Eataly: From brick-and-mortar to digital: Building omnichannel for experiential retail

[00:00:00] Lauren Lavey: If someone perhaps visited a store and tried a pasta dish in our restaurant and loved that pasta shape, we wanna make sure that they come online and have the experience to quickly purchase that item. So, it really extends beyond a SKU and builds a cart as far as a recipe.

[00:00:15] Kailin Noivo: Hey, folks. We have a great episode coming up today with Lauren. She's actually been many of the Noibu customers from Barstools all the way over to Eataly. We're really excited. She talks a bit about how to manage an international organization when you're not in the HQ, talks a bit about how to influence and how to derive digital experiences for brands that really, really historically focus on brick and mortar. So, excited for this great episode.

[00:00:44] Kailin Noivo: Welcome to another episode of The Ecommerce Toolbox Expert's perspective. Joining us today, we have former VP of Digital Strategy and Omnichannel at a brand we all love, Eataly. Welcome, Lauren.

[00:00:54] Lauren Lavey: Hi. How are you?

[00:00:56] Kailin Noivo: Amazing. Amazing. Thanks so much for joining the show.

[00:00:59] Lauren Lavey: Thanks for having me.

[00:01:00] Kailin Noivo: Lauren, why don't you kick us off, talk us a bit through your career journey, how you ended up at Eataly?

[00:01:03] Lauren Lavey: Yeah. So, I have had a journey that is always rooted in digital and really putting the consumer first. So, my experience has varied from what I refer to as treasured retail brands like Urban Outfitters, Victoria's Secret, West Elm, and for the last 8 or 10 years of my career, I've been really focused on hospitality ecommerce, and CPG, food and wellness. So, really tying the omnichannel journey to digital activity and the consumer experience.

[00:01:32] Kailin Noivo: Very cool. It sounds like you have a ton of experience with a bunch of our customers, too. You're at Barstool for a bit as well. That's a cool brand based out in New York, Murray's Cheese. So, that's really, really cool, really, really cool to hear that. To kick us off, always really curious. You're most recently at Eataly North America, focusing on driving revenue and digital brand. What was one of the maybe misconceptions that you had going into having an omnichannel job like that, where so much of the focus is brick and mortar, but now they're also kind of bringing in some digital footprint? Maybe talk us through some of the learnings out of the gate there.

[00:02:10] Lauren Lavey: Yeah. Absolutely. So, most often when I would speak to someone about Eataly, the first response I would receive was, oh, I didn't know that Eataly had a website. So, there's a lot of education that obviously had to happen with Eataly as a brand that is, obviously, a very experiential space. It's almost kind of a third space where someone is coming for their shopping experience to learn about a product or to enjoy a meal, and digital really has the responsibility to extend that relationship online and well past their last visit. Frequently, many consumers have visited Eataly via tourism. If you're in Vegas for the weekend or staying in New York City, you'll go and experience that. And, realistically, what digital provides across our ways to service someone immediately outside of our spaces or ship an experience that they have otherwise experienced in person.

[00:03:06] Kailin Noivo: Very interesting. So, given that this brand is super, super experiential, and maybe it's a little different from some of the other brands that you've worked for before, talk to us a bit about the digital product experience. So, when you're telling a brand story, talk to us a bit about some of the more fundamentals, like, for example, slow pages, failed loads, kind of missing images, anything that would be unacceptable if it were translated into a brick and mortar standpoint. And if you walked into a store and there was a broken window, you would not be okay with that. But, yeah, like, talk to us a bit about how you have to maybe bring that in and how that was potentially different from how you've worked in the past.

[00:03:43] Lauren Lavey: Yeah. Absolutely. So, Eataly is the ambassador of Italian culture. And with that, we have an approach towards a global technology that was sort of lacking in a localized experience, where, you know, in Eataly, Eataly is treated more as a one-to-one retailer; their business is more localized. For North America, our experiences really vary between the local ecosystem, which is certainly a driver of business that we keep going. And then from a digital ecommerce lens, our D2C business is a heavy gifting business. We frequently did about 60% or 70% of volume during Q4, and a large penetration of our assortment that sold was gift boxes. So, during gifting time periods, we know that consumers wanna make a choice on gifts, they wanna have all of the information available, and they wanna understand that this is a premium gift or matches the expectations of their experience in Eataly. So, when we came onto Eataly, what I quickly realized is there was a lot of technical infrastructure that was broken. We quickly assigned Noibu the task of helping us to diagnose that. And from there, it's what I refer to as sort of the distance of math between mood. So, the math was that Noibu was helping us diagnose quickly where those technical problems were and giving us the resources to then tactically bring this to our dev partners to fix it and remove that friction. The mood is really when we know that we have a clunky navigation that in a store, that can be almost charming, where the shelves are lined with so many products, and it's discovery and experiential, and there's a monger behind the counter that's saying, you must try this cheese. Digitally, if a consumer gets lost in the experience or has any kind of speed bump, they're abandoning immediately. So, we wanna make sure that we are shopping the sites ourselves every day to make sure that the experience lives up to the brand expectations. And, also, you really wanna be arming your customer support team because they're on the front lines getting that qualitative and quantitative feedback from customers and really bridging that full experience together.

[00:05:52] Kailin Noivo: Very cool. And how did you think about designing targets? Like, was the target to keep people on the website, drive them to stores? Was it like on-site conversion? Yeah. Talk to us a bit about how you and the teams kind of generated targets and kind of held folks accountable. Like, how do you know you're making progress?

[00:06:10] Lauren Lavey: Yeah. Absolutely. So, there's obviously a lot that goes into digital. And for us, the D2C site is just one channel in the case of Celibon. So, ultimately, this sits in the center between digital experience, operations, and revenue. So, we know that revenue and incremental revenue is obviously our North Star. But when you think about the targets for each channel, we know that our D2C business is really built on that gifting program, seasonal products, and then kind of tying that whole in-store experience together. So, let's walk through a customer journey. If someone perhaps visited a store and tried a pasta dish in our restaurant and loved that pasta shape, we wanna make sure that they come online and have the experience to quickly purchase that item. And then they can also see, oh, yeah, there's this Alfredo or truffle sauce that I had it with in the store, so let me take that into a recipe. So, it really extends beyond a SKU and builds a cart as far as a recipe. And then maybe someone wants to take their friend to a class to learn how to make this dish themselves. So, that really unifies and brings the consumer back into the retail store. So, it really is driven through a full omnichannel experience.

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[00:07:36] Kailin Noivo: Very cool. Talk to us a bit about marketplaces. Was that kind of part of the strategy before you joined? How did you think about marketplaces like Amazon and things like that? Very big in the U.S and in North America, maybe not so big in Europe. Talk to us a bit about marketplaces.

[00:07:50] Lauren Lavey: Yeah. Absolutely. So, marketplaces were a strategy that I helped launch at Eataly, and super proud of the progress that we made. We primarily were launching on Amazon, and the thought process here is, how do we leverage the private label assortment that our fantastic teams in Eataly had been building? This is a different set of private label products where you might walk into a beloved grocer, like, let's say, Whole Foods, and their 365 is an everyday deal and everyday value. Our private label products were built to show the premium nature of our brand and differentiate from some other products that you might find on the shelves. So, the SKU assortments were really built on pantry staples like pastas, olive oils, vinegars, spreads and sauces, and pistachio spread. I think this Dubai chocolate trend is not necessarily going away. That was one of our top SKUs. So, we wanted to make sure that we were leveraging our marketplace partnership to build that pantry. And we know that we were not going to continue to add some gift boxes on there that might not be margin positive, and it doesn't necessarily make sense for that channel. So, we really wanted to build a foundation of using some of these marketplaces like Amazon as a top-of-funnel acquisition to make sure that the consumer that might not have access to Eataly or doesn't wanna pay that $9.99 shipping, and as a loyal Amazon consumer can still reach and access our brands.

[00:09:16] Kailin Noivo: Very cool. Talk to us a bit about the retail media strategy in a business like this versus maybe traditional. Is it more siloed, or is it truly omnichannel? Like, what was kinda the, yeah, well, how did you build the strategy? How did you measure what's working and maybe take us from there.

[00:09:35] Lauren Lavey: Absolutely. So, retail media is an inevitable marketing tactic in current standards. You really have to use it strongly to meet your consumer and not just be a wasted spend. So for platforms like Amazon, knowing that Eataly had a strong brand recognition, we're not necessarily gonna go after long tail keywords to bid on that don't necessarily make sense for the brand. And we're also not going to try to target products that would just be a price comparison against a direct competitor. So, we're really looking for customers that are looking for higher quality, premium brands that make sense in their pantry. Whereas on a platform like Uber or Instacart, there are some aspects that are certainly pay to play, but we wanna make sure that we are leveraging our strong products in store, the availability of the end of the shelf within stores, having about 10,000 SKUs. We can reach more customers in a larger radius via those platforms, and so we use retail media to access two goals. Were we attracting new customers onto these platforms and giving them the right deal? And then, between the time when we were acquiring them, how frequently were they continuing to visit? So, that would require us to really have a strong hold on our P&L to make sure that we were leveraging a lot of tactics that would retain a customer past that first purchase and continue them going forward, and that has been quite successful. Our delivery ecosystem is about a 13% penetration of retail sales, so it's a strong platform so far.

[00:11:14] Kailin Noivo: Very, very cool. Talk to us, this one might be a bit more spicy, but talk to us a bit about when you have a regional team in North America and, like, in HQs overseas or vice versa, how do you actually, like, through a central IT team, like, how do you kinda build priorities, speak in a common language? Because in my experience, central IT teams are often managing multiple different stakeholders, right? You're one of the stakeholders. So, talk to us a bit about that.

[00:11:38] Lauren Lavey: Absolutely. I will say the language barriers were sometimes challenging. I'm only on level 18 of Duolingo, so still working towards those goals. But there were some interesting nuances between the global and local strategies. Ultimately, there was not yet one full unification of a tech stack across all regions, and Eataly is globally in about 14 countries. So, there were some prioritization, but what was quickly realized around global governance was that the current digital footprints were just not meeting consumer expectations and weren't providing the experience the brand was really looking for. So, we've collaborated on what the next phases of digital growth would look like, and that ultimately means a replatforming of a site so that all regions can have that one globalized tech stack. And while that component is important, there is the nuance between global and local strategy, meaning a globalized tech stack makes sense, data infrastructure makes sense, a CRM even certainly makes sense, but from a localized standpoint, you need to be able prioritize your consumer experience, the nuance of culture that is regional, the customer experience there, merchandising, marketing strategies. All of those components really differ globally, so there should be a sort of push and pull and not necessarily a prioritization of tech stack, but what makes sense for the region and driving that revenue value.

[00:13:04] Kailin Noivo: Love to hear it. I mean, I don't think this would be a modern podcast if I didn't ask you about AI. Curious, like, where do you think AI has the most opportunity to create value in the value chain? Is it as an operational tool, is it as a shopping experience tool for customers, like, yeah, where did you see some of this take lift out of the gate?

[00:13:22] Lauren Lavey: Yeah. I think there's a lot of avenues to go with AI. I think every retailer uses it differently, depending on the stage of maturity the brand or business is at. For Eataly, there were a lot of use cases around creative and content. A lot of the creative or content that we received in North America were coming from our creative teams in Italy, and that meant there was a lot of translation that needed to happen and storytelling around PDPs. So, leveraging AI tools for content easily makes sense. And there were other areas where we would look to AI to help fill in some gaps where we didn't necessarily have headcounts around forecasting or food and safety checks, and some warehousing information, allocation of inventory. Some of those tactical needs where we just didn't have the body count to help support. But, ultimately, I like to say that AI is a great tool to continue to iterate and move you forward and provide teams more bandwidth for time. That's the biggest currency. But if you don't have a human that is helping you double-check everything is correct or move the tool forward, you're really just buying a shiny object that's not a silver bullet.

[00:14:36] Kailin Noivo: Makes sense. So, from what I'm hearing is full automation; we're not really close, research and then co-piloting is kind of where it's at right now, in your opinion.

[00:14:45] Lauren Lavey: Absolutely.

[00:14:46] Kailin Noivo: Awesome. Well, Lauren, this was great. What's next for you? If someone wants to connect with you, how do they do that?

[00:14:50] Lauren Lavey: Absolutely. So, you can find me on LinkedIn, and my handle is Lauren Porten Lavey. I've just recently gotten married, so still figuring out the name change. Next for me, I'm really excited to wrap my arms around a new brand and a new challenge, whether that be in the hospitality and food space, or I've also worked in homeware or footwear and other different things, so I'm innately curious and excited for my next challenge.

[00:15:14] Kailin Noivo: Awesome. Thanks so much for joining us, Lauren.

[00:15:16] Lauren Lavey: Of course. Thank you.

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