Konstantinos Koudigkelis is VP of Product at F. Schumacher & Co. Having formerly held product leadership positions at Narrativ and WeWork, Konstantinos has more than a decade of experience building marketplaces and transforming ecommerce platforms that are used by millions.
He spent much of that time working in the Bay Area during the high-growth 2010s, where “it was all about software and trying to create innovative things.” Today, Konstantinos works for a company that is as old as Major League Baseball and sells, of all things, luxury wallpaper — which, he admits, he knows next to nothing about.
Fortunately, he does know a thing or two about what motivates buyers — and, just as importantly, what enables sellers — in a well-established ecommerce marketplace. In our chat, Konstantinos recounts how he managed to push big, technology-driven changes through a sales org that had relied on pencil-and-paper processes for decades. He also shares revenue optimization tips as well as some creative ways to use adtech to validate your own user data.
I never imagined I’d work at a company that has been around for 140 years. Originally, I struggled to see what my role would be in trying to sell wallpaper and fabrics.
Things changed when I talked to leadership and, even more importantly, when I saw the products. It’s one thing if you see a piece of wallpaper in a page, and it’s a very different thing when you see a living room that has that wallpaper in the background, because it changes the narrative. And the narrative might be, “I want to have that living room.”
Our most important goal is to build strong communities through our interior designers network. For us, it’s not about trying to sell more wallpaper and more fabrics; we really want to sell those products through our interior designers because we trust them, and we actually believe that, if a homeowner partners with those interior designers, the end product is going to be superior.
The way it works is that, when you go to a friend’s place or a friend’s home, you’ll notice how beautiful the living room or bedroom is. This creates word of mouth, which is how we propel our growth as a company. Most people, like myself, don’t know anything about wallpaper or fabrics. So when it comes time to buy a home, most likely, you’ll consider hiring an interior designer.
Our job is, first and foremost, to win this community, because the interior designer is going to actually give you the narrative — how the wallpaper might fit into your living room, how you can use a piece of fabric, etc.
One of our biggest areas of opportunity has been around the sales ordering funnel. As a luxury company, we have different ways in which people can engage with us and buy products with us. We have our online presence and also we have our offline presence. We have what we call storerooms, which are physical stores where designers can actually visit and see the physical product and buy.
Most of our interior designers have been working with us for decades, and they have built very strong relationships with our sales teams — personal relationships. When I joined, 6 percent of sales were submitted by an internal sales rep. Some people would never go to the site to order. You would basically pick up the phone and call me to place the order for you.
For years, our sales organization had been operating on different processes, different systems, different methodologies on how to place those orders. We had a complete lack of centralization, and it was very difficult to know who placed an order, when, what they ordered, etc. The orders that were placed had many errors. We didn’t have any controls, and actually we were spending a lot of time chasing orders and manually trying to follow up with orders.
The first thing we focused on was to centralize the placement of orders for all users, internal and external. This became our new website. For the first time, we had actually simplified, standardized, and optimized the experience for everyone.
This has been transformational because now we can really understand exactly who is placing an order, whether it was placed online or offline, whether our sales team is becoming more or less efficient, which products are selling more, what trends are going on, etc. Now we have the power of data to make more intelligent decisions on how to run the business.
Our approach to this problem is to win hearts and minds, which actually adds significant complexity to how we operate.
For about a year, we had to transform the vehicle while operating the vehicle, so to speak. That means things should continue happening as we build.
From a product point of view, we had to modularize the release and determine which specific components could go live without interrupting sales. The first thing we launched was a complete redesign of the homepage. The second thing was to touch up, redefine, and redesign the sets, the product catalog, and other areas where the sales organization wouldn’t feel pain if something went wrong.
It’s very important not to create enemies or make the life of your sales organization more difficult. Through these initiatives, we gained trust and they started seeing the value. Furthermore, we demonstrated to the business and to leadership our operational excellence, meaning that what we said we were going to deliver, we delivered, and people started trusting our ability to achieve. This gives you the room to start having different discussions with cross-functional teams to build partnerships.
And for us, the biggest partnership we’ve built has been with the head of sales. Everything starts from there. In fact, we’ve started tying sales compensation to web adoption and as an extra incentive for sales representatives to place their orders through the website. We identified the specific sales regions that were most likely to adopt it and built on that momentum. Once people start realizing the value of the web, they start to talk, and this creates peer pressure — you don’t want to be the one who’s left behind.
We also partnered with finance and created an integration with Stripe, which really simplified payments for the sales organization.
I joined WeWork back in 2017, and I would say from 2017 till the end of 2019 when I left, it was a very great journey, amazing growth and presenting growth, at least in my experience. In the end, unfortunately, it came to a huge crash.
My role there was to work with the revenue optimization team to develop a system that can price dynamically in real time each and every office that we are offering around the world. And we’re talking about tens of thousands of offices around the world, with the goal to either maximize revenue or maximize occupancy.
I’m not going to talk about profitability because profitability was never our objective. Our objective was always to open new offices and fill them out as quickly as possible while driving the most revenue that we could.
The best example I can give you is what Uber does for pricing, the different vehicles that are available. When you open your Uber application and you enter where you’re coming from and going to, you see a price. There is a system in the backend that calculates this price. Similarly, at WeWork, our job was to build a system so that, if you visit any of our locations, based on the attributes or characteristics of the office, and based on what we know about you, you would be given a tailored pricing.
Pricing, generally speaking, is a lever. It’s just a mechanism. It’s more about strategy than data. In other words, it’s super important to define and align on why and how you want to use the pricing to achieve a specific objective.
Pricing can be used to optimize or maximize revenue, but it can also be used to maximize profitability or gain market share. It’s a very powerful mechanism to drive significant impact on very important objectives. But if you set pricing without controls, it could have unpredictable consequences.
For example, at WeWork, if we had focused exclusively on getting revenue, we could’ve increased revenue by significantly reducing pricing to get market share. But this is going affect your bottom line and your profitability. At the same time, if you only focus on increasing profitability, you may lose customers. You always need to think about how your pricing strategy is going to impact supply and demand.
Pricing, over the last few decades, is becoming more and more important for companies because they see it as a key way to differentiate, especially if they can do it in a systematic and automatic way.
You can see this with Uber: pricing is a competitive advantage. Many users focus exclusively on pricing and compare pricing between Uber and Lyft before they make a decision. Similarly, you can see this with Booking or Airbnb. Another company that is heavily investing in pricing and dynamic pricing has been Amazon. For example, if you try to buy an air conditioner from Amazon during the summer, it’s going to be much more expensive than it is during the winter.
To do pricing, you need a lot of data — a lot of customer data, a lot of product data — and your answers are only as good as your data. So pricing requires big investments into data engineering and data platforms. The modeling and the statistics are, relatively speaking, the easy part, if you first have a lot and clean data to play with.
Generally speaking, you start with the data you can collect from your products and from your users. Then, you can leverage advertising platforms like Facebook and Google to start getting access to anonymized data.
We’ve found that advertising platforms can be used in many ways other than to drive more conversions. You start with a hypothesis — let’s say you want to target specific age groups, or even a specific type of millennials, for example — and you connect the dots around those hypotheses with the data you’re getting from Facebook and Google. You see the results and then you extrapolate to see who your users are. Even if you don’t have their data, you can validate or invalidate your own findings from your own customers.
These are very interesting ways in which you can use adtech to either amplify or validate or invalidate your own data.
When we talk about ecommerce, the most important thing is to define the order journey. And the order journey can be different from customer to customer or company to company.
For example, the order journey might come down to how you get people onto your platform, so you’ll need to focus on lead generation first. Then, how these people start engaging and discovering products on your platform; how they move from the discovery phase into, “I want to actually add things into my bag”; how they convert the bag to a checkout; how you process payments; and then, most importantly, what you do post-sales.
At the end of the day, to put it as simply as possible, ecommerce is about connecting the dots across all phases of the order journey and focusing on making that end-to-end order journey simple and seamless for the customer.
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