Katharine McKee of Morphology Consulting: “Fear of being wrong”

In-store sales get a huge boost from digital data being deployed well. The tighter and cleaner your digital information is, the better you rank in search organically and the easier it is for people who are shopping in the store to find your products and make a decision. Don’t forget that Amazon functions as a […]

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In-store sales get a huge boost from digital data being deployed well. The tighter and cleaner your digital information is, the better you rank in search organically and the easier it is for people who are shopping in the store to find your products and make a decision. Don’t forget that Amazon functions as a search engine and that roughly 60% of their traffic is people who are physically in a store and looking for information. They will look up your product on Amazon to read the reviews and get salient information (colors, sizes, options) and then will buy it wherever they are. This is a big use case for strong content and clean data.

As part of our series about “How To Use Digital Transformation To Take Your Company To The Next Level”, I had the pleasure of interviewing Katharine McKee.

After a 13 year career building out digital commerce capability across pillars such as CPG, FMCG, Luxury, Beauty and Apparel, Katharine McKee founded Morphology Consulting, a digital commerce consultancy that uses algorithmic structure to optimize a company’s strategy to gain them profitable, exponential growth. Katharine is a leader in ecommerce and an expert on systems, who focuses on building clean processes and organizations. To date, Katharine has overhauled the digital go-to-market for more than 50 brands and has sustainably increased client’s revenue up to 600% YoY.

Thank you so much for joining us in this interview series. Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?

I’d love to, thank you. My backstory is kind of funny, I have a background in finance and was working as a sales analyst for a small luxury beauty company in 2010 or so and in a revenue meeting I asked why we didn’t focus on online sales. The channel was logically built and our products had a great fan base that weren’t getting what they needed at retail, and in my analysis, we could nail forecasting down to the single unit, which would improve margins tremendously and give us a platform to expand reach, improve MOQs, reduce inventory issues and let us reach customers who shopped at places other than Sephora. The CFO told me to do it and report back and a deep love of ecommerce systems was born. I set us up on Amazon and built out plans for go live at all of our eretail locations and opened up accounts with a couple of pure plays and business exploded. I was able to set up congruent marketing campaigns with our retailers and eventually took over management of our branded sites. Turns out that a lifetime of being hyper focused on patterns and systems are a great match skill-wise for digital commerce systems. That first year created such a love that I haven’t looked back. I’m lucky that it was with a company small enough, that they let me do it, and had me wear all of the hats, I was our procurement team, trade and performance marketing team, online branding, media rep, sales rep, supply chain, operations and sales analyst. And when I took over our branded sites, I became a UX specialist, an email marketer, our CRM specialist, and social media manager. I am so thankful, because without the ability to see the whole universe, I wouldn’t be where I am today. Backend systems came naturally and I had been trained in finance, but to see every piece, how supply chain effects demand and how that impacts sales and where customers tell you what they want and how to pivot to get them what they need was an incredible education. It also made me hyper aware of when tools or agencies don’t see the bigger picture and how easy it is to miss the forest for the trees. Digital is a world in which there is plenty of rope to hang yourself.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?

When I first started, I worked for a luxury beauty company and to say I was a fish out of water was an understatement. Like a lot of high end beauty, everyone who worked there was chic and beautiful and almost all of the sales team were makeup artists, and then there I was, with air dried red hair and sneakers and a leather jacket and glasses (not in the cool way, in the nerd way) with my laptop. One of the women sales leads took me under her wing, to show me how to sell, and brought me with her to a chic meeting in Soho, where they talked about the cool trends they saw coming for their peer group and that was the sales pitch. Super effective. Then she came with me to one of mine. I sat down with my spreadsheets and profit margin analysis and the VP I was speaking to just laughed and said I set up the weirdest sales meetings but she didn’t care because I made them money. I think that’s true now. I am not a great sales person, but I am an amazing systems person and in digital commerce those are the rules of the game. That is the point of differentiation with Morphology. We aren’t going to pitch you. We explain the system and the inputs and point out which ones you’re missing and set them up for you. It isn’t flashy or exciting, but it is incredibly profitable

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?

I’ve been really lucky in my bosses, I have had many who believed in me and let me chart my own course. My first boss in my first big CPG company was a many year veteran of a very traditional market so to say we approached business differently was an understatement. He was incredibly supportive, he listened to every idea, and backed me up in meetings and with budgeting and went the extra mile to include me in meetings that were above my pay grade to make sure that I was getting the visibility I needed to get things done. He was a joy to work with, and had such amazing vision and had been successful for so long, I was incredibly lucky that he took a chance on me.

Is there a particular book, podcast, or film that made a significant impact on you? Can you share a story or explain why it resonated with you so much?

The Matrix trilogy was one set of movies I watched to death, and not for the reasons you think. The premise that the robots had created a frictionless system where all parts worked in harmony was fascinating to me. The notion that humans would rebel if it were too clean and too easy is one that I run into today. Digital systems, by and large, are incredibly efficient if you follow the rules, and people love to hate rules. I always aligned with Agent Smith more than Neo. There is a clean and efficient way to do everything, but you do have to follow the rules to get there.

Extensive research suggests that “purpose driven businesses” are more successful in many areas. When your company started, what was its vision, what was its purpose?

The vision was simple; a world with clean processes. I had a lot of experience with companies large and small and saw how hard it was to digitally transform them. Huge teams with complex processes and models take a herculean effort to build/change from the inside. But that is what I was good at. As a consultant, you are able to take away a good amount of the red tape and a lot of the stress. You don’t have to tell your CEO you think x product or process doesn’t work. I will and I will fix it for you. It takes away a tremendous number of hurdles and makes all parts of the business more smooth to run. If you have to build a forecasting model to match real time demand online, you now also have a real time model for your in store products, so you know your projected return rate and can reduce it, and you have data from clean and organized processes that can inform company-wide decisions. The mission is to bring order to chaotic environments (retail) and help companies be set up for long term profitable success. There are a lot of charlatans out there and get rich quick schemes and what I think is often missed is how much of a long term negative impact those have. We set out to build long term, sustainable, high margin, profitable business streams and to do that, you have to take every single system into account and remember any action you take online is saved in perpetuity

Are you working on any new, exciting projects now? How do you think that might help people?

Yes! Thanks to Covid, I had to shift my business model from in-person company wide training to more snackable and self-driven content. So I am very excited to say that a weekly podcast called Engineered Commerce is launching in February, which will be a problem-solution format, a 15 min or less deep dive into a white labeled problem we see a often, and how to solve it. We also are launching our tools platform, Morphology Labs, and that will have everything from certification courses to executive primers on how to hire and structure and what to look for in a meeting with your agency partners and how to forecast growth.

Thank you for all that. Let’s now turn to the main focus of our discussion about Digital Transformation. For the benefit of our readers, can you help explain what exactly Digital Transformation means? On a practical level what does it look like to engage in a Digital Transformation?

Digital transformation is the process by which a practice moves from analog to digital. An example of this is the change from hand writing a buy sheet with a buyer to sending an order via EDI. In most cases, it is meant to automate practices that used to be manual and also add a layer of efficiency with data, eg media buying moving from a physical call to get a placement to programmatic buying. It should be saving you time and effort while also using data to make the decisions better and faster.

Practically this means tools and processes. Where can you remove a task from a subjective human and give it to an objective system? This often means re-orgs and or training because it is freeing up time and focus from a person into a more strategic place. Instead of you filling in a new item set up form for a retailer, you have that content syndicated out, if there is a problem with the content, you don’t have humans fix it by hand across 10 retailers, you fix it in the data base and it auto updates everywhere the content is stored.

Which companies can most benefit from a Digital Transformation?

All companies benefit. In the simplest form, digital tools are meant to take mundane things off your plate and give you data; this makes all decisions better and cleaner with less guessing and more optimizing. If frees up your teams to be strategic and play to their strengths. Particularly around product, with more data that is scraped, you are able to make better and clearer decisions so instead of spending your time trying to coax people to buy your products, you know what they want, and you can focus on innovating. It is a big cost saving in that regard, fewer mistakes, and better strategy also mean more profit and happier, more loyal customers.

We’d love to hear about your experiences helping others with Digital Transformation. In your experience, how has Digital Transformation helped improve operations, processes and customer experiences? We’d love to hear some stories if possible.

It helps everything. Removing manual processes and automating things like admin, customer demand signals and internal processes makes everything faster and easier and frees your teams up to do the more strategic side of their roles. For example, if you are scraping customer behavioral data, and their search behavior, you know the white space your product should sit in, what the messaging should be and what customers want. This alleviates focus groups, buying surveys, guessing, re-branding, and brand voice misfires. It gives you the answer before you ask the question. Or ordering, with EDI, the systems speak to each other regarding inventory availability and ship windows and timing. Instead of an allocator manually assigning goods and the human errors that come with that (goods being double allocated and impacting fill rates for example) everyone knows what is available to ship in real time.

Has integrating Digital Transformation been a challenging process for some companies? What are the challenges? How do you help resolve them?

The biggest challenges I’ve seen center on fear. Fear of being wrong, in particular. Traditional businesses that wanted to make big changes only really had trial as a way to mitigate failure. Did someone else in a similar environment try it and succeed? Have we done something similar that worked? Did someone charismatic talk someone into trying it? That’s a lot of open interpretation and a lot of risk, it makes sense that companies are often hesitant to make changes they haven’t seen. We have to keep in mind too, that automation and digital transformation aren’t cheap, so of course there needs to be a compelling reason to go in this direction. Ironically, digital transformation makes these decisions easier and far less risky. When you can reference real-time, actual data instead of theories and surveys and extrapolated data, you make better, more margin accretive decisions. The best way I have gotten around them is to test the whole system on something lower risk. One campaign, a small brand, a tool trial with low overhead and prove it out. It works, but sometimes you just need to see it in action. Then comes the snow ball effect. In the same way that doing Dry January feels ok, but maybe not worth never drinking again, when you do it in concert with sleeping well, and eating right and managing stress, you suddenly feel like a super hero. Digital transformation is the same. Small changes yield positive, albeit small, results. Those that go all in, with the right systems, reap the enormous gains.

Ok. Thank you. Here is the primary question of our discussion. Based on your experience and success, what are “Five Ways a Company Can Use Digital Transformation To Take It To The Next Level”? Please share a story or an example for each.

5 Ways you can use Digital Transformation to take your company to the next level:

If you add to your current tech stack: social listening tools, customer behavior tracking tools, and search data scraping tools, you will be able to impact the your business in the below ways

1.Branding and Product

Digital Transformation tools will give you access to the data you need to be able to build out better, faster, more innovative products that the customer is actively seeking. It will also give you access to how they think of your offering, do you make a lip product with a trademarked name like “lip slick” but the customers all search for “lip gloss” and can’t find your items? Do they call plastic tumblers “pool safe” glasses? Do they see scrunch backed leggings as a butt-lifting product? Learn the language they use in search so that they can find you, and so you can position your product the way it exists in the market. This will also apply to localizing product to your market. If you have a global based brand team that creates campaigns at the macro level, you can use this consumer data that is market specific to localize your campaigns and better reach customers.

Think of this as the pull model. Scrape the data of customers telling you and your competition, what they want and need from you. Then make those products and then deliver them at seasonally appropriate time, as told to you by the customer behavioral data you can track.

2. Forecasting

Your forecasting models will now be predicated on real-time data. In the digital space, because it is real-time demand, you need to be ready for explosive growth. Customer demand signals are likely fairly different from the way you’re currently buying and storing inventory. Using tools that track what customers are saying they need, positions you to be ready to pivot existing product into that space or create newness in the volume they are expecting. This is the shift away from selling down inventory and into providing goods at their demand quantity. You will have a better understanding of what people want and what they will buy and when they want to buy it.

3. Sales

In-store sales get a huge boost from digital data being deployed well. The tighter and cleaner your digital information is, the better you rank in search organically and the easier it is for people who are shopping in the store to find your products and make a decision. Don’t forget that Amazon functions as a search engine and that roughly 60% of their traffic is people who are physically in a store and looking for information. They will look up your product on Amazon to read the reviews and get salient information (colors, sizes, options) and then will buy it wherever they are. This is a big use case for strong content and clean data.

4. Innovation

Company Innovation is the biggest value. Once you have all of this data, and you’re able to free up your teams to do the strategic parts of their jobs, you’re going to be prospering in a lot of really interesting ways. You will have better, faster insights around your product. You’re going to have channel innovation that customers told you they need. You are going to have cheaper and more functional packaging. Products that need to be shipped to consumers have more strict guidelines than in store requirements and that leads to innovation. Remember Tide creating that shipping bottle? It was required for Amazon but also great for travel, great for apartments, great for a lot of things It solved several problems that people didn’t initially see because customers weren’t complaining in store about the problems that they were having, but they did complain online and because a data driven company (Amazon) noted it, the packaging was changed for a bunch of use cases.

5. Vendor selection

Digital transformation will help you with vetting vendor partners. It helps you understand what is being pitched to you and how it can fit your specific use case. We see a lot of tools or programs that in a vacuum are great get pitched into companies where they are a bad fit, and they fail. The company’s take away is often that the kinds of tools in general don’t work, when they do, but they need to be the right ones, and an outside vendor isn’t going to know the ins and outs of your business well enough to know if they are the right fit. You can’t know without data to tell you what you need and processes that are automated enough to make checking less labor intensive.

In your opinion, how can companies best create a “culture of innovation” in order to create new competitive advantages?

Fostering a culture of innovation centers on being open and interested in learning, when you prioritize trial and testing, it is better all around. Focus dollars on training, incentivize employees to learn and grow and expand their talents beyond their job scope.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

“Short cuts make long delays” it is our motto. It may take longer to set it up initially, but once it is done right, you can carry on quickly. It is in the same vein as “measure twice, cut once”

How can our readers further follow your work?


Thank you so much for sharing these important insights. We wish you continued success and good health!

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