Inside the Commerce Revolution with Kamran Iqbal, Commerce Strategist at PFS

(Intro Narrator at 00:00:00) Today, we're talking to Kamran, Commerce Strategist at PFS, about the latest developments in the commerce industry. You're listening to Joel Beasley, Modern CTO.

(Joel Beasley at 00:00:15) Now you guys are in e-commerce. Tell me about what you do, because right now it's the holiday season.

(Kamran at 00:00:21) That's right.

(Joel Beasley at 00:00:22) And we just had Black Friday, Cyber Monday. I learned before this call it was called Peak Week, which I don't know how I feel about that yet, but we'll see how I feel by the end of the call. That's a new term for me, though. But yeah, what's going on in there in commerce?

(Kamran at 00:00:38) Yeah, absolutely. So you're familiar with the holiday shopping. When we were younger—we're probably similar in age or maybe a little bit off—but it was Black Friday shopping. You go to the mall. You go to the department store. There was a deal. You want a new TV. That's what you're going to do. Well, with the propagation of online business, e-commerce, marketers took the playbook and applied it the same way. So instead of having the biggest shopping day be the day after Thanksgiving on Friday, they called it Cyber Monday. And what would happen over the past, call it decade and a half, is more and more promotions and deals and opportunities started coming up in shopping to where the activity that's occurring inside of warehouses, logistics centers, the entire supply chain, as well as what's happening in digital infrastructure—by the way, how many visitors do you have on a site, how many checkouts are you going to do per second—started to aggregate into a very short period. So it literally is the season kicks off, Thanksgiving's happening, and Friday, demand shoots through the roof. Monday, demand shoots through the roof. And through that whole week, you have this hurricane of activity happening all over retail. It's happening in the stores. It's happening online. And the impact to global supply chains is massive because now you're talking about a world where you might be shipping hundreds of orders a day or thousands of orders a day turns into tens of thousands to hundreds of thousands of orders a day in a very condensed time frame. So they call it Peak Week because 90% of the time, you're running status quo with some seasonal pickups, and then this time of year happens. You spent the whole year planning for it. So our business at PFS, now part of GXO, is specifically and mostly in the direct-to-consumer space. So we spend our entire year planning for these two weeks of the year to make sure we have enough inventory, enough people, the technology is resilient, the staffing is in play, and that we can go execute in a seamless fashion for our customers.

(Joel Beasley at 00:02:44) And so you've been there in twenty-plus years. What is your role when you started and what is it today?

(Kamran at 00:02:49) Yeah, absolutely. So this was my first job, I think, not working for my dad and his company. So we come from a family business of jewelers, wholesalers, importers. So it was growing up on a showroom floor. My first job was actually in IT. I was working the help desk on the weekends for a company called PFS. At the time, we were called PFSweb—.com era type of name. And my job was literally to do tech support calls Saturday and Sunday when I wasn't at school. And I was unlocking user passwords. I was running network cable across the data center, doing backup data recovery. Fast forward, I graduated school. I got a job at the company as an account manager. So being the client-facing, business-facing part of the company that worked with our clients. So I spent fifteen-plus years doing that, spending my time in our logistics centers. PFS, by the way, is more than just a logistics company. Our services include everything that happens post-click. So charging a credit card, processing orders, routing orders to the right warehouse, managing inventory, fulfilling orders, planning the transportation of those orders to final mile to the customer. And I spent my entirety of my career working in the direct-to-consumer retail space. And funny enough, you may not believe it, but most of my customers that I worked with are in the health and beauty space. So I've been working in beauty for roughly fifteen years. I took a little break from PFS in 2018. I lived in Manhattan for about two years, and I worked for L'Oréal USA. So I worked in the beauty supply chain for a couple years on that side. And then as of the lockdown, 2020, I came back. By the way, my favorite story, I came back. I met my wife. I got married, bought a house. I got an excellent job at PFS. Now we're part of GXO, so it's been a cool gig. But yeah, I live and breathe e-commerce. I'm a tech geek at heart, by the way. So when they said Modern CTO, I said that's going to be super cool. Let me get in there and start doing some talking. And yeah, I live in a weird intersection of business operations and technology, and I'm a passionate believer that all those things have to coexist to be successful. So that's the career. That's what I've been doing. That's what my passions are.

(Joel Beasley at 00:05:18) How long ago did you start back?

(Kamran at 00:05:20) So I came back—2020, I landed in Dallas because of the lockdown. I finished out my time with L'Oréal through that year, made a couple of phone calls, and said, "Look, guys. I'm back in the area. I want to get back in the business." And so, again, twenty years means you know a lot of people. You know everybody. And I had an opportunity to come back to work in this strategist type of role. So my role today, instead of working with existing customers, is I work with new customers who are coming in to help them structure and shape what a solution looks like and how to solve some of their business problems. I also come up with some subject matter stuff, thought leadership that we do. So you'll see me pop up on bylines and things that we do as PFS, just talking about retail and talking about the space, which is probably my favorite part of it and was my favorite part working in client service as well, which was, what are we trying to solve for? What's an innovative way we can do that? And let's work outside the four walls of "here's what we do," and let's find the best way to accomplish our goals. And usually, that's a combination of business process, technology enablement, and then great infrastructure.

(Joel Beasley at 00:06:31) What type of consumption trends are you seeing? Because, obviously, in the past twenty years, the way that we consume things have changed so drastically. And since you're talking to new customers onboarding, what do the new people want? What are the new models that are emerging?

(Kamran at 00:06:46) Yeah, it's really interesting. So there used to be—I think it's still a debate, but in the customer segments that we work in, there are people that you talk to. They're like, "I'm the online person. That's what I work on. Online, digital marketing, digital shopping is what I do," and there's a whole other group of people that are worried about retail and brick and mortar. And it was always this bricks versus clicks type of debate. I find that as I engage with people now, it's less of that. It's more of let's talk omnichannel. So I have an experience in-store, but I need to have the same experience from a digital standpoint. My retail partners are doing these three things while they should be online with my brand and my key message. And then, frankly, the capabilities are also starting to harmonize as well. So a key point and example in beauty, we do a lot of personalization. So you'd be shocked or maybe you won't, but people like to put their names on everything. So in the world of lipsticks, cosmetics, fragrance bottles, we personalize thousands of them a day where you could put your loved one's name on a bottle of their favorite fragrance and have it shipped to your door. You can do it from our warehouse, by the way. You place the order online. It lands in my DC. And besides just picking and packing an order, I actually put it into a machine and carve out whatever message has to be there, pack it up in a beautiful way, and send it out to the customer all within the appropriate time frame. It's a value-add that gets done inside a Macy's as an example. So we've created the same physical experience and the digital experience on one play. People are really focused about experience. It's about personalization, connecting with a customer, how do you retain that relationship, and then also be able to deliver that expectation online. So you talk about twenty years of the space. It used to be okay to ship something and it gets to you within a week. That was okay to do. Today, that's a terrible service, by the way. People expect their stuff in three days. They expect it in two days. I'm the worst of people. I want it tomorrow or today at all times. So we see a lot of discussion about how do I have this memorable unboxing experience when I get my product, but also, I want it fast. Also, I don't want to pay for shipping. So it's a lot of how do we solve those complex problems at scale. And our value proposition as a company is to say, we do all this high-touch work at scale.

(Joel Beasley at 00:09:14) It's amazing how fantastic our society is that these are some of the problems that we're solving.

(Kamran at 00:09:21) It's a—

(Joel Beasley at 00:09:21) It's a good sign. I mean, these things—things are good. We're an advanced civilization to some degree.

(Kamran at 00:09:25) It's first-world problems maybe is what we could call it.

(Joel Beasley at 00:09:29) How do I get my name on the fragrance? But now that you're saying that, I'm thinking—that might be nice. I don't think my wife wears a lot of that type of stuff, but—

(Kamran at 00:09:39) I'm telling you, man. It all comes down to, when especially when you break it down, it's what's the workflow? Do I have enough people? Does the tech—is it bulletproof so I'm not going to mess it up and put someone else's name on it? That kind of stuff is what you have to think about.

(Joel Beasley at 00:09:54) That could be a mess on Valentine's Day.

(Kamran at 00:09:56) Yeah. It certainly could, but putting all the controls around all of that is what's important. And then the next layer of it, which is where technology comes into play at every step of the process, is customers want their product almost immediately. They want it fast. They want it in a seamless fashion. It used to be the style to say, "I'm going to put all my product inventory in one part of the country. I can get to most of the country in a reasonable time frame. That's where I'm going to manage." So I have an online inventory. It's in one part of the country. Stock planning is really easy. I can get it there. It's really straightforward, and boom, there you go. Well, when you get into a universe where I need it to deliver within two days or less—take an example out of Amazon, right? They have fulfillment centers all over the country in this geography that are delivering same day, next day, two days, three days. They're replicating inventory in a very intelligent manner, routing inventory in a very intelligent manner. So now all of a sudden, the equation for a supply chain leader is, well, which regions do I need to be in? How do I stock those warehouses with the appropriate inventory to be at the right place at the right time? And then how do I keep it stocked? And also, how do I make a decision when I get the order? Which warehouse should it go to? And if it can't go here, can it go to the other one? And if it can't go to either, what do I do with the order? Now there's a lot of intelligence that has to go into the stock planning process, the logistics of moving inventory from a manufacturing point to a regional center into a final mile network. All of that has to be lined up to have an excellent experience, which is the crux of it. So consumer—the acquisition cost of a customer is actually pretty high because it's the marketing that goes at it, all of the technology and infrastructure that it takes to get someone, convert them into a sale, all the stuff that happens behind the scene. And so if you have a bad experience and the customer doesn't come back, well, that's a lost cost. And if you have to reacquire that customer, that's an incremental cost. So a benchmark for any digital marketer is going to be what's my total lifetime value of the customer, what was my acquisition cost of the customer, because those metrics make or break what your P&L is going to look like aside from buying and selling the product.

(Joel Beasley at 00:12:22) And do you—my parents own a medical clinic, and they have a small warehouse. And I was looking at their business model, and their vitamins side of their business is super profitable. And it wants to take off, but they won't—they don't want it to take off because they're physicians, you know, and so the other half of the business of seeing the patients, that's the stuff that they're focused on. The vitamins are just because they have to have them available for people to buy them on-site when they're there. I keep asking my dad. I was like, "Dude, I'm looking at the numbers. Why are you not in the vitamin business? You can make ten times more money, and you don't even need the physician side of the business." He's like, "I just don't want to run a warehouse. I don't want to manage a warehouse." He goes, "I actively discourage the growth of the vitamin business." And so I was like, "You know, maybe you should find a partner or something that would help with that." Is that something you guys would do, or is this completely separate?

(Kamran at 00:13:20) No. It's funny because the majority of customers we work with, we focus on brands because our value proposition that we bring is let's bring a branded experience to fulfillment. But the reality of it is, is you're moving product from point A to point B. Where we excel really well, by the way, is in small format products. So talk about vitamins, that is not going to be overly different from a physical good standpoint than lipsticks or potentially jewelry. We do well in apparel and shoes, so you see a lot of that. But certainly, we spread across a wide variety of markets and verticals of product where we can do the effort. And your dad's not wrong, by the way. Running a warehouse is not easy. It's actually really hard. It's laborious. It's time-consuming. And if you get it wrong, then all of a sudden, you've invested a lot of capital infrastructure and effort on something that is not going to yield the lifetime value of a customer or the recurring revenue of a customer. That's why 3PLs exist in the space because they come back and say, "Look. I'll make that part easy for you." And finding the right one is actually a real challenge as well because it's—you know, it seems to me today you see a lot of tech companies that have a physical aspect that they've built. So they've built a software that says, "I can plug you into my warehouse really easy, and I can do all these cool things. And then I'll go source the work and bring in labor to go do it." But it's rare where you'll find the operational expertise, the scalability of it, as well as the technology altogether to go really deliver on a full-service solution.

(Joel Beasley at 00:14:58) And you're technically in the 3PL space. Correct?

(Kamran at 00:15:01) Yeah, that's right. That's right. We—PFS is considered a 3PL, though, like I said, more than the logistics service. We handle customer contacts on phone, email, and chat as well for a number of our customers. We operate in this full-service type of model. GXO is the world's largest pure-play logistics company. They have facilities all over the globe, hundreds of thousands of employees doing a variety of contract logistics things, receiving product, reverse logistics, value-add services, shipping pallets, shipping containers. And where we spend our time is really in the direct space. So we're picking units. We're personalizing products. We're gift wrapping gifts for people or doing notes for people and sending them out the door. So it is a complicated delivery to make it happen. Whenever I used to interview people for jobs at PFS, one of the first things I'd ask them is, "Do you shop online?" Most people would say, "Yes."

(Kamran at 00:16:02) They do. And then I would ask them, do you know what it takes from the moment you hit click to the moment it shows up at your door? Like, what happens? It's always interesting to hear people's responses because they go, well, yeah, you get an order, then my credit card gets charged, and then UPS guy delivers the product.

(Kamran at 00:16:21) When the value chain is actually vast on development of the product, the production, the quality testing of it, the transportation from point A to distribution points into a warehouse, into the right location of a warehouse to actually pick it, getting packed, getting QA'd again, and then eventually going into a trucking network, a final mile network that, again, hits multiple touch points. So there's a lot of people putting their hands on this experience in order for you to get whatever it is that you ordered today at your door. So it's a complicated procedure, but we aim to make it seamless for our customers so that they can make it seamless and excellent for their customers. And that's the ultimate objective.

(Joel Beasley at 00:17:06) And you're a consumer. You shop online. What's the most frustrating thing for you when ordering from companies online?

(Kamran at 00:17:13) Yeah. I'm the worst customer to deal with because I'll pick up the phone and say, guys, this is how this is supposed to work, and it didn't. And let me tell you why it didn't. Help me out. It's about expectations. It's expectation management at the end of the day.

(Kamran at 00:17:28) So if I order something and I'm told you have it in stock and I'm gonna get it in three days, if it takes any longer than that or my order gets canceled, I'm furious. Like, why did that happen? The other thing is around poor communication. So customers like to be really slick about, let me give you the tracking information, and you can go look and see when it's gonna arrive at your door. And I'm the worst because I'll just hit refresh. Let's see. Where is it now? Oh, it's showing up early. Okay. Good.

(Kamran at 00:17:55) I'll be at home, and I'll be able to capture it early. And then it ends up not showing up early and it shows up on time. Well, me being as reasonable or unreasonable as I am, now I'm disappointed because now I thought I was gonna get it early, and now I'm not gonna get it. And now I have to wait. Well, they met their service promise. They said it was gonna arrive within this number of days, and it showed up. But, yeah, I think what I struggle with as a customer is when the communication is off or my expectations aren't met. I'll give you an example. I bought this house in '20. I furnished it completely.

(Kamran at 00:18:26) And, by the way, I came from a one bedroom apartment in New York City, so all my stuff fit in my kids' room, by the way. So it's a nice four bedroom house, and all I could live in one corner of it. So I ordered a nice table from this company, and it arrived at my door. I was really excited. Cool.

(Kamran at 00:18:44) I opened it up, and there's a crack on the table. It got damaged in shipping. I was like, man, that's terrible. That happens. Right? That can happen. I understand that. So I reach out to customer service and say, hey, guys. I got my table, but it's got a crack in it. So I need to get a replacement.

(Kamran at 00:19:02) And he said, yeah. No problem. We can certainly do that for you. And they placed a replacement order, and I said, cool. When are you gonna come pick up the other one?

(Kamran at 00:19:11) And they said, oh, no. You're gonna have to return that. I said, okay. But how am I gonna return it? Like, I don't have a box for it. I don't have a truck. I'm by myself at this house. I have no way to actually do that. Can you guys come pick it up? And, unfortunately, the person on the phone was not empowered to make that decision.

(Kamran at 00:19:30) She couldn't help me. For as much as she wanted to help me, she couldn't actually help me. So she said, sorry. We can't do that. And I said, okay. Well, please escalate this to your manager because I'd like to discuss it further. And then I got off, and I said, okay. Well, how do you solve this? This is a learning moment for this particular company. So I hopped on LinkedIn and InMailed the head of supply chain for the company, and I got bounced around to a couple people, but the head of consumer affairs reached out to me directly and said, Mr. Iqbal, so sorry.

(Kamran at 00:19:58) What can we do to make this right for you? I said, look. Your agent on the phone did everything that they could. She did a really good job. She handled me. She kept me calm, even keeled, but at the end of the day, she wasn't empowered to make the choice that could service the customer. What I need to happen is for you guys to come pick up the table and bring me one that works. Bring me a table that's not damaged. And so they ultimately came back with the table. They packed up the other one, took it with them.

(Kamran at 00:20:26) I have a nice table. It's in my living room. I'm happy. But it was a lesson that I learned as a kid on, empower your customer service people to really be able to service the customer. Because if they can't do that, then they're not actually serving the purpose they're meant for, which is to represent you as a brand.

(Kamran at 00:20:44) So now that I've had a better experience with that, I can be an advocate about it. Had I had a really terrible experience, I would not be an advocate for the brand, and word of mouth is super critical in any sort of business. Right? And so that's how that played out. So they converted me from being really agitated to they solved my problem.

(Joel Beasley at 00:21:05) Did you find out if they solved it permanently at the company?

(Kamran at 00:21:09) You know, I don't know. At the end of the day, it was a drop shipping situation. So they sell a product on their site. They order. It comes from somewhere else. It delivers not their brand, not their experience. But to me as a consumer, and this is what I tell my clients every day, consumers don't care where they get your product. It's your brand that they're talking about. So if I buy it from you and I get it from Macy's or I buy it and I get it from Amazon, I don't care because it's still the brand that I purchased. If I buy Nikes and have a bad experience, I had a bad Nike experience.

(Kamran at 00:21:40) That's the first thing I'm gonna think about even if it came from some other channel. So having harmony in the experience and have an excellent experience across the board is really important. And that's why managing these supply chains and the way that they're done is mission critical for any brand to get it right.

(Joel Beasley at 00:21:59) I've had a couple good experiences with, like, I bought a gym, like, one of the cable systems. So it's like a big thing. And the guy pulled up with his truck, and he's like, hey. He's like, my advice to you is just to reject the shipment. He goes, because by the time it got to me, the box was split open and there's probably missing pieces.

(Joel Beasley at 00:22:21) And he goes, like, if it's missing some pieces and you can't put it together, like, one packet of screws, it's like you're gonna be really frustrated that you offloaded this and everything. So I signed the rejection thing. I called the company. And within, like, three days, they had another one out to me. And I was like, wow. That was a surprisingly good experience. I don't interact with that type of stuff much, but I can specifically remember me just being low spirited after it because it was a couple thousand dollars. Right? So Yeah. I was thinking this is gonna be like a battle.

(Joel Beasley at 00:22:54) This is gonna be like a war. This is gonna go on forever. Because historically, that tends to be the experience. But the company I was working with, whatever that fitness company was, they were on top of it.

(Kamran at 00:23:06) That's great. Yeah. I mean, my wife got me some custom shoes earlier this year.

(Joel Beasley at 00:23:12) I don't know. Shoes? Hold on a second. Stop. Yeah. What are custom shoes?

(Kamran at 00:23:16) She got me Nikes that she got to customize so they looked, you know, style, color, whatever. And I thought, okay. That's cool. They showed up. Great. I put them on. They were a little tight, and I went, uh, well, they're my size, but, apparently, my size of Nike doesn't, you know, doesn't look. Yeah.

(Kamran at 00:23:33) First pair of Nikes I ever owned. So okay. Lesson learned. Well, you would think that you couldn't have an easy experience to go return those and get something else, but they had a seamless experience. Within moments, she had a QR code. We scanned it, got a label, put it on the box, sent it out. She got a refund, and then within the next week, I had a new pair of shoes show up in my door, and no one had to think about it. We didn't have to work hard to figure it out. They provided the service. And what that means, because being in industry, one, it's the right customer service strategy.

(Kamran at 00:24:08) Two, the logistics infrastructure behind that worked, and it worked really well. They're able to generate a return label on the fly. I was able to send it and get a refund almost immediately from my wife for anything that she had spent on. We placed another order for a replacement. It went through the same process.

(Kamran at 00:24:25) It arrived at my door within the reasonable time frame. I think it was three to five days. Maybe it was a little longer because it had to come. The tracking was super transparent. We knew where it was coming from. We knew what day it was gonna deliver. We were at the house. We signed for it. I put them on. They fit great. Now I got a pair of Nikes that look awesome. So that's an excellent experience.

(Joel Beasley at 00:24:46) You know what I like recently that started pop up maybe in the past year or so? This little icon thing, it says, like, Link or Stripe or something. It can remember my credit card across providers. Yeah. That has been awesome. It's made because the number one frustration for me when purchasing from what I would call a boutique provider, meaning, like, not Amazon, not something that already knows me, is having to go through the process of entering in all my information again and creating accounts and all of that. And then I saw this thing pop up, and it knew me. And I was like, this is brilliant and amazing. Now I know you guys charge some of the credit cards for some of the people.

(Kamran at 00:25:27) Are you using that technology? Yeah. So it all exists in shopping cart. Right? So it's a way to deliver frictionless checkout. An example of where you would see this and not where we're playing as any impact on it, but, like, Shop Pay on Shopify. So most websites you're hitting today, they're likely a Shopify site. You put in your phone number, Shop Pay knows you. All of a sudden, they've retained the credit card. Go. That's how it works.

(Kamran at 00:25:53) But to your point, Stripe can do that. There's a variety of other options. Apple Pay really takes care of it. Right? So I'm an avid Mac user. If you're not, I'm sorry for it.

(Joel Beasley at 00:26:04) Yeah. That's what I said people do.

(Kamran at 00:26:06) Well, exactly. So my car key, my house key, my credit cards are all on my watch. They're on my iPhone. So when I shop, I just, you know, put my finger and there you go. I don't ever have to pull it out of my pocket. That seamless frictionless experience is very important. The other angle of that, though, is the importance of security. Right? Like, I wanna know that my credit card is not gonna end up somewhere. And I know that with this, you know, you follow enough keynotes to know about tokenization and encryption, how we keep your data safe.

(Kamran at 00:26:33) All of those things are the indicators that say, let's make that happen. And in our world as we when I say we swipe the credit cards, we do the processing behind the scenes. So if you think about the little machine that sits at a retail store where you go swipe and it goes out to the bank and all that, we facilitate that type of activity for digital transactions. But at the same token, the technology you put in on a website to say, remember me, right, that's another piece of infrastructure. We're not in that part. We're still on the back end of it. But, yeah, we see that as a prominent feature across the board with customers. It's like, make it a seamless experience. If you add friction to the checkout process, people are gonna drop off. Digital marketers, they all know it.

(Kamran at 00:27:16) It's a funnel. How many people came in? A whole lot. How many people clicked on my product? A little less. How many people added it to bag? A little less. How many people said click order, like, not a whole lot, but that's the conversion rate. That's the success. If you put a base or a roadblock in that process, I'm out of inventory or it takes ten days to deliver or please verify you're human and then type in these things, and let me challenge you to make sure you're real.

(Kamran at 00:27:42) That type of friction dissuades people from making the purchase. So I feel like it's too hard. I don't wanna do it.

(Joel Beasley at 00:27:47) Yeah. Sometimes I ask myself, like, am I real? And I just, like, leave the page.

(Kamran at 00:27:51) Listen. I got on this site with you guys. And before I clicked join, I was on Amazon because I saw your book. And I was like, oh, well, I should read that. So I ordered it on Amazon. It'll be here tomorrow. It's like list checkout. Immediate delivery. Yeah. I'll let you know if it shows up on time and in good condition.

(Joel Beasley at 00:28:15) Oh my goodness. Yeah. That's right. Because that's our brand being distributed through Amazon.

(Kamran at 00:28:20) That's absolutely right. It's part of the story we tell our customers at least is when you're managing a direct to consumer business, you have full control of the experience. You can say how fast it goes. You can say what the box looks like. You can decide what the packaging looks like. You can do all of those things, and you retain all of the data of the customer. Right? So you can continue to nurture that relationship with your customer. Well, when you sell in marketplaces, you actually lose that control because now it's Amazon's customer. It's the Amazon experience, which is great, and it's an amazing experience, by the way.

(Kamran at 00:28:58) But if you're focused on branding and presentation, well, it may not necessarily look like how you would have designed it. It's gonna show up in an Amazon box versus a beautiful Chanel box, as an example. That depending on the product category, that's a really, really important point. It's a book. It's gonna show up in a bag, and it's gonna be safe, and it's gonna show up free. It's gonna show up fast. Those are the things that I need to win. Perfect. But if the experience needs to be I'm charging for a very high end luxury product that has to have a luxury experience for a luxury customer, well, that's a completely different value proposition that needs to be met.

(Joel Beasley at 00:29:35) Yeah. We experienced that a lot. So we have our show, but we make, like, fifteen, twenty other shows for, typically, Fortune 500 type companies. And we did that because we had people sponsor the show, and then they asked us to make them their own show. And I said, yeah. You can have your nephew do it for a hundred dollars an episode. I'm sure they could use their MacBook and stitch together you a thing. But if you have your billion dollar CXO talking to another billion dollar CXO, you need that to go right the first time every time. And that's why you would use, you know, this different type of setup that we have. So we get it. 100%. I like it. I like that you guys are the nicer version because that's what we do. So we get along in that regard.

(Joel Beasley at 00:30:16) That's perfect. Because why else, Kamran, why else would you wake up and not try to build the best product or service possible. Like, I never understood second and third tier providers. I'm always like, if the option is to make a Bentley, like, why would you not make the Bentley? It

(Kamran at 00:30:34) I mean, it comes down to you can't have it all. Right? It's always like, there's a vector of I can do this, I can do this, but I can't do that. And we aim to have the top tier of that experience. Why?

(Kamran at 00:30:46) Because one, we like to be excellent. We like to be winners. You want to be remembered as that, because almost anyone can do the second and third tier, right? If I wanted to build an operation that receives widgets and I ship them out and they show up in a brown box and it takes three or four days to do it, gonna cost me the least amount of money to do that.

(Kamran at 00:31:08) I'm gonna charge you not that much money to do it, and we're all happy. Great. But to the extent that I'm working on a much higher caliber experience, I'm adding value. Yes, it's gonna cost a little bit more, but the reward is also more.

(Kamran at 00:31:23) The experience that your customer has is gonna be memorable. It's gonna cause them to come back and tell the story about, well, it was Valentine's Day, and I needed to get this present for my significant other. And I ordered it on this site, and they upgraded the shipping, and it showed up on Saturday, and it was in this beautiful box that had the handwritten note. And I gave it to them, and they loved it, and we had a memory. And that's the vision that we're selling every day of the week is that experience.

(Kamran at 00:31:52) Now, behind the scenes is what is the operational know-how to make that happen. It is a huge effort. I mean, it is a huge effort. As a company, every year during peak weeks—so it's a word you know now—we deploy all of our corporate staff into these warehouses for a number of reasons, not because we need the hands. We're not gonna add that much value putting the chief marketing officer on a packing line packing boxes, but it is a motivation of, one, being on the ground, touching the work, and feeling what you're selling, but also giving that experience to the people who run your business day in and day out.

(Kamran at 00:32:27) If you don't know the business that you're in and you're not on the ground making it work, you don't have a reasonable appreciation for that. So we send all of our new account managers, all of our leadership from the top down—they're on the floor working for these two weeks. I got excused because I have a newborn this year, so I can't go to the warehouse. But for the past decade and a half, we've been in warehouses every season.

(Kamran at 00:32:54) And it's rewarding in that you actually kind of get to feel like Santa Claus. Like, I made that gift go out the door. I delivered it. I took that phone call for a customer, and they had a problem, and I fixed it. There's a rewarding aspect to that.

(Kamran at 00:33:09) It's the dedication of the people doing their job. At least it's their job and it's their lives, right? And you're getting to directly impact other people's enjoyment, right, which is the important part. So I always tell people, I say, look, the supply chain and these technologies that we use here—this is actually the final thing that touches a product before it gets to a customer. We're the last touch. We're the last person they talk to, last person who put hands on this thing before a customer gets it, opens it up, and then your entire marketing spend and product development spend all lands on this one moment that I got it when I was supposed to get it. I opened it, and it was like, wow. And then I got the product, and it went, amazing.

(Kamran at 00:33:55) And if all those things check off, we all did our job, and it was great, and chances are that customer is gonna buy from us again. They're gonna evangelize us, right? Those are all the important things that we expect. And then if it doesn't go well and it doesn't go right, we gotta learn from those mistakes as well.

(Kamran at 00:34:12) So it's like a recursive circuit. You come back and say, well, we had a problem here. This is where the miss is. Let's go rework these procedures or find ways to make them better, because you gotta go faster. You gotta have more scale. It has to be even more complicated to deliver the experience. Experience, experience, experience. That's I think the bread and butter of all of it.

(Joel Beasley at 00:34:34) Especially with the type of gifts you guys are doing and products. I mean, you're gonna end up in a lot of unboxing videos.

(Kamran at 00:34:41) Yeah, it's funny. So in my last role, it was a strategic role. So I was in there to say, look, here's what we need to do from a direct consumer supply chain. And part of the pitch, part of the story, was completely about unboxing. So to reach out to top-level supply chain executives to say, look, normally when you're shipping pallets and cases to big box retailers, you just wanna make sure that you're maximizing the cube. You're not wasteful on the product, and you wanna go fast. You wanna have the lowest cost per unit.

(Kamran at 00:35:12) Those are all the things that are important to you. Those are all very important things. But in this experience, it's the most high touch that you have to be. So if you want to go search the hashtag on Instagram "unboxing," you're gonna get millions, millions of posts. The moment your box shows up on Instagram or on TikTok as a poor experience and some influencer or even some kid who's on there says, "Look what I got. This is terrible." Now a million people have seen it. That's the worst thing that could happen.

(Kamran at 00:35:37) The flip side is when you show this and it's an amazing experience, and then other people see it and go, "Oh my gosh, I have to have that." I can't tell you how many times the algorithm gets me. I'm just scrolling. My wife's sitting next to me scrolling, and I go, "Oh, that's cool." And I hit two buttons, and then two days later, it's at my door.

(Kamran at 00:35:59) The marketer got me. It worked. Instagram ads happen. Supply chain behind the scenes happen. But the moment that was a bad experience, you're gonna come back and say, "This sounded cool, but it wasn't cool. So don't spend your time on it. Don't spend your money on it."

(Joel Beasley at 00:36:15) I have that experience sometimes where I'm like, these ads aren't gonna get me. I'm not buying this useless junk. And then I'm like, oh, what's that? Look at that. Let's see. I need that. She needs that. Yeah, we'll get that.

(Kamran at 00:36:26) It happens. And after it happens, you go, ah, they got me again. But, yeah, doing my part for the economy. It's okay.

(Joel Beasley at 00:36:33) But when it's good product, though, that's—and when they can figure out what to show me when I'm in the mood to buy something, then everything lines up. I see good product all the time that I don't wanna buy because I just don't wanna make a purchase, or I don't—I buy a lot of things. I have moods where I don't wanna buy stuff.

(Kamran at 00:36:54) Yeah.

(Joel Beasley at 00:36:55) It's just like, I just don't feel like buying something right now. But I'll see something I like in it. And they've been slowly—the social media platforms have been making it easy to save those things. Remember before there was a save or a bookmark a post type deal?

(Kamran at 00:37:09) Yep.

(Joel Beasley at 00:37:09) Yeah. Now you can bookmark it, and there's categories and all types of stuff.

(Kamran at 00:37:12) I'm telling you, it's all about making it frictionless and easy for customers to do what they want, which is "I want this, I want it now," and then click and go, and it happens. The brands that do that really well are the ones that are succeeding. By the way, the brands that are also investing in the infrastructure behind the scenes and have the supply chain and the inventory to deliver all this stuff on time, those are the ones winning. I told you I came back to Dallas in 2020, the beginning of the pandemic and the lockdowns. People who had businesses that were strictly in brick and mortar in retail stores suffered massively for months because you couldn't walk into a Macy's. No one could go anywhere, so now all of a sudden, shopping stopped. That means the purchase orders for more inventory stopped completely.

(Kamran at 00:38:04) Brands like Amazon deprioritized certain types of products and reprioritized things that were more important, like hand sanitizer and cleaning and health and safety products. So now your entire value chain has been thrown into a fit because the activity is not happening. Now what do I do with my workforce? All these problems happen. But if you watch what happened to us—and us being squarely in the direct consumer space—all of our channels blew through the roof because people were shopping online.

(Kamran at 00:38:32) They're like, at least I can order it online and get it to me. Well, the brands that we work with, one, had the benefit of our infrastructure and scalability. We did that. But even as a company, we had to pivot. We used to have primarily distribution centers in the Memphis, Tennessee area in the United States.

(Joel Beasley at 00:38:50) Oh, that's near me.

(Kamran at 00:38:52) Yeah. So there's as many people who live east of Mississippi as who live west of Mississippi. It's a great place to ship product from. There's a few places in the United States that are like that, but Memphis is a good space for it. Well, in 2020, within the first quarter, we set up a second warehouse in Dallas-Fort Worth.

(Kamran at 00:39:11) Why Dallas-Fort Worth? Well, we were all here in Dallas, and it was the easiest place that we could stand up more infrastructure and scalability without too much disruption. The customers that we put in there to have a second pile of inventory, they didn't leave. It became a second fulfillment point. Fast forward into the year after, we opened one up on the West Coast in Las Vegas, Nevada.

(Kamran at 00:39:35) And so now the strategy that you start to see is not just a single point of inventory, but we started having multiple piles of inventory in three parts of the country, and we're shipping now from multiple points. We have resiliency in the warehouses. So if I have a—there was a COVID incident and I had to shut the warehouse down and sanitize it and the people couldn't come back in because they were potentially exposed—I have other facilities that could continue to operate. We did this so much so that with some of the brands that we worked with, they activated their retail stores. So activating inventory across a national network, their brand stores that they had employees that couldn't go to work anymore. Well, they could come in and work to fulfill orders.

(Kamran at 00:40:15) Right? It's a different type of work. And now all of a sudden, you have a national network of fulfillment that's happening. And the only reason it works is, one, because you have inventory in the right place, but you have the IT tech systems to decide, one, can I show all the inventory? Can I route the order to the right place with the right service level?

(Kamran at 00:40:35) That's where we spent our time in 2021. It enabled a lot of our customers to continue to operate and capitalize on the increased demand that happened between '19, '20, and then '21 and '22. It's not unusual for us to get an email from our COO who says, "We broke another record today." That's what the story was in 2021. It was just an intense growth trajectory that retail analysts predicted. That's what was gonna happen—that it's gonna grow, and it's gonna continue to grow.

(Kamran at 00:41:06) It was a quantum leap in how fast it grew and what percentage of business went to the stores versus the online channel. It level set as stores started to open back up, of course, but the expectations were set. The experience has been set. So we have a number of customers in our network where they live in multiple sites. They intelligently put inventory in places to forecast and support business growth. If you follow any of the big supply chain analysts, they'll tell you you went from a national forecast or a sales channel forecast to forecasting by location, which is—when you have thousands of SKUs, this actually gets really hard, by the way.

(Kamran at 00:41:44) It's not easy to do this. You could be easy and say, "Let me just duplicate everything," but that's expensive. There's a carrying cost of inventory. But to the extent you can predict the demand of customers on what they're buying and then getting the right stuff in the right place, those guys are the winners. They're not the ones that are sitting with, "I have too much inventory now. This is a problem." We're actively looking to put inventory in the correct place and let the consumers consume that in an efficient manner so you're not driving up significant carrying cost. You're not driving up significant logistical cost to get product to places where it doesn't move.

(Joel Beasley at 00:42:21) Yeah. No, it's fascinating, this world and the technology and the advancements that are happening. I wanna have you back on in the future and learn more about the robots and all the automation and tech. Wait, you're in Dallas, and I'll actually be out in that area in April. Maybe I'll come by a warehouse. You could show me the robots.

(Kamran at 00:42:44) Yeah. You know what? Come by. I would love to show you one of our facilities. Our friends at GXO, by the way, have a huge investment in automation and robotics. If you follow them, they posted something on LinkedIn the other day. They have this humanoid-looking robot, and what he does—I say he; it's a robot, but I said he.

(Joel Beasley at 00:43:05) It's okay.

(Kamran at 00:43:06) Grabs a box, turns around, walks it over, puts it on another thing. And it's probably the heaviest part of the step that a person would have to do and that you would get tired of doing, and they would slow down. But you have this machine that's not—it's not that it replaced the people; it's actually augmented the activity that's happening in the warehouse. So let me put the hard work on things that can do it efficiently and run all day and all night, and then the people are doing the more high-touch stuff. So there's an interest—we could probably talk for days, Joel, about what is the impact of AI? What is the impact of robotics and automation? And there's a lot to unpack there.

(Kamran at 00:43:37) But it's so cool to see. We ran a pilot in one of our DCs last year. So you have millions and millions of pieces inside of a warehouse. Well, one of the most important things is to make sure all the inventory is in the right place. So inventory control is critical. If the product's in the wrong spot, then everything else breaks down. Well, sending people up and down aisles to count product all day and all night is really not that efficient, right?

(Kamran at 00:44:08) That's—you'll spend days and hours and hundreds of hours.

(Joel Beasley at 00:44:11) Cameras or some robots or something.

(Kamran at 00:44:14) Man, I'll tell you what. We put cameras on drones and flew them up and down the aisles of a warehouse. It was wild. It was like OCR taking pictures of all the barcodes, and it was saying, here's what you have, here's what you don't have.

(Kamran at 00:44:29) And just that one step cut out hours of people running around.

(Joel Beasley at 00:44:34) Whose idea was that?

(Kamran at 00:44:35) I would love to say it was mine, but it wasn't mine.

(Joel Beasley at 00:44:39) That is awesome.

(Kamran at 00:44:41) But yeah, it's that type of innovation and thought that happens behind the scenes at these companies. And then when one—when the idea sticks, it's like, great. Now let's show the value, the use case, the investment, and go.

(Joel Beasley at 00:44:53) Are you still flying drones, or did you find something else that was better?

(Kamran at 00:44:56) You know, I'll tell you this, and maybe I shouldn't say this out loud, but we found that it was easier to put the cameras on a forklift and just drive the forklift up and down the aisle versus fly the drone.

(Joel Beasley at 00:45:06) Oh, that's nuts. Did you just drive the forklift autonomously?

(Kamran at 00:45:11) No. I'm not licensed to drive a forklift. They shouldn't let me.

(Joel Beasley at 00:45:15) Dude, we did it. We made a podcast. How do you feel?

(Kamran at 00:45:18) That was pretty cool, man. That was really cool. I've never done that. I thought we talked about a lot of good stuff.

(Joel Beasley at 00:45:24) Thank you so much for listening. And if you found this episode useful, please share it with a friend or colleague that you think would get value from it. And if you have topics that you'd like to hear discussed on the podcast, either add me on LinkedIn or send me an email, [email protected]. Every time I get an email or LinkedIn message, it absolutely makes my day and inspires me to keep going.