(The following article is property of Avenue Code, LLC, and was originally published with permission at Retail Insider on January 28, 2021.) 

Johnny Russo, VP of Marketing and Ecommerce at The Kersheh Group, discusses how to prioritize digital investments that yield a high ROI.

Avenue Code: Tell us about your career path. How did you get to where you are today?

Johnny Russo: I studied journalism and wanted to be a TV sports broadcaster but ended up channeling my writing expertise into marketing. After only two weeks, I fell in love with marketing, advertising, and branding, and I knew it was where I wanted to be. I immersed myself in research and reading to learn all that I could. Digital was emerging at the time, which made it easy for me to get ahead of the curve in learning about SEO, email marketing, social media, etc.

I should note that I’m still very passionate about writing. I run my own blog, and I’m in the process of writing a book that presents tangible, bite-sized tips for leaders. These tips are a combination of my research and my own learnings as I transitioned from management to executive-level leadership, and they cover both what to do and what not to do. 

AC: What drew you to joining the Kersheh Group?

JR: The people. I wasn’t looking for a new job at the time, but when I met with the leadership team, I knew they were special, and I resonated with their business passion. When I walked into the role, the challenge was to take a 40-year-old wholesale company and scale a direct-to-consumer division with brands that needed to be developed. 

AC: What challenges and opportunities have arisen for the Kersheh Group post COVID-19?

JR: In April, I presented a three-year plan, but COVID-19 accelerated executive buy-in so significantly that we’ve scaled two to three years in the last nine months. Prior to COVID-19, e-commerce was a middle-of-the-list agenda item for most companies, but now, nearly every company has made online shopping a number one priority.

Buy-in is key because e-commerce development requires monetary investment, as well as changes related to technology and people. A successful plan requires proper prioritization of projects, pushes the boundaries while staying realistic, and, most importantly, is profitable. 

AC: What are the keys to creating a successful digital transformation strategy? 

JR: My framework for successful digital transformation is supported by five essential pillars: partners, people, education, culture, and data/change management. If you get these five pillars correct, you’ll be in a solid position to scale. 

A lot of companies love planning their digital strategy, but when it comes to execution, they back away from investing money in platforms and people. If you look at the numbers, however, some of the most aggressive e-commerce companies are the most successful because they made the up-front investment to achieve a profitable outcome. 

AC: What digital initiatives are you prioritizing in 2021?

JR: In June, we’re launching a brand new sleepwear experience. We have multiple brands catering to different target audiences, and currently, these are all on separate sites and different advertising channels. Our goal is to centralize these into a single sleepwear marketplace, enabling us to realize economies of scale, SEO benefits, funneling all advertising dollars through one channel, and enabling our customers to shop for multiple needs on one platform. At first we’ll focus on our own brands, but nothing is stopping us from expanding. We want to be the largest sleepwear site in North America. 

AC: How will data analytics play into your 2021 plans?

JR: We’re focusing on two areas. The first is related to fulfilment operations. When an e-commerce site isn’t as profitable as it should be, it’s usually because there are a couple of levers that need fixing. Usually, it can be because the organization is overspending on advertising relative to its return on ad spend (ROAS) or because the fulfillment process is broken, whether that’s due to internal operations or third party logistics. To boost our profitability, we’re working to maximize shipments with more items since sleepwear doesn’t add significantly to weight/shipping costs.

Secondly, we want to grow our ownership of the customer experience. On our direct to consumer channel, we currently sell a lot of our products through Amazon, which means we don’t have enough first-party data to build a customer lifetime model and strategize deeply on ad spending.

AC: How can executives ensure their tech investments yield a high ROI?

JR: I was stunned to read a 2017 study that said 44% of Chief Marketing Officers can’t measure their ROI. If you approach marketing from a digital perspective, you’re often held accountable for profit and loss, so you know how to measure initiatives and how to shift resources to be more profitable, whether that’s increasing email campaigns, implementing personalization software, investing in search, gaining more social followers, etc. This is another reason that hiring the right people is critical - people dictate both the investment strategy and partnerships.

Image courtesy of Johnny Russo

AC: What trends do you see within DTC and e-commerce as a whole?

JR: Influencer marketing became immensely popular, and I don’t see it going away. For brands, however, it’s important to be careful about which influencers you partner with: you need to examine their followers to ensure they align with your target audience, because follower numbers alone can be deceiving. 

Beyond this, frictionless e-commerce experience and fast delivery always win; and it’s still true that service is the real differentiator, especially when it comes to prompt communication and accurate tracking information for packages. 

Analyzing operations logistics should also be a priority, because so much can go wrong here. You need to process orders the same day you receive them, and if you can’t, you need to know why you can’t and adjust your set up accordingly. 

The other trend I see is an increasing number of B2B players opening the market to DTC. Manufacturers are now opening their own e-commerce channels, which has created an entirely new marketplace ecosystem where the customer ultimately wins.

AC: What is the key to successful strategic partnerships?

JR: COVID-19 emphasized what we’ve all known - trust is a prerequisite. Successful partnerships have to be win-win, and partners have to be thought of as an extension of your own team. It isn’t about negotiating down as far as possible; it’s about strong relationships. 

AC: What do you do to stay abreast of innovations in tools and technologies?

JR: I rely on my network. That used to mean attending conferences, but now I utilize LinkedIn to stay in regular contact with my business connections and industry leaders. I also read a lot, especially content by Scott Galloway, an innovator and skilled communicator who has predicted several industry trends. 

AC: How has your leadership style adapted since COVID-19?

JR: George Santayana says that “Even the wisest mind has something yet to learn.” I certainly have room to grow as a leader, but I think my priorities of inspiring, mentoring, and coaching have remained consistent both before and after COVID-19. If anything, I have more time to invest in development sessions to help my team members achieve their career goals.

AC: What are you personally most passionate about in your career?

JR: In life, I’m most passionate about being a dad, which also influences what I’m passionate about in my career. My goal is to be the best leader and mentor possible. In other words, helping people is my primary passion. On a personal level, that translates to a passion for continuous learning and growth.

AC: Thanks for your time today, Johnny! It’s been great to hear your perspective on analytics-based spending for digital transformation.