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The Agile Brand with Greg Kihlström®: Expert Mode Marketing Technology, AI, & CX
#730: Chasing perfection when agility is what's needed with Tom Schmitt, CEO of Radial
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- [00:01]
Greg Kilstrom
Refresh your space for summer during Pura's Summer Savings event.
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Tom Schmidt
Enjoy 20% off site wide with exclusive
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Greg Kilstrom
savings on our Smart home fragrance Diffusers.
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Tom Schmidt
It's the perfect time to upgrade. Visit pura.com
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Liberty Mutual Spokesperson
and Doug there's nowhere I wouldn't go to help someone customize and save on car insurance with Liberty Mutual. Even if it means sitting front row at a comedy show.
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Greg Kilstrom
Hey everyone, check out this guy and his bird. What is this, your first date?
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Liberty Mutual Spokesperson
Oh no. We help people customize and save on car insurance with Liberty Mutual together. We're married. Me to a human, him to a bird.
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Greg Kilstrom
Yeah, the bird looks out of your league.
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Liberty Mutual Spokesperson
Anyways, get a quote@libertymutual.com or with your local agent.
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Tom Schmidt
Liberty Liberty Liberty Liberty
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Ad/Promo Announcer
the Adjunct Brand.
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Greg Kilstrom
Welcome to Season seven of the Agile Brand where we discuss the trends and topics marketing leaders need to know. Starting Stay curious, stay agile and join the top enterprise brands and Martech platforms as we explore marketing technology, AI, E commerce, and whatever's next for the omnichannel customer experience. Together we'll discover what it takes to create an agile brand built for today and tomorrow and built for customers, employees and continued business growth. I'm your host Greg Kilstrom, advising Fortune 1000 brands on martech, AI and marketing operations. The Agile Brand Podcast is brought to you by Tech Systems, an industry leader in full stack technology services, talent services and real world application. For more information, go to teksystems.com to make sure you always get the latest episodes, please hit subscribe on the app you listen to podcasts on and leave us a rating so others can find us as well. Now onto the show. Is the pursuit of the perfect customer experience actually holding brands back from achieving true agility? Agility requires a willingness to embrace calculated risks and adapt quickly to changing market dynamics. It also demands a shift in mindset from a focus on rigid planning to iterative experimentation and continuous learning. Today we're going to talk about how brands can navigate the ever evolving retail landscape by prioritizing agility and leveraging technology to enhance the customer experience. To help me discuss this topic, I'd like to welcome Tom Schmidt, CEO at Radial. Tom, welcome to the show.
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Tom Schmidt
Greg, great to be here with you.
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Greg Kilstrom
Yeah, looking forward to this talking about this topic with you. Before we dive in though, why don't you give a little background on yourself and what led to your new role at Radial?
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Tom Schmidt
Well, thank you and I'm pumped up to be with Radial. I've been here only for five months in a few days, so still Call myself a rookie here. Although this week actually I did see my last set of facilities across North America. So at least I've been to all of our operations at least once. So I'm a rookie with Radial and not a rookie to the industry. I've been in transportation logistics supply chain for three decades, including competing against Radial several times. When I was President CEO of FedEx Supply Chain, I competed against Radial. At the time it was still GSI Commerce and eBay Solutions. And then when I was at DB Schenker leading their global contract logistics team, I also ran into Radial. So it's good to be actually on team Radial versus competing against them. And I'm thrilled to be part of that team.
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Greg Kilstrom
Yeah, yeah, I love it. And yeah, definitely you're the right person to talk about these topics today. So love this. So let's dive in. We're going to talk about a few things today, but I want to start with really what's changing in in retail and certainly there that could be a whole show of its own. But let's talk about consumer expectations and you know, that's certainly they are continually and constantly evolving. And Radal did a survey recently that highlights this. What. What are some of the most significant shifts that you seeing and how consumers shop and what they expect from brands today?
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Tom Schmidt
Yeah. So. And you mentioned, Greg, there may be other aspects about what's changing, which is more an outcome in the context of the political landscape. Also, we can dive into that a little bit later from a pure consumer expectation perspective. It's not rocket science. So our survey we recently did, there was a top three that came out. So when I go online and click I want to have it now. So there's something about delivery speed. The second thing is when you go online you're looking for something very specific. Most of the time you want to make sure it's in stock. So the availability of the product is a huge deal and then depends on who you are and what it is you're shopping for. The third item oftentimes is returns. And I was again in several of our sites this week and it's fairly common, especially in the fashion, health and beauty where like okay, yeah, I'll just get these three and I'll try them on and send those two back and then keep this one. So speed, availability and the ability to return certainly are the three podium positions.
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Greg Kilstrom
Yeah. And you know, it's interesting how those expectations in the customer experience and you know, consumers may not use the term fulfillment or supply chain or maybe a little bit of supply chain because it's been in the news so much. But they don't necessarily use the word fulfillment when thinking about the customer experience. And yet it's become a pretty central component of the retail customer experience. How do you see the role of fulfillment again, kind of evolving beyond traditional, kind of a backend thing that kind of happens and necessary function to really a central component of the modern customer experience?
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Tom Schmidt
Yeah, I would say if you want to headline this, Greg, you could actually say fulfillment is the experience. Fulfillment is the customer experience. Let me actually just take you back a little bit. So two weeks ago, I was in Memphis, Tennessee, which was home to me for 12 years. When I was with FedEx, we had a celebration of Fred Smith's life, the founder of FedEx. And there were probably about 20,000 of us in the FedEx forum celebrating Fred, who invented an industry. Fred Smith, in his early days with FedEx, coined a phrase, the information about the package is as important as the package itself. And this is how online tracking started. Now, if you fast forward from we're talking in this case the late 70s to 2025 and this is fairly ubiquitous, whether you or I order an Uber or whether we are tracking our Amazon package, it is pretty amazing these days. Kind of the type of information that you get and the specificity, including the proof of delivery, with the picture where you see the package that you care about a lot, in fact was delivered at 1:57pm before the 2:00pm deadline. And here's the picture on your front porch where you actually asked for it to be. And so that level of fulfillment experience is very different from what it used to be. I was traveling this week. I was really looking forward to getting a package last night when I was coming back and was thrilled to see my proof of delivery at 2:57pm and I knew when I was getting home it was sitting on my front doorstep. So the fulfillment really is the experience. And a lot of companies going all the way back to this statement by Fred Smith at FedEx, founder to Uber, Amazon and many others in modern delivery, Veo is a good example, the upstart that's challenging UPS and FedEx, where you can really have your finger on the pulse of your delivery at all times. And it gives you a sense of peace, a peace of mind.
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Greg Kilstrom
Yeah, yeah, yeah. I love that phrase. Fulfillment is the customer experience. And I completely agree with you. You had mentioned that from the survey. Speed of delivery, product availability, free easy returns are certain key factors in buying decisions. How are brands taking those that that knowledge and really rethinking their fulfillment strategies. Like, what does that mean for brands that are really trying to stay competitive?
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Tom Schmidt
Yeah, so it's a bit of a left brain, right brain issue. Right. So if you think about our brain structure, there's the left brain, which is more the analytics, then it's the right brain side which is more the passion and the emotions that go with it. So brands obviously somehow need to make both halves of that brain come alive when they, when they approach you successfully. So when you talk about right brain, it's about the excitement that comes with you getting that particular product right, Whether it's the hottest running shoe on earth or whether it's a fragrance that's just setting itself apart. But the left hand side, the analytical side, is equally important. And this is where in all fairness, it's good, solid, rigorous process management math. You have to go through the so called SKUs. Like, how many units of different items does this company carry? Sometimes the answer is 1, and sometimes the answer is 70,000. In our radio fulfillment centers, we have customers that have exactly one item and obviously several of those or 70,000 different ones. Now with the 70,000 different ones, that math exercise gets a bit harder because it's hard for you to have tens or hundreds of each one. And so if you go online and you want this particular item in red of that particular size and you have a whole kindergarten full of girls or boys that you want to give this to, you might be ordering 30 of those and they're going to be out of stock, but for the most part, it's a replenishment. When's that point of replenishment? When you get down to a certain inventory level, you restart. Obviously there's also math in terms of profitability. You cannot fill an entire warehouse with like thousands of each of the items because that's cost of inventory, that's cost of holding. So again, this is when you say, how do brands do it? It's a bit of art and a bit of science. It's a bit of emotions and passion, of is this a super exciting new hard product? And then it's where the math comes in. Like, how do I get this to the customer at the service levels that they expect undamaged, fully intact order accuracy radial. I'm so super proud. Our team right now is running at 99.9% order accuracy, meaning when you order from us a thousand times, 999 times, you get exactly what you ordered. And the one time we are mad about the fact that we didn't get it right. But this is how do brands do it? They figure out to make both of these halves fully satisfied. They have a process that actually works from a timing perspective, from auto accuracy perspective, from an in stock perspective. And then they obviously have to have an exciting brand that makes you look forward to ordering it and getting it and using it.
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Greg Kilstrom
So I want to talk about, I've talked with a few other guests on the show about the idea of, you know, peak season and sort of the blurring of the, of the lines. I mean, certainly we're seeing other shopping occasions rise throughout, throughout the year as well. I mean holiday season is still, you know, very, very important time and, and lots of activity. But you know, with demand surges happening throughout the year, what best practices would you recommend for brands to manage this? You know, if not always on peak. Almost always on peak, yeah.
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Tom Schmidt
So a couple things. One is let's just deal with the typical good old fashioned peak. And I'm using again an example of my FedEx days where we worked with all the large retailers and then they had all these big promotions leading up to the winter holidays and then they made all these promises that when you order by December 23rd, you'll still get them on Christmas Day. And at some point we actually had a summit with the top 15 top 20 retailers in Memphis and we told them, ladies and gentlemen, we're actually collectively going to disappoint because the promises that all of you are making between FedEx UPS and whatever regional carriers and USPS, you cannot get there. So let's somehow depict this a little bit, perhaps great incentives that if you order by December 10, you get an extra 10% discount. So all of these tactics are still relevant, right? Because ultimately you want to commit and you want to make a promise and then you want to keep that promise. That goes back to that number two item I mentioned, which is being in stock. So to your point, Greg, what are best practices? So when you're in the fulfillment business, then you have a large warehouse, there's 100, 200, 300 teammates that operate this place. And sometimes during typical peak, this number can be 3x or 4x. So it's a challenge. You work with world class staffing agencies and you figure out kind of how you can complement for short amounts of time what you have. So this is good operations. And again, you do two things. One is you try to depict a little bit by some of the tactics I just mentioned, extra incentives for ordering very early. And the second thing you do is when you attract most of These warehouses, not all are multi client warehouses. Not one building is taken up by one customer. Well, if you can figure out to get an online gardening company, if you can figure out to get a company that specializes on swimsuits. And so you basically say, okay, if this is the typical November, December peak for the gift giving kind of items, can we figure out who we need to attract? Who's more like in the gardening business, who's more like in the swimsuit business so that you have a blend that actually keeps that level of pickiness in terms of what you have to accomplish in this building slightly more balanced. So this is one good tactic. Now the world, you have to get 1% better every single day in whatever it is you do because the world keeps getting more agile and creates more challenges. So because on top of what I just mentioned, okay, so we can, if there's a holiday peak towards the end of the year, we can depeak it by ordering early. If we can depict the building requirements by having some counter cyclical offerings by some other customers. Check mark, check mark. These are good things. But then there's all the sales. We have so many companies and customers that create specific mini peaks. That's probably what you're referring to. Where there's the summer sale, there's the spring sale, there's the fall, and that creates extra challenges because you literally sometimes go 20x because customers, you and I, we are trained towards those things, right? So we are attracted by these sales to begin with, but now the company does it the second and third and fourth year in a row. Well, if you know there's a June sale, you're not going to order in April or May, right? And so this thing becomes so predictable that it becomes even more picky. So what do you do? You flex up and down, you work with world class companies, you also plan together with your customers. This is where we communicate with two ears and one mouth. Applies to both sides. Like please help us help you. A summer sale, a spring sale, a special something sale may in some cases be a surprise to the consumer. It cannot be a surprise to your partner. This is team sport, right? So if you, if you're planning these types of special events, this is a joint planning exercise because we can set you up for success or we can set you up to fail with your customers. And so I guess when you talk about best practices depicting getting some countercyclical brands into the same buildings and then team sport, partnering, working with world class partners, but also with the actual brand that you're working with to make sure that we are in exact block step.
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Greg Kilstrom
Yeah, yeah. I mean, do you think that the. Is the future more peaky or in other words, are there, are there going to be more peaks throughout the year or you know, do you think there's going to be some sort of. I guess. What does the future hold from, from your perspective?
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Tom Schmidt
I think we're not done yet. So when I talk with many of these hot emerging modern brands, these are in many cases very kind of up and coming creative people with lots of ideas. And these ideas oftentimes have to do with wowing, delighting, surprising. I'm a big Swiftie, so I like Taylor Swift. I've seen the eras two or three times. So if you are a Taylor Swift fan or even if you're not, you probably are aware of her Easter eggs, right? Like where she plans all sorts of little hints here and there and then when you look at them collectively, they make up for the new album. There's lots of creative brands, there's lots of creative minds out there who like a Taylor Swift, like to wow, delight, surprise people. So I don't think we're going to get back to steady and boring. I do believe we have to get more and more flexible and more agile. We have one company that we are dealing with right now that their mantra is get 1% better every single day. You also have to get 1% more flexible and agile every single day.
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Greg Kilstrom
Yeah. Yeah.
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Tom Schmidt
Love it.
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Greg Kilstrom
So last topic I want to talk about with you, you mentioned you're five months into your role as CEO at Radial, so still relatively new. I want to want to talk a little bit more about this and what specifically about the opportunity excited you and how do you see some of those prior experiences you mentioned shaping your approach to leading the company both internally with your team as well as externally with customers? Yeah.
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Tom Schmidt
So I mean at some point there's something about the 10,000 hours of practice where like if you're. I'm not claiming I'm a world class violinist or world class anything. It does help though if you are practicing to a point where you master a certain skill at a, at a specific level. I write an email to all of my employees every single Saturday. And on the very first, the only exception to that regular Saturday email is, is the first day. My first day happened to be a Tuesday. And so then in that Tuesday email I told all of my employees, you should expect two things from me. One is good intentions. I'm a well intending person. I actually want to make a difference for all of us together and the people that we work with. And you should expect a certain level of competence. You should not expect perfection. So we always strive to get closer. I mentioned how operationally awesome this team actually is. We are industry leading in order accuracy and on time performance. So what attracted me to it? I always loved the story of radio. And I'm not sure, Greg, how familiar you are with that. You have to imagine you go 30 years back to the mid-90s and a young kid called Michael Rubin basically knocked at a whole bunch of world class consumer brand stores and said, hey, I can actually create a web store for you. They're like, we can do what now? And well, you sell through all these stores. But they actually would. People would go online, they would do what now? They would go online and order. And then I can hold these things, I can arrange shipping and payment. And he basically was a trailblazer inventing this industry. And so I was very odd by that trailblazing story in this particular way in this industry. Somewhat similar to Fred Smith athletics reinventing the way economies work. And there was not a dedicated plane flying around boxes and packages. Boxes and packages were if there was space available at the bottom in the cargo section. Right. So I was always awed by that story of imagining and inventing kind of an industry. And then when I got the Internet, competed against it in multiple iterations over two decades. And then I got the opportunity to actually join the team. So. So it's something that I've again, I've had my 10,000 hours of practice. I competed against them, I lost some, I won some. And I thought, okay, this is a great team to apply kind of my 20 plus years of lessons learned.
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Greg Kilstrom
Yeah, I love that. Well, what would your advice be to other CEOs that may be stepping into a new role or maybe even stepping into CEO role for the first time. You know, how are you? How are things different now maybe than they might have been a few years back?
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Tom Schmidt
Yeah, it's a good point. So I think there are some things that are almost like table stakes. So when you walk in, no matter how experienced you are, I love using that label. We can communicate with two ears and one mouth. So early on, you are listening to your teammates. You are. I mean, you're doing it all the time, but at least initially, soak it up. In my first four weeks, I was on teams calls and in person with our top 25 customers one on one. So this we communicate with two ears and one mouth over practice that early. So that's a Table stakes. I'll get to what's perhaps a little bit different in a moment. A second one is don't confuse efforts with results. So there's a lot when you get into something where people go out of their way and show how hard they work and, and so this is where the work smarter, not harder. And then are you working on the right three or five priorities and do the outcomes reflect the effort and if not kind of what, what can I do to increase the impact? Here you also third, you make sure that the top five things that the company needs to be doing and the leaders that are doing those things, they are highly willed and highly skilled in relation to that priority. If they're not highly willed or highly skilled, then you can motivate them on the will side. You can roll up your sleeves on the skill side. But if you have a top priority, we want to go into Canada as an example and then you have a leader who's neither willed or skilled. That's leadership failure. I just screwed up. I'm asking them to do something that they're being set up to fail. Fail us and fail themselves. That's leadership failure on my side. So some of these things I think are table stakes of just open mindedness. You asked what changed I do believe and Covid certainly was an additional amplifier of that. This whole notion of empathy is becoming more important when you run into a situation where there's a huge crisis, could be a cyber attack or so I think there's always a moment to say this sucks. Like this is just not. This is just painful, this sucks. And acknowledging that, I mean oftentimes I think the tendency for us left brain solutions, focused people is you walk in and like and here's the great answer to the dilemma we have that all has its place. But there's something about we lead with empathy like oh, this sucks, I'm so sorry. And even when you talk to a customer and we just failed them again right now, we are succeeding with them 999 out of a thousand times in order. But that one time when I talk with them, I'm perfectly fine saying I'm so sorry. I'm so sorry. We're better than this. So this leading with empathy, I believe the whole scare and kind of just novelty in a negative way factor for a century long time span now of a pandemic of COVID I think reminded ourselves and each other that it's okay to be empathetic. We are tough on expectations, we're not tough on people personally. We're saying sorry when we should before we go into problem solving mode.
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Greg Kilstrom
Yeah, I love that. That's great. Well Tom, thanks so much for joining today. Really appreciate your ideas and your insights. I've got one last question for you. I like to ask everybody on the show, what do you do to stay agile in your role and how do you find a way to do it consistently?
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Tom Schmidt
Well, again, the first thing I should say is we strive to get better every single day. We strive to be perfect, but in Nike's words, it's a race without a finishing line. But I personally, I'm an active person so I do get my juices flowing by sitting on a bike and just getting adrenaline up. I love music. I confess to the fact that I'm a swiftie, but I do a lot of my best work to listening to some of the music that speaks to me and get some more senses going. So between the physical activity and a little bit of a right brain stimulation through music, I've got two bases covered here.
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Greg Kilstrom
Yeah, love it. Well, again I'd like to thank Tom Schmidt, CEO at Radial for joining the show. You can learn more about Tom and Radial by following the links in the show notes. Thanks again for listening to the Agile Brand brought to you by Tech Systems. If you enjoyed the show, please take a minute to subscribe and leave us a rating so that others can find the show as well. You can access more episodes of the show@theagile brand.com that's theagile brand.com and contact me if you're interested in consulting or advisory services or or are looking for a speaker for your next event. Go to www.gregkillstrom.com that's G R E G K I H L S t r o m.com the Agile brand is produced by Missing Link, a Latina owned, strategy driven, creatively fueled production co op. From ideation to creation, they craft human connections through intelligent, engaging and informative content. Until next time, stay curious and stay agile.
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Ad/Promo Announcer
The agile brand.
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Liberty Mutual Spokesperson
There's nowhere I wouldn't go to help someone customize and save on car insurance with Liberty Mutual. Even if it means sitting front row at the end a comedy show.
- [27:55]
Greg Kilstrom
Hey everyone.
- [27:56]
Ad/Promo Announcer
Check out this guy and his bird.
- [27:58]
Greg Kilstrom
What is this your first date?
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Liberty Mutual Spokesperson
Oh no. We help people customize and save on car insurance with Liberty Mutual. Together. We're married. Me to a human, him to a bird.
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Greg Kilstrom
Yeah, the bird looks out of your league.
- [28:07]
Liberty Mutual Spokesperson
Anyways, get a quote@libertymutual.com or with your local agent.
- [28:11]
Tom Schmidt
Liberty, Liberty, Liberty, Liberty.
- [28:15]
Ad/Promo Announcer
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