Transcript: Episode 7 - When B2B Goes D2C

Welcome to episode seven of the ecommerce experience. This podcast is designed to bring you information about both B2C and B2B ecommerce. We've interviewed different people and just given you insight on on different elements of ecommerce that in these days you really need to know about. This week, we're talking to Olivija van Heerwarden, and she is the digital manager for a company called CWM out of Melbourne. And they have made the important step of not just being a wholesaler, they're traditionally a wholesaler, but also moving into that D2C, I e, the direct to consumer space, essentially retailing the customers.

And they've done it quite successfully without upsetting their customer base. I hope you enjoy this chat. Hey. Welcome today, Olivija. Thanks for joining us.

Thanks for having me.

Can you just tell me a little bit about CWM, your brands and, you know, a bit of background about the company?

Yeah. For sure. So CWM Homewares is a homewares glassware and cookware distributor in Australia and also in New Zealand. So we have the exclusive marketing, sales, distribution rights for a bunch of different brands, international brands like Tom Dixon, Burnese Cookware, Black and Bloom, which is a sustainability brand, LSA Glassware, Ronak Acabachet. But one of the more exciting things is they also develop our own brands in house.

So we've got Degree, Symphony, and our most well known brand would be Ecology. And another cool thing the company does is we offer private label services for our retail partners. So we develop ranges for some of our partners as well.

Okay. That are exclusive to those guys?

Yeah. Yeah. So their own label. Yep. Yeah.

And we do all the product sourcing, the beautiful painting, and the artwork on the products, and all that.

Excellent. Nice stuff. So I guess at heart, you're a b two b company. But and you've always had a a wholesale b two b site. But, you know, recently, you also opened some B2C presidents as well or at least a d to c presence direct to consumer.

Yeah. We did. So, yeah, as you said, traditionally, we've been a B2B business, and we're still very much a B2B business. That's our bread and butter. That's what we're known for.

But as you said, as a company we've been playing in the e com space for our B2B side of the business. So we had our wholesale website set up. It was working really well. And yeah, it was a really great space. So technology wise going to the B2C side of things wasn't that much of a leap.

We kind of already had that integration there. But yeah, like most wholesalers, we've just been kind of facing challenges with the changing retail market with stores closing and things like that. So, yeah, we found ourselves in a situation where some stock just wasn't moving, and b two c was a really great way to solve that issue.

Sounds good. So I think years ago, you know, my experience was as soon as soon as a wholesaler goes out and creates one of those b two c sites, all of the retailers are up in arms and you're competing against us and and things like that. What was your experience?

We haven't actually received much of that at all. The retailers actually kind of love us being on ecom. It gives them a point of reference for their own customers. So we list everything at RRP. So it means that they actually have something to reference for their own good deals and things like that.

Yeah. So they've actually been quite supportive and they love that they're able to grab product images and product information and everything they need to help support them.

So it's really helped the brand and help therefore helps your retailers.

Yeah, absolutely. And with all the other marketing that we're doing to support the B2C site, it's kind of supporting the brands and getting, especially for ecology, getting people to know who ecology is and what we're about and what our products are. And then they'll just go off to Maya or David Jones or whoever it is and buy the product there anyway.

Yeah. Okay. So the products on that, you know, B2C or that retail side are really products that in most cases aren't gonna be stocked in that retailer. They're stuff that didn't sell, you know, last year's stock, that sort of thing.

Yeah. Yeah. Definitely. It's a lot of ranges that just didn't weren't popular with customers or retailers or just really aged stock that we're trying to get rid of and move so that we have more room in the warehouse for

All the new stuff. Yeah. Yeah. And and nobody can blame you for that. You know, it's it's it's part of every business' prerogative to turn that stock over and, you know, you never know when you're gonna develop a product, whether it's gonna be popular or not.

You might think it's gonna be popular, and then for whatever reason, nobody buys it. So you've you've gotta

be able to move that

stock. Yeah. Yeah. Yeah. That's interesting.

So I was I was gonna say that, you know, these these d to c sites can really support the retail channel, but it also gives you a direct connection to the consumer, which you would have never had in the past.

Yeah, exactly. Especially having social media to support the website as well. We've got customers talking to us and telling us, oh, we love this, or We found an issue with this product. And it means it kind of streamlines any issues or any product issues that we're having, being able to talk to the customers directly. But yeah, as I said, it just allows us to control that brand image as well and really make sure that who Ecology is is being represented out in the market.

Okay. So it allows you to control that narrative around the brand. And and does

it allow

then, like, if if I bought something in a, you know, in a Myers or a David Jones, can I then get on the Ecology website and talk to you guys directly about, you know, an issue I had with that product?

Yeah. Absolutely. We always have customers coming to us through our customer service portal. Just asking us questions about products and saying, oh, I saw this in David Jones. I can't find it now.

What is it called? Or And you can

even direct them to stores that do have that product based on who you know you've sold it to in a wholesale environment?

Yeah. Yeah. Yeah. So we usually direct them to some of the majors because we know that they're kind of stocking most of the stuff, but we try our best to accommodate for where the customer is and what their their local store is as Yeah.

So I'm I'm always banging on about the difference between B2B and B2C. And, you know, as you said before, wasn't a great leap to go from B2strong2C. But I always talk about that in B2B, you have a buyer and B2C, you have a shopper. And and they behave very differently. I'm interested to get your sort of take on how you you know, you're dealing with B2B people and you're dealing with B2C customers.

How those two beasts are quite different for you and the same. You know?

Yeah. I think in terms of what the retailers are buying for B2B, that's definitely based on buyers and what they're seeing in trend books and things like that. Whereas obviously the consumer is seeing either what they see in azines or on social media or on Pinterest or whatever's inspiring them and their own personal style. So definitely what we sell into a retailer can differ so greatly to a consumer. And that's why the ecology website's been so great for us to push things that aren't moving to retailers because there's gonna be some consumer out there that loves that print or loves that color that just didn't work well in retail land.

It's a bit like when you're driving down the road and you see a car that's a color that you just go, who would buy that car that Yeah. But some people do.

There's always a customer out there.

Yeah. That's right. Yeah. There must also be differences in the way, you know, the the level of interaction between a B2C customer and a B2B customer, in terms of how they deal with your business?

Yeah. Definitely. We've got we have sales reps with us. So they're kind of dealing with their major retail customers. As I said before, with private label, there's a big relationship there that our sales reps have had to build with those buyers at the retailers.

Whereas yeah, the kind of queries we get from end consumers are obviously very different to the questions that we get

through B2B. Through B2B channel. Yeah. What about things like freight and packing and and things like that?

Yeah. I think that's definitely been one of our biggest challenges Yep. When opening the B 2 C site. As we're traditionally a B 2 B wholesaler, all that stock that we're getting in is packed in a way to ship to retailers. Yep.

We'll have six mugs packed nicely in a box. It's not gonna break.

Yep.

So we've faced this challenge of how do we ship just one mug to a customer without it breaking through transit.

And then I guess the challenge is you've then got five left in a box, which you can no longer sell to a retailer.

Yeah. Yeah. Exactly. What do we do with that? So and it's also just picking single orders was taking so long.

So, again, how do we combat that issue? Instead of picking one month here and one plate there, we're now kinda consolidating all our pick slips for B2C and picking it kind of like we would pick a retailer and then picking it separately.

Pretending like all of those customers are one retailer and and picking

them in one of get the addition of maybe there are six mugs so then we you know, for the day so we can pull those particular six ones instead of going back to that aisle.

Back to that saying, oh, I picked this mug five minutes ago. Yeah. Yeah. That makes a lot of sense. And I guess there's some of the things, you know, for people listening to this podcast that think that, you know, oh, we can just sell B2C direct.

There are a lot of logistical things that you need to think of. And the cost of the cost of sale, you know, we often bang on about the cost of sale in selling those products. You know, there might even be postcodes, for instance, that you don't wanna ship to.

Yeah. Exactly. We were finding that just shipping one mug to a rural suburb was at a loss to us. It was not profitable whatsoever even when we were charging for freight, and they're the kind of challenges.

Yeah. Even when you're taking that full margin too.

Yeah. Yeah. Yeah. So, you know and then you face well, we could charge some more freight, but who's gonna pay three times as much freight than the cost of a product?

Yeah. Yeah. That's interesting. Yeah. So I guess without giving anything away confidentially, what what do you see the future for your two sites?

I think we really wanna delve more into technology for both sites. So we've been looking at things like clickable catalogs, taking really beautiful photography, turning that into a catalog, something that the customer can browse through and they get more of an understanding of how that product can fit into a home and kind of personalize it but still be tech savvy where they can click in the catalog and add it to cart. So that would be for B2C and B2B. For B2B, I think, and this is, I guess a response to COVID and just everything that's brought about is there were no trade fairs this year. So how do we get new customers?

How do we sell in the new season? So we've been looking again at interactive platforms to showcase our products. And one of those being like a virtual clickable showroom Yeah. Or a a virtual trade fair. So definitely and look, maybe next year we don't need it, but we do think it's obviously always great to advance as much as possible and give both our retail customers and our end consumers the best experience on both sides.

So it's interesting you talk about that trade fair. I know, you know, being in the IT industry, there's a whole lot of, you know, things that we would have gone to this year, these these conferences and stuff like that that obviously just didn't happen. And they all got run virtually. Most of them, you know, Retail Global did some stuff, and Microsoft did a big one recently with all the partners, which would have been, you know, go to Melbourne, stay in a hotel for four days. And and almost the way they have done these was a better experience for us because you could really only you really only had to attend the ones that you wanted to attend.

And often at those things, you would find that, oh, I need to attend only three today, and god, they're all on at the same time. So I'm gonna be stuck doing nothing, you know, sitting in a, you know, uncomfortable chair just responding to emails for the rest of the day. Whereas you could just go and go to the one you wanted to, and then you can get the recordings of the other one. And I sort of question whether some of those big conferences will ever come back after COVID.

Yeah. I definitely think it's changed things going forward. We've all had to kind of be agile and change what we're used to. Yeah. And I think it's definitely shaped a whole different future for kind of every industry.

For everything. Yeah. I don't think there's anybody that's not affected. So speaking of COVID, what's what's COVID been like for your business?

Yeah. COVID's definitely been a bit of a roller coaster. I think at the beginning, obviously everyone shut down. So e commerce was great, but then all the retailers shut down. So the B2B side of the business was affected, but luckily the B2C side of the business was going great.

But yeah, as I said, e comm just saw such a spike in volume of orders. It's definitely something that we were prepared for but I spoke to being agile and the agile nature with CWM meant that we could easily deliver that. But we also saw that we've got a lot of online retail partners. So obviously their orders were increased as well. So it was managing those that became priority for so long.

But I think one negative impact for us was, and I think most Aussie wide wholesalers are experiencing this is stock delays because of border closures and obviously things being produced overseas and having to fly in. We're planning for launch a range but it's being pushed back a couple of weeks because containers are being canceled and this and that. So I think that's been a negative one in trying to get a season launch on a particular day.

Yeah. I remember speaking to customer very early in the piece when all the rush was on, you know, with food and stuff like that. And he he sells rice, and he had a call from one of the buying managers of one of the, you know, one of the big two supermarket chains. He normally sells a supermarket chain, I think, a pallet of rice a month. And they said we Yeah.

They said, how much have you got? He said, a hundred pallets. They said, we'll take it all. And Oh

my god.

Yeah. Yeah. And he said, you'd think that would be good, but his problem now is he can't supply rice to anybody else. And it Yeah.

The supply in Canadian just,

you know,

all skewed.

To to give that all to one customer actually caused him reputational damage to hundreds of other customers that he would normally be, and he couldn't get that stock then for four months. Yeah. So, you know, you gotta be careful to not see those massive big, you know, I'll take everything you've got. Sometimes they're they're worse than, you know, spreading it out amongst all of your customers and being a bit fairer with

no, you know, customers. Absolutely. And I think that's something that we're definitely experiencing at the moment on our B2C website is we had such traffic and such volume of orders, so much product was being shipped out but we weren't getting product in from our suppliers. So now we've kind of put a lot of out of stocks at the moment and not much variety on the website because of this supply and demand.

So so you're also selling through marketplaces?

Yeah. We are. So we're on five marketplaces at the moment and we it's just been a really great opportunity for us again to get rid of that old stock from especially other brands, stock that is aged brands that aren't that popular anymore or just product that isn't that popular anymore. And as I said, there's always gonna be a consumer out there that wants it. And we found Marketplace has kind of been the perfect avenue to get rid of that product.

Yeah. Yeah. And, obviously, you're integrating all that back to your ERP. It's just all magic.

Yeah. Yeah. It all comes through the same channel. It all goes through the to the warehouse the same way. So the warehouse doesn't see it any differently.

Yeah. And it's, yeah, it's all seamless. It's been really great.

And I think that's really important, you know, and that's another thing I often bang on about is integration. Is that if if you don't think integration to your ERP is important, then you're setting yourself up for failure because the bigger you grow, the bigger problem you're gonna have.

Yeah. Absolutely. And I think having everything in the one ERP for whether it's the rep portal for our sales reps, the B2B site, the B2C site or marketplace, everything gets managed kind of in the one ERP and it's really easy. There's you don't really leave that much room for silly mistakes because it's all coming to the one product in the one ERP.

Yeah. Okay. Sounds great.

Yeah.

Thanks, Olivija, for joining us today. It's it's been quite an insight into what you're doing down there in Melbourne. You know, we hope you get out of your lockdown very soon. You must be Yeah.

Pretty much over it.

Yeah. Your bubble. So Yeah. You know, we're up here in Queensland and enjoying the sun. And but

I don't know. We're all very jealous of the rest of Australia.

But I've known you for a couple of years now, and what you've done in that business has really transformed the position they're in now. And I I think really without those b two c sites and the drive you've put behind it, it'd be a different situation. So congratulations.

Yeah. You. Thanks, Andrew.

Thanks again, Olivija. We'll speak soon. Well, I hope you enjoyed that chat. Olivija certainly does give a lot of insight on how to do that d to c step without alienating your true wholesale customer base. And, you know, do it with grace and and really have a good successful result from their initiatives.

We'll see you next time on The Ecommerce Experience.