Simon Molnar: Sitting around, literally around this table that I'm sitting at right now. To be honest, there have been so many business conversations like afterpay was ideated here. For a lot of retailers, they understand the notion of rfid. This is basically RFID on steroids. I had this inherent need. It was almost like an obsessive need to know what was going on in my site and I want to create that same mobility in store.
[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 Cart.
Nathan Bush: Hello and welcome to Add to Cart. My name is Nathan Bush, host of add to cart and director e commerce talent agency E Suite. Today's guest has retail blood flowing through his veins. And tell you what, I wouldn't mind
Nathan Bush: being a fly on the wall when he has the family over for dinner
Nathan Bush: because this is the dinner table where the idea for afterpay was first knocked about. After taking his parents jewelry business online with great success, Simon Molnar is now the founder of Flagship, a retail focused tech company that uses Bluetooth product stickers to give brick and mortar stores access to the kind of data and insights that e commerce businesses have long enjoyed. In this episode, Simon shares the story of how he went from selling Pandora jewelry to his schoolteacher to building one of Australia's biggest online jewelry sites. He also talks about why his biggest strength is also his greatest weakness and how his ultimate goal is to make manual stock. Takes a thing of the past. Now that's gonna make him the most popular Molnar, surely, especially amongst retailers. All right, so thanks to our partners Shopify plus and Paclio. Here's our conversation with Simon Molnar, founder of Flagship.
Nathan Bush: Simon, thanks for joining us on Add to Cart.
Simon Molnar: Thanks for having me.
Nathan Bush: My pleasure. We have some exciting things to chat about but before we do, let's get the monkey out of the room because I was research and like I've known about you for a long time, we've never actually chatted, which I tried to catch it online retail, we've never actually chatted but in the research the first article that came up that I saw was titled Flagship, the startup being built from afterpay founder Nick Molnar's parents basement. Now I've got brothers. That headline would piss me off. Surely that Headline annoys you.
Simon Molnar: Yeah. I mean, I guess the big thing for me is I don't really carry an ego and I know that. I mean, I've always kind of had the mentality that I'm prepared, prepared to take a personal hit if it's for the greater good. And this was just one of those situations. It's the headline. Everything's clickbait. It's going to get the clicks through. It's just ironic that they mentioned four of the original molars and the one that they didn't mention is the one who the article was about. I think it bugged a lot of other people more than it bugged me. To me it's. It's publicity, it's advertising. People hear about us and if it gets people clicking through to read the story, then, then so be it. But I. At no point in my life I felt like I'm in competition with my brother. So if his name's going to drive the traffic, so be it.
Nathan Bush: He's just clickbait now, isn't he?
Simon Molnar: It's crazy. It's actually wild. I never, never in a million years would I have expected my brother to be the draw card for an article. Click. But here we are.
Nathan Bush: Here we are.
Nathan Bush: All right, let's. Let's take the focus back to Flagship. So tell me, Flagship had an amazing standard online retailer. Really made an impact for me, caught my attention. Can you share with our audience what Flagship is and how you came up with it?
Simon Molnar: Yeah. So the whole backstory to Flagship came about because I was so heavily involved in E Com. I ran my own Pure Play jewelry ecom site. I was helping Venroy with their E Comm site and the more I helped Venroy, who are quite a prominent kind of especially Sydney based apparel brand, the more I realized that the brick and mortar world was this black hole for them. And then the more I dove into it, the more I realized that this wasn't unique to them and it was consistent in retail across the board. And my whole world was E Comm. It was digital, it was data, it was analytics. And coming into a world that didn't have any data just didn't sit well with me. So the ultimate goal for us was how do we bring more of that E Comm world into brick and mortar? And it's quite ironic because the people who understand our products straight away aren't the brick and mortar guys, it's the E Comm guys. So often my in at a brand is through the ecom manager because they just Understand us straight away. And there are more and more pure players who are coming in store and those are the retailers who understand our value proposition straight away and where we have a lot of engagement and yeah, we've had the most engagement today.
Nathan Bush: Yeah, that's funny that you take the E commerce experience in store and that E commerce people are the ones that get it, because I feel there's this real surge of interest at the moment, especially post Covid around that in store experience 100%.
Simon Molnar: I mean, historically in retail there's always been this battle between the online and the offline world. When you look at omnichannel retailers, the two teams are very much separate. You have your online team and you have your in store team and each have their own KPIs and each are almost competing with each other. And the in store team don't want to offer click and collect because now someone's coming into the store to pick up an item that should have been their sale that they're now missing out on. So there's been this real kind of disconnect. And what we're seeing more and more with retailers is not a one versus the other, but how can one leverage off the other. And that's what we're seeing with retailers who are doing it the best. That's, that's their mentality. For a couple of retailers who were traditionally pure players who came in store is actually their e comm managers who are driving that in store rollout so that they have that single channel, single customer view.
Nathan Bush: I'd love to come back to that separation between the two worlds and whether you think that separation is going to come together or get worse. But before we do so we've got our listeners are in the right headspace. Can you share exactly how Flagship works in store?
Simon Molnar: Yeah, so we leverage off batteryless Bluetooth stickers. So for a lot of retailers, they understand the notion of rfid. This is basically RFID on steroids. So we're able to use Bluetooth Bluetooth to triangulate and understand the location of an item without having to necessarily have the item go through or go past a physical gate. So the great thing about Bluetooth is the signal itself can help us understand location. And now the technology's gotten to a point where it's basically printed in the exact same way that RFID is. We now get the economies of scale and the pricing benefit that you get with RFID for the functionality and location benefit that you get from Bluetooth. Gotcha.
Nathan Bush: And so from a retailer's Perspective, when they get new stock in the store, are they putting the same sticker on
Simon Molnar: every item so the stickers get applied at the factory? So what happens is we have the ability to install our sensors basically at every point in the supply chain. So the moment it's manufactured, we can tell a retailer where in its production line it is. Once it gets to the warehouse, we can tell them it's arrived to the warehouse and once it's arrived to the store, we can tell them the same. So retailers no longer need to do that kind of receiving stock count because we always get a signal the moment it hits the store. We actually can proactively count stock for them. So with a lot of the retailers we're speaking to, in some cases it can take a week or more to actually get stock out onto the floor just because they don't have the manpower, power, they don't have the bandwidth to receive in that stock. So the stock in some cases will just sit in a fitting room until it gets merchandised. Which means for a week you lose a fitting room and for a week you can't sell that stock. Whereas what we enable the retailer to do is just to put the stock out onto the floor straight away, just receive the stock, merchandise it and we can see it's there. So we can give you a stock count after the fact and tell you exactly what came to the store and potentially what can come to the store.
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Nathan Bush: from a data perspective, when you're applying those stickers in the manufacturing process, is that matching to a retailer's PIM at that point?
Simon Molnar: Yeah, we get the all the barcode information associated with the product. So once it's on the product we understand everything about that product. The color, the size, the style, the pattern and Everything associated with, with that style.
Nathan Bush: That's amazing. And you've already mentioned a few use cases there, but where are you finding that retailers are getting the most benefit from this?
Simon Molnar: So there's twofold one's from a cost saving perspective. So being able to reduce or remove the man hour required to count, receive, locate stock, there's the cost savings perspective from shrinkage perspective. So because we always have visibility of an item, as soon as we lose visibility of an item and we don't have a legitimate reason that we've lost visibility, we can associate that to theft. And then because we have a timestamp for when we last saw that item, we know the moment that item was potentially stolen. So we can overlay that with a timesheet. We can use CCTV at that point in time to really hone in on who is potentially responsible. So I saw a stat that internal Theft accounts for 57% of all shrinkage. So if we can potentially remove 57% of shrinkage, that's a huge benefit. So that's the cost saving side and then the, the sales upside perspective. The goal for us is to increase full price, sell through as much as we can. There's always been this notion and this expectation in retail that you have to be on sale in order to get a sale, and we want to help shift that narrative. There's always going to be a customer who's coming in, who's prepared to buy, pay full price. The goal is to convert as many of them as possible so that you're left with as little as possible when it comes time to discount. So helping them understand where stock should be placed in the store, helping them make sure that stock is actually on the floor and it's not just sitting in the stock room. Helping them understand what's being tried on, what's being purchased or what's being tried and they're not being purchased to make sure that any underperforming items aren't necessarily taking up real estate on the shop floor. It's helping retailers understand and it's kind of the exact same mentality that I had when I was running an e commerce site. It's I've got limited category pages, I've got limited customer attention span to hold. And while I've got their attention, I need to maximize what I'm putting in front of them. So I don't want to send them to a page that's got product that's not performing. I want to send them to my hottest performing product and it's the Exact same thing in the store. If someone's coming into a store, you've got a limited window where you have, where you've got their. You've got their attention. And you need to make sure that you're putting the right product in front of them at the right time in order to close that sale.
Nathan Bush: Absolutely. That's fascinating. I love that. You know, even that idea of being able to see what customers are picking up, walking around with, taking the change room, how long are they staying in the change room with the product, is fascinating stuff that retailers have never had before.
Simon Molnar: Right? For sure. I mean, again, when I was running ice, I. I had a hot jar on my site. I'm sure most listeners know what hotjar is, but for those that don't, we can basically see the movement of a user through the site. And I would sit there for hours on end just watching customer sessions and see how are people interacting with my site. Where are they clicking, what are they doing, why are they bouncing? They're searching for this product and we don't have it. Or they're trying to do this and it's not working. I had this inherent need. There's almost like an obsessive need to know what was going on in my site and I want to create that same ability in store. So similar to how I had Google Analytics open at all points in time to see what's happening on my site, I want to create that same ability for brick and mortar. You can be sitting at your desk and see what is happening right now. I can be on holidays on the other side of the world and still see what's happening in my stores, which has been the case in eecom. People have been able to build E comm and run e comm sites from anywhere in the world. But when it comes to brick and mortar, you have to be localized to where you are. So the goal is to create that visibility and also that control so that you can make decisions and make changes from wherever you are in the world.
Nathan Bush: Yeah, that makes total sense. Has there been anything that you've seen personally or with your retailers so far that's really surprised you about customer behavior?
Simon Molnar: I'd probably say the, the biggest kind of takeaway is often what you hear is your reality. And what happens with a lot of these retailers is they keep hearing from customers, you need more extra large, you need more extra large. And because they hear it, they do it, and then what do they get left with? At the end of every collection is all the extra larges. And often, again, with brick and mortar, it generally ends up being the case of whichever store shouts the loudest gets the outcome and that store. And often it's the last interaction that that store had with a customer that they remember. So a lot of brick and mortar is anecdotal feedback. And if you have one store who's shouting aloud or saying, we need more of this size, of this style, and they're constantly saying it, then head office decides to implement it. And it was actually a very small subset of a small customer in one store. And that doesn't actually represent every other store that exists. So now a retailer is potentially making a decision that is going to leave them with quite a large number of excess stock at the end of it.
Nathan Bush: And we've alluded to fashion there as the case in point. Can you share some of the retailers and the categories that you're most likely to be working with?
Simon Molnar: Yeah, our focus is definitely apparel at the moment for one key reason. The main reason is there's a clear path to purchase. If you look at an E comm site, a customer's got a path to purchase. They come through the homepage, they hit a category page, product add to cart checkout, and you can track a customer through all of those journey funnels. Apparel, you have similar. A customer picks up an item, they walk with it to a fitting room. From the fitting room to a checkout counter, you have kind of that same concept of a customer journey as you would from an E comm perspective. And each of those points in a journey allow for a different decision to be made. So if you were to think an electronics retailer, for example, sure, we can put our tags and know where it is in the store, but it's not like someone's going to walk into Harvey Norman and pick up a printer and walk around with it and then decide if they. If they want to keep it. So it becomes a bit more challenging to give those insights. For non apparel footwear, we can create a customer journey. Apparel, we can create a customer journey. And over time, we hope to create kind of different ways to create the customer journey in non fashion brands. But definitely for now, our focus is fashion.
Nathan Bush: Yeah.
Simon Molnar: Great.
Nathan Bush: And who are some of the fashion brands that you've got on already?
Simon Molnar: So we're working at the moment with P Nation, with Venroy Academy brand. There are a number of other retailers that we're scoping out at the moment that I. I have this knack of jumping the gun and jinxing myself. So until we're live, I keep it close to my chest. So, yeah, working through a number of other installations now and yeah, hopefully, hopefully start to get some results to keep kicking on from there.
Nathan Bush: Exciting. And you mentioned the Omni Channel and what you've triggered for me is that pain point, especially around Click and Collect, where you don't know exactly where stock is. It could be, hey, it looks like we've got one of these left. But it could be display stock, it could be damaged stock, it could be customers walking around the shop. It says we've got some left. The customers got in their hands in the change room or whatever. Do you see flagship playing a role there for helping Omnichannel retailers give a better experience for customers?
Simon Molnar: 100%. A lot of retailers, especially in the play in kind of the space that we're playing at the moment, don't even offer Click and Collect for the main reason that they don't trust their individual numbers and they don't want to risk poor customer experience. So for us to be able to give them the confidence to know, okay, we see that item, we know it's in stock, we know it's available, you can actually sell it. And then also having that ability to dynamically see what's currently potentially unavailable because it's being tried on, because it's been damaged, because someone's currently walking around with it. So being able to dynamically adjust inventory so that we don't risk selling an item that won't be there when that customer turns up. And on the flip side, there's nothing worse than when head office thinks there is an item in the store and it's not there. Not only from a click and collect perspective, but also from a replenishment perspective. Because if they think there's stock and there's no stock, then that store's never receiving new shipments of that item, which affects any flow on sale. So it's kind of this double edged sword. Potentially someone's stolen the items, which is terrible because now someone's taken and not paid for it. But then there's the other side of it where now you're not getting any future sales because that item's no longer in the store. So it's almost this massive double whammy.
Nathan Bush: Yeah, absolutely. And do you find that your retailers, they still need to do their manual stock take?
Simon Molnar: The goal is to remove it entirely. We're very much in kind of a phased pilot rollout, so we're not yet in a position where we have every single item in every single store tagged up. The moment we get to that point we'll be able to have the confidence to say to a retailer, you don't need a stock count ever again.
Nathan Bush: The doors will open up very, very wide.
Simon Molnar: Well, even again, from an E Comm perspective, and this is again consistent with a lot of retailers I speak to that at ICE we had a threshold. I said if we've got less than three units in stock, I don't want to list on the site because I don't want to risk selling it and it's not in stock. It actually hurt me every time I had to refund an order because it was out of stock. And so yeah, we had that threshold and what ended up happening was we ended up with twos of everything because we had in stock, but I wasn't prepared to sell it. So even at a warehouse level, being able to give that confidence to say we see it's there, we know it's in stock, you can sell it. And also that ease and speed of locating. So from a click and collect and an E Comm fulfillment perspective, from the click and collect perspective, if there is an item, it's not where it's meant to be. A customer's picked it up, they thought they wanted it, they walked around the store, didn't want it, didn't want to try it on and they just chucked it on a random rack and it's not where it's meant to live. And now there's an order for that item and the staff spend 30, half an hour to an hour looking for that item and suddenly they've eroded any margin they had in that item. And the other side of it is also from an econ perspective, someone has placed an order, potentially someone from customer service has gone and taken that item because they need to send a picture because they need to do something with it and it's sitting on their desk and then when the, when the picker has gone to grab it, it's not there. They mark as out of stock. You refund the order when the item was actually available. So now that's an even bigger double edged sword because now you've refunded an order that you didn't need to refund in the first place.
Nathan Bush: Yeah, I used to work with a retailer as a client and it was a Westfield. They had a Westfield store, but they had a little back room, not a huge background because of Westfield, but they also had a just off site, just tiny off site, just near the car park storeroom of items that they need to have close on end. No one knew where anything was, but it was storefront out that little back room or there, and there was so much time wasted going in between. I could see this as such a brilliant, brilliant answer for that.
Simon Molnar: Yeah. The goal is for a retailer to be able to plug in a SKU and we tell them exactly where it is and we overlay it out on a floor plan and we put a little marker to say, this is where it is, go and get it.
Nathan Bush: And I can imagine, given your experience and the success you've already seen with Flagship, that you have a thousand ideas in the direction that this could go. Especially when we're talking about starting at the manufacturing process and going all the way through. I bet that opens up so many doors. Is that a challenge from you, trying to keep focused on the main message that you've got in market at the moment versus opening up all these opportunities?
Simon Molnar: Yeah. Huge challenge. My biggest strength and also my biggest weakness is my ability to ideate. And what that's resulted in is this huge product backlog. But where it's a weakness is when it was just me and engineers, I'd send my engineers in 10 different directions at any point in time. So it actually brought on a product manager who can sit between me and them. So I can send him in 10 different directions, then he can funnel through to them what's really important. He's really helped us create that structure. So I've got a million and one ideas of what I want to do and he'll help us kind of build it and scale it in a really effective way.
Nathan Bush: You've essentially been had a mind to put on you.
Simon Molnar: Exactly. And it's funny, it's one of these products where I sit with someone and I explain it to them and they're like, oh, you could do this, this and this now. And I'm like, yes. Yeah, that's like phase 50, because I've got 49 other things. But it's one of these products where people keep coming up with new kind of ideas. And that's what we want to do, is we want to be able to keep building on top of what we are doing.
Nathan Bush: How do you prioritize what ideas you do take to market if you've got that list of 50?
Simon Molnar: That's my product manager. He's a wizard. He just. He knows the end goal. He's closer to the engineers than I am, so he knows the effort versus reward. And he's got, I don't know, his pieces all together in his brain. And there have been times where I've said I, I need this and I need it yesterday. And then there are times where he's kind of managing expectations. I'm like, okay, if we have it in a year, that's also okay.
Nathan Bush: Yeah, that's nice. Because you'd be on the forefront of clients and not demands, this is the wrong word. But requests from retailers and to have that person sitting in between is really smart, 100%.
Simon Molnar: And I'm a real kind of yes man. Someone will say, can you do this? And I'm like, well, we can't right now, but I'll make it work. And then he turns around to me, he's kind of kicking me under the table saying, stop saying that.
Nathan Bush: And last thing on flagship, because I'm really keen to hear more about your personal story as well. What's the commercial model for retailers?
Simon Molnar: So we sell the tag to the retailer. It is a sticker. However, there is a way for us to enable that sticker to be reusable. So we sell the sticker, we have like a small installation fee to fit out the store with our hardware and then it's just a per store per month fee. Gotcha.
Nathan Bush: And they have their own dashboard to look at the data and everything else.
Simon Molnar: Exactly, yeah.
Nathan Bush: Beautiful. Now, you mentioned your journey with ice. Can you share the story behind ICE and how you were on the forefront of coming into E commerce? And I'm keen to then get to the point where up to last year, I only saw that you stepped away as CEO and I'm keen to hear how that decision was. But let's start with your history. For anyone who doesn't know it, with ice.
Simon Molnar: Sure. So my parents were jewelers. They had a store in the Sydney CBD for 30 odd years. So I've always been in and around jewelry. I was brought up in their store, working in their store. And so I always had this kind of inherent understanding of jewelry. I always say that jewelry is an industry that you are born into. Very few people break into it. It's very generational. And I was at school, I would have been 16 at the time. And I was very aware of Pandora. I sold it in my parents store. I saw how easily it sold. And anytime I saw anyone wearing Pandora, I'm like, oh, you're wearing Pandora. And I felt like a king because I was able to identify the brand of bracelet they're wearing. And one of the people that I mentioned it to was one of my school teachers. And she's like, oh, yeah, How'd you know? I said, well, my parents, my parents Sell. And I said, if you ever want a discount, let me know. And she's like, sure. And it got to the point where, where she was, she kind of became my seller almost.
Nathan Bush: You're wearing a trench coat to school with like jewelry.
Simon Molnar: I mean honestly, not far off. So we'd come, we'd exchange purchase orders, I'd meet her out at Westfield, we'd exchange product and, and I had kind of a little nifty business there. And at the same time I was selling, selling Pandora on ebay which was doing pretty well again. I was 16 year old and I was pretty happy with the cash that was coming in. And then I was going into my hse year, my brother's coming back from his gap year. So I handed over the case to him and he, I mean in true Nick fashion he kind of picked it up and ran with it. And then I was coming back from my gap year at the same time that he was starting to kind of convert the ebay store into a standalone store. And yes, I started kind of plunging away at ice with him. And originally it was very much kind of 5050 eBay verse site and it was almost, I mean this is quite like the level of competition we had. But I was almost like I, I would try and build the website and he would try and build the ebay side and we'd kind of. And then. Yeah, who won? I mean in the long term I won. Just because I switched off the ebay slides, I can't achieve it. And yes, obviously like you mentioned before, my brother went off to start afterpay so he left me to fight the battle myself and yeah, I started kicking things off myself.
Nathan Bush: And Simon, when you and Nick started up the online store and the ebay store, what were your parents perceptions? Did they think that it was going to turn out as big as it would as it was online or were they kind of content with the physical store?
Simon Molnar: I think my mom saw the opportunity. My dad hated us because they're always. There were people coming into his store with our website on his phone saying I can see this at a cheaper price, can you match it? And he's kind of like hating us because he got all these people coming and trying to undercut him. So yeah, I think it was kind of like a natural progression. E commerce was prominent but jewelry in e comm wasn't really a thing at the time. I think everyone assumes you've got jewelry. People want to touch and feel it. It's a high price point. So it's a risky item. To ship. But we found, especially in branded jewelry, we had really good cut through because people knew what they were getting. And we had this really, really fought. We were in a really fortunate position where for a lot of products, the more expensive it is, generally the bigger it is. Whereas with jewelry, the more expensive it is, it doesn't change in size. You can have a $10,000 ring which is the exact same size as a $5 rent. And what that meant was our shipping costs were always really manageable and we were able to, yeah, to, to grow and scale in a really controlled way.
Nathan Bush: One of the most surreal experiences I've ever had is I did some consulting for a large national retail outlet, jeweler and was in the head office and doing our thing was first or second day in there and then they were like, do you want to come and see the warehouse? And I'd come from a background of auto parts and camping and warehouses are absolutely massive.
Simon Molnar: Right.
Nathan Bush: They're football fields. And so I'm like, yeah, well, let's go have a look at the warehouse. Let's go have a walk around, go through all the relative checks and everything else and get to this door. It's a big safe door, as you'd expect. And I'm expecting a warehouse. Warehouse, Right. I walk in and it's literally three. What would it be? Three by four meters.
Simon Molnar: That's literally where we operate out of.
Nathan Bush: Yes. That was stocking, you know, tens of stores around Australia. And it's just such a different game, isn't it? Exactly what you said, 100%.
Simon Molnar: I mean, again, there are challenges associated because of the price point. So actually holding stock is an expensive exercise. So we had to do that again in a really controlled way. So we started almost 100% drop shipped. So we create, I mean, in quotes, drop shipped. So we place the orders in bulk with our suppliers. After the customers made the order, they would get shipped to us, we would repackage it once it arrived to us and send it on to the customer. And then as we grew and we saw which items performed better, we were able to hold stock of better sellers, which brought with it better margins and it brought with it a better customer experience because we were able to ship it quicker and we had more control of the auto cycle. But yeah, it was definitely everything I always did. And again, it's kind of why I started Flagship. Everything was always very data driven, data focused, data leading the way. And I never made a decision without a data point. I always joke that I actually don't know the first Thing about jewelry, I just know how to read data, and I know how to put the right product in front of the right person at the right time. That was literally the crux of it. And I could be selling anything. It's irrelevant. It's just what someone looking for, what product best suits, what they're looking for, and let's show it to them.
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Nathan Bush: It feels like retail flows through your blood. Like, it just seems so natural to you.
Simon Molnar: Again, it's one of these things I took for granted. I. I started, like, when I finished school. I started as a software engineer, then moved into digital marketing, then data, then got into ice, and only a couple years really into ICE that I realized how much of that retail mindset that my parents instilled grabbed off for me. Took me a while to really understand, like, okay, I'm actually a retailer.
Nathan Bush: Does that make it hard at family gatherings to go, can we just not talk about retail for a little bit?
Simon Molnar: Yes and no. I mean, sitting around, literally around this table that I'm sitting at right now. To be honest, there have been so many business conversations, like, afterpay was ideated here, ICE was ideated. And a lot of progressive conversations were had. The number of times, even early days of Afterpay, where I say to Nick, oh, you guys should do X, Y and Z. And he's like, yeah, that's a great idea. And we duck off into the. Into the office and roll it out. So it's never felt laborious. It's never felt like work. It's just felt like fun and natural. And I guess that's one of the best things about what we've done, is at no point in my entire ICE or flagship or even half to pay journey has it really ever felt like I was doing something that I didn't love doing.
Nathan Bush: Yeah. And it must feel surreal now to say afterpay the journey, there that you've been on with Nick. It's like you must feel surreal to go from that moment of, hey, I remember when we came up with this idea to see where it sits in the minds and like in terms of it just being a household name worldwide now.
Simon Molnar: Yeah, it's very, very surreal. I mean, I think in a lot of cases when you're caught up in it, you lose sight of it. And the number of times I've like messaged Nick and I'm like, you just need to take a moment and stop and look back at like what you've built. It's almost like when you've, when you're climbing, I don't know, climbing Mount Everest and you're so focused on climbing that mountain that you don't look back behind you. And then once you look back and you see how far you've come, you're like, ok, this is, I'm not saying that I've ever climbed Mount Everest or intend to ever climb Mount Everest, but it's how I assume it would be. But yeah, there have been a few moments where you kind of look back. It's like, okay, even after online retailer a couple weeks ago, there were a few kind of pinch yourself moments on the back of that that I definitely don't take for granted.
Nathan Bush: What were they?
Simon Molnar: Just the number of people coming up to us saying, I've heard I need to come and speak to you guys. The amount of traffic that we had, the amount of interest that we had, the where in the grand scheme of things, a relatively new business and to have the awareness and the recognition from your peers at such an early stage is really humbling. And that really, we came in, we went to the ori's on Thursday night, so everyone took Friday to recover and we came back in on Monday and I pulled everyone aside and said, I don't want you guys to lose sight of how amazing it is that you guys have been able to get us to where we've gotten to in the time span you've been able to get us there. The speed of the product being built, the speed of the rollouts to retailers, the speed of some kind of industry recognition is a real pinch yourself feeling.
Nathan Bush: That's amazing. And I had exactly the same experience. I got told by three or four people, have you been to the flagship yet? And when I got there, yeah, I was blown away. But then in our pre chat, before we even got on here, you said that it was a last minute addition to online retail. You weren't even planning it yeah, we're
Simon Molnar: at Retail Global in April and I've got a really strong team. I love my team. There's just not a heap of retail experience there. And I wanted to give them exposure. I wanted to show them what the retail world was like. So we went to the Gold coast, we walked the floor, went to kind of a couple talks and events there. And while I was there, I was walking around and I said to myself, online retailers around the corner, it's the first one since COVID People are going to be coming out of the woodworks. We have to have a presence there. And yeah, I basically, I gave one of my guys a task. She had two months to get it booted up and running. And yeah, it was just. We were really fortunate that everything. Everything came together.
Nathan Bush: Well, not just fortunate. It came together. You won the best stand award.
Simon Molnar: It's funny, again, I didn't even know there was an award. And then on the first, like the very first thing I heard on the very first day of online retailer was that there was a best booth award. And as soon as I heard that I needed to have it. If I hadn't known, I would have been content. But because I knew it existed, I. One of my also big things is I'm incredibly competitive and once I knew that it was attainable, I just had to have it.
Nathan Bush: That's amazing. Well done. Now, just to finish up, I'd love to leave with your thoughts on the future of retail, but specifically around this merging of real experiences and online experiences. You mentioned before that you're working with a lot of online retailers who get what you're creating for the physical store. Do you think the experiences are going to come together more or we're going to see more separation into more channels?
Simon Molnar: I think the retailers that do it the best and the retailers who get the best results are the retailers who treat their business as a true omnichannel experience. Retailers often say we're omnichannel, but they still have this real disconnect between one and the other. We're seeing more and more. Pre Covid, there was a big fear for brick and mortar retail. And. And post Covid, it's almost been the opposite. People have realized how much they need and crave that human interaction. And what we're seeing more and more are the pure players coming in store. P Nation came in store. Star Runner came in store. Server label came in store. You're seeing one by one these brands that were traditionally pure player coming in store. And Mark Tepperson from afterpay form the Accent group put it the best way. He said retailers are no longer looking at their stores as a dollar per square meter. It's now dollars per square mile. And that was the most kind of eye opening statement that I heard. And it's the best way to put it that the store itself, as much as it is a sales channel, it's a marketing tool and retailers almost need to create this unified KPI. So for a store their KPI should be, should include sales driven to E Comm. So if someone's come into the store and then they've gone home and because of their experience in store, they've converted online, it's almost a team effort and there needs to be this unified view and it's unified vision that the customer shopping online that started in store is attributed back to that store. There are going to be four different types of customers. There are going to be customers who shop exclusively online, customers who shop exclusively in store. And then there are going to be customers who start their journey online and finish the store, and customers who start the journey in store and finish online. And the key for retailers is how do you service every single one of those types of customers? And what I learned as a pure player is that I can only service the online only customers. For a long time brick and mortar retailers resisted coming online and having that online presence and they completely neglected the online only customers. And what's really important for retailers now is making sure that whatever way a customer wants to interact with their brand, whether they want to start online, come in store, come in store, finish online, that they're really, they're served in the right way, they can find their product in the most effective, the fastest possible way and that the brand tailors the experience towards that customer.
Nathan Bush: Yeah, it's fascinating points and I couldn't agree more. Do you think, just to follow up on that question, do you think that we're going to almost see two classes of physical store? You know, we're going to have the data Cs who are reinventing how to build a store, like really like they're approaching a totally different way versus the old model of create the product, then create the experience. They're kind of creating the experience and then filling it with whatever product or sometimes not even filling it with product at all. Do you feel we're going to have two different types of experiences or do you think it'll all kind of all come together eventually?
Simon Molnar: I think it'll ultimately come together. I mean, not saying it won't necessarily be the DTC versus traditional that will do it differently. I think it will be more which retailers themselves are more innovative. And we're seeing again, more and more retailers creating these really unique customer experiences. You have. I'm pretty sure it's Kathmandu that created their -20 degree fitting rooms. You've got Quicksilver in the US that have created a wave pool to actually try out their product. Obviously in Australia it's a lot harder to do all these things because of the cost of product, property and rents and wages.
Nathan Bush: You just set up a tent on the beach. There you go.
Simon Molnar: Yeah. So I think customers come in store because they want that unique experience and each brand again, more and more understanding what their voice is and what that unique experience is that they're offering to the customer. And it's not necessarily like a experience isn't necessarily coming in and having champagne offered to you as soon as you walk in. It's in the level of the service, it's in the customer flow, it's in the customer journey, it's in the way that you personalize your communications to the customer after the fact, or how that person in the store remembers the person that came in and and recommends product based on what they've purchased. Historically, they're going to be all these little nuances. I played a lot of sport growing up and my dad's biggest point that he drew it into was doing the 1 percenters. And I think that is the absolute most critical thing in any way, shape or form, not just in sport, but in business, about how you do the little things right and those little 1 percenters. And it can seem like something that's so minuscule, without something that's so minuscule has such a big impact on the customer.
Nathan Bush: Yeah, absolutely. I love that. So, speaking of 1 percenters and improvements, what is next for yourself and the flagship team?
Simon Molnar: For us, I mean, the biggest focus for me is making sure that every day we are further ahead in our journey than we were the day before, is making sure we're always making progress, always moving forward. Again, we are still early in our journey, so it's making sure that we, we build in the fastest, but also most stable and most structured way that we can, doing things right for us, not just what's going to grow us the fastest. Again, coming back to my sporting, I played a lot of rugby and again, one of the points that my dad drilled into me is that you need to earn the right to throw the ball around. And that kind of statement is you need to earn the right to Scale, you need to earn the right to grow. And if you don't build the right foundations and the right structures, then you're going to grow and it's going to come back to bite you because you've got that kind of unstable footing. So, yes, really making sure that we do the absolute basics right. We get everything right from the ground up and then once we've nailed that, then we can scale, knowing that we've earned the right to scale.
Nathan Bush: Yeah, that's perfect. Kind of want to have your dad on the podcast as well. You know what?
Simon Molnar: I think you could do a lot worse and you would love it. I would probably say you'd need both mum and dad on the podcast, though. But, yeah, I think, again, it's one of those things that you kind of like, look back in hindsight and you realize how lucky you are. And I think my parents definitely instilled the right things in me growing up.
Nathan Bush: Incredible. Simon. If we've got retailers listening to this and going, I'm loving the sound of this. I really want to get in front of it. I missed the booth, but I want to. I want to have a look at this in person. What's the best way to get in touch with yourself or the team?
Simon Molnar: Either add me on LinkedIn, Simon Molnar, or just shoot me an email.
Nathan Bush: SimonLagship AI beautiful, Simon, it's been a pleasure talking to you. Thank you so much for joining us on Add to Cart.
Simon Molnar: All good. Thanks for having me. It's been a pleasure.
Nathan Bush: That was actually the first time that I had the pleasure of meeting Simon and I'm really, really enjoyed the chat. You can tell that he just loves retail and has for a long time and is so optimistic about the future. And they're always the types of people that I love chatting with. Here are the top three lessons I took from my conversation with Simon. Number one, there are endless omnichannel options, and omnichannel is not a phase. In fact, it's going to get tighter and harder as online retailers enter physical, physical, retail and as physical retailers get smarter about how they integrate their online and offline worlds. But at the end of the day, there's no omnichannel playbook. You can't do everything everywhere and you're
Nathan Bush: going to have to make choices.
Nathan Bush: But retailers should respond to whatever way
Nathan Bush: a customer wants to interact with their
Nathan Bush: brand, whether it's in store, online, a combination of both. They don't see it as omnichannel. They see it as shopping number number two. Opinions are like yeah, well, you get it right, everyone's got one. Simon spoke today around the dangers of listening to everyone around you all of the time, and you can bet that he's had access to some of the greatest opinions in retail. But his advice?
Nathan Bush: Beware of anecdotal feedback.
Nathan Bush: Try to verify in some way before acting on it. Getting validation from your customers beats an expert on opinion anytime. And number three, bring in the middleman or middle woman. Simon talked about his ability to ideate being his biggest strength, but also his biggest weakness. While he has the vision, he would end up confusing his engineers with too many ideas and opportunities that push the boundaries. Bringing in a product manager was his answer to making sure that his ideas led to real outcomes. Now, if your ideas aren't translating to the right actions, consider whether you need to bring in a professional translator to help bring those ideas 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 to
Nathan Bush: go next level on.
Nathan Bush: And if you're looking to explore your next e commerce opportunity, come and visit us at E Suite. 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 cart.
