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On-Demand Webinar
Megan Billingsley:
Hello, everyone, and welcome to today's webinar, How an Agile Catalog Provides a Simple Path to Modern Merchandising Success. I'm so glad you could join us. My name is Megan Billingsley, and I'll be moderating today's event.
As you know, the world of retail changes fast and brands must constantly innovate to provide shoppers with a seamless engaging shopping experience across all channels. Today, we're going to discuss how an agile catalog allows brands to respond to trends and customer preferences immediately by updating and segmenting their merchandise mix on the fly. We'll also highlight the modern merchandising techniques that will allow brands to optimize their assortments and offerings. The goal is to delight customers while boosting their revenue throughout 2023.
We're thrilled to be joined by our speakers, Brenton Sellati, Senior Director of Product, Catalog Data Platform at Wayfair, and Julie Mall, Vice President of Global Solution Engineering at Elastic Path.
Before we get started, I have just a few housekeeping items. Please note that the slides will advance automatically throughout the presentation. To enlarge the slides, click the enlarge slides button located in the top-right corner of your presentation window. If you need technical assistance, click on the help widget. We encourage you to submit questions at any time throughout the presentation using the Q&A widget at the bottom of your console. We will try to answer these during the webcast, but if a fuller answer is needed or we run out of time, it will be answered later via email. Please know we do capture all questions.
So to kick us off, I would like to ask each of our speakers just to provide a quick introduction of themselves and their work. Brenton, we'll start with you.
Brenton Sellati:
Great. Hi, everyone. Happy to be here. Brenton Sellati, I lead product for Wayfair's Catalog and Data Platform team. I've been with Wayfair for about four and a half years now. Prior to that, I was doing product management and insurance, and then prior to that was doing market research for Fortune 100 companies. So like most of us, not direct line into product, but have been here for a number of years.
At Wayfair, I lead a collection of teams that really power the product content backbone for the rest of the company, so what is a product, what are its core attributes, how do we flow that into our marketing domain, our storefront and e-commerce domain back to suppliers who work with Wayfair to actually put their products into our marketplace. So we're really kind of the backbone and the plumbing that many other systems and teams depend on, and so very familiar with and excited to talk about the power of agile catalogs today.
Excellent. Thank you. And Julie, same for you.
Julie Mall:
Thank you. So again, I'm Julie Mall. I lead the solutions engineering team globally at Elastic Path. I've been with Elastic Path for just about two years, but I've been in the commerce space for the majority of my career, which dates back to the late '90s. So I've had the privilege over the course of my career of working with different commerce platforms and different organizations as they leverage technology to realize their commerce and customer experience aspirations.
Excellent. Thank you. I'm glad you both could join us.
Just to level set, what do we mean when we're talking about an agile catalog, Julie?
Sure. So when we think about what an agile catalog means, you kind of have to take a look back and think about what commerce catalogs traditionally entailed, right? So back when e-commerce first started getting a foothold, the commerce experience was driven by the catalog structure in the ERP. Customers wanted to take that information out of the ERP and put it online, and essentially, they were just replicating the structure of that ERP-based catalog into an online experience. And I've yet to run into an ERP that is tuned for the end customer's experience, right? That's just not its job.
But traditional commerce platforms have essentially just taken that model and kept it, so now modern merchandisers who want to create really adaptive product experiences and product assortments, when working with that sort of traditional and rigid catalog, they're really hindered by being able to respond very quickly to those customer demands. You end up oftentimes having to replicate data, having to replicate your catalog for these different experiences, and again, it's really not tuned for that customer experience. I think fundamentally what an agile catalog should do is support the creativity of the product merchandising team as they think about the different collections of products that they want to curate for specific customer segments or specific brands. They should have the freedom to be able to do that and not be hindered by the technology that they're leveraging.
Excellent. Thank you.
And Brenton, of course, I'm curious from your perspective how Wayfair benefits from an agile catalog.
Yeah, you know, it's very interesting. Wayfair has some idiosyncrasies to its business model that not all catalogs need that really over-index in complexity. One of them is just the massive variety of products that we carry. We have over 1,500 different classes of products, everything from plumbing to light fixtures to lawn gnomes and swing sets, and so the way that you would want to describe those products and merchandise them, they vary and they also change constantly. The way that you find related items and complementary items to associate to those also change. So there's just a lot that we do. We're not just selling one sort of standard product type. It's many products with many different ways of optimizing them.
The other way in which we are particularly in need of agility is the way that we then brand and display those products. So hopefully folks are generally familiar with Wayfair. We've kind of become a household name over the past couple of years. But what a lot of folks don't know is that we also have a portfolio of brands. So Joss & Main, Birch Lane, AllModern, Perigold, those are also under the Wayfair family of brands. Even within Wayfair, we have a set of proprietary brands, like Kelly Clarkson Home or Mercury Row, where we're actually taking suppliers' products and we're curating assortment into these brands that have similar looks, feels, and price points to give that customer that brand halo effect that they can only find at Wayfair.
So for all those reasons, there's a tremendous amount of agility that we need in our catalog to manage all those degrees of freedom that's scalable and still allows us to optimize for the customer experience across all those different dimensions.
So what are some of the pain points inherent in trying to update and segment assortments regularly? Julie, you want to kick this off?
Sure. You know, I think the fundamental pain is around the rigidity of a traditional catalog structure, where in that structure, you have your catalog that contains a set of categories and subcategories, and in those categories, select products, and those products have price. So any deviation from that model creates complexity and often, again, hinders the creativity of the merchandisers. And you think about an omnichannel world where you want to create unique assortments based on what you have in store versus what you might deliver to a pop-up shop or your online experience. If you have to replicate that data to create those experiences, now you have to worry about that data being out of sync, right? There's nothing more frustrating as a shopper, and I know because I do a lot of shopping, where as you traverse the different channels of an organization and you're presented with different experiences, the product price might be out of sync from one channel to the other, that creates a bad and broken user experience.
So what Elastic Path has done to really help mitigate this issue is we've essentially decoupled that catalog into its component parts so that we can allow merchandisers to then pull together the components they want for the right experience, right? So now that catalog isn't a rigid entity that kind of lives and breathes on its own. It's a set of components, right? I've got categories or collections, I've got the products themselves, and even the products can be decoupled. If you think about like my jacket comes in different sizes, different colors, you can create that collection but decouple it for merchandising purposes. And then price is decoupled as well. So now as a merchandiser, I have the ability to say, "I want to create this unique collection of products that I'm going to deliver to a specific experience. I'm going to apply a pricing strategy that's specific to that experience, and I'm going to launch that in two or three clicks, push it live, and I can time box it if it's for a special event or something like that," and now, merchandisers can create these unique experiences at speed and at scale.
Yeah, Julie, I think I would add a big plus one to your comment about copy data, de-normalized data being the bane of any catalog becoming agile, because it's an unreliable source of data, and so the more you add to it, the more you're going to find you add this complexity that compounds and it's hard to reason about, and then you can't build anything on top of it either. So a lot of times, we build something, we're excited about it, and you want to extend that thing. If you're doing that on top of copy data, you're going to find that you really just magnify the pain and the negative customer experience outcomes that happen.
I'd say for Wayfair, in addition to what Julie mentioned, I kind of break it down into three buckets. One is just, with a lot of e-commerce catalogs, and Wayfair is no different, there's a really strong Pareto effect, where a small portion of your products drive an outsized portion of your sales. So not boiling the ocean and paying uniform attention to every single product, but really thinking about which of these products drive the most value, how do I focus my efforts there, how do I predict which products are likely to become those value drivers in the future so I'm not just sort of peanut buttering my investment across those. Using your resources smart, especially in 2023, I think that's really important.
A second dimension would be the metadata that you associate to your products. Like I said, Wayfair has these 1,500 classes. There's a set of fields that are required and recommended and optional. Those power things, like filters on site, they power logic about how we show images on site, how we merchandise the products to customers. And so you're going to want the ability to iterate on that metadata but to do so in a way that doesn't create breakage up and down your value chain, so really investing there and investing in metadata, particularly for products that have a lot of different or important descriptive specifications.
And the last thing I would say is, with all this agility comes a lot of ability to get yourself in trouble just by pulling too many levers, and so creating feedback loops that you're actually measuring some stimulus and some result and then being able to feed that into some sort of data lake or some sort of process that then allows you to analyze it and ideally get it back into things like machine learning and data science models. Having operational systems directly inject to those rarely works, and so knowing when you're actually doing harm or good with your actions is a really important part of staying on track, especially as you get to significant scale
Excellent. Thank you so much.
How can a more agile approach improve shoppers' product discovery and increase revenue and conversion, Julie?
Sure. So I think one of the primary components here is basically to deliver the product experience uniquely to the individual customer. And again, you need to do that at scale and you need to do that without creating a lot of replication in your data, in your categories, and all those things that make up a catalog. And so this decoupled nature of a catalog really facilitates that process.
So I think about how I shop. So I look in my office, and much of the furniture actually came from Wayfair. And when I was designing my new office, the way I shopped was I wanted to see collections of products that went together. I wanted to find things quickly and I wanted it to look beautiful. So as a merchandiser, I think of, it's like create-the-look or shop-the-room type of experience, where as a merchandiser, I want to curate the products that create a certain aesthetic, right? So the chairs that I bought are white-and-blue-striped, but they come in a myriad of other colors, fabrics, and options. But when I was looking at that shop-the-room experience, I knew that I wanted the blue-and-white-striped ones.
So in some scenarios, when you have a tightly coupled product and catalog experience in a product like a chair that has all these different combinations, you click on the one that you think you like, the blue and white stripes, and it takes you to the standard product, and now I've got to go through and filter, "Well, what fabric was that again? And what color?" and so on because I can't just isolate the one variation, which is the blue-and-white-striped chair with the blond-colored legs away from its parent. So that creates a broken experience for a customer where I knew exactly what I wanted, you had curated the look beautifully. And this didn't happen at Wayfair, but with other experiences, then when I click on the product, it doesn't take me to the thing that I saw. It takes me to the sort of standard product page, where I have to filter through all the things.
So as a merchandiser, you want to be able to create the experience tailored for the customer. Some people definitely want to see all the things, right? They want to go through and click on each fabric and visualize it. That's not me. I just wanted the one that I wanted. So again, an agile and decoupled catalog allows a merchandiser to create those individual experiences without having to re-architect a catalog, without having to re-architect an assortment. They can just assemble the things that they want and push them into the experience.
A quick example there is some customers, they shop, and when they shop online, they want to see all the latest products, "Show me only your new arrivals first," versus some people that want to shop sale, "I want to see all the sales stuff first." As a merchandiser, you want to maybe create those options, again, without duplicating everything, dynamically swap where the categories align as sale first or as new arrivals first based on segment, and then now you can start to measure what's going to convert better, what's going to drive revenue better. If you can match the shopping style to the actual shopper, does that create better outcomes? We think it does.
Yeah. Again, I'm going to have to plus one you because I think that's just so spot on. The way that I would sort of frame that and add to it is, you have sort of the basic structures that you can use to merchandise your products, and what are the primitives that you have to work with? What are the structural constraints you have with respect to core entities? How those can branch to other entities? Because that really forms the building blocks that you have to work with for all of your merchandising presentations. So think about what some of those different flows might be for different product types and make sure that you have an agile catalog that gives you the right primitive building blocks to work within. That's the first level.
The second level is then, how do you show the right products to the right customers based on their context? So Julie, I think that example of some consumers are very promotion-driven, they just want to see what are the hottest deals, others want to see what are the bestsellers that are tried and true and might be more at a high price point, because customers have such a limited amount of time and mental bandwidth to process their shopping experience, even if they're in they're window shoppers, they don't have unlimited time, and so the products you show them play a huge role in what they actually convert or don't convert on. So that second layer of what you show, why you show it, how you optimize for the sort order and such of products is really critical.
And the third and final one is that sort of final mile of tailoring of products. Which images are you showing? Are you showing silhouettes? Are you showing environmentals? What is the order of shots? How are you tailoring the product name or the descriptions to match what a customer might be looking for given some context you have about them? And I think in terms of value add, it really goes from the structural, to the order in which you show things and what you show, and then to that fine grain tailoring. You really want to work through things in that order because if you're not getting the right answers further up in the stack, then you're just sort of doing decorations on a cupcake that no one wants to eat because it looks gross and it smells bad, so like don't add the nice icing piping.
So as you think about your catalog, it's actually really about having the fundamentals really solid and really flexible, and then a lot of the fine grain optimization and some of the kind of cool and next-generation personalization, that's actually the last thing you focus on because at that point, it's furthest down in the value chain. It adds value, but it adds less value than having the structural levers healthy and right.
These are excellent points. Thank you so much.
I would like to move to covering some modern merchandising techniques, starting with bundles. What are the opportunities and agile catalog supports in this area? Julie?
Sure. So bundles, I think traditionally, have been thought of as a promotional tactic, where you can buy these three things together, I'm going to give you a discount on the price, and you're going to get a bundle price. That's a fairly static and rigid approach because one, it doesn't actually create a great experience for the customer. There's no real choice in there for the customer. You've said, "These three things kind of go together, and I'm going to give you a discount," in the hopes that some of those convert and you can drive some higher order value.
But with an agile catalog, with all of the components decoupled, now a merchandiser can assemble a bundle that does two things, right? One, you want to achieve the goals of the organization simultaneously while creating a great customer experience, right? So when I say goals of the organization, it could be the need to try and alleviate excess inventory of a particular product. How would a bundle do that? Well, you might have a best-selling item that's a premium item that you can discount, but you want to, and maybe it's a high-margin item, so you have some room to discount, and you're only going to discount that item if it's bought in the context of a bundle, and in that bundle is the other high-inventory item that you want to offload. So you've got a high-margin product paired with a high-inventory product, pull those together, you can start again to drive the outcomes that the organization wants.
But you can add components and give the customer the choice to choose which ones they want in the context of the bundle, right? So the merchandiser owns the strategy, they own the rules of the bundle. "Buy these two things together and we're going to give you a discount off of this really hot item. But if you don't, then you're going to pay full price for that item." The customer has the choice there and they can make that decision. So that's really dynamic bundles start and end with an agile catalog, and they're really meant to be a tool that merchandisers can use to create really great customer experiences while achieving the outcomes the organization needs.
That's a great example of the building blocks and the primitives being where you need them, because if you store in your system only those individual products and then the grouping of those products is not something that can have its own retail price, its own wholesale cost, or however you want to handle that, you run into issues because then you start to use those underlying primitives and creating advanced formulas for what to do if it's in this bundle or that bundle, and so a lot of complexity ensues. So I think that's a great example of tying some of these concepts together.
So at Wayfair, I'd say we have three primary bundling concepts that go from tighter bundles to looser bundles. The first kind of bundle would be a set. So we sell a lot of things like bedroom sets or dining sets, where it's a table and chairs, or it's a bed and a nightstand, and a dresser, and/or a lampshade, and so on and so forth. So I want the ability to represent those products in a singular merchandising experience to the customer.
The next level is complementary items. So these items go well with those items. "Hey, you bought a bed. You want to buy some bedsheets? Do you want to buy pillow cases?" So it's more of these upsell opportunities where the relationship between those two items gets a little bit looser but it still has that connection.
And then the third and final type of bundle that Wayfair has is a collection. This would be a sort of modern farmhouse-style collection where we're looking for a variety of products that are in a similar price point in style that you might want to shop within. And of course, then within those, you can have complementary items and sets and such.
Of course, with that many relationships, I talked what variety Wayfair has, we have to make sure that as we change the elements in those bundles, that we're minimizing that breakage, because if I pull one piece out here and I don't also reflect it there, I can result in broken experiences or I take down products that actually should be live. And so again, the more flexibility you add, the more complexity you have to handle, and having those strong foundational primitives and having a platform that's capable of ticking and tying those follow-on effects for you is really powerful and important.
Great. Thank you.
And Julie, how can an agile catalog help with live shopping?
So live shopping, I think of all the different kinds of scenarios that live shopping can create, right? So one, think of an event. You go to a golf tournament or a baseball game and a vendor's there with a selection of products, right? Essentially, what they've done is created a pop-up store, and that store has inventory, but the customer's going to transact online. So as the kind of owner of that popup experience, you need to be able to curate the specific products and inventory that you're going to bring to that popup, transact and sell that there, and then turn off that catalog once that event is over without ever impacting another experience.
So an agile catalog, the idea is that you can spin up and spin down catalogs to support any kind of live experience, whether it's a store kiosk or a pop-up event, or even creating something like a curated product assortment that you want to offer, like a buy-now experience, right? So kind of meeting the customer at the point of inspiration and kind of embedding the transaction in that experience, in that inspiration experience. So an agile catalog is just a tool that a merchandiser has to essentially put the products where the customer is interacting with them, wherever that might be.
Great. Thank you so much.
Another area where digital commerce can struggle is coordinating omnichannel purchasing, particularly at buy online, pay in store. How does an agile catalog support that opportunity? Brenton, we'll start with you.
Yeah, this is a timely question. So Wayfair launched its first three physical retail stores in 2022. We're going to be adding some more in 2023. These are under the Joss & Main and AllModern brands, which I mentioned earlier part of the Wayfair family. Wayfair megastore will come at some point, but I won't spill the beans on that.
And so yeah, we actually have a lot of technology leaders at Wayfair that have taken this problem from the retail standpoint. So our CTO and a lot of our engineering leadership is actually former Walmart executives. And so the lesson that we've learned and applied here is that you really want to identify your center of gravity and extend off of it. What you don't want is to create two siloed operations, one for retail, one for online, and then try to have some sort of connection between them. You need to have one source of truth and then you branch off of that source of truth.
And so for Wayfair, one of the big benefits of our business model that I haven't talked about is that we also have a large parcel supply chain network in the form of CastleGate. We actually have that now for I think six or seven years, we have several million feet of warehouse space, and so for us, a physical retail store is actually primarily just another node in the supply chain network. It just happens to have a front-of-house operation for those physical retail operations. Again, there's some nuance to deal with, like if you have a product that could be merchandised across any of those physical retail stores, it's the same physical product, how do we make sure when a customer scans it in the right store, they go to the right digital storefront?
So we do have to work through things like that. But again, because we are treating physical retail as an extension of the core Wayfair business and really an extension of our supply chain that loops back to the digital catalog, we've been able to get a lot of synergies from how our core business functions. We definitely have some growing pains and lots of learnings, but I think making sure that you're starting with one source of truth and you're branching off of that, you're working with the right primitives, you're extending or making new primitives as you need them, those principles continue to apply and to be really critical to make sure you can scale those operations.And then, I don't know, Julie, if you have any thoughts further to add.
Yeah, yeah. I think it's spot on as it relates to the single source of truth and then having that drive that omnichannel experience so that a customer... And I think Wayfair is uniquely able to take a position there because you've started with the online experience and then moved into the in-store experience, and sometimes that can be a challenge, I think, going the other way, where sometimes you try too hard to replicate the in-store experience online. But basically, what it boils down to is a customer wants to know that what you're showing me is available and how I'm going to get it fundamentally, right? If I want to go to the store because I'm going there anyway, I want to know that when I get there, you have it in stock and it will be ready for me.
And so an agile catalog, really, it's about merging all those data points into that single source of the truth so then you can start to feed it into the experience in a way that's meaningful for the customer, so I can understand when I'm looking at a particular product, I know that it's available online and it's going to have this shipping and delivery window, or I can go and pick up that same product at the store near me because you're showing me kind of real-time inventory for the store that's down the street from me. But it does, just as Brenton said, start with that single source of truth and having the agility to then merge all of the relevant data points to create the experience that you desire for the customer.
What about loyalty catalogs? What should brands know about these? Julie?
Yes. This is, I think, such an interesting area because I think for so long, loyalty has been really just thought about like a points accrual kind of experience, buy something, get points, cash in points for something else. But what loyalty really is about in our view, based on how we've been talking to customers and what they're seeing really resonate, is about curated experiences. As a loyalty customer, I don't just want to accrue points. I want to have an experience that's specific to me. And a loyalty-based catalog is one of those approaches, right? So that when I go to a particular store where I'm a member of the loyalty program, and perhaps I'm at the top tier of that loyalty program, I have expectations of what my experience should be like, and it shouldn't be the same experience as if I had never identified myself to you.
And so what a loyalty catalog achieves is the curation of that special experience. For example, once Julie authenticates, I've told you who I am, "Welcome back. Thank you for being a loyalty member," and now my catalog experience can look different. I might have a category that's featured and it's called Loyalty Exclusives, and there are products in that category that aren't available to everyone else, right? It's a curated product set just for my best customers.
For a brand or organization that's going to do a new product release and they want to allow pre-orders of that product, again, for their loyalty customers, how can I set those products up, put them in an experience that only my best customers have? Well, that's essentially what a loyalty catalog allows you to achieve, is the curation of that special experience for your best customers. And again, to do that at scale and to have nuance in there, a loyalty catalog might be offering a different price point for certain products. So when I go to look at a product, I see retail price and I have my loyalty price, and that's a great experience for a customer. That's a special experience, they feel recognized. The time I've spent with a brand or an organization has been worth it because now I can actually see it reflected back to me in the uniqueness of my experience.
Yeah, I would say that Wayfair does not have loyalty catalogs per se. We do have a logged-in experience which the vast majority of our customers use, we do have tracking across their various visits, and so we do start to learn about them to personalize the assortments they see, the ordering of products, the way we present those products, but I wouldn't say it's to the level of a highly-tailored loyalty catalog. That's actually quite complex and something that Wayfair is still going to be working on at some point. So we're not on that horse yet.
But something that we do which is similar and I think is kind of a good corollary for folks to think about is we do lots of promotional campaigns, especially in this environment, especially if you're whether a retailer or whether you are like Wayfair, more of a drop-shipper and you're for suppliers, it's a very promotion-friendly market, and so what we do is we think about these highly-curated landing pages for every one of our sales.
So as we think about which types of products we can curate together and we can make the most compelling sales pitch around, we then take customers and we want to point them there with our email marketing, with our display marketing so that we're targeting the customers that will find that basket of goods we think the most appealing and we have the best deals for them there. That's kind of their special landing point in the catalog. They can then branch off into exploring the rest of those products. They can also go back into the core funnel experience. But for those more special sort of sales-driven curated product bundles that are temporary in time, it's really creating that landing page or that sort of initial staging environment that you land on, and then you hope the customer finds through those breadcrumbs products they like and they want to buy that they convert with. And so there's less need to have a sort of persistent and structural integration of loyalty catalog, but you get some of those same types of patterns, a little bit more flexibility and ability to change them over time.
We are nearing the end of our time, but before we head over to our audience Q&A, I did want to ask if there's any final thoughts about how an agile catalog can bolster modern merchandising techniques for brands. Julie?
Yeah, I think this is such a great question because it kind of takes tech out of the picture a little bit, which it should do, and I think that's kind of how an agile catalog really can bolster modern merchandising. We ask the folks that we work with, the merchandisers that we work with, "If technology wasn't an issue, what would you like to accomplish? What creative ideas have you had that you haven't been able to implement because technology was a hindrance, or you had this great idea and you went to the tech team and they said, 'Okay, we'll put it in a sprint six weeks from now and I'll get it to you in three months' time'?" And that's when the creative juices really start flowing, and the information that we hear back from our customers really helps us now drive back into our solution as a way to support some of these really creative and modern merchandising techniques.
Yeah, I think that the catalog is a place of particular leverage where you can either force multiply or friction multiply everything else in your business. And something that I get really excited about with the role that I play at Wayfair, a lot of folks will say, "Oh, you're kind of in this more platform role," and, "When are you touching the customer directly, and do you want that?" I get to see those impacts in some cases directly, but in a lot of cases indirectly.
But the value that I think we really provide is allowing the rest of the business to have 10x the experimentation at one-tenth the cost. That's the power that we can provide. So it's not, "Am I testing A, B, or C and hoping one of them works?" but I can actually test A through Z for the same cost. And so when your catalog is not agile, you feel like everything you're doing is a very slow, big expensive vet. When your catalog is agile, you can really shorten the gap between your ideation and your execution and you can see what actually works and what doesn't, because you're going to be wrong probably more than half the time, and if you're close 50%, then you're doing something right. But still, that's a pretty low hit rate, and so having that agility built into your catalog to be wrong quickly in order to be right quickly and to scale off of that success is super important and something that I think we often lose sight of day-to-day but we should be thinking about more top of mind.
Excellent. Thank you both so much.
As promised, we'd like to shift to some questions from our audience today. So just jumping right in with a first one, "How does an agile catalog help with a robust search function?"
So an agile catalog, again, allows you to curate the content that's going to create a rich search experience. So it's having the ability to really extend the type of attribution that you create for your products, the different categorization schemes, so helping your customer get to the product as quickly and efficiently as possible in the context that they want. So any robust search function is predicated on the quality of your product data, and having a catalog that can scale in and kind of morph to contain that is really important because the attributes that we use to talk about a product today are going to be different tomorrow and the next day, and your catalog has to adapt because the way I search for a product is way different than my 16-year-old daughter, and so you have to be able to represent both in any experience.
Next question asks, "What if you're a brand that sells on marketplaces? What are some specific nuances there?"
Yes, I'll jump in with this one. I think if you're selling on any marketplace, the most important thing is to understand what are the rules of the marketplace, because everyone is different. Some are going to be more of a open marketplace, where you have all the levers with how you merchandise your product to customers. Others are going to be a little bit more structured around how that marketplace wants to operate. So I'd say Wayfair is more on the structured side of a marketplace where, as I mentioned, we have this set of curated brands. The majority of our revenue comes out of those brands, and so our supplier partners, thinking about how they can position their products to become part of those leading brands that our customers know and trust. For example, something like the Kelly Clarkson collection, that's a really important part of how you succeed on Wayfair, and so thinking through how you look at our systems and how you sort of optimize your strategy accordingly, you do that for every marketplace that you're a part of.
The other thing I would say is that as a marketplace, one of the key jobs that we have for the end customer is ensuring trust, ensuring that when they purchase a product, they're going to get what they expected, it's not going to be at a gouged price, it's not going to be a knockoff. And so work with your marketplace partners to ensure that anything they have related to compliance, trust, playing within the rules of the platform, and really leaning into showing that you're a good actor will also help you ensure you have that credibility and you get that favorable treatment and the best chance to be successful through that portal.
Our next question says, "How can you handle cross-border commerce when you need to translate your site?"
Yeah. So Wayfair is currently in, I think, five countries, US, Canada, Germany, UK, Ireland. We have ambitions to go to more. And so we're currently supporting French, German, and English across those various storefronts. One of the benefits we want to offer to folks that join Wayfair's platform is you can enter your product in your native language and then we can merchandise it throughout our entire ecosystem, and so you could access to markets that you previously would not have had an opportunity for.
So again, it goes back to thinking about one, what are your merchandising logistics to make that happen. Having a human translate every single piece of content on your site is very expensive, and so building the right structures to take that content, break it down, do some machine learning, where you need to do some human translation, thinking that through and starting it at the early days. It's tough to balance investing for the long term with trying to move quickly because you don't know what's going to work or not. By the time you start going to more countries, especially more countries with different languages, you should have some level of scale and confidence and really think about how you build those systems for the future because the compounding complexity can be pretty extreme.
And then on the supply chain side, if you're thinking about customs and duties and such, a lot of that comes down to, again, that metadata that you associate to your product. And I'd say something that we've learned at Wayfair over time is you really have to treat the compliance and customs-related metadata of a product separately from the merchandising data. If you have one team or one person handling that, you're probably not going to get the right domain knowledge applied. And so think about carving out those functions separately because they're really different domain concerns, even if they're still descriptors of the same product.
Yeah, I agree on the need to have really kind of, where necessary, curated translations versus those that can be done through AI or through a service, and certainly your technology needs to be able to support all of those strategies.
But I think there's other nuance to cross-border commerce as it relates to catalog that goes beyond just translation and even currency, and we've seen this with a lot of our global customers, which is, you're going to have nuance about which products potentially you can actually sell in specific markets, right? So the products that I can sell and ship in the US are going to look different potentially than other regions. So that, again, is where an agile catalog comes into play, because I want to create those assortments as quickly and efficiently as possible, but I want to realize the efficiency of having, as Brenton said, with single source of the truth. So one product can exist in five different catalogs, and I want that metadata and all that core data to be shared as appropriate. And as a merchandiser, if I have to take something offline in EMEA because we can't ship it anymore, that has to be really fast and it can't impact anything else in other catalogs. So that's kind of, I think, the other consideration across cross-border commerce, is how do you get the right products into those markets efficiently and effectively.
Great points. Thank you.
I think we've got time for one more question, so we'll end with this one. "How does an agile catalog help promote best-in-class checkout techniques?"
This is a really interesting question. Checkout is kind of everything, right? You don't want your checkout experience to be an inhibitor to the transaction. And so again, and I think this goes back to some degree to what Brenton was saying about the data around a product, for instance, one of the things that we showcase is a quick checkout experience, but that quick checkout experience might not be relevant to every product that you're selling, right? If I'm buying a $5,000 couch, having a buy now button on the PDP page might not be driving the kind of experience that customer wants, right? A buy now quick checkout experience is one of those kind of quick purchases. I was inspired on Instagram or something of that nature, and I want to transact quickly, and I don't want to lose the customer due to checkout friction.
So having the flexibility to determine where you're going to funnel that checkout experience for customers based on the product type, for instance, is a way to create that best-in-class checkout experience. Even something as for furniture especially, you might have different shipping options based on the class of product, making that a part of, again, the product data that then drives the experience that says, "We offer white glove delivery for the couch that you just bought." You wouldn't ever want to see that when you're just buying a lamp. So that's kind of the flexibility of an agile catalog to create a really dynamic and best-in-class checkout experience.
I'll quickly pile on to that, Julie. I think at that point, when you're in the checkout part of the flow, if something goes wrong, you're losing such a high-intent sale, and in addition to the product, the bundling, and all the things that happened up in the funnel that you then don't want to break at the checkout, the service addition, the warranty addition, all additional upsells that you want to add.
And then also, a lot of cases, your checkout being flexible allows you to do things that you can stand on the shoulders of others. So for example, if you look at Home Depot and their custom blinds and shades experience, it's a great experience, but it's not Home Depot powering that. It's actually Levolor, who's a large custom blinds manufacturer. And so you'll also get these cases where you'll have these large configuration platforms. If your checkout is flexible, you can actually integrate with those folks and you can actually add to your assortment some of these platforms that sort of take the heavy lifting but then drop the sale right into your checkout flow, and so you can have in that way almost like an affiliate or like a distributed merchandising opportunity. So having flexible checkout is also critical for you being able to explore potentially really large extensions of your platform like that without having to go all in on building that from the ground up yourself.
Great points. Thank you so much.
That is all the time that we have today. I would like to thank our speakers, Brenton and Julie, for a great discussion today. We appreciate you sharing your insights and expertise with us. I'd also like to thank our audience for joining us today. If you asked a question during the Q&A that we did not get to, someone will reach out to you later via email. We hope to see you again soon. Have a great day.