#149: The Secret to Ecommerce Growth: Harnessing the Power of Data Integration

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Claus Lauter: Hello, and welcome to another episode of the E-Commerce Coffee Break podcast. In the last episodes, we talked a lot about artificial intelligence, but actually today we want to go back to things that are around for a long time. We want to talk about data and how to integrate data in your technology stack into your business.

So therefore, I'm bringing back Robin H. Smith. He has been on the show before at episode 120, and he is the expert to talk to when it comes [00:02:00] to data integration. Robin has 30 years of experience in supply chain and data integration. He's the co-founder and c e O of v L Omni, a IPAs managed service platform that is boast, elastic and scalable to the demands of scaling e-commerce on multi-channel merchants.

Robin has a BA from the University of Toronto and an MA of the International Relations from Webster University in Vienna, in Austria. So let's welcome Robin to the show. Hi Robin, how are you today?

Robin H. Smith: I'm good. Thank you very much for having me again.

Claus Lauter: Vil Omni is around for a very long time, much longer than Shopify is around , for the listeners who have not heard about Wheel Omni, give me a brief overview of the history of your company.

Robin H. Smith: So we started, doing bricks and mortar retail, e d I, and, , we still do, retail, e d i, with companies that actually supply the major retailers. So complex supply chains are where we come from. After the recession in 2009 and into approximately, we started to see this conversation around the cloud and people hosting things and XML and things like that, and [00:03:00] SOAP and rest APIs and.

we could see where the trend was going, applications were going into the cloud, even though there was this tremendous fear that everyone was gonna have their identity stolen, and, cloud wasn't reliable and people would steal your information. It was a slow progress.

There's been a, quantum acceleration in the. 10 years towards the cloud, we made that move as well from selling on-premise middleware to, , building our own integration platform. So that's where we are today. So we've gone through a, fairly lengthy journey. We've had a number of pivots and iterations of our service offering.

, we do not only edi, but we do, , marketplace in integrations. So things like Amazon and eBay. But we also do Shopify. we came to. Shopify in the very early years. , some of our early cus or our longstanding customers dabbled with Shopify when it first came out. , and in fact one of them within the first nine months.

We've been in the plus ecosystem since plus was created, , which is really where we situate. One of the things that we've seen [00:04:00] over the years as e-commerce has evolved is that there's an increase in complexity that actually, in many ways mirrors what we used to see in the bricks and mortar world, and that complexity is now.

Spilling over into the kinds of questions that we see discussed in chat rooms, , on Shopify Slack channels. For example, , you looked at the LinkedIn Shopify Plus group. You look at all the podcasts, yours included, where people are talking about all sorts of things. They really speak to this increasing knowledge gap that we see where it is just becoming more and more complicated.

Ai, for example, is one that we're starting to hear about. To me, it's, in many ways reminiscent of what we were hearing about VR back in two or three years ago, and Shopify was touting augmented reality for spinning shoes around and spinning dresses around and . There's hype cycles that go on, but there's also , this complexity that keeps growing.

Claus Lauter: Makes total sense. If you're long in the business and , I'm around, [00:05:00] or I'm marketing e-commerce for like 20 years, you see exactly these hypes coming and going all the time, and some things keep sticking and some things just disappear. Robert, why is data so difficult to handle?

Robin H. Smith: That's the million dollar question, , because people are sloppy. , , humans will always find the path of least resistance to create something, and data is no exception. So if you think of somebody creating SKUs, , in their e R P. putting control characters , into the description, putting, exclamation marks and things like that to the human, it looks perfectly fine to the computer that's a control character.

And now it doesn't work so well when you try to move data, , a in a way that is integrated , I mean we see various levels of data. Cleanliness. There's a really good quote from probably 15 years ago , from the head of i b M at the time who said that in the digital world, the value of your data is the currency that you're gonna be trading with. If the data you're trading with is unclean, then your currency is not worth as much, I always thought [00:06:00] was a very, very interesting way of looking at. And I mean, we talk to customers all the time who are potential customers , that will, once you get into it and you realize how poor their data is, it's bandaid after bandaid, after bandaid.

And at , some point they have to pay their data debt or their tech debt as we call, to get things clean. Because you can't scale an organization. You can't grow a business if your data's poor.

Claus Lauter: Makes perfect sense. Now, obviously, , we, ambi has a huge experience when it comes to data integration. Coming back to the data itself. How do you split good data against bad data when it comes to cleaning up?

Robin H. Smith: well, let me give you an example. So there's a lot of merchants on Shopify that have, products with Farian. You think of a master skew, a color size matrix is a perfect one actually. I was talking to somebody in the jewelry business with ring sizes that come in half sizes.

, you may have a ring style what that particular style has 35 variants , based on the 35 ring styles. But that doesn't include the half [00:07:00] sizes in between. So there's all these other variants. I see a lot of conversation around how do I handle all these variant structures?

And basically what the way you need to think about it is that every variant is a unique product. And I know a lot of people say, oh, it's too much work. I can't do this. Well, when you come to integrate, we can't create a one-to-one, We can't integrate that in the data. Yes the human can understand it, the human can make the decision on how to, move forward with that.

But the computer's kind of stupid. It has to be told what to do. Just disconnects like that. We see other sorts of disconnects and we're seeing more of them, for example, where, , people are substituting product. Manually on their Shopify store, and then they go to return something. To a warehouse.

Well, the, the order that's been brought into the warehouse hasn't been updated, so now all of a sudden I I can't take that return in because now I've gotta figure out, okay, why am I getting this return? It doesn't show up on my order. The return is in a line, was either manually added to Shopify, or [00:08:00] it was added by some sort of upsell product, so it's not related to my original order.

All of these kinds of things, and this is where this increasing complexity comes into play, is that people look for simplicity. I get it today. Everybody's under financial stress costs are going through the roof. Everybody's looking for cheap, simple, and quick. The problem , is that the more you pile on cheap, simple, and quick.

Without thinking about how all of these pieces work together, you're basically creating a monster. And that monster will need at some point, if you're going to reach a point where you can scale needs to be taken apart. So simplicity is important, but data cleanliness is the underlying foundation of it all.

Claus Lauter: With all the data and you mentioned already different apps. , one thing, obviously every app comes with its own dashboard. Nowadays you have a dashboard for Shopify, you have one for CLA view, for any app, you have a Shopify, and then you have different owners of that. So you have your email marketing manager, , working in CLA view, and then you have your procurement manager working in another dashboard.

How does it work with so many people working on the data to [00:09:00] really find the key to keep it clean?

Robin H. Smith: Well, and this is the challenge because e-commerce is kind of unique out there in that it touches all aspects of an organization. If you think about it, it touches. Operations. Operations is how do I process that order, how do I fulfill that order? It touches marketing. Marketing's gotta determine what the product is, what it's gonna look like on the website, the design, the functionality it hits.

Financials. You've got tax implications on orders, depending on your jurisdiction. You've got pricing, you've got refunds, you've got credits, credit card processing, payouts from your credit card. What it does is it really exposes all the silos, the operational silos within an organization.

If the barriers between the silos are too high or too solid, , which we see in a lot of larger corporations, , Then the whole thing breaks down , and people build websites independently of all this other stuff, and it just creates this monster of a mess. Because of the fact that e-commerce touches every aspect of an [00:10:00] organization, , when a merchant decides when they're at a certain scale, when they decide to start to build things out, they really need to include everybody in.

The conversation because if they don't, what'll happen is you have decisions that are being made independently that downstream may affect the financial aspects. I've had a conversation with a toy manufacturer, , in the past year about, , irregularities in their tax processing.

[00:11:00]

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Robin H. Smith: And it's because they made a decision to. A tax plugin on Shopify, but nobody bothered to assess how that was gonna intersect with their e R P. And the fact that they were using a tax processing system because they were taking, , verbal credit cards that they had a whole tax process system and the two, nobody had ever thought to think, to discuss how the two were gonna talk to each other if there was even a need for them to talk to each other.

But more fundamentally, how they both interacted with the financial statements and the whole GL account structure. Rounding, for example, is a big issue. Shopify. Which a lot of people discover long after the fact is an ont, if you use native Shopify tax, they've got one of the funt rounding processes ever.

, it's totally contrary to anything any E R P does. you get these rounding, , issues. So it's those kind of [00:13:00] things. I mean, that's a really fundamental example, but it's those kind of things where you need to now start to bring. The various stakeholders so that everybody can understand the implications.

this is where we're starting to come back to the knowledge gap that we had talked about. This is where we see this increasing knowledge gap is that the marketing people who are controlling the websites they don't have the skillset or the interest to worry about the financial stuff.

Oh, that's the finance department. Or the operational people say, well, I could care less about , the finances. I gotta figure out how pick and pack this stuff, get it out in a timely manner because I got marketing screaming at me that were too slow. It's all of these different pressures and I think this is where companies need to bring this together.

If you don't put the proper procedures and processes in place, the knowledge gap really accentuates the data issues. That's where we find that this gap now is getting wider and wider and the bigger the organization go into as the merchant scales, it's more and more silos of people doing things independently.

And that's a recipe [00:14:00] for failure. And it's increased costs also.

Claus Lauter: Yeah, makes perfect sense. What do you do once you have all the parties acknowledging that they have a problem? I mean, obviously they know they have a problem, but they don't have a solution. Now, I guess that's where you coming in? How do you. Start the process of getting all these puzzle pieces together and really then come to the point where you can integrate the data into a system.

Robin H. Smith: , I'll start with your premise that everybody acknowledges that there's a problem, . Cause that's usually where the, that's usually where the first issue starts is that usually there's always some holdout that doesn't recognize or doesn't want to recognize that there's an issue with what they're doing.

, and I hate to say it, in a lot of cases it's the marketing people because they don't care about the operational stuff, but I mean, they should care because the customer journey is predicated on what happens on the backend. I mean, you could have the nicest slickest website, but if the customer journey stinks, , marketing isn't gonna get the results that they want.

And part of it is structural in the sense that a lot of companies don't engage their marketing people in [00:15:00] the operational side of things. They're sort of really a world unto themselves. SEO is very cryptic so the first thing, yeah, you're absolutely right, is you've gotta get people to underst. What are the issues that are cause , that you're seeing? What we do is where we're building workflows. We do workshops we do a data alignment exercise.

I've got this data coming off Shopify. Financial people, what's important to you? How do you wanna see it? Okay. Web people, we may need to tweak some of this stuff because they want information that you're currently not collecting and so on and so forth. So if you go workflow by workflow, it's quite straightforward.

A perfect example is a pre-order with a deposit that goes down to the e R P. It shows us being paid They're now creating a new order and fulfilling manually, well, why are we doing this? We haven't dissected the process.

Often people approach it as tech and not business. Where we come from. We always approach it as a business exercise first and foremost, and a technical exercise second.

Claus Lauter: [00:16:00] Okay, now I think that's a very good, , differe ration , to see it's about the business and the technology is just a tool to solve the issue that you have.

Robin H. Smith: Just a communications tool is the technology. That's all it is, at the end of the day, if you look at what the tech is doing, it's moving data back and forth.

Claus Lauter: Before we started to chat, you said there is a big elephant in the room. , you didn't tell me what it is, so please, , tell me the secret

Robin H. Smith: This elephant is this increasing lack of knowledge that we're seeing as a result of the pandemic, because it wasn't there before the pandemic, , you could see glimmers of it happening, but it's become way more complicated. The customer demands a much more sophisticated journey than, , what we had in 2019.

And as a result, , and the cost of acquisition of a customer is much, much higher. , merchants are looking for much more granularity around the information that they're collecting and how they use it and so on and so forth. But increasingly with a lot of merchants, we see an incredible knowledge gap of what are the [00:17:00] tools that are available, what are the processes that are available?

And there is. A huge body of people who are still of the mentality, oh, well if I build the website, they're gonna come without thinking about , how the customer journey impacts all the operational processes. that elephant is getting bigger as the customer demands a more sophisticated journey.

And merchants are being stretched with, increased costs and there's , a knee-jerk reaction to not do something or to do something. Manually, which actually ends up adding costs. This knowledge gap, and this is where I say people really need to step back and think about their processes.

I think I said on our last podcast chat that one of the biggest disconnects we see is merchants never shop on their own stores. That's part of the first step of understanding what you want in your customer journey because you know, as I've always said, I say it on every podcast, E-commerce is still a trust relationship.

, and I'll give you an example. I can't stand [00:18:00] sites where I go on under the contact us and there's no address. Like, where are these guys located?

Claus Lauter: Yeah, You see that more, more often than you would think. , I think that's a very common mistake specifically for startup companies. , they just try to hide for reasons that I can't understand

Robin H. Smith: I don't understand it either. I mean, if I'm gonna buy from you, I want to know where you are. I want to know that you're a legit business because as I said, it is a trust relationship. , because you're out there , in the ether and I wanna make sure that when I put my money down, I don't wanna have to fight with my credit card company to get my money back if you don't deliver.

, or if you're close, well maybe I'll reach out and go and see if I can pick it up,

Claus Lauter: that makes sense. And I know you work a lot with Shopify Plus stores. , when is the right moment for merchants to start thinking about data integration? At some point . They reach , a size where it becomes crucial for continuous scaling and growing. So where do you see that point?

Robin H. Smith: I think people need to be thinking about it all the time. There are some well-documented financial thresholds, , basket size under a [00:19:00] hundred dollars, 20, 25 orders a day. You really need integration cuz you're losing money. But I think that, In most cases for smaller merchants, the plug and play solutions work quite well.

, it's as you start to push the boundaries and you are changing your business scenarios to suit the software that you're using. You're being restricted by the tools that you're using. Because of the business scenarios that they support. I think that's the point that you need to start to rethink your processes.

, you need to step back and do a holistic look at, do I have the right tools? And if I don't have the right tools, then is this something I really want to do in my business? Is it a something that I just dreamt up? Because, my colleague was telling me about how they do it and oh, I think that's a great idea.

, we see a lot of that where somebody tries to copy what somebody else is doing without thinking through the implications on their actual business, and I'm sure you see it constantly also. So it's things like that, but I think everybody should be thinking about it all the time. But I think as people [00:20:00] start, Question their business processes and they start to try and mold business processes into their solutions.

That's where you've got a problem.

Claus Lauter: I think the core problem is you don't know what you don't know. If you have the gut feeling that something is wrong, then probably something is wrong. What's the process when people get in contact with you, how do you get this process rolling to really find out where are the gaps in the business?

Robin H. Smith: We start with talking about where they are, , what are the issues that they're facing. I mean, it's really a pretty wide ranging conversation around. how's the business growing? What are the problems that you're facing? And so on and so forth. And then, I mean, sometimes, to your point about people just don't know, it's like easy fixes that they haven't found somebody that can tell them how to fix it.

You tell 'em and it's like, oh, that's obvious. You get that kind of a scenario. For us it's to understand the lay of the land first. and then determine what it is that the customer wants to do, , going forward and sort of start with a blank slate, draw out what the customer wants to do, and then look at where they are and how those two align or [00:21:00] don't align.

We often get sites where really should be investing in an E R P, but they can't get their head around the process around that, and that's gonna limit how the business scales or. , as in the case of a conversation I had yesterday, , they're using a plug and play integration that can't handle a presale, can't handle a back order, and can't handle a, split shipman.

now changing your business processes To this integration. And that's a problem. I mean, that's where you really need to dissect it. Okay. Why are you doing split shipments? Our inventory receipts are too slow. Maybe you handle pre-sale orders differently but they're all business questions.

that we go through. So it's a pretty wide ranging lay of the land, figure out what we can and cannot do. What makes sense, what they're willing to change, what they're not willing to change. Change scares a lot of people. I mean, there's been so much change in the last couple of years. My business partner was at An event, , this past week where, , one of the senior economists from one of the big Canadian banks was talking [00:22:00] about the pandemic and he said, the pandemic has been a condition and we have this condition that is going on this condition is influencing the way we look at everything right now.

And I thought that was a really interesting observation. A lot of decisioning that merchants are making right now are being conditioned by the lens with which they're looking through. And sometimes they're not accurate. you know, to come back to what you said, what you don't know you don't know.

, and this is where I think these kind of podcasts are so, so critical to have people talk all the issues that are out there that people don't even think about.

Claus Lauter: Hundred. Right. I think you're also quite right with people fear change, , that most people just like to keep things as they are, as they always were. And in this fast moving industry like e-commerce, , you need to change all the time. And the pandemic potentially has increased that speed even a little bit more.

On that note, before we come to the end of our chat today, , what kind of trends do you see for e-commerce in 2020?

Robin H. Smith: , I think we're gonna see increased sophistication in [00:23:00] processes. You're seeing returns becoming more complex. There's a lot of pressure to reduce the environmental impact of returns in the eu.

The other area that I think is that we're gonna see a lot of scrutiny on the kinds of apps that people use. There's been a huge uproar here in Canada about the major retailers, , passing all of their ere receipt information to. , unbeknownst to the customer, and I think that there's going to be increased pressure on how data is being used for personalization and granularity and so on and so forth. I think the consumer is gonna start becoming more and more critical about how they look at that kind of stuff. Marketplaces are exploding.

We're seeing them everywhere, and everybody's either wants to have a marketplace or they wanna be part of a marketplace. those are the three things that we're seeing, or that I think , are gonna be the things that are gonna be, , areas that merchants should pay attention to.

Claus Lauter: Excellent. Cool. , now that we have made clear that, , data integration is not just a [00:24:00] technical level, it's a business decision, , for the future of your business, where can people find more about you?

Robin H. Smith: , VL omni.com, , is where we've got a lot of material. , reach out to us through the website. We're happy to chat with people. , we've got lots of stuff on our YouTube channel. I was on. A large number of podcasts last year, so there's lots of podcasts around, , yours. There's some on the Amazon channels, so there's lots of information out there.

I think our YouTube channel's probably the best place to start, as well as the website.

Claus Lauter: Okay, I will put the links in the show notes, then you just won't click away. Roman, thanks so much again for giving us a little bit more insight in data integration. I think it's a very interesting topic. And, , before you venture off, I would just say don't follow the latest trend. Don't follow the latest app up there.

Look into your data and see if that is clean. Thanks so much for

your time.

Robin H. Smith: Thank you very much. And I completely agree. I mean, too many people jump on the bandwagon and then fall off because they realize that, oh, I just wasted all this money for something that's kind of useless.

Claus Lauter: Thanks so much. Talk soon.

Robin H. Smith: Take care.

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