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[00:00:00] Suzy Davidkhanian: Atmosphere TV is the largest streaming TV platform purpose-built for shared social spaces like bars, restaurants, gyms, and airports. Atmosphere TV is the creator of ChiveTV and thirty-plus mesmerizing audio-optional channels that entertain over a hundred and fifty million monthly viewers. Built for business.

[00:00:18] Suzy Davidkhanian: Made for fun. Atmosphere [00:00:20] TV

[00:00:25] Suzy Davidkhanian: Hi, everyone. Today is Wednesday, October 21st. Welcome to EMARKETER's weekly retail show, Reimagining Retail, an EMARKETER podcast made possible by Atmosphere TV. This is the show where we talk about how retail collides with every part of our lives, and I'm your host, [00:00:40] Suzy Davidkhanian. On today's episode, we're talking about how retailers figure out what shoppers really want, especially when they're buying for someone else, and how data and technology can help make that experience better.

[00:00:51] Suzy Davidkhanian: Joining me are EMARKETER analyst and podcast regular, Rachel Wolff. Hey, Rachel.

[00:00:56] Rachel Wolff: Hey, happy to be here.

[00:00:57] Suzy Davidkhanian: We're so happy to have you. And we have a [00:01:00] special guest with us, Kristi Carlson, vice president of digital technology at Kendra Scott. Hey, Kristi.

[00:01:05] Kristi Carlson: Hey, thanks so much for having me.

[00:01:07] Suzy Davidkhanian: We are so excited to have you too.

[00:01:09] Suzy Davidkhanian: But before we even get started, let's do a very, very quick introduction. In 30 seconds or less, Kristi, tell us, what do you do in a sentence? And I don't think [00:01:20] everybody needs to know what Kendra Scott is, but maybe just in case.

[00:01:22] Kristi Carlson: Let me start with Kendra Scott. We are a national affordable luxury jewelry brand, uh, founded in Austin, Texas, by Kendra Scott herself.

[00:01:32] Kristi Carlson: I, uh, am the vice president of digital technology here. I've been here for about five years, and I oversee [00:01:40] anything technical in the digital space. So that means marketing tech, e-commerce tech, business intelligence, AI, and some other things.

[00:01:50] Suzy Davidkhanian: I mean, that's a really big job, not just cool. Like, wow, that's a lot that you have to worry about, and connecting the dots between online and in store.

[00:01:57] Suzy Davidkhanian: Tell us what is your, and you pick which one you [00:02:00] want to talk about, your favorite current book, podcast, TV show, movie.

[00:02:04] Kristi Carlson: I love fashion and I love music, and so right now I'm re-watching a show called Painted Ladies, which is a three-part series, I think, about Vivienne Westwood. Oh. It was done about 14 years ago, but it's really well done.

[00:02:18] Kristi Carlson: Highly recommend. [00:02:20] And then I'm also reading, um, Truly, which is Lionel Richie's biography.

[00:02:24] Suzy Davidkhanian: I didn't realize you were a biography person. I love that. Mm-hmm.

[00:02:28] Kristi Carlson: Yeah, big time.

[00:02:29] Suzy Davidkhanian: That's very cool. I am not. I might watch them, though.

[00:02:33] Kristi Carlson: That's fair. That's fair.

[00:02:35] Suzy Davidkhanian: Rachel, are you into biographies?

[00:02:37] Rachel Wolff: Not exactly. It's not my [00:02:40] preferred, uh, material, I suppose, but I do like a good biopic.

[00:02:44] Rachel Wolff: So I recently watched, uh, the one about Michael Jackson on a plane, and that was, I would say, worth seeing if you haven't.

[00:02:49] Kristi Carlson: I've heard that's very good.

[00:02:50] Suzy Davidkhanian: I'm gonna add all of this to my very long list- ... of things that I have to read and watch.

[00:02:56] Kristi Carlson: In your free time

[00:02:57] Suzy Davidkhanian: Yeah, right. Al- always so much [00:03:00] free time. Well, you guys, jewelry is one of those purchases that can be deeply personal.

[00:03:04] Suzy Davidkhanian: We spend a lot of our time thinking about it. Well, we do. We, you know, we on the show do. We buy it for ourselves, we buy it to celebrate a milestone, or we give it to someone who's special to us. But what makes it meaningful can also make it super tricky to shop [00:03:20] for, especially when you're buying for someone else.

[00:03:22] Suzy Davidkhanian: And now that the holiday season is just around the corner, it's hard to believe, retailers are trying to make sense of all kinds of signals, where shoppers are coming from, what they're browsing, what they've bought before. But those clues don't always tell the whole story. Sometimes a shopper knows exactly what she wants, but other [00:03:40] times she's looking for inspiration, and she may even be looking for something she didn't know she wanted.

[00:03:45] Suzy Davidkhanian: So today, we're talking about how retailers can better understand what shoppers are looking for, connect the dots between online and in-store experiences, and know when technology can help and when the human touch makes all the difference. But before we get started, [00:04:00] I want you both to think about the last piece of jewelry you bought, whether it's fashion or fine, 'cause I know it's different price points mean different sort of inspiration journeys.

[00:04:08] Suzy Davidkhanian: How did you first discover it? I'm gonna start. I am now in love with this fashion jewelry brand that I can't even tell you what it's called that I bought. I first discovered in a [00:04:20] department store in France, and now keep going back because it's the right price point for me to buy things that are not my usual

[00:04:28] Suzy Davidkhanian: Sort of it's a little bit more funky than I, I would normally wear. And, and the first time I saw it, I was like, "Oh, I wonder if I could pull that off" And then I bought a pair, and then everybody tells me how nice they are, so I keep buying them every time I [00:04:40] go.

[00:04:40] Rachel Wolff: Yeah, I would say mine is definitely more on the impulse side.

[00:04:43] Rachel Wolff: So the last piece of jewelry I bought was a pair of earrings that I found in a Marks & Spencer. And it was one of those things where, you know, it was a cute piece of jewelry, the price was very reasonable, and I thought, "Well, why not?"

[00:04:55] Suzy Davidkhanian: What about you, Kristi? You're surrounded by jewelry.

[00:04:57] Kristi Carlson: I'm surrounded by it, and so what [00:05:00] usually happens with me is I am eyeballing a collection well before it becomes available to, uh, to us to purchase.

[00:05:08] Kristi Carlson: And then as soon as it hits, uh, I've already thought about it, how it's gonna fit in with my jewelry collection. You know, do I want the gold or silver version? So this last [00:05:20] purchase, uh, they arrived last week actually, and it's part of our Winter 1 collection. And then they're like little daggers, uh, like little pointed shapes, and they come in a huggie, in silver and gold, and then there's a matching necklace.

[00:05:36] Kristi Carlson: There's a matching hand charm. So it's kinda like, [00:05:40] I like to think of it as like a girly punk rock collection, so.

[00:05:44] Suzy Davidkhanian: Sounds amazing, and it sounds like it's very planned, unlike Rachel and I, who did not plan and were just inspired. And it's interesting 'cause, like you guys, Kendra Scott is, is all jewelry basically, and some accessories.

[00:05:56] Suzy Davidkhanian: One would assume that often it is a gift [00:06:00] giving versus now we, we know it's not just about gift giving, it's also about self gifting. Right. How do you guys know when that customer is coming to you if she's buying for herself or if she's buying for someone else?

[00:06:12] Kristi Carlson: It's the same customer, but she's on a different mission, right?

[00:06:16] Kristi Carlson: And so the trick is figuring out what mission she's on. [00:06:20] And so while we may know a lot about her from her past purchase history, the trick really is figuring out, is she buying for herself? Is she buying for someone else? Is she buying for a special occasion? Those are all signals that we need to kinda capture in the moment.

[00:06:37] Kristi Carlson: Rather than relying on a lot of [00:06:40] historical data on what she's done before. We also need to think about if we think she's gifting, she's thinking about different things. Like, when she's shopping for herself, she may be exploring a style or looking for something to complement a specific outfit. Whereas if she's gifting, she's solving a different problem, and she's worried about is the [00:07:00] recipient gonna like it?

[00:07:02] Kristi Carlson: Is it gonna arrive on time? Am I making the right choice?

[00:07:06] Suzy Davidkhanian: So Kristi, it's interesting 'cause, like, people come onto the site with different sort of browsing behavior. Is that the biggest signal for you?

[00:07:13] Kristi Carlson: Yeah, I mean, it's understanding, trying to understand intent from on-site [00:07:20] signals. So where did she come from?

[00:07:22] Kristi Carlson: What she's searching for, what products she's clicking through, how she's moving through the navigation. So for example, like, a search for a birthstone jewelry piece might suggest a gift, but it could suggest that she's shopping for herself, too. If we happen to [00:07:40] know when her birthday is, and if she's searching for a stone outside of her birthday month, then maybe we know it's a gift, right?

[00:07:47] Kristi Carlson: The sequence of actions also tells us more than any, like, single interaction, so looking at the sequence of how she's moving through the site. Historical customer data is useful, but in this particular example, I [00:08:00] put a lot of value on what the customer is telling us in the moment.

[00:08:03] Suzy Davidkhanian: So Rachel, are we seeing that if you're coming from Google versus Instagram, that's leading to a different, potentially a different outcome when they arrive on a website?

[00:08:12] Rachel Wolff: I don't know if the outcome is necessarily different. I mean, hopefully, you know, it leads to a purchase. I guess that's the, that's the, that's the hope. But I think there is definitely different [00:08:20] intent, right? If you're conducting a Google search, you clearly have a set criteria in mind, right? Whether it's price range or a particular type of product.

[00:08:29] Rachel Wolff: You have an image in your head of what you're looking for. Versus if you're coming from Instagram, it could just be, oh, you know, my friend was wearing this really cute bracelet, and I wanna see where it comes from. And so you have maybe a different journey in [00:08:40] that sense because then you're clicking around to product imagery.

[00:08:42] Rachel Wolff: You're more focused on, like, oh, this is cute. How much does this cost? As opposed to I'm looking for this one specific thing.

[00:08:48] Suzy Davidkhanian: And then I guess add ChatGPT, and that, like, also kind of adds a little bit of an advice layer, like a guide kind of. Okay, so Kristi, they come to you regardless of where they came from.

[00:08:58] Suzy Davidkhanian: What are you looking at next? What [00:09:00] are the different signals ... I mean, you've sort of talked a little bit about this already, but I, I'm asking you in a little bit more pointed sort of way, like, what are some of the actions you take once they've arrived from a different channel? Versus they've come straight to you

[00:09:14] Kristi Carlson: What we're trying to do ultimately is translating the information that's happening in the moment into some sort [00:09:20] of decision to help them make a purchase, right?

[00:09:23] Kristi Carlson: So search and product discovery are good examples. If we see them searching for something very specific, we wanna make sure they're getting to that product as fast as possible, and it's a relevant response to their search query. When we [00:09:40] think that person is gifting, we may wanna try to make it easier for them to shop for by recipient, for example, or price point, or, you know, delivery deadlines.

[00:09:52] Kristi Carlson: So all those things we're trying to figure out what their intent is, and then how do we serve up, how do we take action [00:10:00] to serve up the best possible experience for them to make the decision to purchase easier.

[00:10:07] Suzy Davidkhanian: That's the key, right? Like, to make that decision feel less stressful. I think we can all agree that the path to purchase is longer in some ways.

[00:10:16] Suzy Davidkhanian: It's certainly messier, but then when you think about Kendra Scott, you also have [00:10:20] stores. So how does that sort of come together in terms of potential digital signals meshed with store associates that are working with people? Is there a way to tie all of that together for you guys?

[00:10:31] Kristi Carlson: I think the challenge with store associates, if you've ever been in one of our stores, it's a very, um, immersive experience, [00:10:40] and the associates are very attentive.

[00:10:42] Kristi Carlson: And so I think the struggle that we have is ensuring that something digital doesn't get in the way of that in-store experience that provides a very, like, rich, joyful shopping journey. And so we wanna give our [00:11:00] associates the information they need to help inform the customer's decision to buy. But at the same time, we don't wanna make it feel creepy or interfere with the actual one-to-one interaction.

[00:11:12] Kristi Carlson: So for us, we're looking at things like, for a specific store, does it make sense to place the merchandise in different areas of the [00:11:20] store? Based on what we know the foot traffic looks like. So people in Florida may gravitate towards this particular collection, versus people in Texas are gravitating to this collection.

[00:11:31] Kristi Carlson: So we place those up front to really kind of encourage that discovery based on what we know that customer likes.

[00:11:38] Suzy Davidkhanian: I mean, it's very cool 'cause, like, I came from [00:11:40] a, a giant department store where you didn't have the luxury of being able to sort of think about what sits up front of the store, like the easiest access points.

[00:11:49] Suzy Davidkhanian: And then there was also a lot of discussion around, like, the things that they want, you put it at the back so that they walk through your store to discover. Right. But it sounds like we've flipped back to it's better to have [00:12:00] your key items, the, the, like, your best in class sort of things up front.

[00:12:05] Kristi Carlson: I think it's more...

[00:12:05] Kristi Carlson: It's just an example of what AI and the massive amounts of data that we have can do for an in-person retailer. The way I like to think about it is we're collecting all this data on our [00:12:20] customers, and we wanna make sure we're using that in a way to ensure they're having the best shopping experience possible.

[00:12:27] Kristi Carlson: But that doesn't necessarily mean it's gotta be their personal data. It could be just patterns on how they shop in a particular area, and then making decisions about where we place items in the store based on [00:12:40] those traffic patterns. So AI really allows us to get our arms around all that data, and really determine at a store level and a, and a store layout level, like, what's the best discovery spot for this particular collection.

[00:12:56] Suzy Davidkhanian: It's true that w- with AI you can take a lot of [00:13:00] data to find the real signals in the noise.

[00:13:03] Kristi Carlson: And it's really, for me, it's a question of, like, what's the most valuable signal we can use to enhance the customer experience? We always start with the customer and work backwards. And I've been saying this a lot lately, like, I feel like a lot of retailers are looking to use AI to kind of game the [00:13:20] system in terms of getting customers to purchase, but really at the end of the day, you just need to be the best retailer you can be, and those customers, your customer will come to you.

[00:13:29] Kristi Carlson: And so we think about it as how do we use this tool to provide the best shopping experience possible, whether it's online or in-store? And that may not mean super sophisticated [00:13:40] clienteling systems.

[00:13:40] Rachel Wolff: You know, you've talked about how AI is transforming the in-store experience, but how has it changed how you approach e-commerce and personalization in that part of the customer journey?

[00:13:51] Kristi Carlson: I maintain our biggest win when it comes to AI and e-commerce is our onsite chatbot. Like, [00:14:00] we started down that road three years ago with a partner, and it started out as, you know, an on-site bot that had a set of FAQs that it could answer. And now it's evolved to this tool that helps us deflect, like, more than 80% of customer care calls to our care center.

[00:14:19] Kristi Carlson: [00:14:20] And it's now approaching, you know, double digits when it comes to actual e-commerce revenue. So it's converting customers who maybe had a question about a product or even a complaint, and it's converting it into a sale. So that's, again, figuring out how we're using the technology to really provide the best customer [00:14:40] experience.

[00:14:40] Kristi Carlson: And then that customer is gonna be more likely to come back and to convert. Personalization's a tricky one because there's so much data, and there's so many customers who still don't identify themselves when they're shopping online. And I think there's a lot of data there that may or may not tell you who that customer is.

[00:14:59] Kristi Carlson: And [00:15:00] so personalization continues to be tricky when the customer's not identifying themselves.

[00:15:05] Suzy Davidkhanian: Well, and also they might be identifying them. It's like it gets even an extra layer of tricky because they might identify themselves, but they were planning to buy a gift for their mom. Right. So unless they continuously are buying things for other people, and even that gets a [00:15:20] little bit murky waters.

[00:15:22] Suzy Davidkhanian: What I find so important in retail is, like, make the shopping as easy as possible. Make it convenient for me, whatever that means to me as your consumer. But I also don't want you to be, as you guys said, creepy or, like, I don't wanna feel like you're watching me and you know my next [00:15:40] move. So how do we know, and I'm, I'm curious what you both think, like, how do we know as retailers and operators that fine balance between making it so easy for me that I come back over and over again and tell everybody, versus like, "Oh, I don't know.

[00:15:54] Suzy Davidkhanian: This, this is a bit too much now"?

[00:15:56] Rachel Wolff: I think, I mean, this may sound a bit like a cop-out, but I think it [00:16:00] is hard to tell because everybody has their own sense of what's creepy and what's not, right? Like, I would say, you know, for me, I am okay with getting very specific recommendations, whereas my stepfather, if you, like, have the slightest hint that, you know, they have any information about you, [00:16:20] whether it's your name or, like, the general vicinity.

[00:16:22] Rachel Wolff: If you're coming from the New York area, like, that's enough to make him wanna, you know, run to, for the hills. I think it is difficult to know. And I would say based on that, it is better sometimes for retailers to err on the side of maybe less personalization and, and not being as granular as you could be just to [00:16:40] avoid that sense of potential creepiness.

[00:16:43] Kristi Carlson: I think we have more concerns around making the wrong assumption based on data that we have. And so going back to the gifting example, I can make a lot of assumptions about you- based on what I know about you. But if I don't understand what your intent is, I could be [00:17:00] serving you up something that's completely irrelevant 'cause you-- I know Suzy buys only gold jewelry And so I'm serving you up all this gold jewelry, but you're actually shopping for a gift for your mom, and you're looking for silver, right?

[00:17:14] Kristi Carlson: And so now I'm totally missing the mark. So I think especially when it comes to big [00:17:20] gifting times, we wanna be really deliberate on, are we reading the room in the right way, or are we overextending and now making some mistakes that really make the customer feel like they don't know me at all, or they have no idea what I'm trying to accomplish?

[00:17:34] Kristi Carlson: And going back to, like, ease of shopping, I think that's one area that we think about. But we [00:17:40] also really want to make that customer shopping experience feel special and fun and joyful. Yeah. So those are other factors that we think of in addition to, you know, ease and, um, and-

[00:17:52] Suzy Davidkhanian: Oh, yes. Not transactional

[00:17:54] Rachel Wolff: friction. Yeah. I also think that it is easier maybe to lean into personalization if you [00:18:00] are an accessible luxury brand or a luxury brand where people expect that, you know, level of high-touch service that does require knowing a little bit about who the customer is and what they're looking for.

[00:18:10] Suzy Davidkhanian: One of the analysts on the team and I talk about I

[00:18:13] Suzy Davidkhanian: My credit card company, obviously I just use one, so they know everything about my life, and they keep servicing the ads for a competitor. N- [00:18:20] not credit card, a competitive retailer.

[00:18:22] Kristi Carlson: Mm.

[00:18:22] Suzy Davidkhanian: And I find that extremely frustrating, and her perspective is that maybe that retailer is looking for people like you and is willing to pay for you for the off chance that one time you switch.

[00:18:34] Suzy Davidkhanian: And so I wonder if it's kind of the same when you're internally looking at your customer data. If that [00:18:40] person's been buying necklaces forever, maybe there is, like, one out of every 10 things you surface, either a complete the look or a different metal or something to get ... sort of to inspire them. You know?

[00:18:52] Suzy Davidkhanian: Like, how do you make that feel more emotional, an emotional connection?

[00:18:57] Kristi Carlson: Yeah. I think it ... Again, I think it goes back to the [00:19:00] brand and how we represent ourselves to the customer. Yeah. And so there's a whole brand identity that the customer has resonated with at least once, right, ideally. Or a new customer, there's something that brought her to us, and that's really what we want to magnify on the shopping [00:19:20] journey, whether it's in store or online.

[00:19:22] Kristi Carlson: And if they're buying a gift for someone, that's even more of an opportunity to make the gifter's experience magical as well as the recipient's experience magical, right? I think for us, it's thinking about ease of shopping, [00:19:40] personalized experience, understanding intent, and then maintaining the magic.

[00:19:46] Suzy Davidkhanian: Well, and I think for people who don't know your brand, there really is a magic associated to it, and there really is a very specific consumer, and you are meeting them- How they wanna be met, basically.

[00:19:59] Kristi Carlson: [00:20:00] Mm-hmm. Yeah. '

[00:20:00] Suzy Davidkhanian: Cause I went to... We were talking about this before. I went to the Nashville store, which is not the original Kendra Scott, but it's Yellow Rose.

[00:20:06] Suzy Davidkhanian: Right. And wow, that is quite the experience, right? And it's not dissimilar, it's just a different flavor of the Kendra Scott experience, which is, like, the associates are attentive. You can make your, you know, you can [00:20:20] customize and design accessories. That particular one has a bar. There was music. I mean, it was just, uh, that magic that you were talking about, and it looks like you've also found a way to create that online.

[00:20:30] Kristi Carlson: We're trying. That's- I think that's really the goal, is to- to bring that magic to wherever we're meeting the customer or the customer's meeting us. I do feel like [00:20:40] that's a component of our North Star, and something I, you- I think you have to work at every day as a brand, is just showing up for that customer In the best way you can.

[00:20:50] Suzy Davidkhanian: So it's already complicated enough nine months out of the year. How do you... I know the holidays are, like we're already in season basically. Mm-hmm. How are you thinking [00:21:00] about that in particular? Like, as we move into promotional calendars and as we think about gifting and self-gifting and celebrations, is there something different that you look out for in terms of signals specifically over the holiday period, or it's the same thing every day, the magic has to last forever?

[00:21:19] Kristi Carlson: I [00:21:20] mean, you know, holiday is an opportunity for us to talk more about the magic and really, you know, lean into the, not just the gifting part of holiday, but all the events around holiday, the special dinners, the holiday parties. So we really wanna bring an extra layer of sparkle to everything. But it's also kind of the non-sexy stuff that we're [00:21:40] thinking a lot about, like ensuring, you know, inventory's buttoned up and we're removing friction across all of our technology implementations, and we're really crisp on our messaging, and we've thought really carefully about, you know, what we wanna talk about in our gift guides and product recommendations.

[00:21:59] Kristi Carlson: And then [00:22:00] delivery, you know, are our three Ps teed up and ready to go, and make s- making sure that especially those last minute gifts, you know, arrive on time. Um, and so it's just this elevated level of being there for the customer and, and ensuring that they have, you know, the best experience possible.

[00:22:18] Suzy Davidkhanian: The best experience possible. Rachel, as [00:22:20] you think about, I'm gonna give you the last word, as you think about our listeners who are in categories that are both great gift-giving items, but also self-gifting, what's one thing that they should prioritize in addition to giving the customer the experience that they've come to expect?

[00:22:38] Rachel Wolff: One thing that I [00:22:40] was thinking about was in particular the messaging piece. I know, Chris, you talked about, like, being very crisp on your messaging. But I think there also has to be an element of flexibility, right? Because this is kind of an uncertain holiday season, and we're not entirely sure how the consumer is gonna respond.

[00:22:55] Rachel Wolff: So I think you have to be prepared to maybe adjust tactics halfway [00:23:00] through if you see the consumer being a little bit more value sensitive or if you see them, you know, being more, um, open to self-gifting and wanting to really indulge in that. So I think it really is just making sure that you have the ability to change your messaging as needs, uh, arise.

[00:23:16] Kristi Carlson: Yeah, having a plan B, C, D, E- Right ... are all [00:23:20] very very important ways to plan during the, this critical season. Yeah, for sure.

[00:23:25] Suzy Davidkhanian: That's a great place to end. Have lots of plans and be ready to be flexible. We could go on forever and ever, and unfortunately, that's all the time we have for today. Thank you so much for joining us, Kristi.

[00:23:34] Kristi Carlson: Thank you for having me. It was a pleasure.

[00:23:36] Suzy Davidkhanian: And thanks, Rachel.

[00:23:37] Kristi Carlson: Thanks.

[00:23:38] Suzy Davidkhanian: And to our listeners, a big [00:23:40] thank you, and especially to the team that edits the podcast. I'm so sorry that I was in a fire drill. Hopefully it is not apparent in the episode. Please leave a rating or review and remember to subscribe.

[00:23:50] Suzy Davidkhanian: I'll see you for more Reimagining Retail next Wednesday. And on Friday, join Marcus for another episode of Behind the Numbers, an EMARKETER podcast made possible by Atmosphere [00:24:00] TV.