David Chinn of Lexer: How To Create A Fantastic Retail Experience That Keeps Bringing Customers Back For More
Customer experience is the new battleground for many within retail as reports predict that between 2020 and 2024, the global investment in digital transformation will almost double. Marketers seek to be empowered by comprehensive, yet easy to use CDXPs to create the technologically enabled experiences that will drive business growth with many believing it also strengthens customer relationships.
As part of my series about the “How To Create A Fantastic Retail Experience That Keeps Bringing Customers Back For More”, I had the pleasure of interviewing David Chinn, CEO & Co-founder of Lexer.
David has spent his career leading data and technology businesses in both mature and emerging markets.
David is the CEO of Lexer, he joined the company in 2015 and as an early member of the executive team he helped to rapidly scale Lexer in Australia, in 2017 he relocated to the US to establish Lexer’s North American business.
David started his career at Experian where he worked for 10 years. During this time he launched Experian’s retail analytics business FootFall in ANZ and then grew this business throughout China, Japan & the South East Asia region while living in Hong Kong. In his last role at Experian as the General Manager of the ANZ Consumer Insights & Targeting division, he spearheaded the turnaround strategy that transformed Experian from an offline data business into a digital targeting powerhouse.
David holds a B.Sc. and B.Bus. from the University of Technology, Sydney and resides in Los Angeles, California with his wife Stefani and two daughters Heidi and Lyla.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
I was fortunate to start my career at Experian in their Marketing Services business line working in a commercial role across their data quality software products. This role in the early 2000’s gave me an excellent foundation into direct marketing and an empathy for the marketers dealing with the challenges created from compromised customer data.
The challenges we solved were centered around the quality of the contact information for customers, which mainly caused waste when direct marketing. Fast forward to today and I am still helping marketers with their challenges around customer
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
In 2008 I was offered a role to establish the Australian operation for a UK-based retail analytics business that Experian had acquired. This opportunity was provided to me by Paul Vescovi, the Managing Director of Experian Australia. Looking back, this role was incredibly impactful for my career. It was a true first person on the ground role to establish something from nothing. I learned an immense amount in this role and I have Paul to thank for this for taking a chance on me.
Is there a particular book, podcast, or film that made a significant impact on you? Can you share a story or explain why it resonated with you so much?
The Hard Thing About Hard Thing by Ben Horowitz. I’ve read this book a number of times throughout my career. It provides a comprehensive guide with practical tips and insights for all stages of company development ranging from culture, hiring, performance management to leadership. Most recently I’ve valued Chapter 7 that focuses on the skills of a CEO and the difference between a Peacetime and Wartime CEO.
What do you think makes your company stand out? Can you share a story?
Lexer is a Customer Data and Experience Platform (CDXP) built specifically for DTC brands and retailers. Our mission is to help these brands know their customers and enable the experiences that drive sales. We work with a diverse array of leading brands across retail verticals including Supergoop!, Good American, Quiksilver and Sur La Table to name a few.
Leading brands continue to compete on customer experience. You can’t provide engaging experiences if you don’t know your customers and today it has never been harder for DTC brands to really know their customers.
There are three pressures for making it challenging for DTC brands to know and engage their customers:
- Disconnected customer data: DTC brands use a long list of technologies to operate their business including ecommerce, point of sale, customer service, email, SMS, ERP, website, loyalty and reviews. Each of these systems hold valuable data on their relationships with the customer. If these data sources remain siloed you can’t understand your relationship with your customers.
- Resourcing pressure: Even before the economic issues we have today, DTC brands have had margin pressure that makes investment in large IT and Analytics teams prohibitive.
- Changes in customer behavior: From changes to privacy like GDPR and CCPA, changes in measurement from iOS14.5, channel switching from COVID to the shifts in consumer spending and confidence from high inflation — these have all caused massive shifts in behavior and expectation that have required brands to have high agility to adapt.
Lexer stands out as we offer the data, tools, and services to help brands genuinely understand their customers by transforming disconnected data into powerful insights and providing the workflow tools to automate and optimize the customer experiences that continually grow and drive sales. This is all delivered without the need to have a big IT and analytics team.
Ok super. Now let’s jump to the main questions of our interview. The so-called “Retail Apocalypse” has been going on for about a decade. The Pandemic only made things much worse for retailers in general. While many retailers are struggling, some retailers, like Lululemon, Kroger, and Costco are quite profitable. Can you share a few lessons that other retailers can learn from the success of profitable retailers?
Let’s use Lululemon as an example. For Lululemon, it’s about building relationships with customers, not just about higher margins. By knowing consumers, Lululemon is able to get feedback and continue building products that meet its customers’ needs. To survive the retail apocalypse and supplement its existing ecommerce systems, Lululemon engineers rolled out a number of new features and capabilities this year. These include the ability to buy online and pick up in-store or curbside; scheduling shopping appointments before, during and after normal operating hours; mobile point-of-sale systems to process transactions outside; virtual waitlist systems; and a digital education program to allow online shoppers to access the same customer service they would experience in-store.
Here’s an example of how our client, Rip Curl — one of the most well-known surfing brands in the world — achieved business changing goals with Lexer, including an in-depth understanding of their customers, advanced audience segmentation and automation, high-value customer acquisition, and customer lifetime value (CLV) growth via upselling and cross-selling.
Prior to the implementation of the Lexer CDXP, Rip Curl’s data streams were disconnected and siloed across channels and locations. Without a central database, opportunities to capture and draw insights from data were lost, and the ability to work cross-functionally proved difficult.
Rip Curl implemented the Lexer CDXP to capture and interpret data from every touchpoint including online, in-store, customer service, and SearchGPS watch data, and consolidate that data into a single customer view in order to offer a seamless and connected customer experience.
After implementing our CDXP, the Rip Curl Marketing, Ecommerce and Retail teams were able to gain an in-depth understanding of customer demographics, what they buy, and why. This understanding could then be activated in segments to provide personalized targeting in omni-channel campaigns.
Through using the Lexer CDXP, Rip Curl’s new customer segments drove 93% more revenue per campaign, their wetsuit campaign resulted in 15X higher revenue than its benchmark comparison, and personalized eDMs using the Lexer platform increased the open rate by 28% and click rate by 16%.
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 retail companies and eCommerce companies, for them to be successful in the face of such strong competition?
You make such a great point. Retailers have to continue to create innovative ways to compete with cheaper prices. The antidote to cheap prices is improved experience. Here’s an example on how Sur La Table was able to use Lexer to turn one-time customers into repeat customers.
For most retail brands, 50–80% of their customers purchase once and never again. This massive segment of one-time buyers presents an opportunity: Customers who buy twice are 9x more likely to buy again. The potential return on converting one-time buyers into two-time buyers is huge, making the second sale the most critical milestone for customer lifetime value growth. But in an increasingly competitive market, re-engaging and retaining customers is more difficult than ever.
Sur La Table is a retail company selling cookware, dinnerware, cutlery, kitchen electrics, bakeware and more. They also offer cooking classes within their stores, which is also a great way for customers to experience their products. Sur La Table needed to work on re-engaging one-time buyers, but didn’t fully understand the potential impact until the brand partnered with us to perform an in-depth customer data analysis. Using Lexer’s CDXP and strategic guidance from our Success team, Sur La Table implemented a 4-point framework for converting the second sale, resulting in a better understanding of the customer zeitgeist, identifying the hero product that resulted in the most second-time buyers, and a more personalized approach to customer outreach and marketing campaigns.
As a result of working with hundreds of retailers over the last few years, we’ve developed and honed high-impact strategies to improve every aspect of the customer experience in retail, including acquisition, growth, and retention. Empowered by our customer insight tools, data enrichment tools, customer segmentation tools, and more, Sur La Table developed a multi-faceted “crawl, walk, run” approach to driving repeat purchases, which in the end keep customers coming back and away from competitors like Amazon.
What are the most common mistakes you have seen CEOs & founders make when they start a retail business? What can be done to avoid those errors?
The two main mistakes I see are related to customer insights, business agility, and discounting.
Many retail businesses start and grow successfully by providing a valuable product to a specific customer. While small, it is easy and smart to be narrow and focused on one customer type or need. However as brands grow many underestimate how the decisions they make broaden the type of customers they serve. A broader customer set being engaged with the creative and messaging that worked for a narrow launch can lead to lackluster results.
The solution to this is to embed customer insights and a culture of testing into all areas of the business. All decisions should have the customer at core, and before big investments are made, they should be tested to ensure the original hypothesis is true.
On the discounting front, many brands get into a downward spiral of discounting. They underestimate how discounting erodes brand value and get hooked on the discount drug to stimulate revenue. This can be a fast race to the bottom. Focus on the customer and the value your product provides them rather than reduced price.
This might be intuitive, but I think it’s helpful to specifically articulate it. In your words, can you share a few reasons why great customer service and a great customer experience is essential for success in business in general and for retail in particular?
- Down side mitigation: People talk more about the bad experiences they receive than the good ones. This stops people sharing negative word of mouth
- It’s harder to compete on product without a crazy price tag: For example, modern wetsuits for surfing — Rip Curl and O’Neill were the early wetsuit innovators. However today all the brands make a great wetsuit for ~$300 with all the technology and consumers know it. When you can’t compete on product or price, what do you compete on in addition to the brand — you guessed it; experience
- Human nature: Everyone wants to feel special
We have all had times either in a store, or online, when we’ve had a very poor experience as a customer or user. If the importance of a good customer experience is so intuitive, and apparent, where is the disconnect? How is it that so many companies do not make this a priority?
Everlane still sends me women’s emails despite me spending $1000’s on mens products and never having purchased a women’s product.
The answer is not intent but rather capability and capacity. In this example, Everlane either only has the resource to create one email and is playing the percentages or they don’t know the gender of their customers so can’t distinguish the men from the women.
Lexer can provide a gender inference model to help brands make decisions on gender and personalisation.
Can you share with us a story from your experience about a customer who was “Wowed” by the experience you provided? Did that “Wow! Experience” have any long term ripple effects? Can you share the story?
Our client, Starward Whisky, discovered this when they tapped our CDXP to gain a deeper understanding of their customers and the experiences that they expect and want. Starward Whisky had an eager audience of customers, yet without deep customer insight, struggled to segment their audiences to create engaging personalized experiences.
Starward Whisky looked to us to assist them in their customer outreach. With Lexer, Starward Whisky was able to launch a feedback survey that unearthed that deep customer understanding they were after and resulted in high engagement just 48hrs after release.
Using our CDXP, Starward Whisky was able to segment their audiences based on a wide variety of attributes such as purchasing behavior, demographics, and location. With these well-defined customer segments, Starward Whisky sent out personalized forms to different customer groups. Through this segmentation strategy, Starward Whisky hoped to deliver greater survey responses than they would have had they sent more generalized messaging. The results of our efforts were almost immediate. Using our CDXP, Starward Whisky was able to distill survey responses to gain a deeper understanding of their customers and develop fleshed-out personas that further define customer interests and customer experiences.
A fantastic retail experience isn’t just one specific thing. It can be a composite of many different subtle elements fused together. Can you help us break down and identify the different ingredients that come together to create a “fantastic retail experience”?
Customer experience is the new battleground for many within retail as reports predict that between 2020 and 2024, the global investment in digital transformation will almost double. Marketers seek to be empowered by comprehensive, yet easy to use CDXPs to create the technologically enabled experiences that will drive business growth with many believing it also strengthens customer relationships.
Cotton On Group recently adopted our CDXP to better understand their customers at an individual level and use that insight to build more relevant, personalized communications through their customer’s preferred communication channel. Retailers are recognizing that great brands are built on great customer and retail experiences, and as a result, CDXPs are experiencing accelerated adoption across the sector. Competition and the cost to acquire new customers are rising, and customer retention strategies that enhance lifetime value are in the limelight. Serving as a central source of truth, Lexer makes the customer data required for omnichannel personalization accessible to all teams, from customer service to marketing and advertising.
Other progressive retailers, such as Zimmermann, 5.11, and Black Diamond have adopted our CDXP to house their customer data because it also offers measurement, insights, and activation workflows while enriching customer profiles with retail attributes and proven playbooks that enable their marketing teams to make a bigger impact every day.
Ok super. Here is the main question of our interview. 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? If possible, please share a story or an example for each.
- Who the customer is
- What they buy from you
- Why they buy it from you and how they feel about it
- How they like to be communicated with
- Is there anything they don’t want from your brand
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. :-)
There is a lot of waste in the customer acquisition process today for brands. Mostly in the form of paying Google and Facebook to put ads in front of customers.
I’d love to see a widely adopted privacy compliant and anonymous system for consumers to contribute information about themselves that brands can use to provide more relevant offers and services to consumers.
How can our readers further follow your work?
This was very inspiring. Thank you so much for the time you spent with this!
