Leader Spotlight: Communicating the value of commodity products, with Kevin Sakamoto

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Kevin Sakamoto is Senior Director of Product Management at Dollar Shave Club, a razor and personal grooming product delivery company. He started his product management career at Bank of Hawaii, where he was in charge of eBusiness and Internet. Kevin then transitioned to product and leadership roles at Zappos, Target, lululemon, ADP, and Lowe’s before moving to Dollar Shave Club.

In our conversation, Kevin discusses Dollar Shave Club’s transition from a 100-percent subscription-based model to a hybrid one that includes on-demand and in-person purchasing. He talks about his philosophy of leadership that “we all live on the same island,” and tells a story of managing stakeholder disagreements during Taylor Swift’s 1989 album release. Kevin also shares the challenges of subscription-based and commodity products, including how to communicate the joy and value of shaving with high-quality products, even if they’re more expensive.

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Adding an on-demand purchase option

Can you speak to how Dollar Shave Club is thinking about subscriptions and, more recently, retail?

You could argue that Dollar Shave Club is the original disruptor of direct-to-consumer subscriptions. We were founded 12 years ago and we were just using subscriptions for about a decade. Only in 2019 or 2020 did we realize that customers like to shop outside at the Targets, Walmarts, and Amazons of the world as well. We broadened our scope to include our retail and on-demand purchases, which was challenging when you consider that we were doing nothing but subscriptions for a decade.

Moving to on-demand was a little scary from technological and business perspectives. We thought that we would cannibalize our customers, abandon their subscriptions, and go on-demand purchases only. We slowly made our way into Target, Walmart, and Amazon, and what we found was that customers enjoyed that. They love that flexibility and we did not see the type of cannibalization we were expecting. Sales on Amazon, Walmart, and Target continue to be extremely healthy.

What are some of the challenges of being a subscription service in 2024?

Not only for the subscription business but for any online business, the biggest challenge is privacy with the California Consumer Privacy Act (CCPA). We’re international, so this goes for the General Data Protection Regulation (GDPR) as well. What complicates things even more is the fact that every state has varying privacy laws and regulations. Subscription or not, that’s a big challenge. For me, as a product leader, there’s some tension internally too. I value the need for privacy and understand the need when I’m shopping, but I also like to build products that solve problems. There’s that healthy tension, but we know we have to do it because we ourselves like privacy.

For subscriptions, one thing that I’m acutely aware of is macroeconomic trends. The challenge for us particularly is that shaving is a commodity. You could get a pack of disposable razors and a lot of customers only shave with soap and water. It’s difficult to communicate the joy and value of shaving with high-quality products. You might not look forward to shaving, but you can look forward to the fact that you will not get cut, won’t get razor burns, etc.

It’s hard to communicate that value and, like anything, you have to pay a little bit more for higher quality.

Improving account management and churn

Consumer expectations around subscriptions are also changing. How are you addressing these shifts?

Because we re-platformed to Shopify, we’re trying to improve the overall customer account management experience. We also found through research that customers like that flexibility and the ease of pausing their subscription for a month, for example. So how do we make sure that when they come to our site, it’s easy to do, that information is readily available, and they feel welcome to do so? We’re really looking at improving that experience on the account side.

With these new consumer expectations, how are you thinking about and addressing customer churn?

We need to make it easy to unsubscribe to take FTC regulations into account. The only opportunity for us to collect data is a simple multiple-choice question about why you’re unsubscribing. Through that, we’ve collected years’ worth of data, and it’s no surprise — a lot of customers unsubscribe due to cost. Shaving habits change, especially when you look at the cultural zeitgeist of Movember.

With blade buildup, which is related to shaving habits, a lot of customers just get too many blades. Because we’re in the business, we recommend that you change out your blades at a much higher frequency than most customers normally do. I’ll be completely honest, I don’t change out my blades every week. I don’t have a lot of facial hair, so I change it when I feel like I need to change it. Blade buildup is a big issue for us, and it’s a little tricky to incentivize customers to stay when they’ve got four packs of blades built up.

So how do we make sure that we communicate that to them? We tell them that if they want to pause their subscription, go right ahead. If they want to pause it for longer than we think you might, it’s totally fine. We’ll be here for you regardless.

Understanding what customers are coming for

You’ve worked at companies like Zappos and Target, which are known to be very customer-centric. How have those experiences influenced your approach to product?

That customer mindset is ingrained in me. At Zappos, we had this holiday helper program and the majority of Zappos employees would volunteer their time — about 10 hours total — to answer phone calls for our customers. And call center employees were never graded on sales — they were graded on happiness. How long did you spend talking to the customer and did you bring joy to them? I loved that because you got to hear directly what their problems are during this very hectic time of year.

Sometimes, engineers would come back from a call and say, “I had a customer with this problem,” and you start to hear them clacking away at their keyboard. Six hours later, they had a prototype to solve a particular problem that they had. I carried that with me. How do we spend time with our customers? Even if it’s our family and friends, talk to them about their concerns and bring that qualitative data back.

At Target, we partnered with a research firm and went into 8–10 middle-class homes. We did not identify ourselves as Target, we said we’re part of a research company and had to observe how they shopped for commodities online. Of all the families that we visited, they all did the same thing. They opened up Amazon, Walmart, and Target’s websites, and they compared, to the penny, the cost of these products. That opened my eyes because we shifted focus to that.

How are you thinking about improving user experience now with Dollar Shave Club?

Having worked at Target and Lululemon, customers love the imagery on those sites and love the products. The reality, though, is that Dollar Shave Club sells razors and butt wipes. There’s only so much you could do there, but at the same time, that doesn’t necessarily mean that the images are not important. It’s understanding what customers are coming for.

One of the most highly trafficked pages at lululemon was the Women’s What’s New section. We had this huge set of customers that would come every Monday to see what’s new. The importance of imagery was evident because as a consumer, you can quickly scan the images and make a decision from that point on. So images are important, but when I’m looking at razors or shaving cream, I cannot decide from imagery. The product detail page is important and needs images that complement what users are reading. When you’re looking at a commodity product, it’s part of this whole experience on the product detail page and not just a single image on a search result.

Learning from failure with A/B testing

How do you typically learn about what resonates with customers the most? Do you do a lot of user testing or A/B testing?

I am a huge proponent of qualitative testing, partly because I’m a doctoral candidate nerd. I was fortunate enough to carve out a new role at Dollar Shave Club — UX researcher — and that employee’s primary charge is to work with the rest of our product team, engineers, and other stakeholders to identify those types of things. She puts together mockups with our UX designer, goes to usertesting.com, asks a few questions, and boom, we have our answer. It’s not perfect, but at least we have a direction.

Do you have any examples of A/B tests that you thought would have a certain outcome and instead had an opposite one?

One of them was actually at lululemon. When I first got there, I looked at the electronic gift card data and I found that a significant percentage of customers purchased their electronic gift cards during the week of Christmas. And there was a particular denomination, a dollar value, that seemed to be prevalent. I had the idea to build a module right on the homepage to say, “There’s still time, get your gift card.” One click, add to cart, you’re checked out.

We built that and it was a huge success. I presented the results at the all-hands and said, “We’re going to take this very same model and we’re going to apply it to our Hong Kong website for Lunar New Year.” The code was already built. We redesigned it, we launched it. We got two clicks and zero sales off of that.

At the next all-hands, I had to go in front of everyone and present that. The whole auditorium was like crickets. And I said, “But we learned some amazing things.” Number one, this didn’t cost us anything. We tweaked the code and made some adjustments to the colors. It took two hours at most to deploy a test we’d never done before. And that was a huge win.

Secondly, we learned that customers in that market don’t care about giving gift cards to Lululemon during the Lunar New Year. They’re using WeChat or other popular platforms in Asia and spending money on that. So how do we then pivot our strategy to go into there? Even though it was a big fat failure on the website, it opened up some pretty amazing learnings.

How have some of these learnings informed roadmaps feature planning, testing, etc.?

Not necessarily influencing particular features on the roadmap, but influencing the mindset. I started getting my team and the culture in general used to failing. There’s this expectation that every test is going to be a winner, so I wanted to create an opportunity to say, “It’s so easy for us to run A/B tests. If you have an idea, just bring it to us and we’ll test it. And if you’re not sure about it, we can do some qualitative tests as well.”

Creating that culture so that everyone knows if something is actually on the roadmap, it’s gone through some level of testing rigor. They can feel confident that there will be some positive result to that. As you can imagine, our tests are kind of all over the place. They’re about customer retention, they’re about acquisition, the hybrid model, etc. Given that complexity, I wanted to make sure that, first and foremost, we create a culture of learning and that it’s safe for everyone to come to us with ideas.

‘We all live on the same island’

Can you speak to your experience managing conflicting stakeholder perspectives and fostering a culture of collaboration?

A lot of my approach has to do with my upbringing. I was born and raised in Hawaii, and we’re a small island that’s all about community. It’s all about connectivity, and I take that approach in my product life today. I feel like every stakeholder comes with good intentions. We all live on the same island, we’re all living in the same small little company, and we’re all trying to do what’s best for the company. I never view stakeholder negotiations as combative or a winner-loser scenario. I do, however, always go into it thinking that there’s going to be some trade-off and keep my minimum and maximum trade-offs in mind.

I also remind stakeholders that we can iterate. This is not a retail physical product that we’re printing millions of copies of. We’re going to be able to publish this and within three weeks we’re going to get some good data, and if the sprint capacity allows, we can make these iterations. The thing that we traded off, we can put that into future development.

You mentioned letting people know that it’s okay to fail. What else are you doing to foster that culture of empowerment?

I had this conversation with one of my senior product managers. There’s a twice-weekly design sync where my team — product management, UX research, and UX — get together and look over the latest mockups. And as much as I want to join, when your boss is there, the tone of the conversation changes. I stay out of those meetings and give them as much autonomy as possible. My team will come to me with tests that I didn’t even know about. I just want to give them the autonomy to do stuff. I do like to set direction, but I am not prescriptive about what they should do.

The Taylor Swift homepage takeover

Have you ever had challenges where people push back or have a hard time with disagreement? How do you deal with that?

Yeah, a story comes to mind from when I was at Target. It’s the story of Taylor Swift. Taylor Swift and Target have a partnership where she has exclusive albums with additional tracks that she publishes with Target. We were releasing her 1989 album and I talked to the head of music. I said, “Are we doing anything on dotcom?” And they said, “No, we’re not. We might have a banner.”

I decided we should do a takeover because when you walked into Target stores, there were banners and in-store promos. We had commercials about it running on TV. But on dotcom, we had a furniture sale scheduled for the week that Taylor’s album was dropping.

I looked at the data and traffic to Target peaks on Sunday because that’s when the weekly ad appears. It then drops on Monday. Every album drops on Tuesday, so why not take over the homepage with a Taylor Swift experience using the commercials we already shot and make it all Taylor for the homepage? I got a lot of pushback, surprisingly. The furniture team was saying, “You can’t do that. That’s our big sale.” The merchandising team said, “No, we’ve already got all these plans.” There was just this tension.

I said, “But it’s Taylor Swift. Look at all the things we’re doing. Why aren’t we doing anything on the site?” I ran an A/B test where 25 percent of traffic was directed to that homepage takeover. It ended up being a huge success because if customers are really looking for furniture or other stuff, they can find it. They can use navigation or the search bar. But despite all the data, there was a lot of emotion behind the homepage takeover change. We’d never done it before.

Lastly, what are you excited about in 2024?

No surprise: AI. The technology is not entirely what I’m excited about — I’m excited about how we as technologists and product managers have matured in the industry. The talks that I’ve attended focus on improving the productivity of employees using AI. They have these guiding principles around AI, like the things that we are going to develop AI for and things we’re not going to use for AI.

That got me really excited because if you think about the internet in the late ‘90s and early smartphones, you have these useless apps and useless websites. You think about how much time, money, creativity, and energy was wasted on these useless things. I see AI as sort of the internet of the late ‘90s — the app ecosystem of the late aughts. It’s going to change how we operate daily. Now that we learn from our mistakes and we have this rigor, the time to productivity is going to be much shorter.