NRF 2024 Big Ideas | Winning with Culture: How people power AEO Inc.’s legendary brands

All right, hi everyone. Thanks for joining our session. I'm Melissa, I'm the CEO and co-founder of Zipline. Similar to many of you, I'm wearing a heel today through NRF, so if you see me stumbling, you know why. I actually spent over a decade in retail, specifically focused on retail communication and execution. Mark was going to be joining us today, but unfortunately he has COVID, but we were able to record a session talking about what we were going to do today around strengthening the store footprint. Before I play the video, I wanted to ground everyone in the background around how we began engaging with American Eagle and a little bit about Zipline. Most of you know American Eagle, but they have about 37,000 associates and about 1,200 locations. When we first met them, they were struggling with a lot of things that I hear across the board from some of you today. From a store employee standpoint, there was little visibility into direction, little accountability, adoption was hard, and there was low employee engagement. The true pain point is having disassociated store teams. I like this picture because it tells a story, but the hard part is that sometimes our store teams are unengaged not because of ill intent, but because we haven't set them up with the conditions for success. So what do we do? Zipline helps keep everything and everyone on track, from store rollouts to new customer service behaviors to planograms and marketing setups. We help reduce the disconnects that happen across the organization from the store all the way down. We do that by bringing everything into a one-stop shop for everyone, from resources to tasks to messages, surveys, and store audits. We have a very unique philosophy around the way that store communications and operations works flawlessly in an org, and we wrote a book about it. We'll be doing a little overview about that philosophy and approach because American Eagle really mirrors how we think about the store environment. For background, we have about 100 of the world's best brands today. Some of our customers here, thank you for supporting us through our journey. Now I'm going to zero in on Mark, who's the VP of Associate Experience and Customer Care at American Eagle. We're going to play the video because he unfortunately wasn't able to join us, but we hope you enjoy the discussion.

Mark, thank you so much for joining us today. I have to have a true confession: I have always loved the way that American Eagle jeans fit, and also on the side I'm a leggings girl, so Aerie, you're an offline leggings girl. Leggings are still my favorite even post-COVID. I feel like so much has changed in the past years and accelerated both about how we and retail think about the customer experience and how we support that. I think you're a really great example of how brands are keeping pace with changing consumer needs. I'd love it if you could tell me more about your role and how you're bringing different worlds together.

First off, let me say that I'm really sorry that I wasn't able to be there, but thank you so much for introducing me and having me virtually. I am Mark Lambo, the Vice President of Associate Experience and Customer Care at AEO. My role is really focused on creating a one-of-a-kind experience for two audiences: we have a focus on the people who work in our stores, which is our internal customer, and then we have the people who shop in our stores, which is our external customer. While those may seem like very different concepts, they're very interconnected. I've worked in retail for 24 years, 13 of those years I was in stores. Building and maintaining and nurturing culture has always been very important to me. When AEO decided to merge those two worlds of associate experience and customer care together, it truly was my dream job. The main reason I feel that way is because I believe so much in the simple philosophy of always listening to your customer. I believe every decision that is made should always start and end with the customer. When you think about it, the internal customer is the extension of our external customer. When a customer walks into our store, we want them to feel AEO Inc. We want the core values to just shine through and come to life in such an organic way, and that shows up through our associates' ability to create meaningful, memorable experiences that are always connected to the brand just as much as they are tailored to the customer. It's really as simple as that.

I think that there's something so authentic that comes from human interaction that can't be replicated. From a cultural perspective, there's no better way to really ingrain a way of being with your team than setting that cultural foundation. Mark, you and I have talked for a really long time, six years now. I think a lot of the things that really serve us is the role that communication plays in actually creating this vision around an authentic and amazing customer experience that keeps bringing people back. Sometimes in the tech world, people think more robotics creates this experience, but I know from our conversations you have a strong belief that communication is really the conduit and that creates the powerfulness and the stickiness. Can you talk more about that?

The role of communicating effectively and efficiently internally to create positive, meaningful experiences for our customer is basically the foundation of what our team does. Effective communication is key. It clearly defines opportunities and issues or problems at hand that hopefully will eliminate wasted time, but it also enables building relationships, teamwork, and what I think is most important: trust. The other day I was scrolling TikTok at 1:00 in the morning and came across a video where a leader was talking about the amount of decisions that people make in a day. The average person makes 35,000 decisions in a day. I had to fact check that, and Google told me it's true. When I think about 35,000 decisions someone has to make in a day, that's obviously going to vary in topics, inside and outside the workplace, from deciding what flavor of coffee to order to prioritizing one task over another. When I watched this video, I felt a sense of responsibility and ownership because our job as effective communicators is to streamline and simplify how we communicate to remove as many roadblocks for our teams' decision-making process, so they can be present for the customer. One of the things I always say to my team is take the thinking out of it so they can solely focus on the customer. Our job as communicators and communication teams is tough. There's the pure volume of content that needs to be communicated, finding a way to make the communication engaging, and need-to-know versus FYI. It's pretty complex. Our internal customer, if they truly are an extension of our external customer, that needs to be nailed. When my team set out to accomplish this six years ago, the platform we were on could not meet those expectations. We needed a solution that gathers, distributes, and targets information in the right way to support holistic learning, but more importantly, we needed to work with a team that could see the vision we all could see to impact positive change. Enter Zipline.

Thank you. We're so thrilled to be your partner and to enable strategies and bring them to life. When I think about our role as a vendor and a partner, it's really to bring your vision and strategies to life in an easy way for your store teams. A lot of times stores have good intent, but what distracts the strategies from being implemented is that there's too much communication in too many different places. You're drinking from the fire hose. Our job is cutting through the clutter and helping people prioritize what is really going to make a difference to the business. I'm glad that you've had a great experience partnering with us to help you do that.

You make us look good. You guys are an amazing partner. When I look across the many brands we have, you've done such an exceptional job setting a foundation for effective communication and store experience. I'm curious, can you talk about how you set that foundation and how you think about it?

Everyone has heard about the Golden Rule, treat people how you want to be treated. In theory that sounds nice, but in my opinion that approach is a bit out of date. I once had a trusted friend tell me that the world is not your mirror, and that really hit home. When you think about our job as communicators, as leaders, and more importantly as humans, it's about seeing people for who they are and treating them how they want to be treated, which may not coincide with how you want to be treated as the Golden Rule states. In today's world where technology has paved the way to omnichannel communication, there are people who would prefer not to have one-on-one live conversations; they want everything done online through a website or text. But then you have people who want to converse with real people. One of the ways we do that is through embracing learning styles. I am really passionate about learning styles. If you look up learning styles, you may find some people go with seven, some 10, I've seen up to 25 different learning styles. Effective communication and effective learning are really one and the same in my eyes. When you have a responsibility to people like we have 45,000 people, communicating and moving all 45,000 in the same direction, simplifying and individualizing communication is the way we've done that. We've taken it to three learning styles: visual, auditory, and kinesthetic. While these are customized and tailored communication, this is what empowers our associates to be able to articulate our brand voice to every customer, but the key is it's in their own words.

I think that's one of the things I've always really appreciated about your learning philosophy: you need to meet your people where they're at. It might not be where you are, but part-time associates are going to learn very differently than we are. How can we reach them through a learning style, and on our end, how do we have a technology that enables you to do that and meets people where they're at? We need to bring the ease of consumer technology into the enterprise world, otherwise people just won't use it.

Talking about different types of learners and different personas, I know you guys have a global scale. I always think about you set the foundation and then you scale for success, but it seems really hard. What has your experience been with that, and how do you scale to all the different countries and different people?

It's definitely about scalability, but first it's about flexibility. Flexibility to truly achieve the growth, reaching the goals, and the consistency to meet that global scale. I have to always start with: in order to have flexibility, do we have a consistent feedback loop in place? If we do, then we can help prioritize and understand the level of urgency to communicate. This will help us be more agile because we have 45,000 people to move forward. Moving teams and experiences forward and meeting them where they need to be met, that's where our success is rooted in staying focused on the execution of the vision. You may see brands that have this grand vision but lack the ability to execute. When you have the feedback loop in place and you're listening to your customer, the answers are literally right there. Making your customer, for us the internal and external, a part of every single decision, scalability becomes really easy when you know who you're talking to.

I love that. At the beginning of our conversation you were talking about really listening to the customer to help drive decision-making for their experience, the external customer, the shopper. And here you're talking about to ensure the shopper experience, you're listening to your internal customer, really being in support of the field. We're happy to help be part of what's powering the feedback loop, which is ensuring better strategies and decision-making on your end for both, because you can't have one without the other. You talk about 45,000 people, I know I'm obsessing over 45,000 when many communicators have more than that, but it's a lot of people. Sometimes it's hard to get your team to do things with a small group of people. How do you move that amount of people and communicate with them every day successfully?

It's process and consistency. We have a very strong process in place to review the quality of our content. We do this through having a monthly dashboard. With that dashboard, your partnership and your team gives us the statistics we need to understand the many different KPIs. But there's one KPI I'm most passionate about, and that's readership. Readership is telling us how valuable someone views the content that we're communicating. If we have a category of communication, like operations, and that has low readership, our communication team works together with our content owners to identify the problem. It could be a series of problems: the timing of when the communication is being cascaded is wrong, the quality of content meaning the message is too long and the workload hours associated with it are completely off. The list can go on and on, but it's our job to get to the root of the problem and solve it. What I love about what we do is we have the beauty of doing it again and again. We always have that opportunity to do it again. But when you are inconsistent over and over again, that's when you lose the credibility and readership starts to deteriorate. What's way more important and bigger than that is that the belief in your brand from your teams could start to diminish.

I hear very clearly how in touch you are with your communications and operations and how it's resonating with the field and translating to the customer experience. Sometimes that's really hard to do, hence the Ivory Tower syndrome. It's great to hear that close connection. Talking about close connections, one of the things we aspire to do as a company is to be an extension of your team. You talked about going through with our team to look at best practices or if you're going through a communication restart or revamp, leaning on us to be a partner. How has that experience been for you in terms of partnership?

Honestly, one of the best things about our relationship is we are truly partners. We have the same mission: to improve communication. Your team has been with us every step of the way. When I joined the communication team, you were one of my first calls. Our team meets weekly, and they've been instrumental in growing not only our readership but also our communication strategy as a whole. Let me explain through an example. Earlier in the year, we were in a position where we weren't meeting some guidelines concerning how we were communicating in a specific market. I got a phone call from a regional director that made me aware of this. I will be completely honest, this specific issue was not my forte. I called my communications manager, and they called their Zipline partner to understand if anyone had experienced something like this previously. Your team made one call to a retailer that you work with, and you made a connection for us that there was really no benefit to you in that. You truly treated us like a partner. Something I thought would take an entire year was done in a matter of weeks because of our relationship and trust. Your team has been incredible in that way for us. Thank you again if I haven't thanked you previously.

Thank you. That's really meaningful to me and to us. I always felt that store operations and communications are so underserved. We're always heads down supporting the business, hustling, pulling things together, making changes. I see one of our jobs on the other side of the fence in the tech piece is about building connections and community and knowledge and information. Being able to be your eyes and ears so you can focus on the business. When you ask about trends that are happening and how people are communicating, or what we see effective in terms of socialization or rollout, we can help be a partner because we're not reinventing the wheel each time. We have best practices, we have the people, we have a lot of the industry knowledge, and we know some of the pain points. Technology is only as good as the people that support it. I'm really glad to hear that we've been such a good partner to you. Talking about ease, I know there are a lot of people at NRF from the IT world that are interested in AI and thinking about the application of AI across the business. From your standpoint, looking over customer experience and stores, what are your thoughts about AI?

I do believe AI is going to help us with some decision-making. I think it's going to help us with the ability to provide stronger relationships and deeper understanding of our customer. Even beyond the customer, AI can help us build human connections. Human interaction I don't believe is really ever going to go away, but I do think it can improve through technology. If I look at it through the lens of customer care and customer service, the average customer tends to communicate now through chat and email over phone. If they have an issue with an online order or previous purchase, I believe AI could potentially help provide our customer care agents with more information to advance their human connection, allowing for a more effective way to better the customer experience. This will likely improve handle times for those customer care agents and customer satisfaction ratings. Technology as a whole and what it can provide to better the customer experience is pretty incredible.

I definitely agree with a lot of how you see AI improving the internal and external customer experience. One of the things we see is that AI is only as good as the data. How can you get really good data to provide the best insights? What I'm excited about for us with the volume of customers and best-of-breed brands like AEO is the ability to surface up benchmarks or best practices to see what's working in different locations, like Southern California. What's also really exciting around the potential of AI is something you brought up earlier around learning styles. It's so hard to cut through to 45,000 store team members in a way that they really understand. Just take credit card, someone could be talking about private label credit card. There are so many acronyms in retail, people don't know, especially if you're new. I think there is a better way to conversationally connect and coach people on an individual basis based on their role, their store location, and the data and insights we have to produce a well-run store that generates better KPIs for the business. There's huge potential, and I think it could help us leapfrog the industry forward in terms of really helping people achieve their goal in a way that meets both the internal and external customer. Last question: you're all about enhancing the store experience, and we've talked a lot about philosophy and how you've approached it, but what role does technology play?

In life, I believe in balance. I don't believe in having technology for the sake of technology. There was a time where we eliminated most physical tools in our stores, but we swung the pendulum way too far. As I mentioned earlier about learning styles and communicating and training to the individual, at the end of the day what we want are customers for life. That sentiment extends to both our internal and external customer. To make that a reality, we must continue leaning into and learning from communication strategies and tools that create the best culture possible in order to continue moving the brand forward.

When you think about customers for life, which creates a lot of brand loyalty, the hard part for all of us is that so many things change. Technology needs to be an enabler of your people and your strategies because what works today might not be the same answer tomorrow. Think about TikTok, it didn't even exist 10 years ago. To your point about flexibility and meeting people where they're at, they will always be there, but all we know is that change is constant. I want to thank you so much for joining today. I'm so sorry you weren't able to be here in person, but thanks so much for taking the time to answer questions for the audience and join us.

Thank you for having me. Have fun.

Check, check. Great, we can hear me. Hi, my name is Jeremy, I'm the CTO and co-founder of Zipline. I want to give a shout out again, especially since it's recorded. Thank you Mark for recording that, that was wonderful. Wish you could be here, you're missing out on a lot of fun. As you heard Mark talk about, our goal in everything is to partner really closely with our customers. We learn a lot from them, and we've now been doing this for quite a while, some combined 20 plus years of retail experience and working with our customers and Melissa's experience at Old Navy. Specifically, we've extracted a lot of principles about what it takes to deliver on these really amazing store experiences, and we want to share some of those with you here today. At a high level, we've broken this down into what we call the five principles of amazing retail execution. The first one is creating an aligned organization. This sounds obvious on some level, but for any of us who've worked heavily in retail, you know how unaligned sometimes those organizations can be. People asking questions like what time were you in the meeting, what time did you hear that, because it's different than what I heard at a different time. Those disconnects and misalignment can cause a lot of chaos in the organization. While that might be troublesome at headquarters, it's especially hard in a field organization where it's a lot harder to just reach out and get feedback immediately from your district manager. A district manager might walk into one store, see a test setup, think it's really cool, and then take it to the next store where they're not supposed to be a test store and ask them to set up a display that they no longer need to set up, thus invalidating the entire test and control group. That alignment is really specific and critical. Who needs to know the information, when do they need to know it, how do they need to know it, where and when do they need to see it so that everybody can be on the same page? The second principle is about creating intent-based communication channels. Often we see organizations put everything into a chat tool. You've got your reference material, your back and forth conversations, your need-to-know information. But when everything is in one place, it makes it a lot harder to understand where to go when you're trying to get something specific done. We look at what we call the four types of communication. You've got your nice-to-know information: letter from the president, new store opening, celebrating wins, stuff that's engaging and informative but not necessarily business critical. You've got your need-to-know information: product pullbacks, compliance, legal regulations, business changes, merchandising, marketing. You've got your reference material: evergreen content, SOPs, trainings, guidelines, opening and closing procedures. And then what we call dialogue, discussion, and debate: the back and forth conversation between people in a store, across stores, up and down from headquarters to the stores and through the field. Certain products, like we've seen people put everything in SharePoint, which is much more of a reference material tool. If you try to shove a bunch of reference material in there but also layer on the nice-to-know and then put in the dialogue, discussion, and debate in a separate tool, the channels can get really blurry. People start throwing one instance of a copy into a chat when the reference material updates somewhere else. When those communication channels get blurred and confusing, they cause a lot of breakdowns. Intent-based communication where people know where to go to get clarity about the information is really critical. The third one is sending the right message at the right time. We've all seen the bi-weekly cadence of communication, especially if you're scheduling for New York or California with the regulations. Being able to set up a bi-weekly newsletter that goes out and thinking you'll send the updates via email later or get on a VM call every Thursday, chunking that communication up just isn't enough anymore. Business is moving way too fast. The thing we figured out is that if you make the information availability more rapid, those changes that happen because of a shipment delay the day before a promotion is supposed to go live aren't as disruptive because they just become part of the flow of information in a much more effective way. Breaking apart this bi-weekly chunk where people have to spend four hours in the back room on a Monday morning to understand what they need to do for the next two weeks is really important to allow organizations to move faster. We like to talk about what we call our day sheet, which is an organization of everything people need to think about that day. As people start to change their behavior to focus on this day sheet, they're able to start thinking that their role is to get everything done on the day sheet every single day, what we call keep today on track. When the behavior changes that direction, you can actually put things on the day sheet the night before or even sometimes the same day with a high likelihood that they get done. With a bi-weekly communication cadence, that becomes impossible. If you break that apart into something more rapid, you're able to get a lot more done. You also want to target the message to the right people. This should be table stakes across the board, but with certain tools you're just not able to do that. People have to filter through their own big Excel file and find the information that's relevant for them. Breaking that up and being able to target the right information that's pertinent to them directly so they don't get confused and it's easier for them to find is really critical. That level of targeting is absolutely required to get them to the right place. The last thing I said is optimization for change. We've all been through COVID where some of our stores had to implement plexiglass on one day in one district and stickers on the floor in another district. Change is happening faster and faster. If you optimize your communication system for change, you're going to get much happier employees, or internal customers as Mark refers to them, because it's not something that's so disruptive when things are changing; it's just part of doing business. The fourth piece is empowering the workforce. The first bullet point we have here, get out of inboxes, is really critical. This isn't so much about saying don't use email as it's about the idea of a silo. When you have everything going to a single store manager but the assistant manager is not able to see it, or the associate who's opening that day because both the assistant manager and the store manager came to NRF, you've created something that prevents people from actually getting their job done, which can be very frustrating. Getting out of this idea that information is for one person and into an area where information is for everybody, where they're handing the baton back and forth to get things done in every location, is really critical. Also, giving people context so they know why something matters. Why am I being asked to put the shoes on this display today instead of tomorrow? Why am I being asked to fill out this survey that doesn't seem to pertain to me today? The context and understanding of what makes this request so important is really critical. If you just give your stores a task without the context, they're going to prioritize on their own and figure out what they think the importance is. But without context, they're not able to really look at the bigger picture and make something work. Third, making it easy to find. I have a store manager at Lego. We go to a lot of our customer store conferences. I was at the camp in Virginia that we went to with Lego and gave a little talk similar to this. The store manager ran up and gave me a big hug. I was taken aback, like oh hi, you're obviously very excited about this. She said before Zipline rolled out, I started as a store manager and I was nervous about whether or not I was going to be able to do a good job. They asked me to go get a file off of our intranet. I spent three hours trying to find it, and then I went and sat in my car and I cried because I felt so futile at how good I was at my job. With Zipline, I can find things like that, and you have totally changed my life. That's just search, it's not rocket science. But if you make things hard to find, it has real impact on real people every single day as they struggle to just do the things you've asked them to do. That's a big part of our philosophy: it's not necessarily that technology is the solution here, but it sure can get in the way unless it's done right. The idea of making things easy for people to find or easy for them to access so that they have the clarity about what they need to do and how to get it done is really important. Lastly, making it clear and making it matter. Inundating your store teams with a bunch of stuff that might not pertain to them or not making it clear about why something matters really reduces the likelihood that they're going to be engaged and want to get things done for your organization. When we talk about empowerment, we've heard a lot of people talking about engagement and how do you engage them. First you have to make really funny gifts, then you have to make it all gamified, then you have to do all these other things. But it turns out for a lot of our customers and the industry studies we've done, engagement is much more simple than that. People need to understand why their job matters, period. Why does it matter that I'm doing these things? Then they have to understand what the organization is looking to do and what they can do to make that impact in their little role. If you're looking to change the culture of your organization or roll out a new product or something, every single person in the organization has a role that matters in that step. Just making it clear what they can do to make that impact or difference is really critical. Then you have to give them the autonomy, authority, and information and knowledge to be able to get it done. The most disempowering feeling for an employee is being asked to do something and then having no way to actually get it done because they either don't know how, or they don't have access, or they're just not able to because the systems are broken. Engaged employees understand what the organization is trying to do, they understand what their role in it is, and they can get it done and feel that success in their role. That empowerment drives so much of the success for our organizations. I can't overstate it. Fifth and lastly, you have to measure the execution. You heard Mark talk about this a little bit, that feedback loop of we actually understand our readership, we know which categories are not getting the readership we want, we know which regions or districts are struggling with information, we can have accountable conversations with them on how to change that behavior and improve it. I come from a background of technology. I led innovation at Yahoo for quite a while, and we did a lot of A/B testing. The idea of A/B testing is you test something, you don't test something in another market, and then you see the results. If you are not able to actually see the results of anything you're testing, either because only a third of the stores did the thing so your test data is failing, or because you really have no way to know if it got done in the first place, you're not able to make faster decisions. The key of measuring the execution is actually getting that flywheel working in a much more effective way. You can send something down, have a high confidence that they got it done, look at the numbers, and then make changes and do that as fast as possible. Whether that's on marketing promotions, the way you communicate to the teams, your fun engaging social activities, or your DEI initiatives, understanding the impact they have really starts with making sure that it goes to the teams in the first place and making sure that they've received it. Also, the idea of letting people see the outcome. Understanding that you're asking for their feedback and you're implementing changes with a faster feedback loop and a faster communication system, they can feel the reality of that very quickly. Then just doing that over and over again, getting better every single day, every single week, every single quarter. Those are the five principles that we focus on. For a lot of our customers inside of retail, it ends up being really valuable, not just in terms of really high customer execution rates. 92% is dramatically different than the 30% we see across the industry. But also that turnover rate. Our customers have exceptionally high retention rates across the industry, partially because of how engaged the teams feel and how clear their job is and how they're trying to get things done. The funniest one for me is some of our customers pay for the entirety of Zipline just from their printing cost alone because they're reducing the amount of printing they're doing so dramatically that it's saving them printer ink, paper, support, all of that stuff. All these different numbers, depending on where you're looking, can go up just by implementing these five principles. It's not even about rolling out Zipline as much as about doing these five things really effectively. Zipline is a tool, as Mel mentioned earlier, that takes a lot of these features and combines them into one easy-to-use solution that separates information properly, organizes it for the store team automatically, and delivers it to them in a way that they can understand and adopt and learn very quickly. We have 48% less time to launch initiatives with this. It rolls out very quickly. We've done a number of rollouts in as little as a few weeks for our customers globally, and it solves a lot of these problems. But we don't want to tell you that you have to roll out a Zipline to get a lot of these wins. As Mel mentioned and as Mark mentioned, our goal is to serve retail primarily. Don't tell our investors, but our goal is primarily to serve retail. It's not even to grow the business as big as possible. We want to make the most populous job in America a lot easier to do and a lot more fun to do. We have done a lot of that so far for our customers with a net promoter score of 90. Our G2 score is top of the charts. Lifetime customer retention is really high. A lot of our customers are signing five-year renewals after all of this. Our support people love us. I love this quote from Ross at Vision Works, his partner Eric is here with us today. But you can do this without Zipline. You can do this with other tools out there. We took a lot of this information and we wrote it into a book here called Stores Don't Suck. It's very useful for you, but it's especially useful for communicators and operations teams to give to their CEO to understand what is so hard about getting these stores to do the things we're asking them to do every single day. It's not that the stores don't want to do it, it's the way it's delivered, the way it's communicated, and the way it's prioritized that breaks down through the endless disconnect in the field. This book has a lot of best practices. It is free. We have them at our booth at 5157, and we have Mel and myself here if you're looking for it. Lastly, we do have other sessions where the people have shown up. Tomorrow specifically at 10:15 in room 3, we have three people from Travis Matthew, Vision Works, and P. Sun who are going to be doing a panel just talking about what they do to run their stores and how they get such great store teams. It is not going to be a pitch with another white guy up here talking about technology. We'd love to have you. We have tons of events and we have customers in our booth today from those brands and others talking about how much they love using Zipline and what they do with it to run their stores. Thank you for your time today. I really appreciate it. I hope you all have a great conference.