EPISODE 010 : 05/13/2021
Retail Zipline CEO Melissa Wong Shares Her Insights on Retail Communication and Startup Success
Melissa Wong, CEO and co-founder of Retail Zipline, shares insights about the growth of her company, key customers who have broken the code on maximizing customer satisfaction, and the challenges of raising funds as a female entrepreneur. Retail Zipline has raised $39 million in venture funding and is a rising leader in retail communication with customers ranging from global manufacturers to local retailers.
Host: Ned Hayes and Karen Jensen
Guest: Melissa Wong
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Topics Discussed in this Episode
- Detailed small business insights from Olympia, Washington
- Small business resiliency and adaptation during COVID
- Doubling community outreach during the pandemic
- Opportunities for small business loyalty programs
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Ned Hayes [00:00:06] Welcome to SparkPlug, where we talk to smart people working at the intersection of business and technology. Brought to you by SnowShoe making mobile locations smarter. Today, we’re happy to welcome the SparkPlug Melissa Wong, CEO of Retail Zipline, her company is revolutionizing physical retail systems and has raised a successful series, and she’s now changing the face of retail with over a quarter of a million users worldwide using Retail Zipline. So welcome to SparkPlug.
Melissa Wong [00:00:39] Thanks so much. It’s great to be here.
Karen Jensen [00:00:42] Welcome to the podcast, Melissa. What’s your story?
Melissa Wong [00:00:45] My story? It’s funny. So my story actually starts out in retail for 10 years. I actually worked at The Gap, and in that 10 years, I always actually focus specifically on store communication and store execution. And one of the things over the decade working in retail that was always a struggle through, you know, four brand presidents and three heads of stores was that we were never able to achieve consistent store execution from store to store or really get visibility into it. And so, you know, for those of you that aren’t in retail. People always ask, well, what is store execution and what happens in retail locations is that a lot of times, you know, there are so many moving pieces in terms of what stores are being asked to do, from putting up marketing to changing our inventory to pulling to doing pullbacks of potentially hazardous products that maybe are getting sent back. Or there was romaine lettuce recall like two years ago, right? So a store has to execute many, many, many, many, many, many different things a week, every week and every month. And I think COVID has really shown the safety health standards are changing on a dime. The stores just have a ton of things to do. And in the past and my past for 10 years, we always struggled with how do we get stores to consistently execute to direction? And so after 10 years of communication evolutions and trying different solutions, hacking together different processes and frequent siting technologies and talking to different retailers, I actually realized that there wasn’t a good solution in the market that really supported better communication to stores, to district managers, to regional director that gave headquarters visibility into the work staffs were doing. And so I met my co-founder and that was the beginning of the retail supply and journey. So it really started with, I like to say, like a lot of like wine and sweat and tears, right? Like it started from really living, living and breathing. The retail problems,
Ned Hayes [00:03:00] Right or a lot of startup success is scratching your own itch or solving your own problem. So it sounds like you actually live that journey of a customer.
Melissa Wong [00:03:08] Yes. For better, for better and for worse. Right. So very, very intimate knowledge about what retailers are trying to achieve, both strategically and being nimble and meeting the customer where they’re at, as well as the first 10 challenges of how removed and how disconnected the stores can be from the corporate strategies.
Karen Jensen [00:03:31] Well, congratulations on your success so far. You’re a woman and launched a successful business. Do you feel that there are any obstacles to female entrepreneurs today?
Melissa Wong [00:03:42] So, Karen, it’s funny you ask that. So from a because I just read and some frightening news that the primary determining factor to get funded is actually gender. Oh, I know it’s it’s I just actually said this to my partner. I was like, Well, that’s that’s not great. I guess Santa Clara University did a study of forty eight thousand companies, and the primary determining factor for obtaining funding was actually being a man. So I would say, you know, that’s very disheartening. I think, especially with the themes of saying, you know, very highly educated and successful women dropping out of the workforce via COVID. I think that there are societal pressures that make it harder, I think, for women to be successful early companies, but I think obviously it can be done. We did our series A and we did our series B. I have a one and a half year old daughter, so I know that it’s possible. But I do think that at least in this recent study, the odds can be stacked against female founders in an unfair way.
Ned Hayes [00:04:57] So how do we change that moving forward? How do we change the culture?
Melissa Wong [00:05:02] You know, I, you know, just to speak totally candidly as as a first time mom and and as a founder, I think a lot of it has to do with support systems that we give parents and we give we give moms. Making sure our our board emergence NVC was very supportive of me taking time off. Having a flexible work arrangement like I wanted and that I felt would help set me up for success. And so I think that a lot of changing the dynamic has to do with giving women more support. One, having more women in NVCs, right, as partners. Because I think when you look at VCs a lot of times their pattern recognition, recognizing either from their own experiences or seeing themselves and other people. And so and having more female representation and in organizations that are making funding decisions, I think would also have a big impact.
Karen Jensen [00:06:10] So speaking of support systems, how Retail Ziplines customers needs evolved since the start of COVID 19 and the pandemic.
Melissa Wong [00:06:20] I guess I’ll answer your question in two parts. So you ask how how have retailers needs evolved pre like us during COVID before COVID? The need for a retailer has always been to get a seamless customer experience, right? A lot of what the trends we were seeing in the market was that the stores were being seen as the best manifestation of the brand. Store employees were the best ambassadors, the most authentic way to truly connect with customers. And a lot of times some brands like Sephora are really saw. The stores the most significant kind of like marketing channel right had very, very high conversion, very high loyalty that also reduced return costs. So it was a very predictable kind of business unit. When we look at, you know, there was actually a pretty big disconnect in terms of retailers talking about the omnichannel experience, right? Having a very seamless experience online and in-store and actually delivering on it. And, you know, kind of ironically enough, COVID was really a forcing function that forced retailers to actually deliver on that promise. And you see that with curbside pick up, you see it out with retailers looking at optimizing business processes for getting goods to customers, either through drivers. You see that through retailers operating, doing a ship from store versus from distribution centers. And so I think COVID has really been a forcing function on the industry to look at how do I operate my business in the most effective way and truly deliver on this omnichannel promise and deliver a brand consistency to a customer or any touchpoint?
Karen Jensen [00:08:14] Got it, so I mean, grocery stores throughout COVID remained open while a lot of other retail and other type of businesses remain closed. And we saw a lot of people working remote and how can you speak on that type of communication that the platform offered? And is there is there much of a difference?
Melissa Wong [00:08:35] So through COVID, we actually saw an increase of communication up to 40% across all of we have over 50 of the world’s best brands rates with like Hy-Vees, Legos, Sephora, and so forth. Lululemon, Quick Trips. So and across all of our customers, there was an increase of communication and I think a lot of that has to do with health and safety, right? The business was changing so quickly there was a need for actually different hand sanitization. Alcohol percentage types from county to county was quite quite wild. The types of communications that we support ends up going, I would say, fallen to for typical communication categories. The first one is nice to know information, so that can be letters from the president. We saw a lot of that with Hy-Vee CEO talking directly down to the associates during COVID, talking about the role they were playing in public health and safety and how Hy-Vee was really that what Hy-Vee was doing to make sure that associates knew that they were being prioritized and taking care of. The second type of communication is needed to do communication, so that’s like putting up marketing and installing floor decals or installing touchless POS points. The third point type of communication is what we call a library of resources or evergreen information, so that can be like policy and procedure that can be, you know, Bank had a banking information, so anything that a store needs to occasionally go to. And then the fourth type of communication this dialog discussion and debate. So that’s more like chat products. And so Zipline takes all four of those communications and puts them into one platform and a really easy way for stores to understand where they need to go to get the information they need to run their business, regardless of what type of circumstance they’re facing.
Ned Hayes [00:10:38] So over time, I’m sure that you’ve seen retail really change in regards to the communication that’s needed. So what what new forms of communication have become important for retailers over the last, you know, 10, 20 years?
Melissa Wong [00:10:53] Yeah so I think, you know, there are two key themes that I think have really been emerging in the past couple of years. In particular, retail used to be a lot about transaction, right? Used to be about going to the store to get the thing, and it was less about the experience. When we look at the themes of communication that’s evolved more recently, there’s a lot more of a focus on really engaging teams and engaging associates. It’s not just about here. Put this piece of marketing for like the sneaker, it’s really talking to the associates around the investment that the companies made. It could be like, let’s take, for example, Nike instead of just saying, like, here’s the SKU15237 put this merchandise this in this location put up this marketing. There’s more of a trend in need to say like, Hey, as a company, we just partnered with like, you know, this famous basketball store. This is the things that we’re talking about in social media. This is how you should merchandise as this is how the marketing looks. And this is our vision for how we see this promotion coming to life across the company. And so there’s really more of a theme of of tying together the the what in the how we’re doing and connecting the dots and how stores are a part of the larger picture. You know, I would say that that’s one theme. And then the second theme simply is just reaching down to associates and having the chat portion. I think retailers, you know, even five years ago, were a little bit more hesitant to have their teams chatting with each other. But they’ve seen that, especially with the pandemic, there’s a greater need for people to kind of learn from their communities, right? Kind of like knowledge sharing. And it’s a very fast way to get feedback and have a discussion, then that’s a lot more needed now than it was before.
Karen Jensen [00:12:57] OK, so touching back real quick on health and safety guidelines and one to ask about that research study around Total Retail’s top 100 omnichannel retailers and their ability to execute against recommended health and safety guidelines. Can you speak on that a little bit and your findings?
Melissa Wong [00:13:16] Sure. So, so that’s we partnered with an organization and told our retail and to do the Natco study and what that was is essentially a secret shopping, a secret shop at 100 of 100 retailers to see how they’re performing in terms of store execution across four key pillars, which was safety, traffic, friendliness and marketing. I think one thing that was interesting on the first shopping trip was we found that non essential retailers were executing better than essential retailers. And you know, the hypothesis was that because stores closed with non-essential retailers, they had a time to kind of reset their teams to really put the processes in place before they opened their stores again in the second shopping trip. Actually non-essential an essential role in the same bar, and we’re performing the same. So that really showed that essential was able to catch up. Another thing that was interesting to us, and which was one of the reasons why we partnered with Napco, we partner with Napco to actually get the data from the secret shopping trips. We had a hypothesis that retail supply and customers would perform better than than than brands that weren’t using Retail Zipline. And we found that that was true. So supply and customers performed on average 7-12 points above the four categories consistently, then retailers that worked weren’t using Zipline Line, so, you know, a great testament to my head of marketing who thought like, oh, interesting, like be great to partner with Napco to see what the data shows. We believe this, but that is not actually the case. It was it was great to see if that that that was actually how the findings ended up.
Ned Hayes [00:15:08] So in terms of additional hypotheses that you might be testing, what other things do you hope to prove in the marketplace?
Melissa Wong [00:15:15] So we’ve been looking a lot around the role that data like what data can bring in terms of insight, right? And so when we look at execution in retailers at a specific location, being able to triangulate the data from either other supply customers or non-deployed customers by looking at Glassdoor reviews or Yelp reviews and be able to say to give people that information around is this store or district performing better or worse than their neighbors? That’s the type of information we’re looking to surface. Another hypothesis we have is that retailers that have higher ratings on Glassdoor or are more engaged associates actually do better financially and retailers that don’t. And that makes a lot of sense. And we’ve began we’ve begun to see early findings, and that’s what I think. There’s a lot more that we can uncover.
Ned Hayes [00:16:21] Got it. So do you have specific metrics that you measure for communication improvement?
Melissa Wong [00:16:27] We look at it not as much communication improvement as we look at what is the behaviors that we want to generate, right? And for us, that’s store execution, like, are the stores actually doing the things that we’re asking them to do? Gap Inc mentioned is one of our customers, and a couple of years ago they were using an older task management solution and they said, You know, we were we’re seeing about 25-30% execution of things we were asking them to do, which isn’t great, right? If you have hundred stores, that means only 25-30 stores actually doing the thing. And then they said with Retail Zipline. After we implemented with them, they said that they were saying over 90% execution for next day direction, which is great and which also is great because they were using us during COVID. And I’m sure that that ability to be agile and nimble and send information down and know it’s being acted on. I’m sure that helps them keep their health and safety standards up and keep their doors open during a really tumultuous time.
Karen Jensen [00:17:40] Oh, absolutely, yeah. So our execution improvement is quite the superpower. Are there any additional retail consumers that you can speak about that have had the most positive impact since adopting your technology?
Melissa Wong [00:17:55] Yeah. So I think, you know, there are two other examples that come to mind, actually three. So one is Lego. So really most loved brands, and they wanted to make sure that their brand experiences was coming across consistently to consumers. You know, I, one of our advocates, emailed me an email from a store manager that went on PTO and they were using Zipline. And he said to our advocate at LEGO, as a store manager, when I go on PTO, usually I come back and I felt like the brand experience is compromised. Like, you know, I am always falling off. Things have fallen in between the cracks, etc.. And he said, You know, I came back and my store was incredibly running, incredibly smoothly, and Zipline has made me realize what a great team of leaders I have and has made me a better leader myself. And so that was like just a phenomenal. Email to get because we are in service to helping brands succeed. And then the second use case that is really interesting is we have a lot of digital natives, so like Casper will be away. Allbirds and really with those brands, we talk about how they’ve achieved a cult like following online, right? And they open one or two stores. They look at the adoption and the customer, the customer adoption in those markets, they really create a playbook for how things can work and then they begin scaling, right? But a lot of the success of the first one to five stores typically comes from a deep tribal knowledge. And once you begin scaling stores at a rapid rate and opening 20 stores a year and one retailer is actually going to open 100 stores in the next year, you really need a playbook for success and a blueprint that can be scaled because all of your team members are going to be new. And that’s what Zipline has enabled for these digital native native brands. We’ve enabled them to replicate their blueprint.
Ned Hayes [00:20:19] So as companies get bigger. What other things have to change?
Melissa Wong [00:20:25] Yeah, I mean, that’s like a much broader question than Zipline. You know, people are looking at their inventory levels, they’re looking at their real estate positions. And really, it comes down to like, how much can you put your stores into specific cohorts that optimize productivity based off of the KPIs that you have, you know, with the store fleet of 1200? You have hot stores, you have cold stores, small flag, flagship small footprint and you might have some dark stores with a fleet of five. You might. All of this stores might be very, very similar. So the bigger the businesses, the more targeted and specialized it could be from a store experience perspective.
Karen Jensen [00:21:09] In your long experience, what do retailers do well and how can retailers improve?
Melissa Wong [00:21:15] To be honest, you know, there’s nothing better than retailers being able to when they’re able to really capture the hearts and kind of like essence of aspirational living. Whether that’s really high end or whether that’s to do with like home decor or whether that has to do with like a bargain basement, find there’s something about retail that has that captures people’s imagination and aspiration for who they want to be. But I don’t think that as many brands. For other industries have been able to replicate. There’s something around the human connection, the connectivity like Lululemon, has yoga studios and stores, right? They’re known for like this the sweet or the sweat life. There’s something really magical about retail brands and the community it creates and brings and what it enables people to ultimately be or become through new clothes or through. You know, like a different, you know, furniture makeover or that I think that other industries, that puts it kind of like above and beyond other industries.
Ned Hayes [00:22:37] Well, we’ve spent time talking to small retailers who really create a unique, customized, curated experience. Can larger retailers learn from from from those kinds of small retail experiences?
Melissa Wong [00:22:52] Totally. Absolutely. And I think like the the challenge that larger retailers have in creating those, you know, curated experiences is how do I get consistency if I’m going to take that one curated store experience and expand it to two thousand stores? How am I going to get all of my stores to actually create that curated experiences and that comes down to communication and execution?
Ned Hayes [00:23:13] Right? Karen, any last questions?
Karen Jensen [00:23:16] Yeah, I have a couple. What advice do you have for other female entrepreneurs?
Melissa Wong [00:23:23] You know, what’s interesting is that like in my own personal journey, I one I never I never thought that I would be a startup founder. And really, I think through the journey and the fundraise, like we haven’t had as much of a difficult time. Raising money, I think that has to do with us following our passion and the kind of like information that we. We distinctly know so for other female founders, I would say, like, keep going, keep going, keep like fight through the fear, fight through the nose, like if you really have a passion and you have knowledge about something that is special and unique, like you can definitely make it happen. And you can also make it happen with your own personal life as long as you surround yourself with a community or a support system that will enable you to have some sort of balance.
Karen Jensen [00:24:23] Wow. OK, so building off of that, what is your personal mission? What do you want to be remembered for?
Melissa Wong [00:24:32] I think just improving. I mean, to be honest, it’s really like improving how retail operates. It’s like I left retail because I felt like the industry was so underserved all of these startups were focusing on, you know? High tech workers at things like really well funded companies and retail is the. It’s like the most populous workforce in America. So who is helping? Worked, you know, the everyday worker really do better. And if I can help the everyday worker get more clarity into their job to give time back so they can spend with their family. And if I can make their jobs easier by giving them a solution that helps them, that’s the change that I would like to make in this world.
Ned Hayes [00:25:29] Well, thank you so much, Melissa. Really appreciate your time today.
Melissa Wong [00:25:33] Great. Thank you so much for having me.
Ned Hayes [00:25:37] Thanks for listening today to the SparkPlug podcast hosted by me, Ned Hayes and brought to you by SnowShoes Snow.sh for smarter mobile location. Smart Plug is a wholly owned property and SnowShoe all content. Copyright 2021 SparkPlug Media.