Ecommerce Leadership Series - Elio Tremonti, Founder of Respawn Digital, Former VP of Ecommerce of Staples Canada
Convictional frequently speaks with ecommerce executives to learn about their hard-fought successes and experiences in executing large-scale ecommerce strategies.
Today, I had the pleasure of sitting down with a Canadian ecommerce leader and pioneer, Elio Tremonti. Elio brings over twenty years of retail experience to this discussion. In our conversation, we discuss how he led one of Canada’s largest online and omni-channel retailers and built an online dropship program that grew to $100 million in annual revenue.
Elio also shares the first thing that online retailers should invest in before launching their own online dropship programs (spoiler: it's vendor enablement technology). Now, Elio is consulting with retail companies and connecting them to modern services that add value to their ecommerce strategies.
Here are Elio's insights on what it takes to build a $100 million dropship program:
Elio, thanks for speaking with us. I’d love to start by briefly exploring your career. How did you end up in ecommerce?
I began my retail career at Staples, and after completing nine years of various bricks and mortar merchandising positions, I raised my hand to join the Staples Ecommerce team. It was early 2000s and at the time we essentially converted the products in the printed catalogue to a digital format, added them to the website, and included a checkout. Combining both my technical background and retail experience, Staples Ecommerce seemed like a great fit at the time.
Can you describe how dropship fit into the overall ecommerce strategy of Staples.ca during your tenure there?
In the early years of Staples Ecommerce, the dropship strategy served a basic need to enable a wider assortment of products for B2B customers.
More importantly, where physical space was a constraint (due to smaller warehouses and physical stores), dropship facilitated accessibility to products in those markets. After years of development, dropship began serving many more purposes ranging from inventory reduction, testing of new products, line extensions, and marketplaces. The business opportunity became significant once we augmented our ecommerce strategy with dropship.
What metrics did you care about as the VP of Ecommerce? How did dropship factor into those, if at all?
The standard metric we reviewed daily was sales. However, specifically for ecommerce, we would analyze product views and conversions. A product could have 100 views and 0 add-to-carts. Similarly, a product could have 500 views and 498 add-to-carts. In both cases we would try to understand customer behaviour and/or problem solve.
Something that seems obvious — and one thing we learned in the early days of dropship — was that the products with the shortest delivery lead times had better add-to-carts or conversions. Using this information, we built programs around rewarding suppliers who shortened their lead times.
In fact, if multiple suppliers had the same product, and cost wasn’t an issue, we would list with the supplier with the shortest lead times. Shorter lead times improved conversion rates and customer satisfaction.
What trends are you noticing in dropship today?
If you rewind to five or six years ago, the concept of dropshipping was fairly unknown. There were few vendors who were properly enabled to do dropship, making B2B data management a complex process. The infancy of dropship also meant a lack of product availability.
Today, there are many vendors and sellers that are willing to give you access to thousands of products, almost instantly. In fact, you can easily dropship from overseas or internationally with the right knowledge, expertise, and tools. The technology for data management has also improved, moving to faster and more modern API and cloud connections.
What do large online retailers often struggle with when it comes to making their online dropship programs successful?
Large retailers often struggle with making it easy to onboard dropship vendors.
A friend of mine from a Fortune 100 recently shared with me “my company runs on Excel”. While Excel is a crucial and important application, it may prove challenging when scale is required. Along the same lines, matching new technologies to existing legacy systems can seriously impede on a large corporations ability to move quickly, and improve productivity.
How can large retailers succeed with online dropship? What best practices can you share that may be non-obvious to other executives?
From a technology perspective, large retailers should be learning and sourcing new technologies each year. Technology is constantly improving making it necessary to move off of legacy systems and incorporate APIs, AI, cloud and SaaS. Additionally, as dropship programs ramp, there is greater need for retailers to have solutions for customers. For example, if you do not have a package tracking system for your customers, you can expect an increase in calls asking, “where is my order?” Staying close to the voice of the customer from social media or call centre tracking is imperative to understanding what they would like from you.
What are a few key lessons that you learned as the VP of Ecommerce of Staples Canada?
First, have the right software tools to make onboarding sellers and ongoing seller management easy. You don’t want a seller to choose the competition because you have a clumsy solution.
Second, content is king. You need to have meaningful and relevant content, which can improve SEO and on-site search. Great content will also create confidence in the buyer to make a purchase.
Lastly, create a process to stay current with e commerce developments. For example, personalization, mobile commerce, social are all in high-growth mode and need to be part of your ecommerce portfolio.
How did your experiences in building Staples.ca influence the work you are now doing with Respawn?
A few key experiences led me to create my company Respawn Digital Services. First, I was involved with many software vendors/service providers that simply make ecommerce easier to manage. Second, despite its popularity, ecommerce/dropship is often an unknown to many businesses. I blended these two experiences, and am helping connect vendors to retailers as well as provide consultative services.
Final question. Can you share a book recommendation with our audience? It can be on any subject.
I would recommend The Power of Habit by Charles Duhigg. This book spends some time revealing how people form habits, how companies try to create habits, and how to change habits. I was intrigued with the many stories, especially what specifically made teeth brushing a habit.
Thanks, Elio. Those are great insights and I appreciate you sharing them!