it's consistent.

And then just real like soft skills with people and just listening and And having the, the, the best interest of everybody at 

[00:45:38] Jon Blair: heart. It's funny because like, you know, I would venture to say this is probably the case with, for you too, musicians. We get into trying to play professionally cause we just love it so much.

And then when you get there, you realize like. On the business side, the best bands are great marketers. They are in their own right. Like if you think about a band like Kiss, right. And like the showmanship in their shows, that is marketing 101 right there, right? Like Kiss is Kiss and a show with, even if you don't like the band, I know so many people are like, I don't like their records.

But I saw them live and it was incredible, right? And cause that's, that's part of their marketing. And like, um, that just kind of leave us all on this note, this is kind of off topic, but it's something I talk about a lot of my content and I talk about a lot with the brands that I serve as a fractional CFO, the most important thing in your business is marketing.

There, there's a ton of other things that are important, right? And, and, you know, you, you've got to have solid operations, you've got to have solid finance, but like marketing is the engine that drives the plane, if you think about a DTC brand as a plane. And so, you know, just don't ever let up. On just being laser focused on your marketing because when marketing works, yes, you need operations there to support it and you need finance there to support it.

But when marketing fails, those other two things, those other two functions in the business can't be funded. Right? And so just don't ever forget that, uh, whether you're a musician or running a DTC brand, you marketing is, is your top priority as a founder. So, um, Look, uh, Matt, before we, uh, land the plane here, where can people find more information on Pet Supermarket and on you personally?

[00:47:23] Matt Ezyk: Yeah, sure. So we're at PetSupermarket. com and you can find the products to buy online there and have a store locator to find all the great stores. I'm on LinkedIn. Uh, you can just search my name there. It's spelled easy YK. I'm also on Twitter, but not as much. LinkedIn is usually the good place for me.

[00:47:41] Jon Blair: Awesome. Definitely check out Matt's content. He's got a lot of really great stuff and you'll, you'll see me poking around engaging there with him, uh, frequently as well. Um, well look, if you want to find more helpful tips on scaling it, a profit focused DTC brand, consider following me, Jon Blair on LinkedIn.

And if you're interested in learning more about how free to grows e commerce accountants and CFOs can help. Your brand scale alongside healthy profit, cashflow, and confidence. Consider checking us out at freetogrowcfo.com. Thanks for listening this week and until next time, scale on.