Erica Berchtold: About 1500 brands on site, you know, 20 million visits a month, 5 million app downloads. So you know we're dealing with scale, big sort of sets of eyeballs and traffic. So what is your strategic plan? Where do you want to get to? What's going to give you some fast return, generate some cash to then allow you to keep investing in other things? How am I going to relate to these people? That they're from a different world, they're the coolest dresses in the building? Oh, I am just out of my depth.
[Voiceover]: Welcome to ADD to Cart, Australia's leading e commerce podcast that express delivers all you need to know in the fast moving world of online retail. Every week Nathan Bush from E Suite and an e commerce industry expert will share the news, research and insights that you need to know to keep you at the top of your game and of course keep your customers adding to cartoon foreign.
Nathan Bush: Welcome back to add to CART for 2023. I hope you all had such a fantastic, relaxing, rejuvenating break away from e Commerce and ready for a big year that's coming up. I've got no doubt that it's going to be a very different year, but a big exciting year nonetheless. And here at Add to Cart, we are just so pumped to get into the year. We have started with a top notch guest, our most requested guest of all time and a retailer that is held up as the benchmark in e commerce in Australia. Joining me today is Erika Birchtold, the CEO of the Iconic. Now I'm lucky enough to know Erica through a past life when I was at Super Retail Group and Erica was the MD of Rebel. We talk about some of the stories from that time in this podcast including our trip overseas to the Google campus amongst other things. But Erica is just such a brilliant operator, a team leader and and a visionary in this space. So it was great to talk about what she's been up to at the Iconic since then. Now for those who don't know the Iconic, they are Australia's very own fashion powerhouse, committed to customer and at the forefront of technology and innovation. You'll hear a lot about that today and their approach to how tech powers that customer experience. They Dispatch from a 28,000 square meter fulfillment center in Sydney with almost 1,000 staff and they continue to redefine the future of retail in Australia and New Zealand. Erica joined the iconic as CEO in 2019 and in this chat she shares the secrets to an 8 minute fulfillment window from order place to ready to ship in eight minutes. Most retailers could only dream of that Erica also shares the achievement she's most proud of and the strategy tips that have taken the Iconic all the way to the top. Could there be a better way to start 2023 than the benchmark in E commerce? Erica has also given Add to Cart listeners an exclusive discount code which you'll hear about at the end of the chat.
Nathan Bush: So let's get right into it.
Nathan Bush: We've got a lot to get through in 2023, so let's kick it off on a high. There's nothing like setting yourself a big benchmark for the year. Thanks to our partners, Shopify plus and Paclio. Here's our conversation with Erica Berchtold, CEO of the Iconic.
Nathan Bush: Erica, welcome to Add to Cart.
Erica Berchtold: Well, thank you, Nathan, for having me.
Nathan Bush: Oh, pleasure.
Nathan Bush: You are by far, by far our most requested guest.
Erica Berchtold: Oh, I don't know, you know, I think the Iconic we just punch above our weight in terms of just attention and cool factor. Like, I know it's nothing about me, it's just everyone loves to learn about the Iconic and what's it like behind the screen, so to speak.
Nathan Bush: So I think there's a little bit about you too. Don't worry about that. It's actually funny because we've just done our accelerator so we've got a 10 week course to upskill people in E commerce and we have had three people study the Iconic from the outside. One of them on the most recent one got three or four weeks in studying what you're doing on site and went, actually now I'm going to switch retailer because I actually can't find anything to improve.
Erica Berchtold: Oh, well that's very lovely of them but I assure you there is much that we could improve. I think, you know, sometimes are we lucky or is it just, I don't know, I'm lucky that there's not another big like for like sort of competitor that we have here. So. So in a way that's good but then in another way it's not because how do you keep pushing yourself further if you don't have someone nipping at your heels right here in Australia? So, you know, we have to look abroad a little bit to try and try and keep, you know, focusing on improvements. But I assure you there is much that we could do to, you know, improve things.
Nathan Bush: So who do you look to?
Erica Berchtold: Oh, jeez, there's no like, as I said, like there's no one particular business. Like I look at all sorts of things so I might look at grocery delivery times and what they're doing there because you know, Woolies and Coles, they're not direct competitors of ours from a product but they're setting the expectation in consumers minds around what sort of flexibility you should have with delivery and things like that. So I'd look at them from that perspective. I'd look at, I don't know, some of the brick and mortar guys. Like from a assortment perspective, I'd look at other overseas retail. Like there's a big overseas retailer called Zalando, like based from Germany that operates in a lot of European markets. They'd be someone that I would look to to just see what they've done before. We've got sister brands like there's one in South America called Tafiti, one in Southeast Asia called Zalora. So I have a bit of a look at what. And we share a lot of learnings with each other. Actually we had a Russian business as well that the group has sold. They were doing a lot of cool stuff as well.
Nathan Bush: Yeah. So take bits and pieces from everyone. Yeah, yeah.
Erica Berchtold: It's kind of you've got to build your own adventure in this space here in Australia.
Nathan Bush: And when you're building that adventure, I could imagine that you're seeing things from all over the world and seeing all the things you could be doing. How do you determine, as CEO of the iconic, how do you determine what you explore and what you leave behind? Because you can't do everything right.
Erica Berchtold: No, you can't. You can't. And actually we have this conversation a lot saying we need to stop, stop trying to do so much because you can really run down some rabbit holes and spend a lot of money and waste a lot of time and people's time and resources chasing stuff that doesn't give you a benefit. I guess you've got to bring it back to your strategy. So we have a strategy and that strategy has three pillars in it. There's assortment, there's the user experience and then there's the platform business. So everything we do has to be delivering our strategic goals and our strategic plan and then we have some principles that we live by and how we do things. And one of our principles actually that we added last year was style. And all we do and what that actually helps us do is figure out what we'll do and also what we won't do. So you know the categories we get into. So we're not going to get into white goods because there's nothing stylish about white goods. Right. But we will get into beauty because that's quite stylish. A part of your whole look. So, you know, I've really worked quite hard over the last couple of years in particular to take a more enterprise wide look and to get my executive team to take a more enterprise wide view of the business rather than just their particular silo so that we're prioritizing things across the whole business not just, oh well, here's the cap management priorities. Oh, here's the tech priorities, here's the finance priorities. So yeah, so we do a lot of work to really come together and collaborate and yeah. And then start. Stay true to our strategy. Yeah.
Nathan Bush: And on the UX side particularly like you guys seem to just hit that out of the park. Constantly known for your free shipping, the speedy delivery, prompt customer service returns. Feels like you nail all the basics but also take it up a level. How do you balance all that and deliver that really awesome customer experience but stay profitable?
Erica Berchtold: Yeah, well, I mean the business wasn't profitable when I started. So a few things a, you've got to back the right horses, right. So what is your strategic plan? Where do you want to get to? What's going to give you some fast return, generate some cash to then allow you to keep investing in other things. But reality for a business like ours is you need volume to cover your fixed costs. Right. So we've got a big fulfillment center out in Unora. Yes, there's variable costs, that is some wages that you could flex up and down depending on, you know, is it Black Friday or Black November as I'm calling it. And so you need extra people out there. But reality is Whether you're doing one order or 100 orders, there's some costs out there that are just fixed. And so you need to get your volumes up so that you can cover those fixed costs and then you can find that a little bit easier to breathe, I guess. So we are doing a lot of work to have a look at, say delivery, I'm starting to question, well, does everybody want it in three hours still or do they just want to know when it's coming? I mean I know myself as a customer of the iconic. Often I will pick a three hour delivery window because I know definitely where I'm going to be in the next three hours. But I don't want to roll the dice and have the iconic tell me, oh well, it'll get there sometime on Thursday. Like I might only be home for two hours on Thursday or you know, so. And that's where I say, like the grocery guys really help set an expectation of I want this two hour window. So. So you know, we'll have a look at things like that from a customer value proposition. Like what do we need to keep doing in that sort of delivery space, in that operational space and then from a promotional space. When do they want promos, when don't they? Where do they just want premium sort of offerings? And that varies by customer as well. You know, I'm hoping next year will be a bit of a reset in this marketplace. You know, everyone's expecting consumer sentiment to drop a bit. And on the back of that I think you'll start to see retailers probably manage their inventory a lot more tightly. I know we certainly want to do that. Which then means if you don't have as much excess stock, then you probably don't need to discount and promote so much. I mean, that's the idea anyway. Like we'll see how that goes. But you know, I am wondering with, with perhaps a lower volume, will that actually allow a lot of retailers in the industry to actually reset customer expectations around promotional sort of mix?
Nathan Bush: Yeah.
Nathan Bush: And you mentioned those shipping expectations. Have you noticed anything in 2022 that changed dramatically around customer expectations? Anything that's caught you by surprise?
Erica Berchtold: No, not really. We've gone back to some more traditional peaks of traffic and stuff. So you know, during COVID when people were working from home a lot more, all of a sudden that 7am to 9am online traffic pool like just kind of dropped off because people weren't commuting to work anymore. They were probably getting their kids set up for home learning and stuff at home. Whereas then the lunch break was a lot more traffic than what we might normally have found. So. But that has kind of returned to normal from a fulfillment perspective. I think our days are pretty much what they always have been. People are definitely waiting for those big sales though, and they're tapping into those a lot more. But Black Friday was enormous for us. Yeah, no, like not, not huge. Huge swings.
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Nathan Bush: Are you of the belief that 2023 will be softer or potentially just hype?
Erica Berchtold: I think it will be softer. I think like, look, this time last year a lot of us were still in lockdown or just coming out of lockdown. I mean, I remember having so many friends that had booked holidays to Queensland. Right. And actually couldn't get there for their holiday because they couldn't get a PCR test in time. At this time last year, the world was very different. So right now we're seeing people actually just enjoy getting out and about and having Christmas. But actually that is one thing that's changed what they're buying. So people are really embracing a lot more color and like, you know, crazy party dresses and stuff like that. So everyone's living it up a little bit now.
Nathan Bush: Yeah.
Erica Berchtold: But there's going to come a point where reality is going to hit and if interest rates still keep going up for people with mortgages, that's going to start to hurt. Even people paying rent. If that person that owns that apartment they're renting suddenly has to pay a home mortgage, rent is going to have to go up. Cost of living, like just bills and how much stuff costs. So I think there's going to be a kind of come to Jesus moment of like, whoa, stuff is like feeling hard and yeah, I think it will soften next year.
Nathan Bush: And this is our first episode for 2023. Oh, is it probably. Probably a sober.
Erica Berchtold: So let's see how accurate I am then. Hey, here I am in December talking to you about 2023.
Nathan Bush: Good. Now, as CEO of the Iconic, obviously huge organization, big team, huge responsibility, how do you personally stay connected to the customer? Because I know that's something you're really passionate about.
Erica Berchtold: Yeah, I mean, look, I used to love a shop floor when I worked in bricks and mortar. I used to love just going out, talking to customers and talking to the team in store and just hearing what was happening. So I've had to find my own way of being able to replicate that sort of for myself here in this business. So I'll sit in and listen to, you know, customer service calls just to hear how they're having to, you know, pacify or satisfy our customers. I will pack orders at the fc. So last week I was out there packing. I would love to point out that actually I beat our CFO in terms of cooking per hour. So I did 67. He did like 30 something, I think. So anyway. Yeah, well, you know what? The people out there that I actually could pick 90, 90 orders per hour, so I was nowhere near them. But I will go out there and pack orders. And it's funny, you can start to see. I'm like, wow, why, like, literally all these people in Queensland bought knitwear last week. Oh, yeah. And so we ran the data because I thought, I came back to the office and said, hey, I noticed we were selling a lot of knitwear, which I thought was crazy because it's so hot at the moment. And they came back and said, yeah, Queensland actually over indexing network. I don't know why they're just investing for the season ahead because it was cheap or, I don't know, bunch of weirdos. But, yeah, but you can, you can start to see some little trends, you know, NPS surveys. So I read every single customer comment that comes through in an NPS survey. That's how I could try and hear what they're saying.
Nathan Bush: There must be hundreds.
Erica Berchtold: Yeah, yeah. But I love it. Like, and I always. There's some customers that just make me laugh so much. Like, there's some that make me cry because I'm like, oh, my God, we stuffed up so badly. But then there's some that just make me laugh, like, just like the comments they're making about the items that they've bought or, or the sort of models that we use or what have you. So I do love to give a random gift voucher to, you know, some people. Just with a little note from myself saying, hey, you made me laugh with your comment. I really do read this stuff. Here's 50 bucks.
Nathan Bush: So, yeah, everyone out there, if you're doing an MPS for the iconic, keep it entertaining.
Erica Berchtold: I will. Yeah. If you entertain me and make me laugh, you will probably get a gift voucher. So. And also I just shot myself, like, we've got a big app focus at the moment, like, to try and drive app usage, but also to try and drive improvement of our app features and functionality. So we're actually going to look at shifting our entire staff discount mechanism to app only because if I actually get all the team using the app, we're going to get all the feedback on what's working and what's not, so. And what we could do to improve it. So, yeah, there's lots of, you know, we ourselves can experience the customer experience and feed that back into the business too.
Nathan Bush: So, so important on the app. Side, obviously we've seen it been big for a fair while, but people like lskd really pushing incentives to go via the app yourself. Having the app, what is from a strategic point of view, what's the main purpose of the app or driving customers towards an app rather than the website?
Erica Berchtold: I think it can give them a better experience. And then the data shows that our app customers are stickier, like they're more loyal, they spend more, they come back more frequently I think because the experience is better and then it allows you to have a one on one engagement with that customer and personalization is so much easier. And then ideally I would love to be able to spend less on paid performance marketing and actually just give a really personal experience on the app and, you know, so the more people we can get onto the app, the better then.
Nathan Bush: Yeah.
Nathan Bush: And the paid performance marketing pain point for many people in 2022, especially the rising costs. What kind of channels are you seeing still hitting targets for you? And are there any that you've ditched or kind of really scaled down?
Erica Berchtold: I don't think we've ditched anything. But I mean, look, we literally are monitoring our marketing spend on an hourly basis. Like so the team just constantly looking at the data and just saying, should we dial something up? Affiliate programs, paid performance, brand marketing, etc. And then we're doing different things with the marketing that we do. So we might use influences more than models or stuff like that. So like, so there's nothing that we would have killed entirely. But we do monitor everything and just we're constantly recalibrating how we're spending. I do think TikTok is something that we started using a lot more. Yep. And we had our Runway a few weeks ago and we worked with TikTok actually to bring to life like some of that Runway. People were actually watching that for 11 minutes. Now TikTok average time for a live is about 50 seconds. So the fact that we were getting people staying there for 11 minutes was pretty huge. So it comes down to then also not just the channel you're using, but the content that you're serving people on that channel to make sure we're getting the right sort of metrics. Yeah, it's just about the content that you have and then just recalibrating constantly.
Nathan Bush: Are you on TikTok yourself?
Erica Berchtold: Oh, look, I do have a TikTok account, but you know, I don't. Oh yeah, I am. Because I can end up just going down this route like before I know it. I've spent 32 minutes watching kittens chase, you know, cotton wool balls or, you know, something like that. And it's like, oh, my God, that was just such a Sabbath time. Like, you just end up watching these random sort of stuff. It's like reels on Instagram. Like, I just, I don't know why they keep serving me up all of the friends sort of highlights or whatever. Like, and I love that TV show. And then before, you know, I've lost five minutes of my life watching all that, I'm like, no, stop, stop.
Nathan Bush: Get me out.
Nathan Bush: Yeah, and I love some of the
Nathan Bush: experimentation you mentioned the TikTok experimentation. But you've also, you know, pushed the boundaries of tech and I know platform is one of your key Y initiatives and you've done things around avatars, NFTs, metaverse.
Erica Berchtold: Yeah.
Nathan Bush: What's driving your push into these spaces and why are you so excited about this?
Erica Berchtold: As a business, we are equal parts tech company as we are retail company and we're 11 years old, so we're kind of now an old startup, but a young retailer. There's not many people in that sort of space. So we need to make sure we can kind of keep and retain the stuff that made us a cool startup techie, sort of innovative, entrepreneurial sort of company at the cutting edge. But then also bring in some of the more mature, stable processes and things, you know, that a business our size now requires. But you know, things like NFTs and Metaverse, I mean, we, we jumped into that a little bit because we could. And I think customers, like, I would have hated for David Jones or Myers to do something before us, like, like that's our vibe, right? Like, it's our vibe to like, try that sort of stuff. It doesn't have to be big or commercial right now, but let's take the customer on the journey of what that could be about. But we've also got like a lot of existing tech as well that is still actually quite advanced here in Australia, and I think we can continue to develop further. So it might be follow the brand, you know, on the app, or snap to shop. So I could take a picture of something you're wearing, upload it to the app and it will offer some suggestions of similar items, wish lists and wish list boards. Like, there's a lot of stuff we do there that I don't think we tell customers enough about those sort of features that we have. And I think we could tweak them a little bit as well. So I have a personal hotline straight into our Head of product. And, you know, I said to him one day, I said, who might I talk to? Just if I've got some ideas or feedback or something about. He's like, just please just call me. Right. Don't contact anyone else. Just call. Excellent. Thank you. Jeff.
Nathan Bush: They didn't tell you to like, put in a trello board or raise a ticket?
Erica Berchtold: No, no, I don't have to do that. That's one of the luxuries of being the CEO that I get to just go direct to stores.
Nathan Bush: Amazing.
Nathan Bush: And so you build everything yourself rather than partner.
Erica Berchtold: Yeah, we have today.
Nathan Bush: Yeah.
Erica Berchtold: Now, I don't know that we'll do that forever. I mean, I think 11 years ago when we were starting, if you took an off the shelf sort of platform or piece of software, I think it came with some limitations and you were compromising on too much. So we did build a lot of our own. Now, I'm not against copying with pride, like from our sister regions or looking at some off the shelf stuff, but we've got to be able to have the flexibility that we need to keep, you know, being at the forefront of online.
Nathan Bush: So that makes a lot of sense. I could imagine that that would take a bit to manage, especially as you're opening up new channels across the app, the website, the NFTs, the whole lot. Right.
Erica Berchtold: I mean, when I started here, that was the area that actually terrified me the most. I'd never. I mean, Nathan, you worked at Super Retail Group with me. I don't think we even had a job title in that tech team called product. Right. Like, it just wasn't a function that existed in that sort of old sort of world. So coming into this business and suddenly having a team of engineers and product people, like, you know, I was like, oh, my goodness, what am I going to do? Like, how, how am I going to relate to these people? They're from a different world. They're just these cool. They're the coolest dresses in the building. They've always got the funkiest sneakers and the funkiest outfits. And I am just out of my depth. But then when I actually sat down and started talking to them, we were really all talking the same thing about solving customer pain points or improving their experience. They just had a different sort of language that they used to describe that. But once we actually found out our way of understanding each other, I realized I didn't have anything to be so scared of.
Nathan Bush: Yeah. And how are you feeling about. With such a reliance on engineers and developers, how are you feeling about the Depth of talent in Australia at the
Erica Berchtold: moment, Look, I think the depth of talent is pretty hard actually in that space. You know, I do a lot of work with the Tech Council of Australia and also Federal Government as well, Ed Husick and you know, we have a lot of conversations on how we can try and increase the sort of tech skills here in Australia. Covid didn't help in all of the border closures and you know, there's low unemployment figures in tech and high demand for tech professionals. But the reality is that we can't fill enough of the role. We haven't invested in Australian technology skills enough over the years. We can't now fill all of the roles that we need to. And then if you do, if you can find someone that's got the skills that you need, the salaries are so huge because, you know, and so this is some of the conversation I have with the Tech Council where you know, I said can we not create like an industry internship? Right. Because us, Canva, Atlassian, Facebook, Google are all kind of stealing each other's stuff and it just drives wages. It's hugely disruptive to your business, hugely expensive, driving salaries up, which I guess is great for those tech people, but it's not sustainable here for a business and for people to feel like they've got to leave to go and get that experience elsewhere I don't think is a great thing. So I would love to be able to say to one of like to Canva, let's do a job swap of some people. I'll send you someone for six months, you send me someone and at the end of that they go back to their jobs. They've got the insight like they've gone to learn something new without actually having to leave, without the company having that whole disruption. We got a one for one swap. So yeah, I would love to see a little bit more of that kind of camaraderie or something amongst the tech
Nathan Bush: companies, especially in non competing industries.
Erica Berchtold: Yeah, yeah.
Nathan Bush: Have you put it forward?
Erica Berchtold: I have, I have spoken at length to the Tech Council about this. So in 2023 that'll be something that I really try and get across the line.
Nathan Bush: I love it. You mentioned that we worked together at Super Retail Group and I was looking back actually on some of the photos and in 2016 when we went to the Googleplex together, that was so funny.
Erica Berchtold: That trip wasn't, remember the Google like what did they call it? Campus or something, I think and there was like a swimming pool there that was like you could just, I don't know what they call those pools but basically instead of swimming laps in a 50 meter pool, you're swimming against like a current. So it's like you're swimming laps but it's like a 5 by 5 meter pool or something. Like it's like wowzers. Like this is like whole next level.
Nathan Bush: Oh, it was incredible.
Erica Berchtold: Yeah.
Nathan Bush: And it was like another world. It was like. Yeah, we kept calling it the uni campus where people just live. It didn't feel like a workplace at all.
Erica Berchtold: Yeah, no it really didn't. Really.
Nathan Bush: I remember one of the, one of the innovation talks we went to, they were introducing meatless meat.
Erica Berchtold: Oh yeah, yeah, yeah, yeah.
Nathan Bush: Because it was right at the start of that and everyone's like, oh this is going to be massive. You're going to see it in your supermarket soon. And we're like yeah, that's crazy.
Erica Berchtold: Yeah. And yeah, sure enough, there we are now. Yeah, yeah.
Nathan Bush: But you mentioned the salaries, especially for your tech team is key. But what have you noticed around way of work? Obviously that's changed a lot during COVID What does the workplace look like at the iconic and how do you create a way of working that really keeps the team together and productive?
Erica Berchtold: Yeah, look, we've always been a pretty flexible sort of business. Like we've never been a business that says you have to be here Monday to Friday, you know, 9 to 5. And being an online and a digital, I mean we're digitally native, right. Like we're, we're online. It wasn't hard for us to pivot to working from home or working remotely. However, I think during COVID we made it work because we had all been together so much and had a really fun social service. So we had like this social capital that we banked that got us through. But I did notice that start to dry up a little bit by the end. And this year we've really focused a lot more on coming back together because you know, we also have a very young sort of team really relatively speaking, like average age is about 30 or so of the company. So you know, we've got people that love to socially connect. What I'm focused more on like rather than saying that oh you have to be here X amount of days a week, it's more about what is the work that we're doing. So I don't want people to come in here just to sit there by themselves doing emails for three hours. But if there's meetings that are cross departmental where we need to make decisions, that usually is better in person and Would be good to have in person and to just really have good discussions and have everyone engaged in that conversation. And then you know, like I, I was looking at some of the data recently, like the biggest days in the office are Thursdays because look, I like to remind everyone it wasn't that long ago that I was young. I'm unaware of the fact that Thursday is the new Friday. So when we used to do a Friday afternoon stand up and have a few drinks, I knew I had Barclays of getting people in on a Friday afternoon. So Thursday afternoons we do drinks and a bit of a company wide catch up and stand up. So yeah, Thursdays are huge here in the office because everyone just loves a free drink but they also know everyone's going to be here and you know, we can have a bit of fun. So yeah, so, you know, I don't know where it's going to land. I, I think probably if I had to strive for something I'd want people in two to three days a week and that doesn't mean a whole day. Like some people need to drop kids off at school or pick kids up or whatever. So you know, that's cool. So kind of maybe the equivalent of two or three days a week in the office together. But you know, I'm pretty flexible with it.
Nathan Bush: I like that. I like even the candidates that we speak to regularly. I think there's an assumption out there that if you're young you just want to work at home or work remotely. But we're not finding that's the case at all. Most want fit for purpose work essentially. Yeah, I like that approach of the project base. What does the project need? Right now? Yeah, right now I want to go back to your fulfillment efforts. 67. 67 per minute. But I also read that you're dispatching in eight minutes, is that right?
Erica Berchtold: Yeah, from the time a customer places an order for it to be picked, packed in a satchel on the back dock waiting to be picked up is eight minutes. And that's like, I mean that's really important when you know you're offering three hour delivery because us doing that in eight minutes gives the courier two hours and 52 minutes to get it to the other side of Tiffany or you know, to get it on the next, you know, Australia Post truck or what have you. So yeah, so we do pride ourselves in being quick like that.
Nathan Bush: Yeah, I mean most retailers are aiming to get under 24 hours. So eight minutes is incredible.
Erica Berchtold: Yeah, yeah, it's pretty fast and you know, we do that through A mix of automation where you can and then yeah, just trial and error and you know, just experience people like and just the technology that we use, like the systems that we have.
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Nathan Bush: A lot of that technology is custom built obviously. So then it becomes hard for your competitors to compete with you on.
Erica Berchtold: Yeah, pretty much.
Nathan Bush: Is it all out of one location?
Erica Berchtold: Well, we only have one fulfillment center so that's based in Yanora. But that's probably about 70% of our orders. 30, 30, 40% of our orders would be marketplace. So going directly from a supplier to the customer. And we will look at kind of a connected retail offering. Like some of those brands have got physical stores. You know, we should be using that network as well to fulfill customer. You know, in Perth, someone orders a Country Road T shirt from us in Perth, then instead of Country Road fulfilling that from their Melbourne warehouse or us fulfilling it from our Sydney warehouse, why don't we just tap into their store stock in their Perth stores and actually. And that'll be far quicker, much better environmental footprint on the back of that order as well.
Nathan Bush: And how do retailers feel and obviously we know specific examples. How do retailers feel about partnering with you in that kind of omnichannel sense where you might be taking some of that clip away?
Erica Berchtold: Yeah, look they're happy about it because we're bringing an incremental customer to them. So some of those big brands, like the data they give us is that 70, 80% of the orders they're getting from us are just entirely new customers altogether. So we're not just taking, you know, we're not just shifting the, the mix. You know, we spoke at the beginning of this as well about trying to manage inventory more tightly. I mean I think ultimately that's a good thing for the environment and just financially for everybody as well. Instead of both of us having to stock that inventory, try and tap into one pool and. And you know, it's all just about fulfilling the customer order. Who cares whether the customer order was, you know, placed directly with us or directly with them? Let's just get that product to the customer.
Nathan Bush: Love it, love it. And on the inventory management, how many SKUs have you got now?
Erica Berchtold: Oh, geez, we'd have, I think about 200,000 SKUs on site at the moment. Yeah, we have about 500 new arrivals every day, about 1500 brands on site. You know, 20 million visits a month, 5 million app downloads. So, you know, we're dealing with scale now, like, you know, big sort of sets of eyeballs and traffic. Yeah.
Nathan Bush: And you don't half asset. So like even all those products they've got, you know, the leading the industry in terms of descriptions, photos, videos, the whole lot, how do you put the processes in place with the team to make sure that those products, with such a huge volume coming in and being refreshed, how do you make sure that all stays up to date?
Erica Berchtold: Yeah, look, we do most of it. We do try and get suppliers to like, we're trying to upskill the suppliers and teach them how to actually write those descriptions and provide images as well. But from a data perspective, it's funny, our CTO and our head of data, they have this phrase that they call data democratization. Right. Which means, oh, everybody's got access to data. I say, is that just a polite way of saying to people, rack off and run the report yourself, rather than getting us to do it? And it actually kind of is, because what we're trying to do is build data sets and data skills in all of the teams throughout the whole business, that everybody is very data literate themselves, that we're not having to rely on this one centralized data team to be able to do all of this stuff for us is actually getting everybody to be able to do it. So, yeah, so I think, you know, upskilling people, bringing the awareness, training, getting suppliers trained as well, you know, is, you know, all of that, that leads to it.
Nathan Bush: Yeah, it's really interesting you mentioned that a few times about collaboration across teams and we just had Mikaela Wessels from Style Arcade and. Exactly your point. Let's just not make this heavy. Let's make it so everyone can get in and look at the merchandise, let's look at the product, let's get in there together. This isn't a merchant's job to go
Nathan Bush: and look after that.
Nathan Bush: We're all in.
Erica Berchtold: Yeah, correct.
Nathan Bush: So taking a step Back and looking at the bigger picture. You've obviously had an amazing career so far and I was lucky enough to work with you. How do you stay inspired and motivated?
Erica Berchtold: I'm just naturally such a curious sort of person. Like I love, I love retail and I just always looking for what next or what are customers thinking now or so I guess I'm pretty self motivated to just keep looking for the next big thing or it's just I don't know how. I'm kind of programmed I guess and, and I'm really lucky. I get to talk to lots of interesting people. Like I'm naturally a converser as you would know so. So I just love to chat to people and inspiration comes from just sometimes the most random places. So. Yeah.
Nathan Bush: And what are you most proud of in your career so far?
Erica Berchtold: I think, I think that I, I don't think, I believe not having to make a, an either or choice between family or career that I actually was able to do both. You know, I have three young children, I have an eight year old, a five year old and a three year old.
Nathan Bush: We're on the thick of it.
Erica Berchtold: Yeah, right in the thick of it. And some people have these sayings that like, and they only target these things towards women where they say oh women can have it all, just not at once. And I'm like oh that is such B.S. like you know, who does have it all at once? Life is a constant recalibration of you know dollar work a little bit at the moment, okay, down a bit, family, whatever. But the fact that I could have three kids as well as a career, you know, I think is my proudest achievement.
Nathan Bush: Yeah.
Nathan Bush: Amazing. One of the things that I've always looked up to you for, especially with the work that you're doing at the Iconic is around the inclusion and social responsibility.
Erica Berchtold: Yeah.
Nathan Bush: Seems like that's a really strong value for you.
Erica Berchtold: Yeah. And you know I, I've said before that I knew coming to the Iconic was going to make me a better business person because I was just going to learn a whole new skill or just you know, see a pure play from the inside out, not be looking from outside. But I didn't fathom just how much the Iconic was going to influence me as a person and, and just really be the kind of making of me from that personal perspective because of all the work we do around environment, all the work we do around people and you know, it's not that I had no principles around that stuff before, but there's just something about being with such like minded people that really stand behind me and push me forward. To say, Erica, use your voice more for this sort of stuff and give you that confidence to do that I just think is a really wonderful thing. And yeah, I'm just so fortunate to have had that experience here.
Nathan Bush: Yeah. Oh, and they're incredible initiatives like the adaptive edits, the Sustainable and Ethical Sourcing strategy Reconciliation plan.
Erica Berchtold: Yeah. The First Nation Fashion design program that we're doing at the moment to try and, you know, mentor First Nation designers is going to be my next proudest moment, that's for sure.
Nathan Bush: Tell us about that. How'd that come about?
Erica Berchtold: Well, we do a little bit of work with First Nation Fashion Design, like just trying to understand, you know, what they're doing, who their designers are. And a lot of retailers just, you know, kind of do this tokenistic thing of putting some product for sale on the website and, you know, that's as good as it gets. Right. Or sponsoring their Runway show, what have you. But so we did support them in bringing a Runway show to life at Fashion Week last year or this year, actually. Sorry, in June or last year. By the time you hear this, it's confusing. Yeah, so. So we did support them at Fashion Week last year. But then what I want to look at is also how can we mentor them? Because designing is one thing, but having a financially viable business is another thing altogether. So do they need some assistance with cash flow management? And so could I get my CFO and our finance team to help create some cash flow tools or templates for them? Do they know enough about digital marketing? Right. I've got a team of experts in that. Could we actually upskill them there? What about award rates for different pay scale scales? And could my PNC team actually help them with that? Because we've, you know, learned. Learnt a thing or two about that. So it's about how we can mentor these people, not just, you know, sell a bit of product, the, the transactional stuff. Yeah, that's great. But, you know, how do we help them have a long term, meaningful, sustainable business?
Nathan Bush: It's incredible. What's the feedback been like so far?
Erica Berchtold: Oh, yeah, great. Like, so we're running a program at the moment with Fraser and we'll actually get an official program of support. And so the applicants are starting to put together their, their kind of little project overview and why we should be picking them. And just seeing all of the work that they're doing is so amazing.
Nathan Bush: Oh, that's awesome. What I also love is with those initiatives, especially the, the ethical Sourcing strategy and the reconciliation action plan is you actually, like, publish it all online so anyone can read it and they're not just kind of blanket statements in depth documents and strategies on how you're going to make a difference. Yeah, I think it's really important that brands put it out on the line and go, look, we're up for. We're not perfect, but we're up for, you know, this is what we're trying to do. Not trying to do.
Erica Berchtold: Yeah, progress over perfection. And, you know, you've got to be transparent about this stuff because otherwise people just think you're kind of just, I don't know, painting a rosy picture. But is there actually any substance behind it? And actually, some of our shortcomings may be great learning points for the industry overall or for other people where they can go, okay, they've learned that lesson for us, let's not replicate that. Let's, you know, because really, it's not about whether we are first in these things or doing best in these things. If the industry as a whole is not progressing forward, then, you know, it really isn't going to shift the dial much. So, you know, if it's just us. Yeah, love it.
Nathan Bush: All right, I've got one more very important question for you.
Erica Berchtold: Oh.
Nathan Bush: How's Parramatta going to go in 2023?
Erica Berchtold: Top of the table. Well, you know, look, Penris were. Were pretty good, like, you know, Grand Final, like, you know, like they deserve to win that game. But, you know, I think we're going to do pretty well next year. I hope so. I hope so. I couldn't stand another year of the Panthers. An ex colleague of ours, Chris Wildsmith, if I have to hear him crying about the Panthers winning one more time. Yeah. But anyway, I think so.
Nathan Bush: Oh, this is the best time of year when everyone has their hopes up and.
Erica Berchtold: Correct.
Nathan Bush: Yeah.
Erica Berchtold: Yeah.
Nathan Bush: Speaking to a Raiders fan. So it's that time of the year and it's all downhill from here. All right, so you mentioned a few things or a lot of things that you're working on. What are you most excited about? What's next for yourself and the team at the iconic for 2023.
Erica Berchtold: Yeah, look, we've got a lot of aspirations and plans around our tech products, so, you know, just some of the features that we want to take further or some new sort of things we'd launch, really, you know, making that big transition into being a platform business, not just a traditional wholesale sort of business. And looking at those different business models, you know, that we can offer to different brands. And then, you know, I kind of like to say converting the unconverted. So online penetration in Australia is around 16%. So that basically means 84% of retail sales are happening in physical stores. I want some of that. Like, you know, so yeah, it's interesting to say, oh well, we've got x percent share of the online market or whatever. So what I want their business, right? So how do I convert the unconverted and get some of those bricks and mortar customers into our world?
Nathan Bush: So a few little department stores in
Erica Berchtold: your site say, oh, just a couple.
Nathan Bush: Great stuff, Erica. So if we've got retailers listening to this and they want to get in touch to understand more about working with the Iconic or, you know, learn more about your story, what's the best way for them to do so?
Erica Berchtold: Look, you can Find me on LinkedIn or Erica birchtoldeiconic.com Shoot me an email and I will make every attempt to get to that quickly.
Nathan Bush: The best way probably just to leave a good entertaining NPS score. Right?
Erica Berchtold: Well, that's actually probably the fastest way because I will definitely read that every month. So awesome.
Nathan Bush: Erica, thank you so much for joining us on Add to Cart.
Erica Berchtold: No worries.
Nathan Bush: Oh man, what a way to kick off 2023. What a brilliant chat with Erica from the Iconic. Now if you, if you are in the market for some new threads, head on over to the Iconic where Erica and the team have generously given us 20% off for add to Cart. Listeners use the code Add to cart. All one word minimum spend of $99. TNCs apply. I feel like a radio announcer now, but 20% off when you use the code Add to Cart. All right, three lessons that I got from that conversation with Erica. Hard to narrow it down to three, but here goes. Number one, there is gold in the nps. It actually blew my mind that Erica goes through and reads all of the NPS comments. And don't worry, I've actually tested it. I put a bit of feedback on some of my recent purchases and I've got to say it was a good experience. But if Erica, the CEO of one of Australia's biggest online retailers, is personally reading customer feedback, you better believe that you should be too. Number two, project based teams. I have this conversation nearly every day at E Suite. We are not going back to the old way of officeworks. We have just been rewired forever. There is no going back. But I really liked Erica's approach to the remote versus face to face challenge. And with her emphasis being around the idea of project work Be together when you need to, work through a project or a problem, collaboratively work alone when you don't. It seems pretty simple, but it doesn't even need to be a routine or even broken into day by day. Just be where you need to be for the work you are doing.
Nathan Bush: There's a lot of trust involved in that.
Nathan Bush: Number three the Talent collaboration. We heard how much the Iconic relies on internal tech development for their own unique position in market tech powers their retail experience, but getting the right talent is always going to be an issue for them. It was music to my ears when Erica talked about the idea of talent swaps. It seems like one of those win win situations for everyone and a great way to share knowledge around in Australia. Can you imagine having someone from the Iconic team working in your business for a short amount of time and the impact that that would have? So if you can help bring this network to life, make sure you reach out to Erica. If you think that you can help with the great Australian talent swap, I think it'd be a great thing to bring to life. To get the highlights of today's episode, head on over to add to cart.com and sign up for our free newsletter each Tuesday. We will send Monday's episode summary links and discount codes for you to go next level on. And if you're looking to explore your next e commerce opportunity, come and visit us at E Commerce Esuite. We're a dedicated e commerce talent agency connecting the best e commerce talent with the fastest growing brands in Australia. Head on over to esweettalent.com where you can download the free e Commerce Salary Guide and sign up to our weekly e Commerce job emails. Thanks for listening and until next time, keep those customers adding to car.
