CMO in Focus: Bob Sherwin (Wayfair)
Lessons from a decade at the coalface of e-commerce
The Wagamama at the Prudential Center in Boston is not somewhere I’d suggest for the world’s best ramen, but it is a great place to meet one of the best CMOs out there, at least in my marketing universe.
Bob Sherwin is someone that has lived and breathed e-commerce marketing across various stages. From the giddy days of a nascent platform called Facebook - and the goldrush that came from its direct pathway into consumers’ eyes, hearts and minds - to today’s messy and saturated media landscape, Bob has been in the arena for all of it.
I’ve come to realise that the best marketers - no doubt, like anyone who’s in total command of their field - can talk about big issues in simple terms. They wrangle together seemingly disjointed strands of information into clear narratives, and help their teams rally around those points of view.
This is why I was delighted when Bob accepted my offer to be the first CMO in Focus on
. He’s been in the arena, and he can speak to the past, present and future with the plainest authority. Anyone who’s about to read this is going to get years and years of learnings, condensed into a neat and digestable package. Not dissimilar to Wayfair’s own uncomplicated value proposition of great quality and value, with fast and free delivery, I suppose.Please enjoy!
Raffi Salama: How have the last few months been since we caught up in Boston?
Bob Sherwin: Things have been good. I mean, it’s a bit hectic but that's the norm! We are in a really exciting spot. Wayfair is in a vertical where obviously we did great during the pandemic and then came out of the pandemic like we were, you know, less great! People stopped spending as much on their home. Now, however, it has started to normalise a bit. What's been exciting the last four or five months: it's been very clear that we've been taking share. So even though the market hasn't been growing in a huge way, we're taking a lot more share. Our marketing programs that are new and emerging are working well and driving a lot of traffic. Our offering on site is good, we're priced really well, and items are in stock. Comparatively 2022 was a tough year, items weren't in stock and they took too long to get to customers. So, that made it hard for marketing, you know? We could drive demand but we couldn't monetize. But as I mentioned, these past few months have us feeling great about the momentum we have right now.
RS: You have seen Wayfair evolve so much over the years and that's where I’m excited to start – how have you seen the world of marketing, and marketing at Wayfair specifically, change over the last decade or so?
BS: One theme would, of course, be performance marketing. It wasn't necessarily brand new ten years ago but it was still emerging. Google Search was relatively still in its early days and, in the grand scheme of things, so was social and display advertising.
Certainly retailers having access to all the data that these channels provided - that was still relatively a new phenomenon. Meanwhile the ad platforms that these publishers provided, were still very clunky.
10 years ago, there was a lot of low hanging fruit for organisations that had analytical folks who knew how to capture the data and make use of it. We enjoyed a huge competitive advantage by being a little bit more data savvy, a little more technical and a little more willing to test and learn in a nimble way. Over the years what changed is that everyone realised the gains that are inherent in that approach. So more companies try to invest in those areas, but even more importantly, the likes of Meta, Google and Pinterest started building out much better off-the-shelf tools. Like Advantage Plus shopping on Meta, for instance. Basically this made it much easier for any marketer to get a lot of the advantages of optimization. It became much easier to operate a performance-based marketing organisation.
So now, to have a competitive advantage, it requires more investment. You're now not just competing against other advertisers or retailers to have smarter bids or better targeting. You're now competing against Meta in Google. Their off the shelf package is so good. Now to have a competitive advantage the bar is way higher. So that means better data science teams, better analytics, better tech stacks and so on.
The other main theme is the proliferation of media consumption. The sheer number of places where you can show up with your brand – it has always likely been overwhelming for marketers, but I'd say even more now. Whether it’s podcasts, TikTok, Snap or Pinterest. 10 years ago these channels were either non-existent or barely emerging and honestly, just shiny objects. Now a lot of companies have built huge followership and big businesses around finding excellence on these different types of channels.
RS: So to combine those points, it’s now even more about excellence and prioritisation?
BS: Exactly. It’s harder now because to succeed you have to choose, and prioritise your time and energy in the areas where you want to be showing up.
RS: It makes total sense. Especially with that proliferated media set, each one has their own tips and tricks, their own intricacies… So it feels like a new and difficult time?
BS: Yeah, 100%.
RS: And then when you stretch the telescope out and you take us to the end of this decade or, even just midway through, how do you think these changes play out?
BS: Great question. Look, the tectonic shift that's been moving for the last five to ten years and has gained a lot of steam is around the privacy landscape. For digital marketing, the lifeblood has been data, and with the privacy landscapes changing both from a regulatory standpoint as well as these different platforms interpreting rules differently and creating their own workarounds - our job probably gets even more complex versus less over the next few years. So the companies that will do best by their customers from a personalization standpoint, from a curation standpoint, are going to be the ones that have invested in first party data. One of the themes we've been seeing, and you and I have talked a lot about is, Influencer and Creator marketing. With that proliferation of media consumption patterns, you have to figure out: do you want to loosen the reins a bit and allow your brand to show up in many more places? Brands that are willing to do that, and have the right set of guardrails in place, you know, so their brand is presented in the way they want, but not too precious. I think we're gonna do really, really, well.
We've seen great traction with our influencer networks, and affiliate partnerships, and all these approaches where our brands get pushed out to the edges. This is not a brand new thing, but the trend just keeps moving in that direction. Inspiration is not just through Google search anymore, and it's not just through people having bought with that brand before. They're getting influence from many more places, and earlier in the buying process, which I think is great for those who are able to take advantage of that.
As their sources of inspiration have changed, consumers are also more willing to switch brands and try new things. I remember reading a couple of studies during the pandemic: how it forced a lot of consumers to do that because their tried and tested CPG brand that they liked was out of stock. So they were more willing to try other ones, which means you want to be out there when they're in the market to figure out which brand to try. You need your brand to be showing up there with value props that are clear so that they choose you!
RS: I love the idea of loosening the reins because it does feel like that is the battle that CMOs are having with themselves. To win in the next 10 years, they’re going to have to give up a little bit of control and even if that feels uncomfortable in the short term, it's the only way to reach all these different places where consumers are. Another point you made which is fascinating is the way COVID forced people to try new products. That's great for Wayfair in terms of people trying Wayfair for the first time, but what we've spoken about in the past is just how important your loyalists are. Repeat purchasing is critical for the Wayfair machine.
How do you think about loyalty in a world where everyone is open to trying something new?
BS: We want to deliver an amazing end to end experience. That's our number one goal for loyalty: delivering on our brand promise. Which for us means people see and experience the inspirational part of our site. And then continue that experience through seamless delivery by which your chosen product reaches them fast and for free. And, overall, they were delighted as we met or exceeded your expectations. If that happens, that alone is pretty differentiated in our space. We know that when that happens, the propensity of someone to repeat is extremely high. So we're always trying to get better on those dimensions. We also make sure that the consumer knows that when things inevitably go wrong or get sticky, we're there, we have their back. We have people that sit behind the website in our delivery teams that will help you, you know, resolve that issue. Those are the basics. Beyond that, we're in a category and in a model where it's not a subscription. You’re not necessarily purchasing new large items for your home every month. So we have to do a lot with all the touch points. We have to make sure we’re staying relevant to the customer. So we think a lot about how we make sure we are showcasing other parts of our offering to that consumer that we think are relevant to them. In some cases, that could be highlighting our design services offering because it looks like you're doing a home project and we know when someone engages with our service team that that has a direct correlation. Or a direct correlation and actual causal link, to them being a more loyal customer.Or it might be: which customers do we need to introduce to our app? Because when we introduce them to our app, we know that that creates a more sticky customer.
We're also doing a lot more work around broader segmentation right. For instance, taking all customers who have been highly engaged with us in the past but have not engaged with us in the last six months… And just thinking through our push regarding when and where it is an appropriate time to offer them a unique discount offer, or another way to re-engage them and get us back top of mind,
RS: One of the things I remember most from our initial chat is the variety that Wayfair does offer. The question for me is how do you really understand the different pools of customers through the different channels in which you’re going to find them and then make all those different criss-crosses happen?
BS: Maybe the other thing I'd add in there is that we think a lot of Wayfair is well known. Yes, it's a household brand. But it's not yet well understood. People don’t know the full suite of our offerings. We have a great selection, as good as anyone, so, for us, that is one of the big opportunities to drive repeat and loyalties for many purchase occasions for their home. And so one of our big challenges and big opportunities in marketing is again, when, where, and how do we make sure that they're aware of our full suite of offerings?
RS: One of the key red threads through everything we've talked about is everything becoming more segmented, more personalised, and more complicated, which is all exciting... But what that means is the best talent matters more. What are the ingredients and characteristics that you love seeing in high quality marketing talent?
BS: There’s no one person that spikes on every dimension but generally one of the themes I've seen in our most successful team members here is folks that are just consistently intellectually curious. Knowing that the landscape is changing and that presents you with the chance to grow intellectually. One other term that a friend of mine uses is “data curious”. That means, “What is the data telling us that might actually confirm a hypothesis?” or “What are the nuances we can find in it?” Lastly, the people that we are looking for: they have a continuous improvement mindset. They are proud of what has been built, but are always thinking, “We can do better. What's next? What can we do to get even more out of each of our touch points with the customer?” Those are some dimensions for sure. But you need to have great consumer instincts as well. To have empathy and be in the head of the consumer helps a lot. Those traits in combination are very powerful.
RS: This flows nicely into my final question. What is one aspect that is really specific to marketing for an ecommerce business? Versus, say, B2B or SAAS.
BS: We're spoiled in e-commerce in the sense of having a lot of data on where the customers are coming from into the site, what the funnel progression looks like and where that funnel is breaking. Basically in e-commerce generally you're trying to drive a transaction, you can see all the touchpoints and all the different ways that consumers came in before they made a purchase and are able to create a rich feedback loop on what marketing is working and what marketing is not working.
I think with SAAS or B2B the purchase journey is even more complex. That spaghetti soup is more tangled so you just have a bit less of a feedback loop and a bit less data to rely on. On the flip side, the benefit of those businesses is, once you get that acquisition and activation, it turns into more of an annuity, right? So there's maybe a little more waste but you can afford a little more waste because once you lock them in, it's going to pay off in a much bigger way. For Wayfair, we have to earn their trust and earn every sale with them every time. Ideally it's a great experience and it's very differentiated so we get it for free and they come directly back to our site next time they’re in the market, and that's what we generally see. But it's not guaranteed because they didn't sign up with us. They didn't pay an upfront fee with us to require them to come back to us next time.
RS: Crystal clear. Bob – a massive thank you.
BS: Thanks, Raffi.