Direct consumer connection. Cut out the middlemen — which also cuts cost — and share those savings. Control and manage both the customer experience and customer relationship. While some retailers have made advances here through online shopping and buying clubs, they themselves risk being cut out as the pandemic has pushed some of their suppliers to forge their own direct-to-consumer links.
As part of our series about the future of retail, I had the pleasure of interviewing Rob Holdheim.
Rob is the co-founder of Zayve, an online app that automates the pick-up process for restaurants and their customers. His career has been a unique blend of entrepreneurial and traditional corporate roles. Prior to founding Zayve, Rob worked for three startups, including his own consumer products company built over 10 years before being sold. He is also a 15+ year marketing and communications veteran, having consulted for companies such as Harley Davidson, Starbucks, Samsung, GE, UPS, PwC, Microsoft, RIM, and LinkedIn among others.
Rob has lived and worked in the US, the UK, Germany, India, Hong Kong, and the UAE. Currently based in Los Angeles, Rob is a native English speaker, speaks fluent German, conversational Italian and French, some Hindi and has studied Arabic. He holds a BA from Cornell University and an MA from Johns Hopkins School of International Studies (SAIS).
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a story about what brought you to this specific career path?
Over my career, I have jumped back and forth between being an entrepreneur and working in the corporate world as a marketing consultant. But even on the corporate side, I was always the guy who started up operations or salvaged acquisitions in new markets. So I have lived and worked in India, the UAE, Hong Kong, Germany and the UK among others. For me, Zayve (my current company) represents the culmination of everything I have learned and done over the past 35 years — the chance to build something of my own, from scratch, instead of advising others on how to build their businesses.
Can you share the most interesting story that happened to you since you started your career?
I had been in India for two years leading a marketing services firm that had already more than doubled in size by that time from 50 to 120 people. We pitched and won marketing and communications support for India’s largest conglomerate: an industrial behemoth turning over more than $100 billion across 100+ companies. We were given three months to hire 120 new people, open offices in 7 new cities, create infrastructure and plans for some 30 subsidiary companies as well as the corporate brand. In parallel, we had to manage over 100 previously planned events, trade shows, earnings announcements and product launches during those 90 days. Not to mention continuing to service our existing client base while stretching our teams as we ramped up. There were no handovers and, to maintain confidentiality, we could not prepare or hire in advance. Everything was from a standing start. Our first product launch — an automobile — was on our second day. You can imagine the pressure we faced. The first thing my teams did was to cancel all planned holidays. Without being asked. Every single one of them. Worth noting that this included Christmas. Somehow, we survived those months, and even thrived — but it remains by far the biggest business challenge I have ever faced.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson or takeaway you learned from that?
My first job out of grad school was with the American Chamber of Commerce in Germany. I landed in Frankfurt two months before the fall of the Berlin wall and ended up working with American companies looking for investment opportunities in what had been East Germany. There was a transition period during German unification where they were uncovering the files of the former state security organization, outing people daily who had been internal spies or informants for the East German government. We spent months negotiating a deal with an East German company; since everything in that country had been State-owned, the negotiations were led by the mayor of one of the major cities. We signed the deal on a Tuesday; on Wednesday the mayor’s file was uncovered and he promptly disappeared. By Thursday, our deal was invalidated and we had to start from scratch. Months of work down the drain. I learned the hard way to make certain you are negotiating with the right people.
Are you working on any new exciting projects now? How do you think that might help people?
Absolutely. We just launched Zayve in the LA area, which is starting out as a means of automating the restaurant pick-up process, but has bigger ambitions around changing the way people shop and save money. The pandemic has made both restaurants and consumers dependent on the delivery industry, which has responded with pricing that is, in my opinion, predatory. Restaurants are losing up to 25% on a given order — well above their profit margin. Consumers are paying on average 26% on top of the food costs in delivery charges (open and hidden). Neither can afford it. Our app seeks to help people get discounts on the food they love from the restaurants they choose — while saving up to 30% vs. delivery. We help restaurants — already facing an existential crisis — build an alternative to delivery orders. And we give consumers a way to support their local restaurants and communities.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
Always keep an eye on the bigger picture of what you are trying to achieve. It’s easy to get bogged down in the details and lose sight of why you are doing something in the first place. There is an old story of a guy walking past a field where people are smashing rocks with sledgehammers. He asks 3 of them what they are doing. One says, “smashing rocks.” The second replies, “clearing the field.” But the third answers, “building a cathedral.” You have to believe in what you are doing, or find something else. Build cathedrals.
None of us are able to achieve success without some help along the way. Is there a particular person to whom you are grateful, who helped get you to where you are? Can you share a story?
I have been lucky enough to have had several people over the years who have helped — whether proactively, or simply through their ability to lead by example. Sadly, I have come across as many who have pretended to be supportive in their own interest, ultimately showing their true colors. The trick — and sometimes the difference between failure and success — is recognizing which is which.
How have you used your success to bring goodness to the world?
I have and continue to support causes that are important to me, though I consider this to be personal and private. I suppose I could point to the general fact that making businesses successful creates jobs — both directly, as well as up and down the supply chain. Teaching and training people helps them build careers, lives, families. This is more pronounced in emerging markets perhaps, where there are fewer alternatives. I would like to think, for example, that the 400+ jobs I helped create over the 4 years I was in India had a positive impact.
Ok super. Now let’s jump to the main questions of our interview. The Pandemic has changed many aspects of all of our lives. One of them is the fact that so many of us have gotten used to shopping almost exclusively online. Can you share a few examples of different ideas that large retail outlets are implementing to adapt to the new realities created by the Pandemic?
In some ways, the pandemic has been like one of those acceleration strips in a computer game. Existing trends — notably around digitization — have been expedited. A lot of the shopping that has shifted online is likely to stay there. It will be difficult for retail to rely on foot traffic alone for the foreseeable future. They will need to find innovative ways to combine online and offline business — as ever, Amazon leads the way here. Think Whole Foods Market and Amazon brick & mortar bookstores. WalMart’s huge investment in their online business will really pay off during and post-pandemic.
The real challenge will be for small and mid-sized retail businesses (SMBs). Such businesses have tended to be technology shy. They will have to find innovative ways to reach customers and engage with them online. In the restaurant space, the concept of “ghost kitchens” — fulfilling digital orders from low-rent industrial kitchens — is a promising trend.
In your opinion, will retail stores or malls continue to exist? How would you articulate the role of physical retail spaces at a time when online commerce platforms like Amazon Prime or Instacart can deliver the same day or the next day?
I do think stores and malls will continue to exist — though perhaps not in the same quantity as before. There will be a shakeout. The survivors will find ways to target their customers directly online, build relationships and integrate their on- and off-line presence/experiences. They will likely cater to specific needs as opposed to general items; focus on targeted vs. impulse purchases. They will incorporate entertainment into their shopping experience, and find ways to make it social (ie. shareable). Delivery is simply the last mile. People will still want a shopping experience. But that experience will be different than it was before.
The so-called “Retail Apocalypse” has been going on for about a decade. While many retailers are struggling, some retailers, like Lululemon, Kroger, and Costco are quite profitable. Can you share a few lessons that other retailers can learn from the success of profitable retailers?
Lululemon is a great example of finding your audience and communicating directly with them across multiple channels. Building a strong brand, core customer relationships and a loyal community. Adding an entertainment element — in this case wrapped around a lifestyle — and providing social inclusion. Their marketing is highly targeted and at times seems to place the actual product in the background. They have created a classic lifestyle brand, but their brand expression is thoroughly modern, giving them appeal across generations.
Costco is perhaps the best example of shopping as entertainment. The giant warehouse stuffed with a constantly shifting, high quality product mix. You never know what you will find from cutting edge electronics to clothing, furniture and camping equipment. The unparalleled breadth of selection and bulk pricing. The ability to get all of your food, a TV, medicine and a prescription for glasses in a single location — and eat a hot dog while you wait. And, increasingly, they are integrating their on- and off-line presence. Costco is as close to a brick-and-mortar Amazon as it comes.
Amazon is going to exert pressure on all of retail for the foreseeable future. New Direct-To-Consumer companies based in China are emerging that offer prices that are much cheaper than US and European brands. What would you advise to retail companies and e-commerce companies, for them to be successful in the face of such strong competition?
Find your audience wherever they are. Communicate directly across channels. Build a brand that is tied to something your customers care about. Create promotions and discount offers on things they want to buy — as opposed to things you want to sell. Make the shopping experience convenient and entertaining. Reward loyalty.
Based on your experience and success, what are the five most important things one should know in order to create a fantastic retail experience that keeps bringing customers back for more? Please share a story or an example for each.
- Shopping as entertainment
This is where Costco excels. The giant warehouse approach. Constantly shifting inventory — you never know what you will find. The coolest electronics. The biggest selection. And bulk pricing. Shopping becomes a family outing. During the pandemic, there have also been some smaller retailers that have innovated around direct electronic sales sessions — basically Home Shopping Network meets interactive digital theater.
2. Social shopping
How can you make shopping — online and off — a social experience? Allow your customers to communicate with each other in real time. Let them see what each other is buying. Real-time reviews and recommendations — but from friends & family. People you trust. Group buying to unlock discounts. Groupon introduced elements of this, though Chinese companies like Pin Duo Duo are far ahead of the US.
3. Direct consumer connection
Cut out the middlemen — which also cuts cost — and share those savings. Control and manage both the customer experience and customer relationship. While some retailers have made advances here through online shopping and buying clubs, they themselves risk being cut out as the pandemic has pushed some of their suppliers to forge their own direct-to-consumer links.
4. Intent-based marketing
Tech companies have spent millions to establish purchase intent, from analyzing past buying patterns and online search histories to tracking email communications. Intent drives conversion. Think Amazon’s ubiquitous “people who bought that also liked this”. Why not just ask consumers? Let them choose what they want to get discounts on. You will have exponentially higher conversion rates. Plus it’s a lot less expensive and intrusive.
5. Targeted and timed discount offers
People are sick of being flooded with irrelevant ads on uninteresting products at bad times. And there has been a backlash. Technology exists to establish purchase intent and even predict purchase timing. Imagine delivering a discount to burger aficionados in their offices (once we have those again) at 11:30 on a weekday. Or pizza coupons to families with small children on Friday at 5:30 pm.
Thank you for all of that. We are nearly done. Here is our final ‘meaty’ question. You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
I would build a way to enable consumers to pool their demand so they can negotiate greater discounts from manufacturers and retailers. Consumers leverage their combined purchasing power to save money on things they want and need — as opposed to things that sellers want them to buy. Things they would likely buy in any case. By dealing directly with consumers, manufacturers achieve guaranteed sales, saving marketing and distribution costs — and passing these savings on to consumers. Indeed, this is our ultimate ambition for Zayve.
How can our readers further follow your work?
They can check out our website at www.zayve.com or follow @savewithzayve on Facebook, Instagram, or LinkedIn.
This was very inspiring. Thank you so much for joining us!