Episode 210: Apu Gupta, CEO Curalate | Social Commerce Mistakes and Opportunities

Bob: Welcome Apu Gupta, CEO of Curalate. It's a social media company that turns any image or video into a storefront.

Apu: How are you, Bob?

Bob: I'm well. I understand you've got more than a thousand customers from Nordstrom and Crate and Barrel all the way to Stitch Fix. So, tell me about it. What do you do, who are you, and what do you have to do with retail?

Apu: Well, thanks so much, Bob. What we're doing at Curalate is basically helping brands use social media to sell more effectively online. Our approach to that is to view social media, not just as a channel to build awareness and drive engagement, but also as a source of content. Fundamentally what we're doing is helping brands solve e-commerce as inspiration problem. We think that as people start shifting their spend from offline to online, one of the fundamental reasons why we shop is often overlooked. We don't just shop for the things we know we want. One of the great joys of shopping is stumbling across something that you never knew you needed in your life beforehand and online. It's actually really hard to do that, to stumble across something. If you think about physical story, you can wander the aisles, but if you've ever tried to wander the aisles of Amazon, it's not exactly the most pleasurable experience. And so, how do we create those moments of discovery in commerce environments? Well, we think we can do that with social media and social media content.

Bob: So how does it work? If I'm Nordstrom and I have this picture that I want to put up on Instagram, does it start there, or do you say to Nordstrom, "We think that beige trousers with a black cuff are trending on Instagram and you should jump in with something." How does it work?

Apu: At the core of what we're trying to do is make it dead simple to turn any image or video into a storefront. Now, the way that that ultimately works is those storefronts can live on social or they can live on your site. So, if you think about, one of the things brands are doing today is they're posting content to Instagram, for example, and you can tap on a picture and you can see the products that are in it. So one of the things that we do is we make that really easy for brands. We make it easier for them to post that sort of content to Instagram and to measure the results that they're getting from channels like Instagram. We actually work on any social channel.

But, often Instagram is not enough. If you think about most brands and retailers, well, they get a lot of traffic from sources other than social. They get traffic organically, they get traffic from search and a bunch of other things. And so, you've got this much larger audience of people that you want to inspire. And you can inspire them with content, and virtually every brand and retailer is foundationally in the business of investing in content. They are creating content for social, they are creating content via influencers. They're creating content by asking consumers to create it. All of that content can be harvested and used to inspire e-com visitors regardless of where they come from. And so what we do is we make it really easy to get that content and we make it really easy to tag that content with the products that are in those pictures. And then we make it really easy to publish that content onto your commerce site, into your email, into your apps, or even into ads.

Bob: And does that work with Pinterest as well or is it pretty much just Instagram and Facebook?

Apu: No, we publish at Pinterest as well. In fact, when we started, we got our start with Pinterest. And Pinterest has been doing a wonderful job of enabling brands and retailers to do more and more with images on the platform. They rolled out their shop, the look product in about a year ago or so. And so, we want to inspire people on that platform as well. And Pinterest, in many ways, is largely used early in the product discovery process. And so it makes a lot of sense for brands to participate there.

Bob: At Shoptalk they talked about the surprising thing about Pinterest is more guys are showing up on Pinterest than they ever thought were there. So I had honestly, as a social platform, I had really thought that much about Pinterest. I did it when I was redoing a house and used it, the whole ideas. But going back to your point, how hard it is for...when I go into a store, for example, I'm going to buy, I don't know, I'm going to buy baby stroller. Okay, fine. So then I might see a hunter green jacket. I was like, "Oh, I can get that too." But if I was looking for baby strollers online and suddenly there's a hunter green jacket showed up, you'd be like, "What the hell is this?" I mean, that's the problem, and voice has got to be a problem too because it's lateral thinking, but you're selling... The whole point of social, I think, certainly with pictures, is that discovery and that visual understanding that takes you a little different rabbit path.

Apu: Look, I think that e-commerce is rooted in a paper catalog mentality. It lends itself to search. It lends itself to intent, but shopping's not just about search, it's also about serendipity, stumbling across something that you never knew existed. Something you never knew you wanted in your life is a very essential component to the shopping experience. And it turns out that great content can foster that inspiration, and so figuring out how to activate that content is core to what we do. The challenge with that content is virtually all of that content is created for channels that sit divorced from commerce. So that content is completely unstructured. It has no metadata that identifies what products are in those images. And therefore it's effectively useless in programmatic environments. And so what we're doing is basically enriching that content so it can be used at scale.

Bob: I think that's the key. And then ultimately there's so many micro brands that have harvested the whole look and feel of Instagram like Showpo and some other ones that have their digital natives that really understand their customers so much better and they know exactly who she is. They are trying to be everything to everybody. So I think when you have that focus, I think it's probably easier to use a program like yours to actually juice sales than just put up pretty pictures because ultimately it really isn't about likes. I mean, anyone that's worth their salt, how are we making money on this and am I going to get a promotion or am I going to be able to make my numbers? I mean, that's ultimately what has to happen, I think.

Apu: One would think, one would think. Now, in practice, what you see is there is still this interesting divide amongst marketers and particularly social media marketers. We work with a lot of social media marketers and we work with a lot of e-com teams. And one of the things that we continue to see is there is a camp of social media folks who really view themselves more as brand marketers and there's a camp that view themselves more as performance marketers. And it's an interesting debate. And obviously, we come out on the side of you should be able to attribute hard dollar, benefits to all of these investments you're making, but other people view it purely as an awareness-building activity. I think that's harder to justify.

Bob: I'm not a fan of that. I went to a big product launch and I was there talking about the product and all these things, and there's a guy eating a cupcake in the store and they're taking all these pictures and I'm like, "What the hell is it? Oh, this guy has a great following. Anyone that sees him is going to see us." So it's like, "Yes, but they're not seeing you. They're seeing him eating a cupcake." I'm like, "Really? That's brand building?" I mean, I just sat there like, "Did I miss something in basic marketing, like the brand is secondary?" And they're like, "Yes, that's the new way of marketing." And I just thought like, "Well, I don't think so. I think that's always been the case. People aim the shotgun at the sky and say, "Well, as long as something comes down somewhere, I'm happy. I don't have to know." But I think, I haven't we evolved? I mean, isn't everything to performance? I mean, when you've got like an IBM Watson running so many websites and they're looking at eyeballs and click rates and all of that, all of that data that people are obsessing on, why is it social media gets a pass?

Apu: Listen, it's an interesting question. And look, and I don't mean to sound diplomatic. I definitely err on the side of performance, but I'm a marketer by trade. Prior to this I built what became the second largest pharmacy chain in India. I was a physical retail person myself and I was the CMO of that. I understand that building brands has value, and you build brands in ways that become hard to measure. And I think if you strictly take a performance lens on everything, one of the challenges that you end up having with something like that is it can very easily become extremely short term in focus. So you can focus at an extreme on last click attribution, for example. The problem with looking at shopping through the lens of something like last click attribution is it ignores how customers form opinions about products, to begin with.

Bob: Exactly, right.

Apu: And so, I think you've got to keep in mind that... And it's actually one of the things we educate brands and retailers on all the time, they'll activate, for example, Instagram shopping post and they'll say, "Hey, I made my pictures shoppable on Instagram. Why is nobody buying? Or, I did the same thing on Pinterest. Why didn't people buy?" Well, because they just saw your product for the very, very first time and most products are considered purchases. You take some time to become familiar with it and determine if it's right for you, and that's a journey. And as much as technology has changed and we can compress the time from consideration to transaction, you still have to contend with the fact that people are people at the end of the day and they take some time to make decisions.

And so, there is a balance there. I understand that brands engage with influencers. One of the things we try to help brands figure out, though, is that a lot more of these influence or activities can be measured now. And so, if you're saying that, "Well, we don't measure influencers because we can't measure influencers." Well, that's wrong. If you are doing it in a deliberate way where you're saying, "We're not going to measure these influencers because this is purely a brand building endeavor and we have decided that that's how we're going to look at the lens we're going to look at this through." Well, okay, fine. Maybe you can take a more holistic view, but I think where brand starts saying, "We don't measure because we can't measure," that's where we tend to push back.

Bob: So it sounds like there's kind of a learning curve that you have to do with marketers when they come to this. Because you're also dealing with different age groups. I'm a boomer, so I probably am more performance-driven than I would imagine millennials may be, but that might just be a mansplaining something, I don't know. It could be totally off base, but there's got to be a learning curve, I would think, with your product. Is that true or does everybody understand everything right from the get-go?

Apu: No, there's definitely a learning curve. I think social commerce, as a concept, is a relatively new concept. I think for a lot of brands, when they think about social commerce, they think strictly about making Instagram shoppable and then they wonder why it isn't generating...why it's not been transformative to their revenues. What we often have to educate brands about is, at a more definitional level, what is social commerce when we look at the brands who adopt social commerce in a more holistic way, what you find is that Instagram might contribute 3% to 5% of their total social commerce revenues. And so the first thing we have to help brands understand is the breadth of social commerce activities you need to engage in, number one. And number two, what is the problem that this is solving for your consumer? I mean, those two things in tandem are really important for us to help brands understand. But once they understand it, they really get it. And that's what we tend to see. And frankly what I've been actually really impressed with as amazing is all these D2C brands have been, some of the legacy retailers have been very, very good about leaning into discovery.

They have entire discovery teams that...and they've come to the realization that one of the things that made our physical stores great was the ability to walk or wander around them and add things to cart. And we've got to figure that out online because we've got the customer base but we don't want to risk them buying less from us.

Bob: What do you think, if you were to list them quickly, what do you think the top three pitfalls would be? Obviously not for your customers, but for just general retailers on social. What do you think the top three pitfalls might be?

Apu: Number one pitfall is divorcing social from commerce. We continue to see this problem today. They operate in silos, it doesn't work. Two is thinking that making money from social means selling on social media itself, that doesn't work because of the customer journey. And then the third thing would be measurement, not actually measuring the performance of all of these investments. And actually I'll add a fourth, and this is really specific. A lot of brands are randomly putting their Instagram content on their website and then clicking off, when you click on that content, it takes you back to Instagram. These brands are working so hard to get traffic to their website only to send it to a site that has more traffic.

Bob: Right. Oh, that's great. That's really helpful. I talked to people who have worked in retail somewhere back in your history, long ago before you were the guy, before you built the 650 physical pharmacy chain, you worked in retail, you did something to do with retail. Didn't you?

Apu: I did. Well, yes. So, I grew up in the Silicon Valley. I've been around tech for a long time, but I took this random detour where I moved to India and built what became the second largest pharmacy chain in the country.

Bob: That's quite a detour, by the way. Anyway, keep going.

Apu: It was a bit of a detour. It was a bit of a random path, a random walk, but it was a lot of fun. We put up 650 stores in 3 years and they were small stores, 400 square feet or so. But we carried this massive assortment of medicines and we were largely trying to build a brand and bring consistency and quality of medicines to a country that needed it, frankly.

Bob: Well, I see. Oh, there's got to be lots of headaches with that. I mean, I don't care if you have 400 square feet or 4,000, that's 650 data points of human beings to wrestle and try to get a unified culture going. Did that come about quickly for you, or was it a lot of hit and miss, or did you launch pretty much assured of what you've had to do and not do?

Apu: Oh, we made numerous mistakes along the way and I learned a tremendous amount. I think chief amongst them, though, I gained a really deep appreciation for the plight of marketers, retailers, brands. Look, it's a tough business. And I feel for them. And having experienced it, and now back on the technology side of things, I understand a lot of these challenges that folks face. And it's a hard business because particularly if you operate physical stores, you've got employees. And one of the most challenging things about retailers is often you need a large number of employees for your physical stores and they're often not paid all that well ,and yet they're the folks interacting with your consumers, your customers on a day in, day out basis. That's hard. It's sets up some really challenging dynamics that physical store retailers have to deal with.

Bob: Well, I would think the way you saw people use social, I think people who think that their employees are a cost center and the people who think it's the greatest asset, I think that's really where I see the difference. That if you feel that they are an asset, you're probably going to give them tools and you're going to give them training. And if you don't, you're going to assume that you can hire someone who will magically just do a great job and you don't have to pay them that much because you've already said they're temporary and they're not going to be here. But the problem is you're often settling for people who really are invested in your brand, really aren't invested in any kind of performance or anything. They're fogging a mirror when you say, "Are you alive?" And they're like, "Yes, fine." Versus these other ones that...I've talked to a lot of retailers on this podcast and the unifying thing is that the people who are excited about retail and were enjoying it are the ones who realize that, "Holy gosh, the work for us is we've got to make our employees today, or they'll never make our customers today."

And I think ultimately that's the challenge that whether it's online or inline, online or in-store, either you respect that fact or it's a churn and burn. And I think even Walmart's realizing those days are gone. They opened 200 training centers, they're doing all kinds of things to develop the people aspect. At the same time we're seeing an awful lot of people are saying, "Oh, it was iPads and everywhere and then we'll just self checkout," which, I get, it could work. The problem with that, of course, is that you pretty much give up what makes your store special and then of course someone's going to catch you online. Someone's going to find someone else who probably does better because people are developing that feeling online. That's what you're saying, is that these guys have come up with social, men and women who've come up with social and made a dynamic ad. Can you give an example of somebody that, out of the park, you don't have to tell me the brand, but what kind of a post worked or why it worked or anything?

Apu: First of all, we tend not to look at this on an individual post basis because it's ultimately it's largely about the content. I think we tended to try to educate people about is, there aren't silver bullets in this. You don't want them actually to think about the time that...

Bob: Damn it.

Apu: I know. Can I just post one thing and make $1 million? Well, you can if you're an influencer, evidently, but if you're a brand, it doesn't work that way. So, no, it's less about thinking about the world that way. It's more about, we have tons of brands and I see some really innovative stuff happening with some of the really big retailers out there, where they're using content in really effective ways online and driving large amounts of traffic to that content. And they're seeing these massive increases in time on site. They're seeing these massive increases in conversion rates and order values, and it speaks what happens in store. Those are the three things that happen in store, now they're happening online, and that's exactly what we want to see.

Bob: Those are great metrics. Can you repeat that again?

Apu: We tend to look at things like time on site, conversion rates, and order values as a proxy for if discovery is happening.

Bob: That's great. I really appreciate that, and you've been generous with your time today. You're a firebrand, so I appreciate that. You've got a lot of the ideas about it and I think that's great. What would you tell a friend if they said they were looking to open around a little brick and mortar store up there in Silicon Valley? What would you tell somebody, take them to Starbucks and you're like, "All right, let's talk about this." What would you tell somebody?

Apu: I would tell somebody that curation still matters. I think that today so many people are fighting over transactions. And if you're an online retailer or whatever it is and you're thinking you're going to win on transactions, it's a pretty tough game to play, and you effectively are leading yourself down a commoditization path. But there are so many products and stories around those products to be told. And I think what you continue to see that work really well is curated product sets. People who have an opinion on...have a point of view on a particular segment and take the time to curate a set of products that are great for people, that fit a lifestyle, and that are right for a particular niche. I think that level of focus and curation, it's very hard to replicate online and leads to a significant amount of differentiation. And I think it's what you're starting to see more and more people engage in.

Bob: That's a great point. I think we're going back to this age of the pilgrims in some way where everybody knows their little community and they just take care of that little community. So I'm going to be a craft beer guy. Okay, well, I just have to be a craft beer guy for, I don't know, Lubbock, Texas or Paris, Texas or something. I don't have to end up trying to be the next world brand. I think that people are much more trying to figure out, how do I develop this really niche brand, this ethos, this style in particular on social, and then deliver on it exceptionally well, but keep it narrow so that people know, "Okay, that's my brand"? Instead of here's a million products and you can buy anything, which I think to your point, leads us back to that transitional idea instead of relationship. Would you agree?

Apu: Yes, definitely. I mean, I also think that, frankly, most people are not going to be able to build the 500 million product infinite aisle retailer again. So why even start down that path?

Bob: Excellent. Well, I always end my podcast with tell me something good about retail, since that's the name of it. So, Apu, what could you tell me something good about retail?

Apu: Frankly, I think I just love all the innovation happening, particularly amongst the legacy retailers. I think this industry has been battered for so long and people love to tell the story of how retail is dying, but it's not. It's actually more innovative than ever, probably born of necessity, but I actually think that the innovation is inspiring right now.

Bob: I would agree with you. It's got the sense of new and I think the thing, even though we might work a little different worlds, I'm a brick and mortar guy. That's what I do, sales training and motivation for brick and mortar retailers. But this whole idea of the store matters, that the brand story matters is moving center of stage, like you said, getting away from this transaction, "Oh, it's 2 for 1, it's 20% off." It's really trying to figure out how do we give more value to our people who've given us money. And ultimately that's what you're doing there with your program.

Apu: We are indeed.

Bob: So, Apu Gupta, tell me, how can we find out more about Curalate?

Apu: Just go to curalate.com.

Bob: That was pretty easy. Is that it?

Apu: I mean, look, we would love to talk to anybody who wants to learn more about social commerce. You can find a wealth of information on our blog at curalate.com. But you can also reach out to me. I love talking to people who want to learn more about this stuff. I'm simply apu@curalate.com.

Bob: Excellent. I will also post your link to LinkedIn as well. You've been gracious of your time today, and thanks so much for joining us.

Apu: It's so great talking to you, Bob. Thanks so much.