Sachin Arora - 18 Months Later

Summary

Highlights

• Sachin Arora transitions from The Bay to launching his own venture, Maple Direct. 🚀
• Maple Direct empowers brands with tools to thrive in the online marketplace, unlike traditional retail models. 🛍️
• Retail market has faced significant shifts with the emphasis now on sustainable and profitable growth. 📈
• Retailers face challenges with high fixed costs, driving a need for strategic digital adoption. 💼
• AI is crucial for modern retail, particularly in inventory management, but should be applied thoughtfully. 🤖

Key Takeaways

• Transition to Digital: Sachin Arora talks about the shift from The Bay to launching Maple Direct, highlighting the growing need for retail digitalization. 🛒
• Evolving Retail Landscape: Retailers are moving towards a platform-based model, dealing with challenges like excess space and inventory. 📈
• Focus on Profitability: Investors are gravitating towards profitable growth rather than just expanding top lines. 🤑
• Empowering Brands: Maple Direct helps brands scale online, giving them tools and insights for reaching a broader audience. 🚀
• AI in Retail: Sachin stresses using proven technologies like AI for inventory management rather than getting distracted by the latest tech trends. 🤖

Overview

Chapters

• 00:00 - 01:00: Introduction and Background In the 'Introduction and Background' chapter, a conversation with Sash is revisited. The discussion revolves around previous work conducted at the bay, which has garnered interest and sparked discussions within a digital transformation program. This chapter sets the stage by reflecting on past interactions and establishing context for the topics that will follow.
• 01:00 - 02:30: Shift in Retail Market The chapter titled 'Shift in Retail Market' discusses the transition in the retail industry through the lens of the narrator's personal experience. It begins with an expression of gratitude for the learning and educational advancements that the changes have fostered. The narrator acknowledges feedback from course reviews inquiring about subsequent developments in the market. Currently, the narrator has moved on from their role at 'the Bay' but maintains a collaborative relationship by continuing to undertake some work with them. This suggests an ongoing involvement despite the formal separation from the company.
• 02:30 - 04:30: Focus on Profitable Growth The chapter titled 'Focus on Profitable Growth' discusses the transition from a previous role at 'the bay' to current ventures, amidst a rapidly changing retail landscape. The narrative begins with a conclusion of past activities and moves into current engagements, highlighting the continuous evolution and challenges within the retail sector.
• 04:30 - 06:30: Challenges in Retail Transformation In 'Challenges in Retail Transformation,' the speaker reflects on the ongoing changes within 'the Bay,' a retail business. The conversation highlights a previous strategic decision to divide the business and the ambitious plans to expand and enhance its market presence. The chapter sets the stage for discussing how these changes are being managed and their impact on the future of retail.
• 06:30 - 07:30: Personal Career Transition The chapter discusses the shifting landscape of the e-commerce market starting from early last year. It notes that the market valuations for e-commerce companies began to soften, impacting major players such as Shopify, Amazon, and Wayfair. This change created less favorable conditions for taking companies to market, with investors increasingly shifting their focus toward profitable companies.
• 07:30 - 10:30: Launch of Maple Direct The chapter discusses the shift in focus from top-line growth to sustainable growth for Maple Direct. The ownership team is encouraged to refocus the business on its fundamentals, which include a significant amount of real estate and a robust e-commerce platform. The aim is to integrate these aspects to ensure effective functioning.
• 10:30 - 12:30: Impact on Shopping Behaviors The chapter titled "Impact on Shopping Behaviors" discusses the evolving landscape of retail, focusing particularly on how companies are adapting by developing new retail platforms. The author shares their perspective on the future of retail, emphasizing that despite various challenges, the creation of a platform-based retail system remains an inevitable trend. This shift is highlighted as 'the new way of building retail,' indicating a significant transformation in how shopping experiences are structured and delivered to consumers.
• 15:00 - 18:00: Advice on Digital Transformation The chapter focuses on the challenges retailers face during digital transformation, particularly dealing with excess space and inventory. Retailers must find solutions to manage their current problems without compromising their future growth, though this can be difficult given limitations in capital and cash flow. Many global retailers and department stores struggle with these financial constraints.
• 18:00 - 19:00: Conclusion The chapter discusses the current challenges faced by the industry, highlighting that it's in a poor state. Due to these challenges, businesses must strategically choose where to minimize losses. The reality of business forces is evident, underscoring the relevance of e-commerce and digital-first shopping, which are portrayed as the future of the industry, suggesting they are here to stay.

Sachin Arora - 18 Months Later Transcription

• 00:00 - 00:30 okay so Sash and thank thank you for talking to me once again we talked a couple of years ago and uh about the work that you were doing at that time at the bay and uh that's been a popular video inside our uh digital transformation program particularly people have been reviewing It And discussing what you had to say uh and
• 00:30 - 01:00 and it's Advanced the learning of many people so you know thank you for doing it uh but they've also asked uh in our course reviews uh we've had people asking well what happened next and I know in your case there there are a few things we can talk about here uh that are uh that are important to that about what happened next you're now no longer with the bay uh but you are just still doing some work with them and so we're
• 01:00 - 01:30 gonna touch on that touch on what you're doing now H but I thought as a starting point uh we might uh conclude on what you were doing at the bay and then move on to what you're doing now so uh so first of all uh in the time between your last interview and leaving the bay uh how have things progressed because you know retail has continued to change at a rapid rate and The Bays
• 01:30 - 02:00 uh changes which you were managing at that time uh the Bay has continued to change too yeah I I think um you know first of all thanks for having me back on great great to to chat again and um I I think when we last left the business had at that point SP been split um if I remember correctly and you know there was a hope to really aggressively go go into the market and build Bay into more
• 02:00 - 02:30 of an e-commerce platform I think a lot has changed since then for sure um you know what really happened was the market kind of beginning of last year started to really soften in terms of the valuations that e-commerce companies were getting um like Shopify if the if you remember the stock took a big at Amazon all all of those Wayfair the bigger ones and so you know going going to market the the conditions were less favorable for that and and what investors were starting to really look for was profitable companies profitable
• 02:30 - 03:00 growth and it was less about growing the top line and more focused on you know sustainable growth and I think that was in a way a call to the the ownership team to say well we we probably need to refocus our business a little bit back to where where the fund fundamentals lay which is a lot of real estate a lot of stores um with an e-commerce business that still I think was robust and and and really think about how to make that work and um I think I can speak more in
• 03:00 - 03:30 in generalities on what what we've seen across the market as well um and and and some of this is just my perspective as well but I I think you know what what was trying to what we were trying to do and I'd say what is still happening um with a lot of companies building out kind of the the new way of building retail which is a platform I I think still the future right I I don't don't there's any denying that the challenges
• 03:30 - 04:00 you have these retailers that have so much space so much inventory that that has to be kind of dealt with as a problem that it's almost something you say you know I need to figure out a way to deal with this and putting the the future a bit on on hold which um you know in a way is is maybe not not always going to be what you should be doing as a business but businesses only have so much capital and so much cash flow most retailers and department stores around the world like their cash flow is very
• 04:00 - 04:30 very poor I would say right right now especially the industry is very very challenged and as a result of that you're having to pick and choose um on almost H H how do you mitigate as much loss as you can I think the reality of the business forces of the world kind of dictating what what is relevant and what is not have clearly shown e-commerce and and this more um call it digital first wave of shopping is is the future it's not going away and and I think
• 04:30 - 05:00 it's a matter of now the next couple of years like where do things start to play out a lot of you know retailers are going out of business there's consolidation there's store closures there's rationalization um and so where that goes in the next couple of years I think will be interesting to watch absolutely and uh a really interesting answer because what you seem to be suggesting is that the traditional retailers if we might call the bay and others like that that term
• 05:00 - 05:30 um they have uh they experienced covid uh there was a rush to online at that time but in the period uh as we've got clo back to the closer to the old normal uh though not there and never likely to be there the uh what you're saying is their response to this change we've seen over that period has been to say well we need to focus on what we're good at or
• 05:30 - 06:00 what we did before uh we think that might still have a role in the future uh we also have our own financial position which is challenging to deal with and so our response now is perhaps to go a bit less quickly into online and to do more to try and support our bricks and martar is that correct or I I think that's fair you know the
• 06:00 - 06:30 reality is with a lot of these businesses including the bay there's just a significant amount of fixed cost that exists in the business right and so one Viewpoint could be well this fixed cost is what it is and arguably your cash flow should be put towards offsetting that fixed cost as much as you can right and make sure that you can make that into a viable asset as as as much as you can um I think for pretty
• 06:30 - 07:00 much any retailer like they haven't seen the rebound that they would have wanted postco right there was a bit of a rush for a while but I mean this year the economy has been quite soft especially for discretionary Goods um and so I think that's that's simply the answer to say how can we fix that business as as much as we can very interesting uh so as far as you're personally concerned you left the bay last January uh and
• 07:00 - 07:30 uh you have continued your focus on online uh so I guess the question is what are you doing now yeah it's it's it's a great question so I I think a lot of what we were trying to do at the bay which was build sort of what we called supplier enablement tools um I think there was still a need unmet in the market and what we mean by that is you know retailers they they don't produce products generally they make most of their money off of almost reselling
• 07:30 - 08:00 Goods to customers uh inherently they are a platform for Brands they're not like and retailers often think they make money by selling lots of products well they actually make money by you know making margins off of brands that that sell products and so our thinking at the time was well we need to make give Brands more levers to grow their business within the bay ecosystem and charge lots of money to do that and Brands were willing to pay because they didn't have access to a lot
• 08:00 - 08:30 of the things that the bay had at the time which was like great fulfillment really significant digital marketing scale things like that and so you know the the business that I I launched called Maple direct is almost a similar model just agnostic to platforms so what we're building is what we're calling a you know a growth platform for brands that are looking to scale their business online so we're giving them you know everything they need from the right you know in information and insights um the right access to customers and
• 08:30 - 09:00 customer data digital marketing tools and capabilities fulfillment right and and and on the flip side also distribution and channel management so all of that is in kind of one centralized infrastructure that gives Brands who you know they TR traditionally are used to working with retailers in a more wholesale capacity as that model becomes more difficult to manage this is an alternative route for them to say well you can achieve scale and reach the Canadian customer in a bit of a different way
• 09:00 - 09:30 okay very straightforward that makes sense uh giving Brands access to the market or direct access I guess to the market U the obvious question in my mind and this may reflect my own lack of knowledge about what you do uh but uh what's the difference between what you're doing in Amazon well so Amazon is a platform right whereas we are
• 09:30 - 10:00 almost a a provider that would help brands use those types of platforms so we would help Brands launch on Shopify on Amazon on Wayfair on the bay on all those other marketplaces as a channel right and so we're not actually building an e-commerce platform for customers we're building a B2B uh product okay that's that's straightforward so you're basically helping businesses get online with all the different things they need to do it is including selecting an appropriate
• 10:00 - 10:30 Channel and supporting their movement into that and their operation of it yeah yeah and I think our our rationale is pretty simple right you know running a business direct or running a business on Marketplace from a unit economic standpoint for these Brands it actually works really really well because you're you're you know you're not paying a whole lot of fees to retailers at the end of the day you're paying them a much smaller commission than you would by going the traditional route the
• 10:30 - 11:00 Retailer's happy because they're not actually owning any of the inventory and the customer happy because they're getting more Choice than ever in the market um so this is something that we're offering both to brands that are in Canada today and brands that are looking to enter the market in a way that is is a lot more you know asset light so typically it'll take a brand who wants to come to Canada a year to to enter the market they'll have to register a business find Distribution Company the Distribution Company will try to get them into you know shelves in stores things like that what we do is we
• 11:00 - 11:30 say you know we'll launch you in 12 weeks we'll get your business registered tax number we list you online in your you're live right it's it's a very quick way to almost get into a market that we know Canadians are interested in seeing these types of brands in a bigger way okay and and with those bigger Brands uh you know in the past they may have been less accessible online and that may have led people to go to places like the bay uh and to other you know retail
• 11:30 - 12:00 locations uh to be able to get to those Brands you're now making those available online to what extent do you think uh this is going to influence the change in people's shopping behaviors because presumably if they now have access to brands that they could have bought in this that that they would have gone to a a department store or a physical retail location for before they're going to be less likely to go there so it seems to
• 12:00 - 12:30 me that your business is likely to accelerate the movement towards online I would say so I mean like Amazon has done that right and like in a big way you can basically get anything any brand on Amazon but often it's resellers people who are you know buying it and you're paying a lot of Duties like so for us it's just it it is I would say accelerating that process and you know giving as you said the consumer more
• 12:30 - 13:00 access to brands that they they would typically not have Okay that that makes perfect sense uh so uh so you're working with this business at the moment and you're and it's growing you tell me the business is going very well uh so far so good I'd say we've been operating for three months now um and have a handful of of Fairly sizable clients and a pretty growing pipeline that we're hopeful will will continue to accelerate into the new year um you know we hopefully see a bit more
• 13:00 - 13:30 of a normalized economy and and and all that as well okay and and certainly as we look broadly at the retail sector this is uh a a facilitation I guess of uh traditional brands or perhaps not necessarily just traditional but uh but assistance for them with their digital transformation with their movement into
• 13:30 - 14:00 the digital age yeah absolutely I think you know a lot of Brands their core competency is creating good products right and that's why they exist they create good products that people want um and then they rely on Distributors and retailers to get that product in front of customers and I think because of the fact that that model is just becoming less and less favorable in in the consumer's mind today that model is also less reliable
• 14:00 - 14:30 for Brands to use to reach those customers so this is sort of saying let's do what what has been done in the past in a way that's more modern that um still gives you the same access um but it's in a much more economically effective way as well okay I just have one more question you may have other things that you want to add to the uh to tell the people who will be watching uh my my last question is around any advice you would have it's
• 14:30 - 15:00 just basically a catch all question but basically trying to uh gain your expertise uh as in giving advice to the people who will be watching but I'm especially interested in you know it's been a couple of years since we've chatted and you know what has might have changed during that time uh in terms of your thinking around digital transformation uh and around the advice that you might give people today
• 15:00 - 15:30 compared to what you might have given two years ago that might be a tough question but yeah I'll ask it anyway yeah I me I can't remember what I said two years ago I don't know if the answer will change that much but maybe I'll make it more relevant and specific to what's been going on um you know obviously there's a lot of interesting technologies that are continuing to emerge AI now is talked about a lot I mean it's existed for a long time and I feel like every company now talks about Ai and their AI strategy you know before
• 15:30 - 16:00 that it was web 3 and and there's always going to be something like that and all of these things are relevant to digital transformation right but I I think where things often go wrong for when people are thinking about new technologies is they think about a technology that's really cool they don't think about like the business application of that technology and so what I would say is is like emerging Technologies are are always going to be that which are emerging technologies that I have hopes of transforming business to succeed I think you almost
• 16:00 - 16:30 have to start with the business problem first versus the application um because you know we we're talking about you're talking about AI for for retail as an example well every retailer is I would say pretty much around the world is is not not very good at Inventory management like they're they're okay but they could all be a lot better and a lot of that is done by manual processes and and I and there's only really one retailer and I would would call them a retailer but one um process that I've
• 16:30 - 17:00 seen work well which is how Amazon does does their inventory management and it's all done by AI every retailer should be adopting that a lot of retailers are looking at chat GPT Integrations into their websites and all these other fancy things that may not have a lot of business utility like when we're talking about business transformation and Technology let's use things that are proven focus on those and scale them to actually solve real problems and I think that's um I think for anybody coming into the industry like think about you
• 17:00 - 17:30 know what are what are what is a business's core competency so what makes them good how can AI actually improve on that or technology improve on that and and make it more sustainable for the future versus sort of the other way around like trying to change a business model based on a technology and and I think that's something that um is applicable for for any industry great advice uh advice that certainly seems important with what I see too uh particularly around AI today
• 17:30 - 18:00 where uh you know there's a lot of excitement about the things it might be able to do but that does seem a bit detached from the reality of the things that businesses a lot of businesses are having to deal with not that it doesn't have value but the uh but yes big problem okay uh that was all I had for you today Sation did you have anything else that you wanted to contribute before we finish today
• 18:00 - 18:30 um no I mean I I think like this was this was great again getting getting a chance to chat with you and I mean for any of the students out there I'd be happy to connect and and share some of my experiences as well and and you know just I think it's great to hear from the future generation of leaders as well so uh don't hesitate thanks Sachin for doing it again and uh and I may get back in touch in another couple of years to see what you're doing at that point but uh but I really appreciate you're talking today
• 18:30 - 19:00 sounds like a plan