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The Commerce Collective Podcast
Building for commerce growth now and in the future w/ Jason O'Toole of Hanesbrands
00:20:33
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- [00:00]
A
Foreign. Hello and welcome back to the Commerce Collective podcast brought to you by Flywheel. My name is Emma Irwin and I am your host for this series. Today I have the pleasure of bringing you an episode that brought me back to my days as a retail specialist. If you've been here for a while, you know that that's where I started at Flywheel, in the spreadsheets, in the Amazon tickets, in the client calls. I was reminded of this because this episode is primarily about the nuances of selling apparel online with none other than one of the most iconic apparel brands out there. And a lot of this conversation just brought me back to my really tactical retail days. But enough about me. Without further ado, let's meet our guest.
- [00:46]
B
Hi, I'm Jason o' Toole and I lead the connected commerce and media teams at Hanes Brands.
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A
And I'm curious, how did you, how
- [00:53]
C
did you get to that role? How did you make your way to leading connected commerce at Hanes for a while?
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B
Internally, we've struggled to keep up with the growing interconnectivity between brand retail, omnichannel, full funnel. So we believe CCM brings those functions together to measure consumers complete path to purchase.
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C
Question that we ask absolutely everybody, and it depends on where you're from and kind of what businesses you're in. But I'm going to ask you, what is the last thing that you purchased on Amazon? Okay.
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B
I was prepared for this question, so I, I ordered some espresso pods to have a better answer than pull up diapers.
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C
I love that. Are you. I'm trying to think of flavors of espresso. I was gonna say are you light roast or dark roast, but that's not how espresso works. Do you do any kind of flavors or are they just standard like plain espresso?
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B
We generally order the, I think it's called Levanto and we order it in a big coffee family. So we just purchased it.
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C
Beautiful.
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B
I made sure to purchase it before this episode so that the answer was accurate.
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A
Alrighty. Like I said, we're going to talk a whole lot about the nuances of the apparel category when it comes to the digital sphere.
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C
That's not all.
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A
We'll also get into Jason's thoughts on how brands need to be structured for commerce today and the commerce of the future. And then we'll wrap it up flipping the question to what the agency of the future looks like. To start it off, I asked Jason to tell me about some of the key differentiators when it comes to running the Hanes Brand's connected commerce strategy, which is compared to other categories such as, you know, cpg.
- [02:24]
B
First of all, thank you for recognizing apparel. I feel like of course it's the largest GMV category outside of electronics on Amazon, but it never gets the love on podcasts for the most part or on stages. So we appreciate it. There are several differences. I would say the biggest two are really SKU complexity and 3P proliferation. So with SKU complexity, if we think about fashion cycles, you know, every six months we're introducing either new products or new colors across a variety of categories, right. And then the second is kind of attributes, right? So we think of attribution and style, color, size. So if you think about a category like Ballybras, right, There's a potential to have, you know, 100 plus child Asins on a single product page, which is, you know, an incredibly challenging thing to navigate compared to how CPG may have one or two child ASINs on a single page. The 3P proliferation thing is really interesting as well, right? Most categories have three to four key competitors. And what we found over the last probably three to four years is that in apparel, 3Ps make up at least 50% of the market share in clothing, shoes and jewelry on Amazon. And so battling against that is a, certainly a different dynamic than some of our friends in CPG have to face every day on platform for sure.
- [03:47]
C
I'm curious, going off of just the like SKU complexity, when you're cycling in these new products, do you then, and this is kind of more of a like fashion curiosity, do you end up deleting a lot of old products or is your catalog just like five bazillion items that you are ready to ship?
- [04:05]
B
I think we're at four bazillion, so we're not quite at five, but yes. And you know, on Amazon we say you can never kill a sku, you can just hide it, right? Hide the body. And so we will have a sell through period. And that will either live on if it's successful or if it's meant to be kind of a cut to order program for six months, then it will be replaced by something else.
- [04:27]
C
Got it. And I'm also curious, for a very brief time, like four years ago, I did work on an apparel account on the Amazon side of things. And do, do you have a opinion as to like the max number of child ASINs that belong on a PDP? Because I think like a hundred would be a lot to go through as a consumer. And so I'm curious, like do Have a best in class recommendation for when that is your case.
- [04:49]
B
It's a great question. And Amazon changes its experience all the time, right? So there used to be a like a 50 SKU limit for the thumbnails. From the thumbnail to go from a visual thumbnail to a dropdown. That has changed on and off throughout the years, but that was certainly one that we always wrestle with. The challenge, Emma, is that there are so many different attributes, right. So when we take the bra category, right, there are band and cup sizes and then there are colorways on top of that. So if you have a full run of band and cup size and you have three colors that right there you're at 100 child ASINs alone. And so it's really interesting to navigate through that and build media strategies that help us win on site within this complexity.
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C
Gotcha. And I'm going to ask a very flywheel centric question, but we have this framework, we've been talking about this for years just in terms of like certain categories are clicky. That means when you search it, you're probably going to click within the top row of products because you just like you kind of know what you want and it's going to be there. Other categories are scrolly, where that isn't enough information, you're going to scroll. I'm assuming apparel fits into the scrolly category. But would you agree with that kind of assessment?
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B
Yes, I think on balance it's a scrollier category than say paper towels or Q tips. But we've adopted this rule of 70s methodology. So 70% of all search is non branded on site. 70% of all sales are done generally on page one search results pages. And then 70% of those sales are generally done above the fold. So while we honor this clicky verse scrolly methodology, I think that it's still important to win above the fold.
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C
P1serps, you're assuming 70% of searches are non branded.
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A
But when we've talked before you said
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C
there like there isn't an awareness issue with Hanes brands. So I'm curious, can you elaborate more on those challenges further down the funnel?
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B
So, and you're right, awareness is is on our side. Nine out of ten Americans have a Hanes product in their house, which is an awesome starting point to have. Right. However, to your point, you know Amazon honors the solution, right? And so that's why 70% of consumers are buying non branded products. Right? So let's take men's underwear as a category, for example. We still have to win in that Non branded space. We have a ton of organic share voice love but there are new entrants all the time and they're getting really good at that media right and navigating how to convert and, and move up this, you know, this page one search result. So we are always thinking of how do we outwit, outlast the competition. If I can borrow from Jeff Probst about a moment and I think that it's ever evolving and so I think that we still have to win lower funnel search right on site search is critical. From there is when we can do some meaningful brand building and that's when we deploy DSP and some more upper funnel tactics like ctv, O L V and creators and other type things.
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C
I'm curious on the 3P proliferation part, what is your brand protection strategy when it comes to competing with that kind of landscape?
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B
That's a really interesting challenge because 3Ps don't have this problem, right. They don't have to dedicate any budget to brand protection and threats of conquesting. So part of our budget absolutely does that search frequency rank shows how meaningful we are to certain categories throughout our portfolio. And so we do have to dedicate budget to that. We have to balance that with you know, rising CPCs and CPAs in the space. And and so we always say the battle is a non branded and so we know that that's where we're going to gain share and we hope that our, you know, our brand media and upper funnel efforts continue to tell the comfort and value story that Hanes offers and that will be enough to create high intent purchase for branded search categories. But that being said, it's something that we're always evaluating because you know, people, people want to conquest those keywords. And even in the last 12 months we've seen our own branded keywords rise considerably in CPCs.
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C
Do you have any issues on like when it comes to your own product listings there being a bazillion different three piece sellers that have the product as well.
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B
We do see that and that's a part of the strategy in the game we have to play, right. If we can't win on price, we have to win elsewhere whether it's branding, messaging, you know, value creation. So we have to think of it in an number of different ways for sure.
- [09:31]
C
And I'm assuming apparel is a relatively high return rate kind of category just because things fit sometimes and sometimes they don't. And every brand has a slightly different sizing structure. So you're not only trying to work with making sure Your stuff fits on someone, but it's also the actually getting the thing that they thought that they clicked on and all of the things that can go wrong there. So just another nuance of the category.
- [09:54]
B
Agree. It does depend on the category. And that's why, you know, we had talked about fashion versus basics. I mean, we sit in a, in a nice place in apparel where we're not chasing trends. We listen to the consumer and build solutions for their ever evolving lifestyle. We believe in creating comfort for everybody. And it's what's honestly made Hanes a successful brand for now 125 years.
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A
125 years.
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C
That's insane.
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A
Now that you've got a thorough understanding of what sets apparel apart. Skew complexity, 3p proliferation and then what sets Hanes brands apart from the competitors? Legacy staple closet items versus trendy items and how they think about winning those conversions. We're going to talk about how brands should be organized and structured to win in commerce, retail media, whatever you're still calling it. Jason told me it was something that he's passionate about and I said, hey, if I can ask your real life brand about this, I am so in. So let's get into it.
- [10:53]
C
I am always curious. Every brand that I've ever spoken to like, structures their team for retail media very differently. And it's maybe not even like the people that work within the retail media team a lot of times don't even have a say of how it's set up if they're even on a retail media team. That's a big step. I'm curious, like from your perspective, do you like have a definitive stance on how a brand should be structuring where retail media fits within their broader organizational structure.
- [11:19]
B
So we've recently reorganized and have created this team called the Connected Commerce and Media Team. And I think that it serves what's happening in the broader media landscape and that is that interconnectivity is everywhere. Right. Yesterday, Macy's Media Network announced a partnership with Amazon. How do you organize like that if you just have, you know, one retail media lead for each account? We are structured that way today. Right. But it's, it serves as an illustration for the bigger change that's happening. Walmart purchased Vizio a few months ago. Amazon is doing deals with Disney plus. So everything is becoming interconnected. And so we wanted to build an organizational structure that supports the future and interconnectivity of, of media. Right now our connected commerce and media team does sit under the head of E Commerce. And so I think that it's brand dependent. But we are E commerce first in media. But we are very quickly organizing around how do we think around an omnichannel strategy? Right. As we think about initiatives by brand or by business unit, you know, can mean different things for different people. Right. We may want to drive trial and innovation in store. And so my team should be responsible for delivering a media strategy in partnership with the agency to deliver growth and success, whatever that looks like for that strategic initiative. Other initiatives are I want to gain on site share on Amazon. And so we have to deploy strategies that are much different than that other one to lead to a winning strategy. Connected commerce and media said differently owns the path to purchase. And so it is our job to measure demand creation and demand capture efforts and then ideally pass it off to a conversion team who owns content, add to cart analysis and other components at the conversion part of the path to purchase to deliver POS growth. So our head of E commerce actually owns all of content, all of activation and all of the Amazon specific component of our organization.
- [13:50]
C
Do you see a future where if your job is running search like you just start, you do search everywhere and when it comes to the different retailers you think that is, is that something in the future?
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B
We are considering that approach. I think there are implications to keeping it the way that we have it, where it's account account led and then switching it to tactic led. Right. Or channel led. So that's something we're always considering. I think the challenge if you move to the structure you're referring to is if someone is the search lead across all of our RMNS causes a bit of complexity for the RMNS because now they're dealing with five people when, when once they dealt with one. I think the other thing that we're considering is do you, you know, have it based on the line of business? And so if it's, you know, the men's underwear team, do you have someone that is the retail media, you know, lead connected within that men's underwear team and they're running strategy holistically across all channels. That's another idea we're exploring, but we're certainly not there yet. This is an incredibly nascent industry still. Amazon got there first, but we're all still trying to figure it out. As we think about again the growing complexities between omnichannel full funnel retail media networks now intertwining with one another, there's a lot to a lot for the dust to settle to understand, you know, what, what a structure looks like long term, all Right.
- [15:26]
A
All right. Since I grilled Jason on brand organizational structure, it's only fair to let him also talk about what sets the agency of the future apart. So I gave him the floor.
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B
It's a great question. So I, I think we have to start with the consumer, where the consumer can buy. Right. And as we think about how RMNs are very quickly evolving, omnichannel and in store retail media is evolving. We need to be equally as adaptable from a brand and an agency side and honor speed in that effort. So I think that when you think about who's going to win long term, it's going to be brands and agencies that can be incredibly fast, that can get to the data quickly and assess the data to make speed decisions. I challenged my team in the agency that I would love us to be day trading media. I mean, I think that's how quickly a lot of our competitors, you know, are moving, especially the three Ps that don't have certain things, challenges that we have. And so I, I just think aligning to a brand's business outcomes will be the benefit of the agency long term as opposed to traditional media relationships where I deploy this media and then we, then we run the campaign, it stops, then we, then we ramp up for something else. I just think that there's, there's an evergreen, always on, you know, component to this now that we have to be adaptable and on a daily basis be competitive.
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C
Okay, so I'm going to begin to wrap us up and I'm going to hit you with some rapid fire questions that I just came up with off the top of my head that it should be really easy and not terrible. But I'm curious, like, do you have a favorite Hanes brands product from any of the brands?
- [17:15]
B
We launched Hanes Moves this past year and it's incredible, Incredible. The women's products, great. Men's products, great. But for some of our friends that charge in the hundreds of dollars for activewear, this is a much, much better solution. It's amazing. I work out in it all the time. I would recommend everybody go to Amazon or Walmart or Target and check out Hanes moves.
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C
I will have to do that. I'm always on the hunt for some activewear that doesn't cost my entire paycheck.
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B
This is your solution? We found it. Emma.
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C
Yes, I'm on a roll. Okay, my next question. Are there any Hanes brand products that you think are like overhyped? You don't get why so many people like them or like it?
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B
No comment.
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C
Fair enough. Okay. Is there a brand under the HVI belt that you think is the most interesting to kind of oversee and the nuances are just different and it's actually interesting to you and not a pain. I'm curious what that kind of brand or line of product is.
- [18:21]
B
Good question. So we recently launched Bonds, which was a massive, massive innerwear company, innerwear brand in Australia and we brought it to America. And Steve Irwin's son was actually the face of our initial campaign and it did really, really well. So Bonds is a really interesting brand that we're keeping a close eye on. We're very excited to see where that goes.
- [18:45]
C
Who knows? That'd be cool. But. Okay, last question for you. And this is when we ask every single person something on your digital wish list, it lives in a cart forever and ever. It doesn't have to be a Hanes product. It can be absolutely anything, but you just won't purchase it. And why.
- [18:58]
B
Hmm. I've had a trusty MacBook Pro for about 12 years. Over the last probably six months is when the MacBook itself has been telling me, hey, I can't do the things that you need me to do anymore. So I think, yes, in the near future I will probably have to upgrade to a new MacBook. But it's a proof point that Mac makes incredibly innovative and durable products.
- [19:25]
C
Yeah. And it's one that I feel like it's like, you know it's coming, but you're really not going to buy the new one until the old one, like, truly is not functional anymore and does not like you can't open a browser and search something. You've gone that far into the. It doesn't work.
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B
But I've never had that issue. Right. It's never. It's never once failed me. So thank you, Apple. I appreciate all the hard work.
- [19:52]
A
And that wraps up another episode of the Commerce Collective podcast. Thank you to Jason for bringing the Hanes grants perspective onto the show and for talking about the nuances of apparel. That one hit home for me. If you would like to connect with Jason in person, he's pretty cool and inspired, insightful guy. He has several upcoming conference appearances, including Itel west in February and the Commerce Media Brand Summit in March. You know what I'm remembering? I'm remembering that I can't even remember the last time that I asked you to write a review of the show. If you listen and enjoy it, or to shout us out on LinkedIn if you get something out of listening to these episodes, I would greatly appreciate it.
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C
Okay.
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A
I've been your host, Emma Erwin. And we'll see you next time.