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BRAVE COMMERCE
Beko Europe’s Marco Brucato on Scaling eCommerce Without Losing Local Relevance
00:23:20
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- [00:00]
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- [00:34]
Marco Brucato
What I don't like is to hear one word in this world and it's omnichannel. Because when I hear talking about omnichannel from companies, it means that they didn't understand what is real. Omnichannel. Because if you need to label it, it means that you don't have it. Because omnichannel shouldn't be a buzzword that you can use one day and the other one not. It should be just part of your corporate structure. It should be fully embedded in whatever process, product, business unit, everything. Because it's not about how we decide to label ourselves. It's where our consumer is. Consumers are everywhere.
- [01:11]
Rachel Tippograph
Welcome to today's episode of Brave Commerce. I'm Rachel Tippograph, the founder and CEO of Micmac.
- [01:17]
Sarah Hofstadter
And I'm Sarah Hofstadter, chairwoman of Profitero Plus. And this is a show that talks about what's relevant in commerce for the world's biggest brand.
- [01:32]
Rachel Tippograph
Sarah, Profitero's original business, meaning the founder, it was headquartered in Europe, correct?
- [01:38]
Sarah Hofstadter
Correct. The company was founded in Europe. I don't remember how many years into its existence. I mean, Properture has been around 15 years or so, but yeah, it's very much started European based and then eventually made its way across the Atlantic and then out east, and now we're global. But I think a lot of that came because of tremendous fragmentation, country by country, in how their approach to commerce was done. Even before the COVID explosion, if you will.
- [02:09]
Rachel Tippograph
Mic Mac is obviously global. We went from us and then moved across the world. And I would just say it's not just how commerce is different, but just even how the customers want to be serviced culturally differs from market to market.
- [02:23]
Sarah Hofstadter
Remember my first few months at Profitero, it was a bit of a blur because I started in January of 2020 and then Covid hit like five minutes later. I was trying to get onboarded onto Profitero, but also onto our customers and all that other stuff. And I made the horrible Mistake. The horrible mistake of just kind of assuming that E commerce was the same in every country just in terms of like consumer behavior. By February, I had been schooled, so I learned a lot in February. I remember I went to Europe. It happened to have been like, right before COVID Do you remember, like when it started breaking out in like Milan? Yeah, of course. End of February. Ish. So that week I was in London, Paris and Nuremberg visiting customers and listening. And that is how I basically got schooled and miraculously did not get Covid.
- [03:10]
Rachel Tippograph
I was just gonna say I thought the punchline was. And that's how I got Covid.
- [03:13]
Sarah Hofstadter
No, I didn't get Covid until two years later also. First time I got Covid in Europe. But that's a story for another episode. But then, you know, you kind of understand the difference between how things get priced in France and the control that store managers have and the way consumers like to shop, the whole click and collect versus last mile delivery.
- [03:35]
Marco Brucato
Yep.
- [03:36]
Sarah Hofstadter
In the US we were so myopic. I mean, we were so overly simplistic. I got schooled early. I'm so super thankful to Danone and Pernod Ricard for insisting I come and see them. So smart.
- [03:48]
Rachel Tippograph
Smart. You know what I think is interesting just from operating a business is, is because there's so much fragmentation in the market and you can't take a one size all approach. You have to weigh that against essentially like the GMV of these markets. And there is a tension which is what the customer wants, whether it's B2B or B2C. Married to the service and delivery model can put you in a position as a business operator of having an unprofitable business in those markets.
- [04:18]
Sarah Hofstadter
It's why they end up becoming more underserved, because the cost to serve becomes that much harder. And there continues to be a massive push pull between how to service regional local businesses that have theoretically similar assortment but wildly different behavior.
- [04:33]
Rachel Tippograph
So we're about to bring Marco onto the show, who's overseeing the entire emarket within the home appliance vertical, which, you know, Sarah and I are trying to diversify guests. So we're super excited to bring Marco onto the show. But he oversees all of Europe and when you hear his scope of work, you almost think that it's a global role just because of all the nuances within that one continent. So without further ado, let's bring Marco onto the show.
- [05:03]
Sarah Hofstadter
Today we are happy to have Marco Brucato head of E Commerce for Europe DTC transformation at BEKO Europe. That was a mouthful. I am so happy to have you. We're just going to stick with Marco today. That worked for you.
- [05:18]
Marco Brucato
I think it's far away, better.
- [05:21]
Sarah Hofstadter
Okay, wonderful. Well, let's keep this cash then. First let's just kind of talk a little bit about how you started in Italy and then how that bridged out because we have not had a lot of Italian HQ'd companies on the podcast and I think this is going to be an interesting place for us to start, but we'll see where we go. So you've scaled digital commerce across lots of different markets. You launched E Comm in Italy, then you built this out to broader pan European strategies. So how do you balance that regional consistency with the local relevance? And how have you dealt with either the tensions or maybe not dealt with, but even like unlocked benefit from the tension. Sometimes the tension comes the best outcome. So would love your perspective on that.
- [06:09]
Marco Brucato
Yeah, definitely, Sarah. So I think this is one of the hardest problems to solve when you are at scale. Right. And is one of the most biggest frictions that you can have with the markets. So yes, I believe in a concept that is the freedom within a frame. Nothing new, but it's something that I believe it's completely important and relevant when it's about scaling e commerce. So building a frame means that you need to have global or European structure, strategy, architecture, KPIs, governance, everything has to be central and has to be the same for everyone. Then you need to allow a lot of local freedom and it can't just be, okay, let's translate it in the local language. It wouldn't work. It can't be working. Even in Europe, the cultural differences between all the markets are so many. And I always do the example of Germany because Germany, it's a very nice example. When you want to show something to a German consumer, you can't do it as if it was an Italian one. You need to be much more precise, much more technical. And so you need to adapt probably the ux, you need probably to adapt all the message, all the contents. And so having local freedom, it's super important. So let's say I would think about more in general of this concept. What does it mean? It means that you need to standardize not just the outcome, you shouldn't be standardizing that, you should be standardizing the principle. And so it's about trusting your local teams or not. And that's the super important step. So we really need to have a very say, control adverse structure that creates principles and leaves the outcome being completely managed from the market.
- [08:04]
Rachel Tippograph
So you talk about the nuances from the buyer side, from country to country. Here you are trying to transform an organization and at the end of the day you're dealing with people. So what type of culture are you trying to build internally while also acknowledging that probably you're managing a multinational workforce.
- [08:26]
Marco Brucato
Yeah, I mean, I would start from a question that is, how do you nurture an idea? How do you make sure that you are creating appetite for change? And this is the hardest part, I would say, because as humans, I mean, we're naturally change resistant, right? We wouldn't change anything if it was on us. But you need to create the preconditions for that. And I think that the preconditions are two mainly. First, you need to create the context. So especially when you talk about digital in general, you need to make sure that whoever is sitting at the table, they do have the same understanding of the topic as you do. And that is not easy, especially when we're talking about digital. The second one is the gap. You need to show it and it has to be tangible. And you need to make sure that what I always, let's say, try to show in a very clear way the cost of doing nothing that is so important in digital. Because in digital there is a cost of inaction. And all of this is about selling the problem rather than the solution. So when you're trying to do a digital transformation, you don't have to think about the solution of that. If all the problem is clear to everyone, if the gap is clear, then the solution will come by itself. Because all of us, we do base our decisions based on something, right? That something has to be clear to everyone. So this is the most important part. I would say that also if you want to digitally transform a company, you need the leadership buy in. Without that, nothing will ever change. And this is such a big and important step. Having leadership buy in is the main and most important step.
- [10:13]
Sarah Hofstadter
How did you make that part happen?
- [10:16]
Marco Brucato
Well, actually, I think that, as I said, you need to create the context. I think that one of the most difficult things is making sure that the people that you have in front do understand what you're talking about. This is the hardest part today, whenever you talk about digital. So that is the trick for me. I try to do, for example, I try to do a lot of parallel examples. So with the offline market, that works always very well. Because when you try to take an idea that people don't understand or are not used to, and you make A practical example of something that they do understand. So for example, the offline world, that tends to work quite often.
- [10:56]
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- [11:28]
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- [11:38]
Sarah Hofstadter
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- [11:54]
Sarah Hofstadter
One of the things that I found organizations are getting better and better at both top down, asking the questions, but within these, the role like the one that you have when you are an E commerce lead. How do you contextualize the impact of action? And almost a little bit of a. We call it the coma, the cost of missing out of inaction. And so if you don't do something, what ends up happening and who will fill that void? So you know that could be insurgents, that could be. It could come from anywhere. Where do you go to get that kind of information to help you make that case?
- [12:38]
Marco Brucato
That is one of the hardest parts. I would say having a solid base of numbers sometimes is not easy when you deal with digital. And I fully agree with you, Sarah. You need to find the right ways and you need to decide. So simplifying in digital is something that pays off. Simplifying and trying to do not get to the lowest level of detail, especially when you're dealing with something new. If you try to stack yourself into details, you will never get out. So you need to sell the idea, the concept. You need to try to find as much values as you can to give value to that idea. Okay. But then what I try to do, and this is why I don't spend that much time on the solutions because I always tend to go for a test, small scale, fast environment. You need to find ideas, right? You need to find ways that could be working. Most of those do work, but 99% maybe doesn't. Okay, so you need to make sure that what you are saying it can be data proof. And how do you do that? With small tests. And if it works, then you do it at scale. That is a way of working and that is actually a way of working that I'm trying to bring. And I've been, let's say leveraging a lot in craft times before this experience and that is super important for me.
- [13:59]
Rachel Tippograph
So question E Commerce penetration is at a place of maturity both in Europe and in the US and so totally understand your perspective on change management, of bringing a test forward and then leading the fish to a larger pond. But you also don't want to lose market share from your competition. And I mean scale is already here, especially in environments like Amazon. So how do you balance protecting the business at scale and then bringing people along for the journey?
- [14:35]
Marco Brucato
Yeah, I think that's quite complex. What I always say about Amazon are three things and are the three things that Amazon taught me during my career. First, that complexity, it's a word that has a meaning before you start working with Amazon and after. So it is completely different after. Because Amazon is not a complex customer, right? It's the most complex customer. Both if you're working with them in 1P or in 3P. Okay. But it also teaches you another thing that is discipline. Discipline is something that Amazon is forcing you to learn. Why? Because Amazon has its own ways of working. You can't get out of it. You have to stick to the process and that's the full stop of it. And then the third part that I see as an enabler is to approach a customer like that one. And so to get the benefits of having scale, because that's the point of having a huge traffic with the higher conversion rate people, how do you get there? And you need to have an IT infrastructure that is actually meant to do that job and is not easy and it's not, let's say, for free. It's an infrastructure that requires a lot of investments and they do require to avoid whatever kind of manual intervention in the flow as much as possible, of course, but especially in the feed management and in the order flow. It has to be completely human free, let's say. Otherwise it's a mess. And that allows you to to take the best from a huge market, let's say an hybrid strategy that takes the best from the marketplaces in general. That is the traffic, right? The distribution, the velocity, the scale of that. And that has to be combined with something else. Because the beauty of the team that I lead is that we also do manage D2Cs, right? Repeat marketplaces and D2Cs. And so you actually merge the two. You actually merge the learnings from such a big customer and then the customer knowledge and the two together can really create insights that can be shared across the organization and can be useful and insightful for everyone.
- [16:50]
Sarah Hofstadter
Can I click a little bit deeper here? Because you mentioned earlier about your time at Craft and it's very interesting just even looking at those two different companies, whatever it was about five years ago you were at Craft. I know you were there for many years. It's almost like at Craft you were managing the stuff that goes inside the refrigerator and now you're managing the refrigerator to a certain degree. But ecom penetration, even when you're looking at more daily staples versus considered purchase, is extremely different. And the relationship that you have with Amazon or D2C is incredibly different as well. So our audience beautifully represent companies like Beko and companies like Kraft. How would you advise even the people that work here that are listening on what it means to change your mindset? Because I would guess, and please tell me if I'm wrong, that Ecom pen for appliances is likely higher than canned beans, but please help our listeners understand a little better.
- [17:54]
Marco Brucato
Yeah, absolutely. No, you got it. Absolutely. No, it's far away different. I mean, if you think about econ Penetration in the UK for groceries is around 15% if I'm not wrong. So if I do recall it well in the same market for appliances is almost 60%. So six appliances out of 10 are sold online in UK, just to give an example. So yes, it's completely different. The scale is immensely bigger. I would say in all the channels what I think about this, and I love to say that you said I was working before, let's say for what is inside the fridge and now I do work for the fridge, but actually didn't change much and it won't change much even in the future because at the end for me, the product by itself, it's super important, but it doesn't change the work that you do. It changes how you do it. So it changes the kind of nuances that you want to provide to the consumer. It changes the way that the consumer shops. Especially between the two where we're talking about, I wouldn't say commodities at all, but let's say it's almost commodities for the both. Okay, so it didn't change dramatically. For me, the two companies are completely different by let's say in any case because two very different styles of corporations. But no, I Wouldn't say that I've been feeling a huge difference between the two. And to whoever has to change from one sector to another one, I would say do it. I mean, it's going to be great and you're going to learn so many new things from that.
- [19:33]
Rachel Tippograph
So here you are working at an organization where on average 60% of sales is going through a digital channel. I don't know much around how you guys are investing your media dollars, but if that's the relationship with the end user, digital first, what would be your advice for organizations that are struggling with this legacy mindset, yet have this channel dynamic where the consumer's already changed? How do you think they should be investing their dollars to drive growth?
- [20:07]
Marco Brucato
That's one of the biggest questions I would say. And I also do understand, let's say, why some companies are still in a stacked mode, not yet digital. But even though the market is, what I don't like is to hear one word in this world and is omnichannel. Because when I hear talking about omnichannel from companies, it means that they didn't understand what is real omnichannel. Because if you need to label it, it means that you don't have it. Because omnichannel shouldn't be a buzzword that you can use one day and the other one not. It should be just part of your corporate strategy, right? It should be fully embedded in whatever process, product, business unit, everything. Because it's not about how we decide to label ourselves. It's where our consumer is. Consumers are consumers. Consumers are everywhere. An omnichannel should be a dogma. Everyone should have such a strategy for everything. And the lack of doing that step for me is due to just one factor, of course, fear. But it's also lack of digital leaders that today is something that is quite hard to find. It's very hard in whatever industry to find real digital leaders that do really understand and embrace the digital channel. This is, for me, one of the biggest things that impacts most of the companies. I was saying before, if you think about large appliances manufacturers, that's the same. Some of them are still not digital. And it's impossible. How can you do that? 1 out of 3 appliances in Europe are sold on digital channels. And on this side, I see Beko investing a lot and completely embracing the digital challenge. And this is absolutely a must for whatever other corporate that works, in whatever space, whatever market, however big or small the digital is. Because even when it's small, it's more than 10%.
- [22:22]
Rachel Tippograph
Marco, it seems like, you've been very brave navigating the European landscape. But we got to ask you our famous last question, which is, what is the bravest thing you've ever done?
- [22:32]
Marco Brucato
So I've been thinking a lot this question, actually, I've been hearing a lot from your previous guests of what they said about this famous question. But I will go for a principle and what I think is being brave. Being brave for me is not being afraid of saying yes to whatever new opportunity that pops out, is forcing yourself into a discomfort area to get things done and to get out of it and to learn from that. So I think that what I've been brave in the last years, personally and professionally, is that I've always embraced changes, saying yes to challenges that I had no idea of how to complete those. And then you force yourself in finding the way to get out. So that's the bravest thing I would say in my personal experience. I've done well.
- [23:33]
Rachel Tippograph
Marco, we're so appreciative for everything that you shared with us today, especially about learning about the European market. We want to do more of folks who aren't living in the US and interviewing them. So we really appreciate you spending time with us, especially before the holidays.
- [23:50]
Marco Brucato
Thank you very much. And actually, thank you for inviting me. It was a huge pleasure to be here today with you both. So thank you a lot.
- [23:58]
Rachel Tippograph
If you like what you heard and you want to keep on the trend of listening to some of our guests who have recorded with us across the pond, go check out a very recent episode we did with Laura Briggs at Philips. Or you can go further into the Brave Commerce archives and check out the Chief Digital Officer from Buyer's door of Axel Ada, or the global head of Commerce at Henkel, our deal friend, Boris. And don't forget, tell a friend, write a review. Thanks for listening.
- [24:50]
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- [25:52]
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