The company is hiring people with smart-TV experience for a new “Home Theater OS.”
To date, Sonos has built apps to control its speakers for mobile devices and desktop PCs but not TVs.
Sonos appears to be getting ready to play a bigger role on the TV: The company is hiring multiple staffers for a new “Home Theater OS” project, with job descriptions hinting at plans to run apps or experiences directly on the TV. This comes after the company considered various ways to play a bigger role in TV streaming in recent years, according to multiple sources who spoke to Protocol on the condition of anonymity.
A Sonos spokesperson declined to comment.
The company recently started searching for a “UX Lead — Next Generation Home Theater Experience,” who will work “across device surfaces (mobile, television, tablet, and HW remote) to deliver a next generation content delivery experience.” Applicants need to have multiple years of experience designing for mobile “and/or TV.”
To date, Sonos has built apps to control its speakers for mobile devices and desktop PCs but not TVs. The company’s existing home theater products also don’t ship with a hardware remote and can instead be controlled with third-party TV remotes.
Another job listing is for a future “Principal Platform Product Manager” to develop an “OS & Media Platform roadmap”; the listing asks for applicants to have experience with modern operating systems, including Android/Android TV. And a “Head of Partnerships, Home Theatre” will “play a pivotal role in connecting users to the content and services they love with Sonos quality experiences they’ve come to expect,” according to another recent listing.
That listing was promoted on LinkedIn by Sonos Chief Innovation Officer Nick Millington, who said he was working on “a new home theater project.” Millington noted that the gig would be a great match for people with experience with streaming media, including “audio, video, games, sports, music, news, movies, TV, news, podcasts.”
Sonos released its first soundbar nearly a decade ago and has seen revenue from home theater projects grow significantly as people embraced streaming video services. In its fiscal Q4 of 2019, the company’s soundbar revenue nearly matched its smart speaker revenue (Sonos stopped breaking out home theater products in its earnings reports in subsequent quarters).
Sonos has been exploring a variety of ways to further capitalize on the growth of streaming, according to multiple sources with knowledge of these discussions. One approach, which was floated internally several years ago, was to partner with smart-TV manufacturers to equip their TV sets with Sonos speakers, similar to the way the company has been partnering with car-makers like Audi.
Another idea under consideration involved turning the company’s soundbars into full-fledged media players capable of running smart-TV apps. Roku, JBL and other companies have developed similar products in the past, with mixed success.
It’s unclear whether the current “Home Theater OS” plans are related to either of those ideas. Technically, it would be possible for the company to take other avenues, including running its own apps on third-party smart TVs, to achieve similar goals.
Whatever the ultimate product may look like, the new job listings make it clear that Sonos wants to play an even bigger role in the living room and shift its business model to benefit from the recurring revenue streams of the streaming media market. The “Head of Partnerships” is supposed to help the company develop a “a platform monetization strategy,” among other things. Applicants are supposed to have a “background in digital media and/or media/application distribution platforms & technologies” as well as “working knowledge of platform monetization technologies (AdTech, billing, audience measurement, etc.).”
Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.
Don’t have any plans this weekend? We’ve got you covered.
Here are our recs for the weekend.
Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.
Between Unity’s new tech demo, “Enemies,” and “Spider-Man: No Way Home” getting a video-on-demand release, we’re not planning on leaving the couch this weekend. In that case, might as well get comfy, lie down and spill your guts to Eliza, the therapist chatbot that was recently honored with a Peabody Award.
Didn’t catch the latest Spidey movie in theaters? Or maybe you did, but you really want to watch it again in the comfort of your own home? Now’s your chance: The movie became available on iTunes, Google Play and a bunch of other video-on-demand stores in recent days; you can buy it for $19.99.
Joseph Weizenbaum’s pioneering chatbot has fascinated, enraged and amused people for decades. Playing the role of a therapist, Eliza is both very inquisitive and obviously limited in her understanding of what we tell her. And yet, we can’t help but engage. We try to trip her up, get her to say something funny, swear at her or even confide in her. This week, Eliza was honored with a Peabody Award for Digital and Interactive Storytelling, which is as good of a reason as any to once again chat a bit with her. I highly recommend the online version hosted by Masswerk.at, which allows you to experience Eliza in an old-school terminal interface.
For some time now, Netflix has been on a quest to become its own best media partner. The company launched a print magazine, podcasts, newsletters and more, all doing journalism-ish things while also advertising Netflix movies and shows. The latest addition to this is the Netflix Jr. magazine, a print magazine for the preschool to early primary school crowd. Think Highlights High Five, with every page featuring characters from Netflix shows. There are puzzles, mazes, activities and even recipes (“Cocomelon” toast, anyone?). Netflix clearly isn’t trying to reinvent the wheel here, but the magazine should still be fun for little ones, especially if they’re into shows like “Ask the StoryBots” or “Ada Twist, Scientist.” A subscription to the print version of the Netflix Jr. magazine is free, and the magazine is also available as a free digital download.
Game engines have improved a lot over the years, and there’s no better way of keeping track of visual fidelity improvements than Unity’s tech demos. Its latest looks like a high-end Hollywood visual effects production, but it’s all been rendered in real time. To add to the wow factor, it’s worth reading this Twitter thread from the tech and rendering lead on Unity’s demo team, which explores all the intricacies of the short film in detail.
With the $325 million acquisition of Stitcher, SiriusXM also got its hands on the podcast network Earwolf. Insiders told The Verge that the acquisition didn’t exactly go over as expected. This story is a worthwhile read, and another proof point that monetizing content with small but engaged audiences is hard.
A version of this story also appeared in today’s Entertainment newsletter; subscribe here.
Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.
When Samsung acquired Whisk, a smart food AI platform, in 2019, the nimble startup realized it had to ramp up its workforce quickly. Seeking to triple its employee base, Whisk, a fully remote team, sought diverse talent from a wide variety of regions through Upwork, a work marketplace that connects businesses with independent professionals and agencies around the globe.
“With Upwork, we got access to a wider talent pool,” says Nick Holzherr, CEO of Whisk, “and we found specialized talent in food data that weren’t restricted by location.”
Whisk isn’t alone in unlocking the global marketplace to find the right types of employees to support its business goals. More than three-quarters of U.S. companies have used remote freelancers, according to research from Upwork, and more than a quarter of businesses plan to go fully remote in the next five years.
The pandemic seems to be the obvious instigator of the remote work boom, but February 2022 research from the Pew Research Center notes how U.S. workers are opting to work from home as a matter of choice rather than necessity: “Among those who have a workplace outside of their home, 61% say they are choosing not to go into their workplace, while 38% say they’re working from home because their workplace is closed or unavailable to them,” the Pew study writes. “Earlier in the pandemic, just the opposite was true: 64% said they were working from home because their office was closed, and 36% said they were choosing to work from home,” it went on to say.
That hard lean into remote-powered and freelance work models is a natural progression companies such as Upwork have been tracking over the past decade. “We’ve seen how project managers got innovative in a tight labor market and already adopted remote freelancing long before the pandemic,” says Tim Sanders, VP of Client Strategy at Upwork. “And then we all learned since March 2020 how companies should lead based on outcome rather than based on employee attendance - a longstanding mindset of ‘management by walking around’. Managers have been focused less on aptitude and more on demonstrable skills, and that change in management style has made taking a look at on demand remote talent solutions a no-brainer.”
In fact, Upwork’s enterprise clients mirror the talent joining its work marketplace ― each requires new methods to engage in deeply collaborative relationships that transcend location, and defy outdated definitions and boundaries traditionally separating freelance and full-time work and workers.
Pointing to Upwork being one of the largest work marketplaces in the world with more than “10,000 skills available on the platform,” Sanders says their enterprise solution set “offers a great governance solution as budgets can be managed effectively and procurement can be handled, all within a centralized view.”
Vetting workers efficiently is part of why businesses turn to Upwork, especially if they need to increase their talent pool quickly. For Whisk, that meant Upwork managing the key pillar of compliance under a large conglomerate like Samsung. “Upwork handled issues such as background checks and compliance with local laws, which is always critical to a company using independent talent,” says Holzherr.
Sanders credits the company for folding existing talent into its working culture, along with new workers it brought in from Upwork. He says, “They opened up the window for Upwork talent to collaborate with them, and that egalitarian style in how they work with freelancers gives them so many new ideas and allows them to recognize patterns and see blind spots they otherwise might have missed.”
Whisk hired independent workers from a range of regions, such as Serbia, Thailand and Montenegro. To cite one of many success stories, Whisk needed a food ontology expert to build a knowledge graph of foods, so it cast its net wider to look at potential team members overseas. They found a Product Development Engineer in Belgrade, Serbia, who was also seeking the right kind of freelance fit for her way of living.
Ruzica Miladinovic, senior product manager at Whisk, says, “I wanted a role that connected my unique skill set and expertise with an interesting problem and the flexibility to remotely collaborate from my home in Serbia, while having the financial freedom to spend more time with friends and family. Not only has Whisk been great to work with for many years, but their remote-first and output-based work model aligns with the way that I’d like to construct my ideal career and lifestyle.”
A recent Upwork blog post from Upwork’s CEO points to what’s required for enterprise clients to shift their strategies and protocols to better leverage the benefits of freelance workers: “Businesses are realizing that to attract and partner with these professionals, they need new working models ― including leadership and management skills, and cultural and behavioral norms.”
Asked to elaborate on what managers can do to finesse that transition successfully, Sanders replies, “First, organizations need to make the mental leap from talent acquisition to talent access. Leaders who think of talent as a resource that is accessed have a more open mind to flexible talent solutions. Second, leaders should treat independent workers as first-class citizens and not outsiders. That can lead to loyalty that’s needed to build a very strong virtual talent bench. And third, set up an approach to metrics to review business goals and find out how that independent talent is helping you accomplish those goals, so you can see across the company the value of your growing talent bench.”
Work innovation and the freelance revolution are upon us, and it’s up to each business to figure out if they want to ride the crest of this rising wave, or if they want to remain on familiar shores from the outside looking in.
Read more research on the shifts in work trends here.
In Staten Island, Amazon warehouse workers are voting in a union election. In Bessemer, Alabama, the NLRB is preparing to count votes for another election. Here’s everything you need to know.
Fights over unionizing Amazon warehouse workers in Bessemer, Alabama, and Staten Island, New York, are approaching the finish line.
Anna Kramer is a reporter at Protocol (Twitter: @ anna_c_kramer, email: akramer@protocol.com), where she writes about labor and workplace issues. Prior to joining the team, she covered tech and small business for the San Francisco Chronicle and privacy for Bloomberg Law. She is a recent graduate of Brown University, where she studied International Relations and Arabic and wrote her senior thesis about surveillance tools and technological development in the Middle East.
The fights over unionizing Amazon warehouse workers in Bessemer, Alabama, and Staten Island, New York, are both moving closer to the finish line, as Staten Island warehouse workers head to the ballot box on Friday and the National Labor Relations Board prepares to count ballots in Alabama on Monday.
No group of Amazon workers has ever successfully unionized, and the efforts to unionize in Bessemer and Staten Island are the first and second attempts, respectively, since 2014. The two attempts are not related: The Bessemer fight has been ongoing since 2020 and is led by the national Retail, Wholesale and Department Store Union, whereas the Staten Island union fight began in earnest this year and is led by a group of workers unaffiliated with any national union.
“Our employees have the choice of whether or not to join a union. They always have. As a company, we don’t think unions are the best answer for our employees,” Kelly Nantel, an Amazon spokesperson, said in a statement.
In Staten Island, the group of workers calling itself the Amazon Labor Union secured approval from the NLRB to hold a union election in two facilities, JFK8 and LDJ5. The JFK8 election begins on Friday and will last until Wednesday at the facility, after which the NLRB will begin counting the votes. The NLRB scheduled the LDJ5 election to begin about one month later, on April 25. When the election date was set for JFK8, Amazon said it was skeptical that the union had enough support to be able to legally hold the election, but, since the date was set, that it wanted “employees to have their voices heard as soon as possible.”
Bessemer workers have been voting by mail in a second union election over the last two months, and the NLRB will begin to review the mailed ballots starting Monday. The RWDSU does not expect votes to be counted until sometime around April 6. This Bessemer election is essentially a redo ordered by the NLRB after a judge threw out the results of the first election because Amazon’s interference broke the labor board’s rules.
If turnout is low, the RWDSU expects the election to be very close, though the union will have no sense of whether Amazon was successful in mobilizing enough opposition until the ballots are counted. Though the first result was thrown out, the votes went in favor of Amazon by more than a 2:1 ratio last year, and many workers still strongly oppose the union effort.
It is unlikely that there will be a clear winner named in the Bessemer election within the next two weeks, as both sides will likely contest the validity of specific votes before they are opened and counted.
“The most likely scenario is probably that there will be challenged ballots that amount to the effect of the election hinging on that. We won’t know the results necessarily. It should be really close,” Chelsea Connor, the communications director for RWDSU, told Protocol.
The RWDSU has also filed several unfair labor practice charges against Amazon during the course of this election, and the NLRB will need to rule on those charges before the result is final. This month’s “rerun” election was called by the NLRB because the judge ruled in favor of the RWDSU on unfair labor practice charges filed during last year’s election, so the outcome of this ruling could determine where the process goes from here if the RWDSU loses. “It could continue for a while,” Connor said.
Workers in Staten Island have reported that Amazon has been holding regular meetings with small groups advocating against the union efforts, known as “captive audience meetings.” Amazon held similar meetings in Bessemer before voting began this year and last year.
“It’s our employees’ choice whether or not to join a union. It always has been. If the union vote passes, it will impact everyone at the site, which is why we host regular informational sessions and provide employees the opportunity to ask questions and learn about what this could mean for them and their day-to-day life working at Amazon,” Nantel said in the statement.
The company has said in the past that it believes its workers do not want to unionize and that the results of last year’s Bessemer election proved that the company offers competitive wages, benefits and an attractive place to work.
Anna Kramer is a reporter at Protocol (Twitter: @ anna_c_kramer, email: akramer@protocol.com), where she writes about labor and workplace issues. Prior to joining the team, she covered tech and small business for the San Francisco Chronicle and privacy for Bloomberg Law. She is a recent graduate of Brown University, where she studied International Relations and Arabic and wrote her senior thesis about surveillance tools and technological development in the Middle East.
Former Microsoft Senior Director Yasser Elabd is working with whistleblowing agency Lioness to share information about kickbacks and bribery in the Middle East and North Africa.
Microsoft has already been charged once with violating the Foreign Corrupt Practices Act based on an anonymous whistleblower complaint.
Anna Kramer is a reporter at Protocol (Twitter: @ anna_c_kramer, email: akramer@protocol.com), where she writes about labor and workplace issues. Prior to joining the team, she covered tech and small business for the San Francisco Chronicle and privacy for Bloomberg Law. She is a recent graduate of Brown University, where she studied International Relations and Arabic and wrote her senior thesis about surveillance tools and technological development in the Middle East.
In June 2019, former Microsoft Senior Director Yasser Elabd traveled to Washington, D.C., to meet with members of the Securities and Exchange Commission, the Federal Bureau of Investigation and the U.S. Attorney General’s office to discuss his allegations that Microsoft was ignoring bribery at subsidiaries in the Middle East and Africa.
The meetings lasted nearly the entire day. Federal agents asked Elabd questions for hours. Elabd’s attorney told him that it was one of the first times they had witnessed the AG’s office send a representative to a whistleblower meeting like his.
But more than a year later, the SEC still hadn’t made a decision about Elabd’s allegations. The agency kept promising him that the team in charge of his case would make a decision soon about whether they would bring charges against Microsoft. Finally, at the beginning of March 2022, the case agent in charge of Elabd’s whistleblowing report told his lawyer that the SEC was closing the case because it didn’t have the resources to conduct interviews and find documentation abroad during the coronavirus pandemic.
So Elabd decided to try a different route to share what he knows. Today he published an essay on the whistleblowing website Lioness that accuses Microsoft of firing him after two decades with the company because he asked questions about what he saw as bribery within the contracting services Microsoft uses to sell software to government and public bodies in countries in the Middle East and Africa.
“We are committed to doing business in a responsible way and always encourage anyone to report anything they see that may violate the law, our policies, or our ethical standards. We believe we’ve previously investigated these allegations, which are many years old, and addressed them. We cooperated with government agencies to resolve any concerns," Becky Lenaburg, Microsoft's vice president & deputy general counsel for compliance and ethics, wrote to Protocol.
The Foreign Corrupt Practices Act makes it illegal for U.S. companies or citizens to bribe people working for foreign governments, and a federal whistleblowing protection program is supposed to give people like Elabd privacy protection and rewards for reporting evidence to the SEC that could prove a company is breaking that law. Microsoft has already been charged once with violating the Foreign Corrupt Practices Act based on an anonymous whistleblower complaint like Elabd’s. In July 2019, the SEC announced that Microsoft had paid $16 million to settle corruption-related charges for licensing services in four countries: Hungary, Thailand, Saudi Arabia and Turkey.
Research from international financial institutions has found that bribery, kickbacks and corruption remain intractable problems within the governments and financial institutions of some countries in the Middle East and Africa; for example, a 2019 UN survey found that 30% of all Nigerians who interacted with government officials were asked to pay them bribes. “Progress in eliminating this problem has been limited and corruption still stands as a major obstacle for doing business in the region,” according to one report from the Organization for Economic Cooperation and Development.
Elabd told Protocol that he believes that the people who work for the contracting services Microsoft uses to sell products in these Middle Eastern and African countries are regularly using bribes and kickbacks, and that Microsoft knows about these bribes. He also believes that he was dismissed from the company because he insisted on asking questions about what he believed to be suspicious financial transactions. He said that he has spoken with at least five other current and former Microsoft employees who shared similar experiences and frustrations with him and gave that list of names to the SEC as people who were willing to be interviewed to share their stories and corroborate Elabd’s claims.
Lioness, the organization that published Elabd’s essay, is run by Ariella Steinhorn and Amber Scorah, who work in tandem with whistleblowing attorneys and nonprofits to help people like Elabd share their stories publicly. Because the Foreign Corrupt Practices Act includes a federal whistleblowing program, attorneys who work with sources like Elabd usually receive a portion of the financial reward given when the report results in a successful prosecution (though Elabd’s did not).
Elabd wrote in his essay that he believes he was dismissed from his role at Microsoft for asking too many questions about bribery and corruption. During his two decades at the company, he was promoted multiple times, handling global strategic accounts and, eventually, helped manage Microsoft’s public financial partnerships in the Middle East and Africa. But after he reported a request for $40,000 from a business fund that seemed suspicious and unjustified in 2016, he said his relationships with his managers changed dramatically. Though the suspicious request was eventually stopped after he reported it, he then escalated the issue above his manager, was reprimanded for doing so and then eventually emailed Microsoft CEO Satya Nadella to say he felt mistreated by his manager, according to the essay. Microsoft then put him on a performance improvement plan and fired him in the summer of 2018, after he refused to acknowledge the PIP. (He now runs a small IT firm with other former Microsoft employees.)
One audit of a Microsoft contracting service reviewed by Protocol, labeled as from the “Microsoft Partner Audit Program," describes how products were discounted but then customers paid the full amount, how orders for Microsoft products were placed without actual purchase agreements in place and how the contracting service failed to prove that it actually conducts required anti-corruption risk assessments.
This audit and Elabd’s other allegations in the essay mirror some of the violations described in the 2019 SEC settlement. In his essay, Elabd describes a former colleague who sent him documentation that shows how government bodies in Qatar and Nigeria were paying for Microsoft licenses despite the fact that they did not have any computers that could actually use the licenses, meaning they were likely paying for nothing they could use.
Elabd also claimed that he believes that Microsoft and its subsidiaries are often made aware of the corruption, bribery or kickbacks but generally try to quiet people who want to speak publicly about the problem. He described one employee who he believed Microsoft had identified to be corrupt. “Executives from Microsoft’s human resources and legal departments confronted the employee, who threatened to reveal the scale of corruption inside Microsoft beyond his individual case if they took further action. He resigned and joined Oracle the next day,” Elabd wrote in his essay.
When Protocol asked Elabd why he had decided to file the whistleblower complaint, he said that he simply wants Microsoft to do more to fight corruption at its subsidiaries. “I just want them to fight the corruption, and to not cover up when there is corruption,” he said.
Anna Kramer is a reporter at Protocol (Twitter: @ anna_c_kramer, email: akramer@protocol.com), where she writes about labor and workplace issues. Prior to joining the team, she covered tech and small business for the San Francisco Chronicle and privacy for Bloomberg Law. She is a recent graduate of Brown University, where she studied International Relations and Arabic and wrote her senior thesis about surveillance tools and technological development in the Middle East.
The company's pivoting away from its department-store model toward active and casual clothing in an attempt to renew growth; Chief Technology and Supply Chain Officer Paul Gaffney thinks tech will help it grow.
Kohl’s has been slower to adapt than other retailers.
Jonathan Douglas ( @jondouglas27) is an enterprise researcher and growth manager at Protocol, based out of Washington, D.C., Before joining Protocol, he worked as a customer solutions manager at AWS, where he helped enterprise companies adopt cloud technology. He graduated from Brown University with degrees in computer science and political science.
It’s been a tough few years for Kohl’s.
Amid pressure from ecommerce competitors like Amazon, department stores have struggled to shift business online and cater to customers with changing preferences, and Kohl’s has been slower to adapt than other retailers. The company has lost 17% of its market share since 2011, according to UBS, and announced several changes at its investor day on March 7, including a pivot away from its core department-store model toward one centered around “active and casual” clothing.
Investors aren’t happy. Private equity firm Sycamore Partners and department-store chain Hudson’s Bay have put in separate bids to take over the company, indicating that they see further value for Kohl’s under private ownership than on the market.
But Kohl’s Chief Technology and Supply Chain Officer Paul Gaffney thinks technology could play an important role in the company’s plan to boost its ecommerce business, streamline its self-service pickup and integrate with other brands. By cutting down the time it takes to get customers the items they want with tech-enabled pickup and return stations and by suggesting cross-brand clothing pairings based on other shoppers’ buying data, the company hopes that convenience and upselling will help it avoid the bankruptcy fate that competitors Sears and JCPenney have met.
That means that in the background, there must be changes to streamline the company’s web designs, as well as modifications to its supply chain management software to maintain a lean inventory amid a stocking pivot. Those initiatives will be critical for getting customers to actually buy online (nearly 70% of people abandon their online shopping carts, according to the Baymard Institute) and keeping costs down.
In a recent interview with Protocol, Gaffney spoke about the company’s push to improve customer experiences and how COVID-19 has impacted its ways of thinking about technology investments.
This interview has been edited and condensed for clarity.
At the company’s recent investor day, Kohl’s spoke about increasing personalization, driving self-service in stores and growing the ecommerce business. How is the IT organization driving some of those initiatives?
No. 1, which we didn't talk about at investor day but we've talked about in the past, is reorganizing the technology organization to be focused on end-customer populations. We have teams that are focused on things that our end customers do, like search, product exploration and recommendations.
Kohl's Chief Technology and Supply Chain Officer Paul GaffneyPhoto: Kohl's
Step two is a great customer experience. That primarily shows up in simple things, like making sure our website and our app are fast. No one really does the press release, “So we made our app faster,” but in fact, that's something that's really important — sometimes that's more important than new features. For example, we took our online checkout from four pages down to one. We are also enhancing payment methods. We're doing more to make sure that the experience when you show up is fast, easy and increasingly personalized.
Third is a great experience in the stores, and that's a combination of better tools for our associates to help fulfill orders and help customers find things and then a better experience for the customer themselves. It turns out that no customer wants to have to interact with people to pick up an order, and yet most people built their order pickup experience to depend on store associates or spent an awful lot of money on these super complicated and expensive lockers.
Instead, we built something that probably feels more like the Panera pick-up experience than a typical “buy online, pick up in store” experience. We've deployed it to over a third of our stores right now, and we'll have that in all stores by the end of the summer. We're applying that same thinking to returns. It's a super simple process: Scan your item, put it in a bag, drop it in the box. Right now, most folks don't start that transaction until they're in the store, but we're going to find a way this year to get customers to start that transaction when they're not in the store.
The fourth building block is better use of data, moving from what I think has been pretty much commonplace in retail, relying on data that the firm has about itself and its customers, and instead recognizing that the universe knows a lot about our customers, probably more than we do. How do we tap into that? And how do we deliver relevant changes, whether that's in our physical assortment in our stores, or in the way we interact with customers digitally?
Kohl's has also talked about the company's pivot away from being a department store toward being an active and casual retailer, as well as increasing the number of Sephoras in stores. Those changes feel more like retail strategy changes that don't necessarily have too much to do with the technology. How is your organization helping with some of those broader pivots that aren't necessarily purely technology-focused, but have some tech element?
Some of the tech is not easy to see, but it's incredibly important. Underneath, we are trying to make all of these merchandising pivots while improving our inventory productivity. Usually, that's a very difficult thing to do, and technology has an incredibly important role in making sure that as we are entering new categories and exiting old categories, we’re doing it with increasingly leaner inventory investment.
It turns out that no customer wants to have to interact with people to pick up an order, and yet most people built their order pickup experience to depend on store associates or spent an awful lot of money on these super complicated and expensive lockers.
With Sephora, there's actually a pretty tight technology integration between Kohl's and Sephora. When you go into a Sephora shop at Kohl's, you can actually sign up for the Sephora Beauty Insider program as if you are in a Sephora. We’ve announced cross-company pickup where you can place an order on Sephora’s website and then choose a Kohl’s as a pickup location. We're also integrating on the back end, jointly managing a pool of inventory. None of those things can happen at this scale without a significant amount of technology work.
I believe we'll start to see more of those kinds of tighter cross-company partnerships. Ten [or] 20 years ago when there were more apparel salespeople, you came in to buy one garment, but you left with a whole outfit because the salesperson made you feel really good about a whole collection of pieces. I think technology is going to have to unlock that. It doesn't actually seem to be gaining traction, even though people keep trying it, but I am hopeful and optimistic that we're going to find another way to be a radically more effective technology-driven sales organization.
Some of these changes were obviously accelerated by COVID-19, like the importance of self-service pickup and returns. Are these shorter trends that will fade as COVID-19 fades, or are these changes lasting?
I don't know that there's a definitive answer on that, because there are a couple of different consumer behavior patterns. One pattern is: “I am not even thinking about going into the store for whatever reason, whether because I don’t have time or I don’t feel comfortable.” Pre-pandemic, that was virtually nonexistent other than at fast-food drive-throughs, but now that’s become commonplace, and I think there’s a segment of customers who will stay in that mode.
You shouldn't rely on third parties to be able to build software.
There are a couple of other patterns on pickup, though. Others will say, “I plan to go into the store. I have a handful of items that I know for certain that I want, but I have other things I'm looking for that I'm not certain about.” It's this hybrid trip of [self-pickup] and buying more, and we want to encourage more of that, but right now that's entirely the customer's choice. We want to try to create more reasons for the pickup customer to spend more time in the store, enhancing the purchase that they were certain of on their pickup. I do think there was a third group of people who were picking up only because of pandemic concerns, but I don't have the data in front of me about the trends on that third bucket.
It sounds like your team is working on a lot. What headwinds have you run into while working on these projects, and what partners have you engaged to try to help you solve them?
There are a lot of folks in big companies who want to build things for their own personal view of the problem. This is the classic “design for the team at headquarters, and then see if the customer likes it.” The pandemic was a great example of that: We had a long roadmap of features that we were pretty sure we needed for curbside pickup, but when the pandemic came in, it gave me a great opportunity to set aside our list, because the customer needed it right now. People have now come around to that pivot — from trying to design everything in advance to getting something smaller in front of customers quickly and then reacting and iteratively responding to it — but it's still uncomfortable for some people who would really like to know the whole rollout plan.
There's a similar headwind on data. Our intuition is often challenged by the data. You might believe something, but I have to show you that there's actually not only something different, there's also X, Y and Z. Getting people to come to grips with the fact that machines can find things that don't match your intuition is also a headwind because that's just challenging for people. Humans don't like when the world doesn't match their intuition.
In terms of partners, one of the first things that I did two and a half years ago was make sure that the Kohl's technology team was on a path to being capable on our own to drive big changes. This is a playbook that I ran at Home Depot, at Dick’s and now here at Kohl's. You shouldn't rely on third parties to be able to build software. That said, we do leverage skills, abilities and talents from a handful of key partners.
Most of our cloud computing is on Google, and most of our big data work is on Google's data platform. We also have benefited from a longstanding relationship with Dell and with VMware and, in particular, VMware spinoff Pivotal. VMware’s Tanzu Labs, which provides super effective help to organizations who are trying to become better at building software themselves (we’ve also hired a lot of alumni from that org). On the data and machine-learning side, we're currently doing a good amount of partnership with Deloitte on the third-party data and data-science side.
Jonathan Douglas ( @jondouglas27) is an enterprise researcher and growth manager at Protocol, based out of Washington, D.C., Before joining Protocol, he worked as a customer solutions manager at AWS, where he helped enterprise companies adopt cloud technology. He graduated from Brown University with degrees in computer science and political science.
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