Amid concerns over the coronavirus, followed by stay-at-home orders across the country, we witnessed a scenario that no one could have predicted: lines of consumers waiting to purchase basic essentials, and facing out-of-stock scenarios while at the same time, the rush to eCommerce grocery drove the urgent need to speed up hiring for delivery. I’m proud of the way our team, and our clients and partners all rose to the occasion, working tirelessly around-the-clock to get essential supplies to consumers. This is an experience I will never forget.
As part of our series about the future of retail, I had the pleasure of interviewing Steven Boal, the founder, chairman and CEO of Quotient, the leading digital promotions, media, and analytics company that has been delivering digital coupons and ads to shoppers every day for over 22 years.
Steven Boal founded Quotient in 1998 and serves as the Chief Executive Officer and Chairman of the Board of Directors.
Prior to founding Quotient, Boal served as Vice President of Business Development for Integral Development Corporation, a privately held financial software company in Silicon Valley. He also held previous roles of Vice President and Head of Global Emerging Markets Derivative Technology at J.P. Morgan, and served as the president of OptEdge, a real-time options, analytics and risk management business. Boal also held various management positions at TriStar Market Data, eventually running the company’s Montgomery Securities division.
In addition to Quotient, Boal is also the Founder and Chairman of electronic gift card company Cashstar (acquired by Blackhawk NYSE:HAWK) and a founding board member of Matia Robotics (https://matiarobotics.com), a robotic mobility device company. He holds a B.A. from the State University of New York at Albany.
Thank you so much for joining us! Can you tell us a story about what brought you to this specific career path?
Absolutely — I actually started out my career at the intersection of technology and finance, working on Wall Street. One morning, I watched someone get the Sunday newspaper and sit down to clip coupons, which fascinated me. Not surprisingly, I wasn’t a couponer back then. But watching this take place, paper and scissor, and seeing how technology was starting to disrupt traditional media, I thought there had to be an easier way. We were in the middle of this massive digital boom, and I wanted to see how technology could be used to improve something as commonplace as clipping coupons. I researched and realized the multi-billion-dollar couponing promotions industry was one that was ripe for disruption… What I didn’t know, or appreciate back then, was just how slow the industry would be to change.
In the same year that we started the company, Google was officially born, and it was clear media consumption was starting to change. Smartphones weren’t even invented yet, but it was clear that a digital revolution was underway.
Can you share the most interesting story that happened to you since you started your career?
Since the founding of the business in 1998, there have definitely been some interesting moments, but nothing could, or hopefully will ever come close, to COVID-19. Amid concerns over the coronavirus, followed by stay-at-home orders across the country, we witnessed a scenario that no one could have predicted: lines of consumers waiting to purchase basic essentials, and facing out-of-stock scenarios while at the same time, the rush to eCommerce grocery drove the urgent need to speed up hiring for delivery. I’m proud of the way our team, and our clients and partners all rose to the occasion, working tirelessly around-the-clock to get essential supplies to consumers. This is an experience I will never forget.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson or takeaway you learned from that?
This certainly wasn’t funny at the time, and wasn’t a mistake, but it’s definitely a moment in our company’s history that stands out. We were the backend to a coupon being promoted by Oprah — and in true Murphy’s Law fashion — everything that could go wrong, did. We were still a relatively young company at the time, and this was a massive opportunity for us. I mean, it was Oprah. To make a long story short, Oprah was giving away free chicken to everybody in America. The vendor that her team had chosen to host their giveaway didn’t implement our coupon the right way, and as a result the whole situation became a huge mess. I think I spent something like 24 consecutive hours pacing in my bathroom, on two live conference calls, trying to do damage control while actual fights were breaking out in KFCs across the country as they ran out of chicken. It’s taken me a few years to be able to laugh about that particular story.
Are you working on any new exciting projects now? How do you think that might help people?
We recently signed our first pure-play grocery eCommerce delivery partnership with Shipt, bringing digital coupons to its network of more than 90 retailers. This comes at a time when grocery delivery is more important than ever. Grocery eCommerce has experienced tremendous growth due to COVID-19. We also have an active pipeline of other retailers and verticals that we are excited to work with, and we anticipate additional announcements in the months to come.
We have invested in Artificial Intelligence and that is starting to pay dividends as we continue to accumulate and process enormous amounts of daily sales data. The near real-time targeting and measurement of program effectiveness allows brands to make changes to in-flight campaigns with the speed and precision never before possible in this industry.
And we have one other exciting new project, but that is still under wraps, so we’ll need to wait until later this year to see that roll-out.
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?
There are so many people who have had positive influences on me, both professionally and personally, it would be impossible to list them here. I will say, I tend to admire most the people who have been successful in business, have taken their success and focused their time and resources on solving some of the most difficult challenges facing society, and still take the time to answer my emails when I have questions. People like Reid Hoffman and Naveen Jain are great examples.
How have you used your success to bring goodness to the world?
At Quotient, we have always prioritized getting involved with local initiatives that help our neighbors. The general areas we focus on are: making education and development more accessible; eliminating poverty and hunger; and preservation, appreciation, and sustainable development for the environment. We encourage the team to share thoughts, ideas, and initiatives. This allows us to learn about new opportunities to make an impact and put actions in place. We also encourage all employees to take paid days off every year to volunteer for causes important to them.
Ok super. Now let’s jump to the main question of our interview. Can you share 5 examples of how retail companies will be adjusting over the next five years to the new ways that consumers like to shop?
1. Mixed-mode shopping will continue to rise
The vast majority, roughly 97%, of grocery shopping occurred in physical stores up until just a few months ago, but the global pandemic changed all that. While many people visited stores, hoping to secure some essentials, many were unable to leave home and relied on grocery delivery to provide essential items. As states test their abilities to partially open up and stay-at-home orders and other restrictions are eased, I believe consumers will return to doing most of their grocery shopping in physical stores. However, now that so many have experienced eCommerce grocery, there will be much more of a mixed mode of shopping. For example, a household might decide to purchase their personal items — like toiletries and home products — by ordering online while perishable consumables — such as meat, seafood, produce and dairy products — are purchased in store. The big change here is that eCommerce will take up a larger percentage of overall grocery shopping than it ever has before. Retailers who respond accordingly and offer strong, personalized digital experiences that meet the needs of their customers will do well.
2. Free-standing inserts will dwindle
The free-standing insert has been around for a long time. Couponing started in the late 1800s with Coca-Cola, and then C.W. Post did it for cereal. But it wasn’t until after the Great Depression that couponing really took off. By the late 1930s, over 70% of U.S. shopping households were regularly using grocery coupons. It was a pretty big step forward and it’s been that way ever since.
Many of these coupons are found in Sunday newspapers. The rest are found in shared mail, something that, in my opinion, is aerodynamically designed to go from your mailbox to your garbage can without landing on a surface on your home. It’s slick, it’s glossy, and it just goes right into the can.
More than 300 billion coupons are distributed via free-standing inserts (FSI) every year. They once redeemed at 1.6% to 1.7%, and now, they redeem at 0.04% or less. It’s simply not an effective vehicle for retailers, brands or consumers. And, most notably fueled by the pandemic, paper coupons are simply not being accepted at a rising number of retailers.
3. Digital will continue to be a vital driver of growth
The average grocery store can stock roughly 42,000 SKUs out of a product catalog of over a million potential products. Every week, there are about 4,000 items on sale — roughly 10% of the store. A physical circular can only hold a few hundred of those items. In a digital environment, every one of those items can be featured. Each customer can receive customized offers that meet their own personal needs. It’s a much better way of doing things, and it will continue to be a vital driver of growth for retailers and brands alike. This is just one way digital continues to be a major growth driver for retail.
4. Consumer choice will be of significant value
If consumers go into a store to search for a particular item and there are multiple choices, price plus brand affinity are the decision criteria. If the brand they were specifically searching for does not offer a discount, in the current, and worsening recessionary environment, shoppers are more likely to choose the brand with the best perceived value. Brands need to provide both value and stay top-of-mind to maintain or grow their current share.
5. Retail brands will shine
In the past, consumers turned to familiar brands for many consumables. They purchased Kraft Macaroni & Cheese, Kellogg’s Frosted Flakes and Heinz Ketchup. Then around the year 2004, Steve Burd, an industry savant and CEO of Safeway at the time, gave a speech about how he wanted to brand stores the way CPGs brand products. Now when you go into a grocery store, you have bright stores, wide aisles, and colorful palettes. The store brands feature colorful logos that, up until 2004, were generally black and white. American shoppers proudly tell you the store they shop at, not just the brands they buy. They have a grocery “experience” relationship.
As eCommerce grows, retailers must find a way to replicate the store experience in a digital environment. The last thing they should do is show a vegan who wants whole grains and vegetables the same promotions as a meat-lover who enjoys turkey, steaks and salty snacks. The retailers that treat shoppers with respect, provide them what they want and give them value for shopping in their stores — those are the retailers that will win.
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’m a founding board member of a company called Matia Robotics. At Matia we manufacture a robotic mobility device for people with paraplegia or other mobility related needs. As a society we’ve come so far in so many ways with technology, yet we can’t seem to solve some seemingly basic, but obviously vexing problems. Artificial intelligence, robotics and 3D printing, for example, all present huge opportunities to solve very difficult problems.
How can our readers follow you on social media?
You can connect with me on LinkedIn at linkedin.com/in/sboal
or Twitter @stevenboal
This was very inspiring. Thank you so much for joining us!