[Step by Step] Where Does Data Fit Into My Tech Stack?

Phillip: [00:00:00] Hello and welcome to Step by Step, a podcast by Future Commerce, presented by Brightpearl. This is Season 2 of Step by Step, and you're listening to Episode 5 of a five part series. So if you're just jumping into the series at the very end, I suggest that you go back and listen from the beginning. This season of Step by Step is getting into the weeds and telling you everything you need to know in how to build a tech stack. That's right. A technology stack that serves an eCommerce brand and specifically a high growth retail brand. So if you're struggling with making decisions and choosing technology, this podcast series is for you. In this five part series, we have talked to people just like you who are solving this every day. CIO, CTO, CMO, even CFO. It doesn't matter who you are. You are faced with building out technology and adopting technology platforms that allow your business to grow and to meet the needs of your customer. Joining us today on the show is the Director of Operations at LovePop, Dan Nephew. LovePop is one of those really interesting brands that you've probably seen before. From their 2015 appearance on Shark Tank to retail locations all across the United States and in third party retailers, their products are on a mission to create 1 billion magical moments with something so commonplace as a greeting card. LovePop is adopting and building technology where appropriate to accommodate their booming business. Their licenses with Star Wars and Disney and Marvel have accelerated their business far beyond their wildest imaginations, and they need technology that can accelerate along with them. So let's all take a moment and sit back and learn from Dan Nephew about what it takes to build a tech stack at LovePop, step by step.

Phillip: [00:01:43] Hello and welcome to Future Commerce, the podcast about cutting edge and next generation commerce. I'm Phillip.

Brian: [00:01:48] And I'm Brian. Today we have Dan Nephew with us, Director of System Operations at LovePop. Welcome, Dan.

Dan: [00:01:54] Thanks for having me, guys. Appreciate it.

Brian: [00:01:56] Yeah. Thanks for coming on the show. We're super excited to have you. And what a fun brand LovePop is. You guys are just whimsical and delightful and and really I think the kind of brain that can spark joy. These are all like buzzwords in this world right now. But it's so true. If you're listening to the show, go right now to lovepopcards.com and check out these cards. They're so cool.

Phillip: [00:02:25] Dan, could you, for those who are driving and can't do that, can you explain what the brand is and what the products are and what you're all about?

Dan: [00:02:33] Yeah, absolutely. Thanks, guys. So LovePop started about five years ago with a mission basically of creating what we call magical moments. Our mission is to create one billion magical moments. And we do that through an engineered art form that's a laser printed art form that was actually found by our two founders, John and Wombi. They both went to the Web Institute. They were naval architects. They traveled. They went to Vietnam. They saw this is art. And they felt like they could turn it into a business. And that's kind of where the inspiration came from. And five years later, yes, we make what we like to call laser cutted paper designed magical moments. And they're all different. They're all special. We try to bring something meaningful and joy into people's lives. I got to tell you, it is a super fun company and business to be working for that reason. There's a lot of great business out there, but what we do is fun. It's truly...

Phillip: [00:03:51] For sure.

Dan: [00:03:53] And like you said each and every month we're coming out with new designs, new products. And they always amaze me with what our engineering design teams come up with. But they're absolutely awesome.

Brian: [00:04:07] How did you end up at LovePop? What was your path to joining?

Dan: [00:04:11] So, yes, I have neither naval architecture or design in my background. I am at heart an operations person with a lot of emphasis on using systems to build better, more efficient, scalable operations. I started to LovePop actually as a consultant. They were looking for somebody to come in and help them figure out how to go that next level and build an enterprise resource planning systems or, you know, system. And I started consulting with them, fell in love with the company. They fell in love with me. Match was made and I joined LovePop not quite a year ago. I've been here since April of 2019. And yeah it's been wonderful.

Dan: [00:05:05] My background, for those wondering... I was an engineer but an industrial engineer. I did end up going back to grad school and got a business degree, and I've worked for mostly big companies in the past, both insurance, consumer products and always on the engineering operations side, if you will, as I like to say, you know, trying to help the business scale without scaling the size of the business. So that's kind of my background. I love fixing stuff. I love solving problems. We're a young company with a lot of opportunity, which creates a lot of operational issues. So that's where me and some of my peers come in to help fix all that stuff.

Phillip: [00:05:54] That's great. I know your products based on having seen the product around before, probably in person. I imagine that you're probably in a number of stores. What is your actual sales strategy right now? It sounds like you have eCommerce {laughter} because I can go to your website. Where else can you be found?

Dan: [00:06:21] So it's fascinating. We started as a retail play on our first little kiosk to prove out the business and then quickly turned online to where now online is by far the biggest segment of what we do and is actually a huge differentiator for us. There are very few players that can do what we do online to deliver like a greeting card or a magical moment to a customer with a hand written or written message in it that's special for that individual, not just canned. So that has actually grown and led to a lot of our further growth opportunities. So online is our biggest piece of the business, we do have a growing retail footprint. We keep spreading out. Started in the northeast, as you can imagine. So a couple of locations around the Boston market. A couple of locations around the New York market. We do have a location down in Disney, Disney Springs, which is fantastic.

Phillip: [00:07:29] Yup.

Dan: [00:07:29] And it is also great for one of our really strong partners we have with Disney licensed product. We sell a lot of licensed products with them. You know, their culture fits ours. They're trying to create magic. So are we. It was just a nice little fit, and we've done a lot of work with them. They're a great partner, and we do have a growth expansion. So only east coast right now. But we're going to you know, we're going to branch out as we can. And, you know, sometimes those decisions are financially determined and sometimes they are resource driven. Sometimes they're like "Are we ready?" We still have to balance all of those things. But yeah, I would say retail is another big chunk. And then we're now starting to figure out how we spread these magic moments to other providers. So we've historically just done everything ourselves through eCom or retail. But we want to try to partner up with different wholesale relationships, third parties that can also sell our product, fit with our brand and carry our same message. And we're trying to venture into that as well.

Brian: [00:08:36] That's amazing.

Dan: [00:08:37] The goal is I mean, ultimate goal is LovePop everywhere. Right? You should be able to go get it anywhere. But we are at the beginning of that journey.

Brian: [00:08:47] Yeah, that makes complete sense. And, you know, obviously, the eCommerce channel is a great spot because people can access it from anywhere. It's a great place to start. It's a great place to have as your flagship. Obviously, you're got to have a lot of systems that go into building out your eCommerce site and your supply chain that sort of attached to it. Talk to me a little bit about 1) what a customer journey would look like and what tools you're using to facilitate that customer journey. And then second, tell me about your product journey and then sort of the back end. What sort of systems are you using to facilitate that journey?

Dan: [00:09:31] In front end, we use Shopify as a platform to take all our customer orders. Shopify doesn't necessarily provide all the customizations we need. So we do have some internal services we bolt on to that to make the experience more special. Typically a customer will start on our web site and decide are they just buying cards? Are they going to schedule a card to somebody at a later date? Are they doing what we call a Send a Surprise, which is they're customizing their card with a message or a picture? All that and then basically builds into our order management inventory system, which today is Brightpearl. All that flows into Brightpearl. And then from there we decide how to fulfill. We have a couple different fulfillment options, different things that we do on that. So it goes out to one of our fulfillment centers and gets shipped out to our customers. We can turnaround orders in less than a day, which is also very... Speed is important, right? Especially like now Valentine's Day. Those people are scrambling like, "Oh, my gosh, I need to get a valentine. How am I going to get this to somebody quickly?" That's part of the journey. All of our product that we source is from a wholly owned subsidiary we have in Vietnam. So they are just an extension of LovePop. We don't third party that out. We have our own people making and  designing cards. We fulfill from Vietnam to our operations here in the US and send out the cards. The design of that... So how do we get these designs and how do we build the inventory? A lot of that is the secret sauce, if you will. We have a great design team in the US. It's, you know, like you would imagine, very artistic, creative, engineering, focused people that use a smattering of both non software solutions and software solutions from Adobe and render everything, and just printing the cards out on a lot of our custom laser printed equipment and hand assembling the product, which is kind of the heart of LovePop. It's that engineering and art together, if you will. So we laser cut everything, but then everything is hand assembled.

Phillip: [00:12:01] Well, you mentioned it there. It's art, but it's engineering. And I would say that a modern eCommerce business probably has a good amount of balancing the art and engineering in the way that architects it's tech systems. And today's episode series is capping off the end of a mini series that we are talking about where we're saying we're taking you step by step to help you understand and make sense of making the right technology partnership choices to build your business on. And being that that was your bread and butter to implement ERP or Enterprise Resource Planning or platform systems, what would you say are the types of systems and like how many systems are you managing that your customers, you know, may not realize that that to get a product that they're going to depend on? I imagine, you know, it's not just the eCommerce platform. There's probably a lot of platforms that have to work together in concert.

Dan: [00:13:06] There's a ton. Yeah, there's an absolute ton. So, you know, to think that it's one silver bullet and have everything done is just not doable today with what customers expect. If there was one silver bullet, everybody would be using the same system and buying the same products and getting the same experience. So if you want to specialize, you have to figure that out. We have from analytics platforms that we've homegrown built and then some that we bought to figure out our planning and forecasting. We have EDI platforms that we use with third parties to be able to transmit orders because as you can imagine, you know, just sending somebody an order through email and having them printed and type into their system, when you're doing like now during Valentine's Day thousands of orders a day, is not doable. So we need technology to bridge systems like that. We have financial systems. So a lot of our systems integrate with our backend financial systems. And then we have manufacturing systems that do all the MRP type stuff. In between all those... So if you think like there's the order capture, order management, inventory management, finance and MRP, there's a whole bunch of bridges that have to be built. And within LovePop, that's where we found a differentiator on building a lot of internal services to cover those connections the way that we feel needs to bridge those systems together to make the experience and the journey very flexible, very fast for us.

Brian: [00:14:50] You mentioned something in there that kind of perked my ears up a little bit. The homegrown systems. What systems are you running that you've built? What parts of the process do they play?

Dan: [00:15:05] A lot of the forecasting and planning is home grown. A lot of our routing logic is homegrown to figure out the optimal route to get the customer their card most efficiently. The planning and forecasting also links with our order placement into our factory and a lot of the management of the planning of scheduling what orders need to get processed first to meet customer demand based on inventory levels. Several of those systems are homegrown. And the reason for that is we have two factors that influence us. We're growing. So that growth rate is somewhat challenging to manage, especially when we're always introducing new products. So you don't have the year over year comparison. You do. But, you know, we're always introducing new products and trying to figure out how those are going to sell and work through the system with customer demand. And then the other pieces were highly seasonal. So, you know, Christmas is huge for us. Right now in the middle of Valentine's Day. I would call the biggest season, our Christmas season, which is Mother's Day. That's coming up. Yes. You can forget to send your love a valentine, but if you forget to send your mother a card...

Brian: [00:16:38] Yeah, I would definitely agree with that. Mother's Day is such an interesting holiday from a retail standpoint. It's one of the biggest up there with Christmas and the end of year holidays.

Phillip: [00:16:53] Yeah. It's like you don't get a do over. Right? You better to do it right on that day.

Dan: [00:17:01] And if you're married like I am, then you have two mothers you got to take of. Your mother and your mother in law. And you can't outdo one or the other. So you got to be careful with that.

Phillip: [00:17:11] It's true.

Brian: [00:17:14] It's super interesting to me the idea that building a system especially... So you have a really unique business, like you said, you're coming out with new products so often, and you've got such big swings in your purchasing behaviors due to the seasonality. I would imagine that building a system is actually, in certain cases a really, really smart plan because it's going gonna be a lot harder for... Like most systems are built for a much more, I would say, even keeled approach to the purchasing behaviors. So talk to me about like when you would buy a system and why you would buy it and talk to me about how that seasonality is playing into that decision.

Dan: [00:18:10] For us, a lot of decision around build versus buy... I wish there was a silver bullet. We circle around this all the time. But kind of the driving factors are if we can get like a core operating system and we know it's going to run just like it needs to kind of be an engine, if you will, we're more apt to buy. So we think of our order management, inventory management. OK. Order came in, right? Calculate the inventory. Send it out. Acknowledge back to the customer that their order has shipped. So those types of systems, those blocking and tackling core systems, like an accounting package, like an order inventory management system, like a front end point of sale to capture orders, we are more apt to to buy. There are some big, big companies out there that's all they do. They have thought of everything. And you know, they've got it, what I would call, 80 to 90% buttoned up. The systems that we tend to build are either focused on the in-between connections of those or the uniqueness of our product to customer experience, if you will. So I can give you a couple of examples of those. So we today customize the sending of a card for individuals. You can go on our web site, you can upload a picture to any one of our products and put a special message in there or a photo. And we will then transform that and put it right into the card. We will stamp and seal the card and send it out just like it came from you. The experience is really exceptional and very magical. That is custom. That's not off the shelf package. We need some other internal service to build that, if you will, for us. And that makes LovePop uniquely LovePop. We're probably more apt to build that in-house for us. The other things are you might think like, OK, demand planning. There's a lot of systems out there that can deal with seasonality. We're not the only ones that have Mothers Day, Valentine's Day, and Christmas, and we're not the only small companies that are growing rapidly. The difference there is whether or not you can get by with an investment for the next year. Or do you make a big investment into one of those core systems that when we're a more stable company is much more economical. So sometimes we will focus on build there, knowing that we can build it cheaper for now and then build it cheaper again next year and then revise it again next year, as opposed to making that big bet on what we actually need because we sometimes don't know what we don't know. So that's two cases where we will choose to build versus buy, if you will, if it's something that makes it uniquely LovePop magical, like in our engineering and design or fulfillment, or if it's something that we're just not ready to make that bet yet, and we can do it cheaper for the near term. It's not a hundred percent, but gets us where we need to go.

Brian: [00:21:41] It's interesting. I can imagine, particularly also with your analytics, you are in a really unique position because you're not just having your analytics tools feed back in to your customer experience. Because you come out with products so frequently, I would imagine that your analytics are also feeding back into your product lifecycle and decisions you make about what kind of products that you build and come out with every season. And so one of the things that has struck me about analytics in the past is that most of these tools that you buy, they all seem to have sort of an analytics component. It's closer to like a box checker or at minimum like its analytics, but it's very siloed to whatever platform they're in. But I would imagine it's really important for you to have a better and bigger view of your data. And so I was curious, have you been able to integrate some of these systems together, both your internal and third party systems and find a more holistic view? And how are you using that data to work back into how you build products and what you're putting out?

Dan: [00:23:01] Yes. So we, as I like to say, there're two types of data in operations that we focus on. Decision making data and then problem solving data. And to your point, like the core systems that you're buying usually do a pretty good job on the, what I would say, problem solving data. Like an order is stuck. Where is it? How do I find it? I'm out of inventory. Do I have it in this location? How do I find it? You know, that type of thing. What are my sales for the last week? Six months? Year? The trouble is, you tend to need to kind of build on to that is more decision making data. So, you know, we have a new product. It's kind of like this. We marketed it through different promotions and it's seasonal. It kind of fits three categories, not just one. It can be so Mother's Day as well as Valentine's Day. So there's a lot of decision making and that's where our data scientists and engineering team comes in. We have some very talented and bright people that that's kind of all they do is kind of look at, OK, take all the factors in, whether it's the season, the card, the newness of the card, the market, how we promoted it, and put that into an engine and make decisions off of that. And in our case, we've done that in the back end. We do use software to do that. It's not like we're just using an Excel spreadsheet to create a bunch of data models. We do have some software that we bought that helps facilitate that data modeling, if you will, and aggregation of data. But they're mostly done through reading a lot of algorithms, a lot of models through the use of software. And then from a systems side, where we come in on the operation side, is how do we give them all that data efficiently? So we can't just be giving them Excel spreadsheets and ask them to upload everything into a software platform. So you've got to come up with engines and those integrations and they've got to be timely. They can't be OK. We'll give it to you monthly. You know, if you want to be nimble and flexible, you need information every day. So those integrations got to be pretty robust, handle a lot of volume.

Phillip: [00:25:29] When you're looking at, you know, those more, I don't want to say "off the shelf solutions" Right? But when you're looking at those more capable platforms, do you find that there's a particular use case that you need to fulfill that they provide, but in true sort of platform fashion, there's probably a lot of stuff that you don't need? How do you weigh up whether you buy into a piece of software that does a lot of things that you probably will never make use of? Is that part of your decision making process at all?

Dan: [00:26:03] It is. You know, it's probably a better question for my peer who heads up our data analytics team. But I know some of things he's always asking me about are, one, can I customize it and build my own models, so can he dump his own SQL code into the model and the data and transform it to give an answer? And then the other piece has got to be the user experience on the other end. So we create a lot of dashboards for people like myself and other people in the business. And the user interface has got to be, you know, can't be onerous. I mean, it doesn't have to be, you know, the best thing since sliced bread. But the end user has to be able to go in and be able to do a quick little pivot and pull up their dashboard and easily kind of get to the data that they need to drive those decisions that they need. So those are probably the two biggest ones. Is it customizable in terms of the models and being able to, you know, do your own manipulation through code, not just through filters, but through code? And then the other would be the user experience. Those are two key ones.

Phillip: [00:27:25] Right.

Brian: [00:27:25] So I don't want to put you on the spot in any way, but maybe you could talk us through a current technology challenge that you're facing right now, or maybe a couple of them and what your playbook is to mitigate those challenges.

Dan: [00:27:43] So our biggest one right now that we're working on is as we've grown we have grown our retail operations somewhat independently of our eCommerce operations. So we have separate systems that manage those. And one of the challenges we're trying to figure out right now is how do we integrate those from an omni channel experience? So one of the things you can't do, unfortunately, on our website is go see where our locations are and know if you can go pick up your card. So we're quick, but we're not same day. So we're trying to figure that out as a lot of other companies. How do we make that experience much better for the customer? And then vise versa. Because our retail locations can't carry all of our inventory. It would be great if you could walk into a location and somebody said, "You know, I saw this online, you don't have it. But I was wondering if I could get it if you had it here. And then it's like, "No, but we can order for you right now and have it shipped to you or your whoever you're sending it to." Those are things we're trying to figure out. What's the technology we need? Do we need new technology around all this? Do we need more integrated point of sale and eCommerce platform? Can order management and inventory systems handle both of those things together? We're right in the midst of those decisions. And, you know, it's not different. It's kind of funny. These are things that aren't different from a big company to a little company. It's, you know, it's figuring out, OK, what are our requirements? What does the software do? How do we test for that? How do we demo the different things? And kind of just, you know, go through the same requirements of gathering, selection, you know, standing and then do a project. Our timing of that, we don't know. That gets back to the, you know, we're still a small company. We've had like 10 of those initiatives and we cannot do them all right now. So those are the things that we're always wrestling with. Okay. How important is that relative to something else?

Brian: [00:30:00] Yeah, that's a great question. Like, how do you make those decisions? What are some of the criteria for like what would be a more important system to sort of retool or reinvest in? Or to invest in for the first time vs. versus another system?

Dan: [00:30:19] I hate to say, but it simply comes down to resource availability and capital. Do we have the capital to do it and then do we have the resources to do it? And then it becomes like, well, maybe we don't have the resources, so maybe we just buy it versus do it ourselves or a third party hire somebody like me that's a consultant to help do it. And maybe they'll fall in love with a company and stay. Really those are the same that you would have anywhere. Sometimes it is strategic. Sometimes we have one area of the business that we want to spend more energy on and focus on. And so that may drive the decision one way or another. But we're still small enough that everybody kind of works together and talks about these things pretty free form. We make a decision and move on and execute. There's no secret sauce or rocket science to how we make those. I wish there was.

Brian: [00:31:30] I think you hit on something that I see as really important, which is that collaborative approach. And so helping weigh each other's priorities and understand, as a team, what you're going up against. That's what I'm taking away from that. Especially if you're able to be nimble, I think is going to help you make better decisions. And so that's awesome.

Dan: [00:31:55] Yeah. This is one of the fun things about working at LovePop. We all sit on the same little odds, all worth together, highly collaborative. There are no walls. It's a very dynamic environment. We don't wait around to make decisions or set up meetings with people. We just go ask, you know, collaborate, move on. That's kind of refreshing. I have not had that opportunity in a long time working for a lot of bigger companies. And that is one of the things that I've found is very dynamic about a small company, especially LovePop, that we're able to... That creates a ton of speed for us. We don't dwell on things. We allow smart people to make the decision and move on.

Brian: [00:32:44] That's amazing.

Phillip: [00:32:46] If I look back over the last five years, there's been a tremendous amount of change even in the way that eCommerce platforms or marketing automation platforms are built and in the types of challenges that they solve have changed dramatically over the last few years. I imagine that the same is true of other business systems. If you were to look into a crystal ball a little bit and anticipate rapid pace of change and how quickly tools advance, what kind of challenges do you think that you'll have to overcome in the next few years? And what are the kinds of things that an investment today might be a sound investment or a hedge for the way that the future might change and set you up to kind of have a more durable, long, longer term investment?

Dan: [00:33:41] Yeah. I think the openness of the application, in terms of its ability to integrate with others, is probably a huge one that I see. You see growth in a lot of these platforms, at least from my experience, a lot of these platforms that have grown so fast, so quick. One, obviously because they're on the cloud. Yes, that's obvious. Two, they're not afraid to open up and say, "Listen, we don't do everything great. So if you have a better tax system or a better inventory planning system than us, you can integrate that right in." And those platforms, I think, are the ones that are going to grow faster, in my opinion, than the ones that try to do it all themselves and internalize everything and kind of lock others out and restrict. That would be my guess. We'll see. But I think the more open you are in terms of your ability to integrate and bolt on or build partnerships with other platforms... It is the way to go. You know, Apple is the king of this, right? If they decide to build every app themselves, you wouldn't have the Apple store. So I look at that as the example. Like they basically say, listen, somebody else is going to create a better app. And we partner and let them in. You know, it's not the same as a business because they're charging for those. But it is that kind of philosophy. If they tried to build all those apps that they have on their store by themselves, they probably won't be the same company they are today. In my opinion.

Brian: [00:35:27] Well, that's amazing. I would agree. The ability to integrate and be open and be flexible and have those connections is essential going forward. So it's a super good place to end this. I think, a great word for our listeners... Be ready to invest in software that allows you to have flexibility and freedom for the future and to grow with your business.

Dan: [00:35:54] Exactly. That is a good point. Most of our platforms that we've bought have that capability, so we don't lock ourselves into something that we're like this is not going to work out for us. And sometimes you don't know those things for a year or two. And then you're stuck with it.

Phillip: [00:36:15] Yeah.

Dan: [00:36:15] The core has still got to be there because of blocking and tackling. You need those systems that do that, those core operations, finance or management inventory. So those... MRP... You need those core based systems to kind of churn through the volume, if you will. But then the flexibility to be nimble around those edges is important.

Brian: [00:36:39] Absolutely.

Phillip: [00:36:40] That's great. Couldn't have said it better myself. And I love hearing it from an operator who's in the trenches every single day. Dan Nephew from LovePop, thank you so much.

Dan: [00:36:49] Thank you, guys. Appreciate you having me. Happy Valentine's Day.

Phillip: [00:36:53] Same to you. Wish you a lot of success. It's the big show. {laughter} I love it. Well, thank you so much for joining us.

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