Chris Richter Of FloorFound On The Supply Chain and The Future Of Retail
An Interview With Martita Mestey
You have to know your customer, and understand their priorities and preferences. With that knowledge, you can offer the right selection of the right products at the right price — pricing and product selection being the second and third components.
As part of our series about the future of retail, I had the pleasure of interviewing Chris Richter. Chris is founder and CEO of FloorFound.
A startup focused on bringing new levels of sustainability and reuse to the oversized eCommerce space through the company’s industry leading circular commerce platform. Prior to founding FloorFound, Chris spent 25 years in technology, including key roles with leading enterprise SaaS businesses such as Bazaarvoice , Edgecase, and, most recently, Convey, where he served as VP of Revenue. Chris was also previously the Founder and CEO of Socialware.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a story about what brought you to this specific career path?
FloorFound is the perfect intersection of two domains I’ve worked in over the past 25 years: eCommerce and retail operations, specifically supply chain.
I was an early employee at Bazaarvoice, who pioneered customer reviews and social commerce, and I worked with leading retailers to create and implement online business models that enabled them to stand out from the competition and meet changing customer expectations. Then, in my later work at Convey, we recognized that the last-mile delivery experience has a massive impact on brand perception, revenue and loyalty, and that technology could help retailers better address that crucial aspect of the customer journey.
Both Bazaarvoice and Convey commercialized capabilities that most individual retailers can’t build individually within their organizations. For example, there are significant operational and technology complexities behind implementing, accumulating and truly learning from a critical mass of customer reviews. And, of course, fulfillment logistics rely extensively on third-party providers. With the notable exception of Amazon, most stores don’t own their own freight delivery network. But as Amazon proves, in the case of reviews as well as delivery, both of those capabilities are increasingly essential for competitive success.
Those experiences made me the perfect founder for FloorFound. Our vision is to help support circularity by making it easy for retailers to extend the life of their oversized products by reselling high-quality returned and open-box merchandise. Practically, this means working with retailers to reimagine their ecommerce experience, as well as adapting their supply and delivery ecosystems to operate in reverse — complex challenges that partnering with FloorFound helps solve.
Can you share the most interesting story that happened to you since you started your career?
Starting a company in a pandemic has been a unique experience and the most interesting phase of my career. In March 2020, we raised pre-seed funding, and people were jokingly telling us not to spend it and wait and see what happens. And then of course the pandemic turned everything on its head.
To conceive and launch FloorFound, we had to be very fearless and certain in our idea and business model. So it was a tremendous shift on all levels — personally, professionally — to put on the brakes and adjust to the uncertainty about what would happen in the world. In the two years that followed, building the business in the right way meant rethinking so much of how we worked and wanted to grow. We’re treating how we invest in ourselves and others differently now; we’re more vulnerable with each other as a team, and more open to new concepts.
I believe that our transformation mirrors changes in society as a whole, in terms of how people think about the world. There are different priorities, a desire to live sustainable lives and maintain a sustainable planet. Plus, of course, the speed of eCommerce adoption skyrocketed, and supply chain shutdowns meant consumers literally could not buy new goods, and so found their way to resale. So ironically, amidst the heavy toll, it’s also been an enormous accelerator for our business, because our message is resonating more than ever.
Are you working on any new exciting projects now? How do you think that might help people?
My mission right now is to help retailers align with consumer desires for brands that are values-driven, not just value — as in price — driven. A recent study from the Wharton business school found there’s a deep disconnect between what retailers think consumers want and what consumers actually want when it comes to resale. As just one example, the study found two-thirds of consumers would pay a premium for sustainable products, but only a third of retailers believe that’s the case.
On the one hand, retailers are prioritizing sustainability like never before, but some of those efforts only go so deep. Many think it’s too difficult to get into resale and reuse; they only know how to sell new stuff. And no doubt it’s complex: they not only have to process traditional reverse logistics of returned merchandise, but then they need to factor in evaluating the condition of the resale goods, pricing and reselling them, and then manage redelivery.
At the same time, retailers have a lot of built-in advantages. They already have floor samples, warranty models, returned merchandise — but right now they aren’t able to work with those items because they don’t have the systems in place that can get these items resold and back to customers a second time. That’s FloorFound’s mission — helping them step into recommerce and solve these challenges. We’re the “easy” button, if you will, to activate this kind of circular strategy.
None of us are able to achieve success without some help along the way. Is there a particular person to whom you are grateful, who helped get you to where you are? Can you share a story?
I’ve been lucky to have smart people see my unique potential and help me realize it. When Brett Hurt started Bazaarvoice, he saw in me a personality trait for taking something brand new to market and creating a repeatable selling opportunity. I was the third employee after the two founders, and enjoyed learning about our customers as a first step into retail eCommerce. I learned directly from Brett, who’d built a great company, how to run successful sales processes in the SaaS environment.
That experience led to my role as head of revenue at Convey, where CEO Rob Taylor convinced me that the supply chain was going to become a hot space. Rob not only led the way to a successful acquisition, but gave me the confidence to be the entrepreneurial CEO of a new startup — he was a great role model for me.
How have you used your success to bring goodness to the world?
I’m passionate about shining a light on the fact that we need to completely rethink our relationship to everything we use and buy. With consumer growth globally and more people around the world joining the middle class, there is quite simply no way to satisfy demand with the natural resources we have on this planet. If we keep up our current pattern of consumption, that route is going to lead to resources being completely depleted within decades. We’re going to end up upside-down, and the trends are already heading that way — just look at the latest report from the IPCC outlining the hazards we’re already facing due to climate change.
To escape this trajectory, we all have to embrace change, and one way to do that is to reverse the supply chain and tap the items that already exist to extend their lifecycle. This reimagined supply chain starts with consumers reselling their goods, and retailers need to join the effort, or else be left behind. It’s not optional. It’s critical to business’ viability and relevance, as well as vital to life on earth.
Ok super. Now let’s jump to the main questions of our interview. The Pandemic has changed many aspects of all of our lives. One of them is the fact that so many of us have gotten used to shopping almost exclusively online. Can you share a few examples of different ideas that large retail outlets are implementing to adapt to the new realities created by the Pandemic? (E&A)
The fact is that even with the growth during the pandemic, eCommerce still only represents 30% of retail today. But there are definite advantages to being omnichannel and having the technical capabilities to follow shoppers as they fluidly switch between online and offline worlds. The pandemic definitely prompted retailers to prioritize offerings like curbside pickup, and these offerings aren’t going away now that shoppers are coming back to stores.
Right now, people are still focused on the fact that the pandemic accelerated digital adoption by 5 years. This is a huge trend, and I don’t want to downplay that. However, I truly believe that when we look back at this time from the perspective of the next 5 or 10 years, the biggest trend we will see is that the pandemic accelerated sustainable retail and meaningful business model change. Huge brands across verticals — shoes, apparel, furniture, mattress, sporting goods, luxury — are adding resale or buy-back programs almost daily. Allbirds is the latest darling but there are hundreds of brands. And the forcing function is the supply chain as much as the climate crisis. Resale allows brands to continue to quickly ship and sell inventory despite supply chains that have been upended by COVID, and more recently, the conflict in Ukraine. These are creating massive shifts with an impact on par if not greater than the acceleration of online shopping.
A great example of this is Floyd, who has already built a reputation for high-quality, sustainable furniture with a following among Millennials and Gen Z. These younger shoppers prioritize sustainability more than other generations, and knowing that, Floyd partnered with us at FloorFound to launch their recommerce initiative, Full Cycle. Now Floyd is reaching new shoppers in that demographic who either seek a lower price point as an entry into the brand, or who simply prefer buying non-new products. Three-quarters of Full Cycle buyers are new to the brand, and a quarter have returned to purchase new products — so it’s a sustainable initiative that benefits the bottom line on multiple levels.
The supply chain crisis is another outgrowth of the pandemic. Can you share a few examples of what retailers are doing to pivot because of the bottlenecks caused by the supply chain crisis?
One silver lining of the past two years is that retailers are finally getting serious about ways to reduce their dependence on the single-use global supply chain. That can mean doing more of their manufacturing onshore as opposed to overseas, and diversifying their sources.
Circular selling can and should play a critical role: retailers are adding repair services, reclaiming and reselling items, and even remanufacturing, where reusable component parts are rebuilt into new products. All of these techniques help retailers make the most of stock they have already produced or obtained, rather than relying on a constant stream of goods from halfway around the world.
How do you think we should reimagine our supply chain to prevent this from happening again in the future?
There’s a great book I’m reading right now, called Waste to Wealth, which is related to the movement we’re a part of. It’s not about just zero waste, but positive-impact waste and getting to a carbon-negative approach over time and making a contribution back. The idea is that we move away from a “make, take, and trash” linear direction of consumption to a circular reality. But to do that, we need to expand the overall perspective of retail and make some fundamental shifts.
We need to think in terms of the lifetime value of any given product, and realize it extends beyond one person’s purchase cycle. For retailers, if you have several generations of customers for a single product, then you can extract the maximum value out of that item.
To get there, as a first step, we need to develop products that have longer lifespans. Retailers are already starting to do a better job of ecologically-sound sourcing, using sustainable labor, designing products for life, and so on.
The other key component is to think about inventory in a completely different way, to include all the items already made as well as the new stock being produced in factories. That means retailers need strategies for getting products back from original buyers, and encouraging them to resell it.
In your opinion, will retail stores or malls continue to exist? How would you articulate the role of physical retail spaces at a time when online commerce platforms like Amazon Prime or Instacart can deliver the same day or the next day?
I mentioned earlier that stores can serve as critically-important forward stocking locations for localized fulfillment. But they also play an important role in the recommerce process; they’re the places customers can go to trade in their goods, and for retailers to manage the buy-back process, including inspection of incoming resale merchandise. In the apparel space, TheRealReal has opened physical outlets and ThredUp is collaborating with Macy’s, Walmart, and others to facilitate these exchanges.
Taken together, these elements potentially contribute environmental benefits. If retailers use store-to-store fulfillment and localize their delivery networks, goods travel less. For recommerce, reselling and redelivering from local stores means there’s a lower likelihood of damage in transit, reducing the likelihood that the second buyer will immediately return the merchandise. That helps reduce delivery distances and chips away at the 15 million tons of carbon emissions generated by eCommerce returns.
Amazon is going to exert pressure on all of retail for the foreseeable future. New Direct-To-Consumer companies based in China are emerging that offer prices that are much cheaper than US and European brands. What would you advise to retail companies and e-commerce companies, for them to be successful in the face of such strong competition?
To stay competitive, retailers have to understand their customers and appeal to them authentically with genuinely superior and sustainable experiences.
Shoppers are increasingly values-driven. They want to know about product sourcing and sustainability, and those can be differentiators. But they’re also discerning, so it’s important for retailers to live up to their marketing. Some brands will say they’ll carbon-offset every purchase, but exactly how that happens isn’t clear — and shoppers will increasingly question those claims and want to see proof.
So sustainability is now table stakes, but if the buying experience is terrible, or the products don’t appeal, then it will still be difficult to compete. You need all three, and you need to be transparent. If sellers explain why it’s hard to deliver quality and sustainability at rock-bottom prices, and why it matters to do it right, consumers will support that.
There are highly-commoditized categories where price is always going to be a top consideration, and competing on anything else is going to be an uphill battle. But even those categories are increasingly ripe for reinvention. There are now a half-dozen brands selling eco-friendly toothbrushes, so anything is possible.
Based on your experience and success, what are the five most important things one should know in order to create a fantastic retail experience that keeps bringing customers back for more? Please share a story or an example for each.
The keys to a great retail experience are simple, but that doesn’t mean they’re easy to execute consistently well. First, you have to know your customer, and understand their priorities and preferences. With that knowledge, you can offer the right selection of the right products at the right price — pricing and product selection being the second and third components.
Then add a great buying experience, which encompasses everything from comprehensive product content to delivery and post-purchase support. And then last, but certainly not least, you need to appeal to the greater good and authentically commit to sustainable practices.
One example that ties all of these components together is S’Well water bottles. The company tapped into a new consumer habit, which is that people would refill disposable plastic bottles from fancy brands like Fiji using tap water. S’Well came along and delivered a quality product that’s durable and has an aesthetic appeal, priced it right, and provided a good experience that validated the desire to reduce usage of disposable plastic.
Thank you for all of that. We are nearly done. Here is our final ‘meaty’ question. You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
I want retailers to put in motion their circular plans, and make it easy for them to do the right thing. I’m driven by desire to see retailers succeed in a future where it’s going to be impossible to source competitively for all but the biggest players.
In that world, the fastest brands to understand circular will prevail. And it’s not just about winning against competition, we can become carbon negative by giving back more — that’s what we’re aiming for and all about.
There’s a $4.5T opportunity around turning waste into wealth. It’s a planet-serving mindset, and it’s also big for business. It’s not just tree-hugger stuff.
How can our readers further follow your work?
The FloorFound website and blog, www.floorfound.com, showcases our latest innovations and our cutting-edge partners, and you’ll find our latest webinars and research there as well. You can also follow me on LinkedIn at crichter1.
This was very inspiring. Thank you so much for joining us!