EP10: Rick Neuman CTO of Flipp, Former EVP eCommerce Walmart
How Flipp.com is quietly leading a retail revolution with its 50 million app downloads and saving families thousands of dollars a year.
Raphael: Hello, everyone, and welcome to episode ten of the eCommerce podcast from DataHawk. Today, Prateek and I have the honor of welcoming Rick Neuman. Rick is the current Chief Product and Technology Officer at Flipp, the retail technology company that helps families by making their lives more affordable. The Flipp app has been downloaded 15 million times already. Prior to being at Flipp, Rick has held several leadership roles, including being Executive Vice President of eCommerce and Chief Technology Officer at Walmart Canada and the Director of Ecommerce Operations at Sears.
Raphael: Rick, we’re really happy to have you on the show today, and we want to thank you for taking the time. Before we dive right into this episode, maybe you could tell us a little bit more about yourself, your background, and how you got started in this space.
Rick: Sure. So, I’m Canadian born and bred, grew up in Montreal, and then moved to Toronto in the mid-90s, where I was fortunate enough to go to school for Business for Commerce. Found my way into eCommerce and Technology by just passion and devotion to trying to make things easier and better for those of us who love the online world and found that eCommerce was one of the areas that, at least back in the early 2000s, was a hard place.
Rick: Found my way to Canadian tire on their marketing team, just doing like site management and marketing coordination. Moved to Sears, where I had the opportunity to lead eCommerce operations and product management and build the first product team. From there, Walmart came knocking and was finally ready to get off the bench and do something meaningful in eCommerce in Canada, which was incredibly exciting. So, I had the opportunity to join that team when it was still fledgling. I think my first day on the job, the number one product on Walmart CA was the BlackBerry Playbook.
Prateek: We’re talking of a different year right now.
Rick: That tells you everything you need to know. Shortly after that, we launched diapers, and it was a rocket ship from that moment on. And then after doing the Walmart CA thing, was asked to lead technology for Walmart Canada, which included stores and warehouses, and the home office technology as well, which was eye-opening in terms of the complexity that technology truly has in an organization like that. When you kind of pull it all the way back in the supply chain, right down to the person who’s loading the shelf and checking you out at the store, really learned a lot about how technology and operations connect. I was asked to then move to the US, so I moved down to Arkansas for a couple of years to help the international team go through the same kind of agile technology transformation journey that we had done in Canada. And then, finally decided that it was time to be back in Canada and to try something outside of retail, having done it for about 15 years, working across various retailers and I had worked with the guys at Flipp for a number of years. The founder and I had developed a friendship when we originally integrated Canadian Tire, when we then moved to Flipp at Sears, and then ultimately when we worked with Flipp at Walmart. So, knowing how well the company served large retailers and the vision that they had, it felt like it was an amazing opportunity to come and join a retail technology support company on the media side where I could learn something brand new and try my hand at something that I’ve never done before. And it’s been an awesome journey. I just crossed one year. The team is brilliant. The work that we’re doing is incredibly fun and ever more relevant through a pandemic.
Prateek: 50 million downloads of the app. That’s huge. I mean, when you consider there are maybe 120 million households in North America, 50 million downloads are huge, right? So, tell us, what is Flipp and how is it helping shoppers save those bucks?
Rick: Yeah, absolutely. So, every retailer has some form of saving and deal strategy, some way to encourage a shopper to say, you know what? I’ve got great things for you this week. You should come and choose me. And they normally communicate that in a variety of forms, but it’s normally taken the form of a paper flyer delivered to your door or the form of a coupon book mailed to your house. The whole paradigm behind Flipp is that’s not good enough in today’s day and age. A) – nobody picks up the mail. I don’t think I’ve touched a physical piece of years other than to hand it to my wife or hand it to the recycling bin. On top of that, the format just doesn’t connect with the expectation of a customer today. And so, Flipp is trying to change all of that. It’s trying to reinvent the way that merchants reach shoppers and that shoppers make informed decisions about where to put their hard-earned dollars. And so, we aggregate all of the savings and deals together. All of the Flyers, all of the coupons, all of the local deals from individual stores that we have access to. We pull it together into an easy-to-navigate shopping experience that helps you choose where to shop every week. And by doing that minimal amount of decision-making work of man, where am I going to go put my dollar this week? You can see real savings for your family as each different store has a different reason why you might choose them. And not everyone wants to go to four or five different stores to get all the best deals in a given week. We’re all-time-starved. So, if you can make that one best decision for your family, you can save some real dollars, and that’s what we’re trying to do and to make that decision-making process as easy as possible.
Raphael: I love it. I think your mission at Flipp is so noble and critical, as you say, especially in this time right now.
Rick: Absolutely. I just love it. The research that we’ve done says that using Flipp on a weekly basis can save a family, on average, $45 a week.
Rick: You guys immediately react to how good it is. But when you do the math, that’s over $2,000.
Prateek: Yeah. I can get a huge vacation. I can go to my dream destination with that much money in a year.
Rick: Well, we don’t operate in France. All of those millions of downloads were across the US and Canada. You want to experience that, come across the pond. You’re going to love it. I’ll message you guys first.
Raphael: Rick, what’s a typical workday for you?
Rick: For sure, as the Chief Product Officer at an organization and a Chief Technology Officer, no two days are the same, but there are some common themes. I mean, the most important theme is how do you set your strategy right? So, a good part of my day is working with my CEO, with the rest of the executive team, and ensuring that we’ve got the right strategy in place. There are so many things we could work on and we’re not a huge team. We’re not a Walmart, where we have access to those kinds of resources.
Prateek: You pick your battles, right?
Rick: You got to choose the right path, right? And so, I’d say, number one is having the right strategy. And so, I spend a good amount of time understanding the market, understanding how we’re performing and then looking at what are some new avenues that we can do and new products we could even explore that could help us achieve the mission. But of course, the next highest priority and probably more amount of my time is then spent on making sure that we’ve got the right team to go do it. Because in our world, the team is everything. When you’re breaking new ground and you’re trying new things, there’s no like automation program you can just fly off the shelf and say, poof, your strategy is realized. We really can knockdown and change the way that you go and deliver. And so, the biggest part of my energy is spent with the team making sure they understand the strategy and where we’re going so they have as much context as possible, inclusive of the context of retail. One of the great advantages I have is that I’ve worked in retail for a long time, so I can help explain the mentality of the merchant and why they’re putting out all of these savings.
Prateek: And the business side of things, not just the tech side.
Rick: Exactly, and give them both the strategic context and the customer context in order for them to make great decisions when I’m not around. Because the reality is, I don’t want to make all of the decisions. There’s a brilliant team for that, and so really trying to make sure that I have a brilliant team, they understand the context and they’re motivated to go chase it. And I’d say that’s like the number two piece of my day. After that, it’s really telling as many people about Flipp as possible.
Prateek: So, Rick, tell us who is Flipp’s retail partners? There are so many retailers in America. You’ve got your Walmart and then you’ve got regional players, like Food Line, which I’ve seen in the East Coast. I’ve seen High Beans in the Midwest. So, who is Flipp’s retail partners? And do you have a specific target, like, for example, Target is, let’s say more high-end than Walmart?
Rick: The target is Target. And yes. All of those retailers work with and partner with Flipp to a certain extent. Now, I say that with confidence because truly over 90% of major retailers in North America is available and visible on the Flipp app. And we work with those leadership teams, the teams at each of those merchants, to try and help them cut through and help them be successful with services like content strategy, how to make their content jump out, and reach the shopper in the best way possible so that they can put their best foot forward with different media capabilities inside Flipp and beyond Flipp to take the best advantage of those savings and deals and get a jump on the competition directly where they want to do it. The nice thing about the app and the experience is it’s super local. So, you’re targeting a very specific customer, and every merchant is trying to grow and define their strategy, not just at the macro level, but right down into the community, and we can help them do that. So, those are some of the different ways that we help the merchant side. And then we’ve earned a seat with so many North American merchants that it’s truly inspiring that now, having worked in retail for so long, I get to turn around and then work with all of the people that I’ve worked with and support them, whether they’re at some of the major grocers in Canada or the US. From Kroger to Walmart, Canada to Sobee’s or outside of Grocery, even in the hardware space at Home Depot, at Lowe’s, at Rona, at so many of these other major North American retailers, we get a chance to work with them and try new things with them and innovate with them, which is really fun.
Prateek: You know how you just mentioned that you’re working with the same retailers across many different geographies within the country, like different regions. So, let me ask, do they vary between, let’s say Canada and the US and also within States in America? So, let’s say East Coast, West Coast, are consumers’ tastes different, and does that impact the kind of coupons and offers you show on your platform?
Rick: So, the taste definitely differ, and retailers have caught on to this and offer different promotions and then different material in different regions. And we help them reflect that. And we’re trying to give them better and better tools to increase the ability for them to be agile in that way to tell an even more compelling story right down to the store level or even beyond. Like, as eCommerce becomes far more pervasive and you can truly personalize down to the individual, there’s an opportunity for us to get even better. So, we’re working on a product right now. We’re calling it Merch Agility. It’s a working title. I know that, considering what a fancier name might be. But the whole point is giving merchants the tools that operate at the speed of retail because prints never did. I mean, when you were trying to build out a print program, you had to then manually look at each different version as it was being printed and it added the latest complexity. Still, most merchants have a regional strategy, but they have it in the dozens or less, in most cases, you have to have the staff or the eyeballs or the discipline to manage every detail of every print piece that’s going out. With an automated capability, you can get much more nuanced, and then you can tailor your message and change it based on inventory position, weather, personalization, so many other factors.
Prateek: In real-time. Right? Like whichever ads working, you push that product to that ad.
Rick: That’s exactly right. Giving them the real-time tools to help them then shape demand and work with their customers in the right way. And it’s really customer-centric as well. I hate it when I get a flyer and I look at an item on the front page and go, that’s amazing. And I drive to the store and it’s out of stock. But if we can help them to make every ad spot that much more compelling and make the shoppers’ time that much more valued, I think everybody wins. So, we’re working on problems like that.
Raphael: Was there any initial skepticism, apprehension on the part of the retailer side to digitize?
Rick: Yes and no. I think every merchant has known that they have to digitize the way that they operate and the customer is driving it. And honestly, merchants are very customer-centric. They listen to their customers and they react. They traditionally have been a little slow to react to some of the inevitable future of eCommerce, but understandably it’s been a challenge from a profitability perspective. So, I know why a lot of merchants haven’t jumped in. My perspective while sitting in the merchant chair has always been, it’s very clear that if you don’t get into eCommerce, your customers who want that are going to go somewhere else as they build the capability. Other people’s customers who also want that would be willing to switch if you are the best opportunity, and there’s a real habit-breaking moment as people decide that they’re going to switch contexts. And with the right technology and over time, you are able to make eCommerce as or more profitable than physical retail. But it really takes kind of that innovative spirit and thinking beyond the physical box of the store in order for you to get there, and I think that a lot of merchants are finally seeing that and it’s unfortunately through the propellant of COVID had done it, but they’re finally seeing that with scale, you can then manage through the fixed cost portion of eCommerce and get to that marginal cost basis and start to see it turn positive. And once you do that, scale becomes no longer a barrier and you’re able to drive. And so, it’s really exciting to see the world get there because I think that part is going to make many people’s lives meaningfully better into the future. But I think we’re probably a good year away from really celebrating that as I still wait for my vaccine and maybe you guys would as well.
Prateek: It’s good that you mentioned COVID because my next question is related to that too. The thing is, people wanted to make fewer trips outside during COVID. They normally went to stores where they could get all of that stuff under the same roof like under one roof, get everything right. And that favored some retailers and didn’t favor some. It favored like Walmart or something where you can have everything under one roof. So, did you see the scale tip? First question. And secondly, does the landscape now where let’s say COVID is sort of maybe receding, does the landscape now look different than it did pre-COVID?
Rick: Yeah, it’s changed and changed again, and it will likely change again. That’s the really interesting thing about this past year and the year ahead is there hasn’t been a fixed pattern. As you said, at the very start of COVID, we saw trips plummet to retailers because of exactly what you said. People weren’t excited about shopping when they had to wear a mask and they were paranoid around getting anywhere close to another human being no longer fun, especially in the grocery space. And when it used to be like a really enjoyable experience for a lot of people, it became a chore. And so, the number of trips came down dramatically, and then the value of each incremental trip went up dramatically. And that was really, really important. What’s happening now, what I saw in a recent Dawn Humvey report as well is that trips are actually rebounding and growing, not necessarily because the basket is growing at the same time. So, the value of each trip is holding, but with less food being eaten outside of the home and more happening inside the home, and the comfort level of people on the shopping side growing as that hasn’t really proven to be a strong vector of disease growth. I think you’re seeing more trips happening now. And so, the article suggested the same, and we’re seeing it in our data where we’re starting to see traffic continue to grow from individual users. Oh, shoot, my kids ate all my yogurt again. Where am I going? They can go pull open the app, do a quick search and then decide, okay, I’m going to go there.
Prateek: I think people at this point are just looking for any excuse to leave homes because they’ve just been confined so long.
Raphael: Really, what would you say is Flipp most, or in other words, what is about Flipp’s business model that separates you from the competitors not only today but in the foreseeable future?
Rick: Yeah. I’d say the biggest thing about us is we are trying to be focused on the shopper, but in the shopper through supporting the merchant and not competing with the merchant or actively kind of disrupting their right to serve. We don’t want to make a sale. We’re not trying to build a marketplace. We’re really trying to be in support of the merchant and the many marketplaces that exist to help them reach and convince shoppers so that shoppers have the best place to come when they’re deal-focused in order to pick where they’re going to shop that week. And we’ve got some really strong data points that support that. We have another product that I haven’t mentioned. So, if you go to most major merchant websites, if you go to Walmart.CA, if you go to many other retail websites and you click on See My Savings and Deals or View my Flyer, what you’re going to see is a page that’s powered by Flipp that we give to merchants. We give them that access to a very good and industry-leading technology platform for free because we know it’s so critical for them to have a way to display that content and ensure they can digitize their print. And we are going to be doing that for our own platform in support of them, and so, we really want to give them a way to go and display that back to their own customers for free. And I think that really differentiated us from the competition early on in the business model, and I think it continues to because we have such a strong relationship with those merchants, when we start in a position of helping them solve one of their biggest problems and then giving them a platform to reach more shoppers to solve one of their other biggest problems. It’s a really unique way to go to market.
Raphael: And talking about competitors, how do you watch them doing in terms of technological advancement, and does that factor into your own tech roadmap?
Rick: I mean, in all honesty, we are the market leader in the space that we play in.
Prateek: You’re setting the benchmark.
Rick: I’ve used as a team is that competition is for losers. Once you start to compete, you’ve already lost, and we’re really focused instead on the customers. So as much as we do keep an eye on what’s going on in the industry, in all honesty, we probably spend more time looking at really cool and compelling apps that we see shoppers are adopting and loving to see what we can learn and what can apply in our own context versus obsessing around what the competition is doing and just trying to chase them. When you’re the market leader, I think you have the advantage to set the table and not just chase.
Prateek: Right. You mentioned something interesting. You said your focus was the customer. And if you say that, the first company I’m going to think of is Amazon, the most customer-centric company in the world. And so, Amazon is making an increasingly large play in the grocery space, of course, not just online, even offline. Amazon Fresh stores and things like that. So do you see Amazon as a potential competitor, or do you see Amazon as a potential partner, because they might want to advertise their offline retail inventory on the Flipp app on the one hand, on the other, because they have so many prime customers, et cetera, they may not want to advertise on any other platform besides their own? So, they might only want to advertise on the Amazon.com platform. Right? So, how do you see Amazon going forward?
Rick: I see them as a great potential customer, not even potential. We’ve actually done several campaigns with Amazon and given savings and deals to our shoppers. And as they continue to grow in grocery, they’re going to continue to be relevant. But even beyond grocery, there are some great deals on Amazon. They’re known for having some excellent prices and some big promotional events like Prime Day. And if we’re trying to help the shopper to make life more affordable, that ultimately means that having visibility and understanding of what those deals are as important to our shopper base, and we need to reflect it. And we need to work with Amazon in order to give them a voice to go and do it. What I would say is, as much as they might want to communicate only to Prime membership and have people locked in, there are many merchants beyond Amazon with some great deal encourage the shopper to keep their eyes open and to keep their willingness to go and try something different. If there is a great deal on a product that’s going to save them a bunch of money somewhere else, that’s the beauty of competition in the retail landscape. More competition means better prices for everybody, and then a willingness to go and shop between two, three, four different experiences really does help keep that competition healthy and alive. So, I’m eager to have Amazon on the platform, and I’m eager for our shoppers to consider them and for every week to make an informed decision on where to go shop.
Prateek: Rick, when it comes to shopping for groceries, right, what are some of the things shoppers value apart from price? Because I think in terms of pricing, eventually companies come down to the bare bones. In the sense you can’t fight on price alone, right? So, what are some of these shoppers’ values apart from price?
Rick: I mean, first and foremost, not many people shop for pure price alone. They normally shop for value, which is a combination of price and quality. So, getting the quality that you demand your family at the price that best serves that family and allows you to stretch your dollar to get even more for that family. So, it’s not even price. It’s really about value. And we’re not trying to suggest that there’s a particular price that is best in the market but rather helps them shop inside the value set that they’re looking for. So, you can choose which merchants you want to look for. You can choose which brands you care about, which allows you to set your quality threshold, and then find the best price inside of that. But even beyond value, shoppers definitely look for many things. They look for the experience that they’re going to get either in a store or online. What is the end-to-end experience that you’re going to have as you choose that merchant? And part of that is distance, so, how far do I need to go or how easy, is that store accessible, or what is the convenience level that eCommerce site can provide? Part of that as well is, like, actual content and availability of understanding of what you’re actually buying. And then a big part of that is assortment. So, do you have the products that I’m looking for in stock, because that’s kind of an important part of it, and do you have something that’s going to excite me? Something that’s new that I haven’t seen before and something to get me out of my chair to come and try you that particular week. So those are a couple of different features, right? You’ve got the price, experience, access, and convenience, some of the major factors.
Prateek: And I do have a couple more questions.
Rick: Yeah, go ahead.
Prateek: So, Rick, this time, because of the stimulus checks and things like that, and from what I’ve been reading, it seems like there’s a very clear correlation between retail spikes and when the stimulus checks went out. Did you guys see something of that sort on your app correlations between stimulus checks and people shopping increases?
Rick: I would have loved to say that we had not. But unfortunately, this is true in normal times as well, because we serve an audience that is looking for savings. That needs savings. There’s a correlation, too. As money becomes available, they serve their families. To me, that only reinforces the mission even more. It makes it clear that we are there when they are able to serve their family the best, and it just means we need to fight even harder to have even more savings and deals reach even more shoppers and make it easier and easier to find access.
Prateek: Got it. Got it.
Raphael: Rick, how much of this COVID-led online shopping boom will stay on once we’re past the pandemic?
Rick: Yeah, this is, my personal perspective is COVID was an accelerant to online shopping, not a short-term boom. And so, the optimist in me would say that we’re not going to see it slide backward really at all, that a lot of it is here to stay and it will continue to grow at a similar rate to what it was growing previously but off of a very significant base. But it won’t grow forever. There is a natural balancing off point until and unless even greater convenience levels are unlocked at the scale that we achieve and we’re able to deliver against full baskets, at sub 1 hour delivery times, with a great experience, with all of the products that you would want and an amazing online discovery tool. That’s going to take some time.
Raphael: Do you have any questions?
Prateek: That’s all for me.
Raphael: Rick, do you want to say one word or whatever you want to throw into the podcast?
Rick: Sure. What would I say to your audience? I would say retailing is at one of the most exciting times ever, and shopping is at one of the most exciting times ever. And it’s incredibly cool to see all of the innovation that’s coming to market right now in terms of different retailers, different products, and different ways to reach customers. If you’re interested in making Flipp part of your mix as a shopper or a merchant, I strongly encourage you to start by downloading the app. At least take a look. And if you want to connect with me on LinkedIn and talk more about the future of retail, I’m always happy to do it.
Raphael: Thank you so much, Rick. This has been a great use and thanks so much again for coming on the show. Hopefully, I’ll be able to download it in France soon.
Prateek: Thank you, Raphael. It was a great pleasure. I think, Rick, if people ask me what’s my one takeaway from today’s conversation, I’m going to say it’s your humility. That’s going to be my one takeaway from this conversation. And thank you Raphael for having me as a guest today.
Raphael: Thank you. Guys, don’t forget to subscribe to the DataHawk eCommerce podcast on your favorite podcast platform. You get alerts for every new episode that comes out. See you next time. Bye-bye.
Prateek: See you. Bye-bye, Rick. Thank you so much.
Rick: Thank you.