Paula: Welcome to Let’s Talk Loyalty, an Industry podcast for loyalty marketing professionals. I’m Paula Thomas, the founder and CEO of Let’s Talk Loyalty. Today’s episode is hosted by Phil Rubin, the founder of Grey Space Matters, an innovation and growth advisory firm in the US, focused on driving profitable growth.
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Phil: Hi everybody and welcome back to Let’s Talk Loyalty. I’m Phil Rubin, founder of Grey Space Matters and your host for today’s podcast. Today’s guest is Doug Glazer, the Vice President of Loyalty and Gift Cards at Fanatics. Doug’s been with Fanatics since 2015 and is leading their efforts as the company continues its significant growth and expansion from merchandise into collectibles, and soon into betting and gaming. Over his career, Doug has worked for some of the most customer-centric companies in the world, notably Amazon, where he worked on Prime in its earliest days and at Nordstrom. Doug, like these companies is based in Seattle, which while it isn’t Fanatics headquarters is clearly home to a set of companies and business leaders that weigh over Index for loyalty.
Doug’s originally from New York where he started his career with Time Inc. after he received his MBA from the Stern School of Business at NYU. With that introduction, let’s get to talking with Doug and learning what it’s like to focus on customers at some of the best companies in the world.
Phil: Doug Glazer, how are you today? Thanks for joining us.
Douglas: Thanks, Phil. It’s good to be chatting with you. It’s always enjoyable.
Phil: It is. I’m really, I really appreciate you joining us today, Doug. There’s something about Seattle and loyalty marketing in Seattle. Even though Fanatics isn’t based there, you’re based there.
That seems to bring out the best in all things loyalty. And with that quick introduction, I, we’ve gotta go to the first question, which you probably are aware of. Doug, what is your favorite loyalty program?
Douglas: We can argue about whether it’s a loyalty program or not, but, uh, I’m gonna go with a hometown favorite, which is Amazon Prime.
Um, as a consumer, I fully buy into the convenience the service provides. Um, even if the core delivery benefit is much less consistent than it was years ago. Now that there are so many drop shippers on the platform. Um, and as a former insider though, I know how the entire company works to deliver the prime experience.
And I think that’s really the engagement that all loyalty programs reach for. Uh, not to have a loyalty program that’s bolted onto the business, but to fundamentally be a loyalty business. So that’s why it’s my pick.
Phil: I think that’s a great pick. It, it reminds me of the Emily Collins line. Don’t be a company with a loyalty program.
Be a, a loyalty company. And no question, Amazon is about that. And, and Fanatics is about increasingly about that as well. But in spite of all the exciting things happening at Fanatics, including the fact that we just had a great Super Bowl and got all, you know, all the NBA, NHL baseball’s coming, premier soccer, etcetera.
Let’s, let’s start with, because, especially because you mentioned Amazon Prime as your favorite loyalty program, and I will say that’s, that’s in my top five for sure. But you were actually involved with Amazon Prime earlier in your career. Um, before you worked on some other things in Amazon, there’s literally both folklore, legend, and history in terms of how that organization operates. Really going back to day one and that first letter to shareholders, and you described Prime as, as being emblematic of Amazon being a loyalty company. You came from Time Inc. which we, we don’t need to spend a lot of time talking about , the magazine, the media business in general, or print advertising and how that used to be.
Um, but going from a place like that to Amazon, especially in the relatively early days of Amazon and Prime, was it as striking then as it might be for those of us in this business to think about looking back? 15 plus years.
Douglas: Yeah. So I joined Amazon at the very beginning of 2007. So Prime had been in market for about a year, um, and was just starting to get some traction.
Um, we had subscribers, members that were in the hundreds of thousands still operating just in the US. We launched five countries during my time there. Um, you know I would say that, the cultural contrast, the organizational contrast, the operating philosophies were a lot more, um, striking and different than an old line company like Time Inc. than, than they would be now. Because I think as so many industries have become digital first, tech oriented industries. A lot of old line businesses have started to catch up to where Amazon was 15 years ago. So, um, I think if I were to, if timing still existed and I were to go back there, I would find that it had adopted, you know, at least some of Amazon’s operating principles today.
But at the time it was incredibly striking. I will never forget my first day there where I was looking for someone to hold my hand and tell me how things worked. Um, and instead, uh, the guy sitting next to me pointed me to a wiki and said, yeah, there you go. And uh, we were just off and running, um, figuring things out as we went.
And that was, that was how things were. And I think to some extent, at least how they still are, which is, they’re, as much as has been written about Amazon in the years since then. And as much as they may, may be up against some headwinds today, um, there is still an inventor’s culture there. They’re always trying new things. They’re always pushing the envelope for customers. Um, and I think it’s. It is, uh, a very interesting place for sure.
Phil: Which, so it, it literally still goes back to day one, especially if you’re in that building, right?
Douglas: Yep. Yep.
Phil: Why don’t, why don’t you take a minute and tell the story of day one and what that means in, in Amazon, in Amazon culture.
Douglas: Yeah. So, Yeah. So in that famous, uh, shareholder’s letter, uh, Jeff Bezos talks about how, um, day one means that they’re always just getting started at Amazon. They never want it to be day two, which means you’ve gotten comfortable and complacent. And so if you ever get to the point where it’s day two, you can start looking over your shoulder because the inevitable decline will have begun.
Um, so that’s, that’s what day one means to the company, which is always be looking forward, always be looking to invent, um, creativity, you know, looking for the next big thing.
Phil: Was the headquarters building always called Day One?
Douglas: No. Day One, um, was, uh, added when the, uh, when that, when Southlake Union campus was built and in fact, day one isn’t even in Southlake Union.
I think it’s in what’s considered to be downtown Denny here in Seattle. But um, yeah, when I started in the company, uh, we were in a collection of buildings actually south of downtown and shuttling, shuttling all around. That was we, we knew it was getting to be a bigger company cuz we had a series of shuttles that took us from building to building.
Phil: And it’s amazing to think that you were there when there were hundreds of thousands of prime members and only a few countries, and now there’s literally nine figures worth of Amazon Prime members.
Douglas: Yeah, it’s pretty striking. To say the least.
Phil: It might be the, it might be the biggest thing ever in loyalty is that, is that are, are we paying too much, too much homage to that?
Douglas: Uh, for any one program’s membership, I don’t think it’s overstating.
Phil: It, it, it’s just so fascinating to sit here in 2023 and think about that, but also the simplicity of that cultural mindset that is so, that is literally obsessed with the customer and by extension data, which, which probably is a function of Bezos working in a quant hedge fund. Mm-hmm. But before that, but how, how pervasive was that? It’s all about the customer mindset back then.
Douglas: Um, it was truly pervasive. You know, I, when I started in the company and got the message of, you know, we work backwards from the customer, we think about the customer first, we make decisions for the customer.
Um, the customer is always in our meetings with us. Sort of, we have to advocate for the customer cuz they’re not literally there. I kept waiting for the other shoe to drop and for someone to say like, yeah, but not really. Like if you need to make some cuts, go ahead. Uh, and that never happened. The, you know, at least then the operating philosophy really was do the right thing for our customers and the business will follow.
Um, so, uh, I, it was actually really refreshing coming from a business that was declining and looking for ways to claw back revenue that it was no longer generating. Um, it was, uh, yeah, it was really an eye opener to, to be at a growth company that could do that.
Phil: What an unbelievably liberating thing, especially in contrast to Time, Time Warner back then. I think it’s probably a little bit different with under Mark Benioff and his family’s ownership. But I’ll never forget this, a very famous publisher, uh, shared with me once that the last thing that they ever wanted to do was demonstrate the effectiveness of advertising to their, this is back in the print days.
Douglas: Yeah.
Phil: Which, which leads the leads to the question back then at Time Warner. Who was the customer? Was the customer the advertiser? Was the customer, the reader at the top?
Douglas: Yeah. I think it, it was the advertiser. You know, my, my job at Time Inc. Was to deliver the rate base. at any cost, which really meant at the lowest potential, you know, the lowest possible cost.
I think publishing has changed a lot now and that subscribers have a lot more power, if you wanna call it that, than they did 15, 20 years ago, because that is where revenue is coming from and they’re paying probably a more natural rate that they could or could or should have been. Um, but you know consumer revenue at the time was seen as an offset to cost more than a profit center in and of itself.
Phil: it was really all about the advertising dollars. Amazing. Yeah. And yet, now, so to bring this back to Amazon, which who, who’s now a larger publisher than Time Inc. How do you think that affects the whole customer first, consumer first, customer first mindset there?
Douglas: You know, having not been an insider there for a long time, um, and having seen the business itself evolve, I’d have to, I have to think that there is, you know, they’re investing in things that, like print ad pages are somewhat hard to measure.
Uh, you know, the thinking that if you, um, deliver great TV programming, um, you will sell more goods to those customers because they’re just generally more loyal. I’m sure there’s a methodology internally to measure that, but there’s, there also has to be a little bit of a leap of faith just given the size of those investments.
They’re investing billions in content there. Um, you know, so I, I just think that. I don’t wanna say they’re less disciplined than they were, but they’re probably thinking in, in a different dimension, than they were. Prime was very measurable for us. We had, you know, a very, a, a, a clear tracking cohort in place and we were able to really measure the lift that the program delivered, um, for members.
And I think it’s probably a, a harder task to do that today.
Phil: And that brings up another it, it’s at least something I’ve read about, so I won’t say it’s Amazon folklore, but you can speak to it. That question that these investment decisions and something that those of us who have in the past or currently are building programs, whether it’s an Amazon Prime or, or whatever it, the ultimate question is the business case and how you go about making the business case and my understanding is the way you make the business case at Amazon is with, with a memo that everybody reads before the meeting to, to determine if you’re gonna, if things are gonna go forward or not. Can you speak a little bit to that process and that I I think it’s a no more than a six page memo?
Douglas: A six, it is. It’s a six page white paper that lays out the business case. It comes with a, um, sort of a mock. Press release that describes the consumer value proposition of what you are discussing. Um, I will say the, the addendum to the six page white paper can be a hundred page, you know, um, um, exhibits, uh, a hundred pages of, of exhibits and whatnot.
So, um, you do have some room to breathe if you need it. Um, but yeah, the thinking is that, first of all, let’s not waste time on pretty slides that aren’t necessary. And that by writing a paper, um, you are forced to think more deeply about your business case and your topic than you would otherwise be. If you could just put a bullet on a slide, it needs better support, um, and more rigorous thought.
So that’s, that’s always been the thinking there. Um, I don’t know if it’s still a hundred percent true. Uh, but I think you’re right. It, it has entered into folklore.
Phil: It’s so interesting to think about the size and scale of Amazon and these relatively simple prem principles and, and, and ultra simple present premise that, you know, to sort of paraphrase James Carville, when he got Clinton elected.
You know, not it’s the economy stupid. It’s the customer stupid.
Douglas: Mm-hmm. . Absolutely. Yep. Yep. And you don’t ever wanna lose sight of that.
Phil: It’s just mind boggling. When you think about so many things that are done that are not done, uh, where you sort of wonder what are they thinking and how is this a good idea?
How is this a good idea for the customer? It’s easy to see how you can do things that are good for the business. Mm-hmm., but also it’s not good for the business if it’s not good for the customer.
Douglas: Well, agreed. Well..
Phil: So, so we, we could, we could talk about Amazon for the whole, for the whole podcast, but we, let’s not, let’s not do that.
But I do have one last Amazon question because you worked on Alexa very early on. No, not Alexa. Kindle . Kindle , right?
Douglas: Yeah, yeah.
Phil: Which is transformative. So my, my question there is having worked on, on the Kindle product very early on, do you read on a Kin.. a Kindle, Doug?
Douglas: I do, I do, of course. Um, it’s a, although my kids per my kids prefer paper books.
Phil: That’s really interesting. Digital natives preferring paper books. Mm-hmm. Digital native prefer analog reading. So..
Douglas: Yeah, I, uh, I think it’s because the, uh, Kindles are great for just straight you know, text, but any kind of graphics or work design elements are just lost on it. It’s not great for that.
Phil: Or the Kindle app on an iPad is, is my own favorite.
Douglas: Yes. Although even, even my kids, my digital natives need a break from the iPad. Yeah, no, from the screen.
Phil: It makes sense. So, so you went from one retailer that remains, well, they’re more than a retailer now. Um, obviously, but going from Amazon to Nordstrom, you know, another that o that, that, that other, like there’s something either in the water or the weather in Seattle that makes people right, tend to tend to be more customer-centric as business leaders than a lot of other places.
And Nordstrom was all, I mean you, I remember walking around, walking down the halls at Nordstrom and seeing these quotes from John Nordstrom on the wall about it. You know, their, the John Nordstrom version of Day One, you were there kind of in an interesting period when it was still, it was still more of the original Nordstrom before they mm-hmm… started, made, made some very strategic business decisions to do things differently. Um, they’re sort of a legendary retailer or maybe a once legendary re.. retailer. Right. What was it like going from, you know, an inventor day one mentality to. A Nordstrom, every customer is valuable ethos.
Douglas: Yeah… it’s funny, um, because the companies really in some ways couldn’t be more different.
Um, Amazon obviously, as you already said, was all about the data, all about growth and innovation and Nordstrom wasn’t really about the data, it was about empowering buyers. It was about the intuition of what the market wanted. Um, it was about empowering store managers. Um, but where there was really, really clear overlap was in their commitment to the customer and doing whatever it took to make the customer happy and to get them what they wanted because the customer walking out of the store unhappy is unlikely to return. But a customer who feels served, seen and heard is entirely likely to come back. Uh, and so I don’t, I haven’t seen another retailer, um, and it’s been close to 10 years since I was at Nordstrom, but who empowered its staff, its frontline staff, um, to the same degree to meet the customer’s needs and to encourage personal relationships with customers? Um, and, you know, really focus on, on developing those relationships. We talk a lot about CRM, but Nordstrom really focused on the relationship part. Um, and it mattered.
Phil: In such a transactional business too. It, it, it really does underscore that that whole, what do they call it? The Nordstrom way. Yeah. Yep. And it’s interesting to think about empowering buyers to use their intuition, if not data, to make their buying decisions in the interest of serving customers. Did you get, did over time, did you see, did you, was there a shift?
I, In, in the early, well, like 2007, 2008 when we helped them. It was before you were there. I was fortunate enough to work with them and, and launch what, what, what at the time was fashion rewards and that was right before the Great Recession and right. Which was right before you got there. And there, our sense was that there was a shift to be, to recognize that fashion rewards and the data and those insights became more valuable on the merchant side of the business.
Did you feel like that was in place? Was that really a sustainable thing or was that, was that the marketing team wanting to take credit?
Douglas: I appreciate the aspiration. Um, I can’t say that in my time there, I felt like the insights that we were delivering through the loyalty engagement specifically was having a big impact.
You know, Nordstrom did invest in insights, um, and they had additional loyalty insights that came from that group. But, um, I felt like it was a.. I happened to be there at a transitional time for the company where, um, the business was getting harder and they were trying to figure out how to continue delivering the experience they were known for while staring down the battle, the barrel of you know, some real economic realities. Um, that consumers were shifting a… away from full line stores, not just Nordstrom, but department stores generally. Um, and you know, RAC was growing tremendously at the time I was there. And so there was this real tension of how do we lean into RAC, but also sustain and refocus the full line stores.
And, you know, we did a fair amount of work to try to energize the program. But you know what made Prime, just to, to back up for a second, so powerful isn’t, um, the fact that you get two-day shipping. It’s. two-day shipping on the things you want. Um, because Amazon was fundamentally focused on the, the assortment and the inventory and being in stock where it could actually be delivered in two days.
Like it had to have all of those prerequisites to even get to two-day shipping. And I think Nordstrom, when I was there, we were looking at ways to tweak the program without really looking at the underlying business, um, with an equally, um, you know, an equally sharp lens.
Phil: Which goes back to both the data. But, and also I think what people often, what’s e, what’s so easily, easily misunderstood is creating something relatively simple like the, the original prime proposition is incredibly complex when you think about supply chain and how do you actually get goods fulfilled to people.
Douglas: Absolutely. Incredibly complex.
Phil: As, as the legacy the other legacy department stores are figuring out as they try and become more digital. I think the other thing that I wanted to ask you about relative to Nordstrom was that time and that pressure that they were feeling that that was, I think more around, more or less around the time where they went from being so disciplined about sales and promotion and, and especially mass point of sale markdowns, like you get in a mm-hmm… Macy’s, one day sale type of thing.
Douglas: Right.
Phil: And they went from just having the two sales a year to publicly sing. We’re gonna shift to seven promotional periods just like everybody else.
Douglas: That was actually a little bit after my time. I was, when I was there, we were still doing just, um, the two sales a year, uh, the two events.
And they, they were, A big deal and they were huge drivers for the business, obviously. And, um, they were innovative in their own right. Um, and as you rightly point out, they’ve been only watered down.
Phil: Thank Macy’s, which is really not the original Macy’s… for that Macy’s, which is federated, right? So somebody who worked for the original Macy’s and, and cringes and can’t even walk into those doors anymore.
Sorry. Mm-hmm. , sorry, Macy’s. So that’s a good let, so let’s move, let’s move, move much closer to the present even though it’s you, you’ve been there a little while. Uh, I mean, The business of sports and entertainment. But, but really with that, that focus on sports and now we’re talking about fanatics and, and your current role is so relevant to society and to, I mean, to culture today.
And you guys have literally built this moat around the, some of the, like some of the best brands in the world, the NFL… all the teams, man, you like, what is that like on a day in, day out basis when you’re, when you’re, you’re tasked with loyalty to fanatics, but really what you’re, what you’re tapping into is the loyalty that people have to these teams, which are just, I mean, they’re what?
They’re tribal. And I say that as a, as a diehard New Orleans Saints fan. Um,
Douglas: Yeah, it’s a really interesting dynamic. Um, and it it gives us some, obviously, um, some clear personalization opportunities when we are messaging a, a fan about their favorite team or a favorite player or a milestone or the start of a season, or any one of, you know, dozens of, of sports-oriented um, you know, uh, sort of events or milestones a year.
But I will say it’s challenging as well because the fanatics brand itself doesn’t enjoy the same reputation. And this is something that we’ve made a lot of progress on. Um, but it’s still a work in process. And so, I think in, in, in some ways, um, we’re succeeding.
Um I, I won’t say on the backs of our partners, but, um, really with the help of our partners more than with the strength of our own brand, we’ve built a tremendous business, a fantastic business that’s imperfect, um, and in a sense is still overcoming a lot of its growing pains and its imperfections. You know, when the, when the market holds every retailer to Amazon’s standards of delivery speed, for example. It’s hard to never disappoint a customer. Uh, and unfortunately one disappointed customer, um, is much more vocal than a hundred perfectly happy customers.
Phil: And I would imagine sort of the, the time aspect, sort of that time driver of loyalty and purchase consideration is a huge deal, right?
Your team just wins a big game. You want to sort of wear that badge proximity. And all those problems that Amazon solved a long time ago. I mean, especially as the business approaches, what I imagine will be like a 10 billion dollar business pretty soon.
Douglas: Um, yeah, so it’s, it is interesting thinking about, you know, the Super Bowl was last week as we’re recording this and, um, you know, there’s an expectation.
We, we have fundamentally changed the way championship gear is produced and distributed. We’ve gone from a, you know, play both sides of, of the game and risk half your inventory model to primarily a made to order model. And we start printing the second the game ends. Um, but there’s still huge demand and capacity constraints and so, we are inevitably disappointing customers who want their championship t-shirt and time for the parade, and we can’t get them all there in time for the parade.
We start shipping the same day, um, but not everyone’s gonna get it right away. And so we’ve made the business a lot more efficient at the same time. Um, and that has helped us with all sorts of things like keeping prices down, but at the same time, there is a cost to it. So, you know, to circle back to our, our how do you service the customer, the conversation, you know, I don’t know that we’re a hundred percent doing the right thing for the customer, but I think in the big picture. We’re trying to.
Phil: It’s such a ver, it’s such a real-time variable that has such outside impact on consumer demand, which then presses the supply because like a big game last night.
I imagine you guys see this great correlation between, oh, you know, Celtics beat the Bucks, or the Bucks beat the Celtics. All of a sudden you see upticks or down ticks in demand for different teams and I, you’re probably not looking at that day in, day out, but I imagine the merch, the people on the, you know, the category merchants are.
Douglas: Yeah. I, I think that day in, day out, anyone win even a blowout or, you know, doesn’t influence demand that dramatically. But when there are unusual occurrences, it can completely skew whatever forecast we may have had. So, DeMar Hamlin, for example, um, when what happened to him happened, demand went crazy immediately.
Um, for his jersey there, there was another, I’m gonna forget what it was, but there was another instance a couple years ago with a Pittsburgh player. Um, and demand just went through the roof for his jersey overnight, you know, in a way that’s tough to keep up with, but we try. And we have, um, you know, we have processes in place for that, you know, blank inventory presses, um, printing, standing by, so.
Phil: Sounds like a lot of late-night production rubs.
Douglas: Yep. 24-7.
Phil: It, it’s funny you mentioned Pittsburgh. We, we were lucky enough to do some work with the Pittsburgh Steelers. And when we got introduced to, we, we were like in the cafeteria, got introduced to Mike Tomlin, the head coach. He’s a super, super nice guy, and they introduced us as the fan engagement people.
And Coach Tomlin says, fan engagement. I only know one thing about fan engagement. It’s like, oh, what’s, what’s that coach? He says, run up the score. Which is such, which is such an interesting thing in that, I mean, for that business. And it’s interred when you, when you think about that against the backdrop of customer loyalty and so much of loyalty has become, especially in retail, just over transactional.
Right, like the department stores have just become transactional versus experiential. You know, unlike 40 years ago where they were actually experiential, that the emo,you guys are less tasked. Like you, you’re leveraging the emotion that’s already there versus trying to create. I mean, you want to create the emotional attachment to the Fanatics brand, but you guys are in this really interesting, and I think fortunate position, well, clearly a fortunate position because you guys keep raising money at bigger and bigger valuations as the business keeps growing.
Um, but it’s, you’ve gotta tap into the motion that’s already there. Versus trying to add emotion to something that’s not very emotional to begin with.
Douglas: That’s a, that’s absolutely right. And, um, we still have to, to do it well because you could do it poorly. Um, if you’re not understanding what teams a fan actually cares about and continuing to send them offers for irrelevant sports or irrelevant teams.
Um, given that we’re a relatively aggressive marketer, um, that could get really annoying really fast. Um, but I like to think that we’ve done a terrific job that the team has done a terrific job of, of, um, understanding our customers using data, um, to create relevant messaging, um, that they’ll actually want to look at.
Um, and while they may not be buying a jersey every week, um, cuz they’re not, it’s a big purchase, um, they’re still at least entertained by what we’re showing them and that creates that longer term connection.
Phil: Yeah, it’s sort of like a high data customer relationship in terms of data, in, in, in terms of the measure of volatility.
Mm-hmm… because as, not to put this too much in the first person, but being a New Orleanian, living in Atlanta, who always goes to see the Falcons play when they’re hosting the Saints.. Mm-hmm. They don’t, there’s no context for that. If they’re just looking at that in transaction, they think I’m a, I’m, I might be a Falcons fan, sorry, Mr. Blank. Um but that can be, that can be for the polarizing to the, to the fans, if you get that right. Like a Yankees, red socks type… type of thing.
Douglas: Yeah. Yeah. So, I, you know, we have to be able to sort of separate out and, and have a good sense of what are you buying for yourself? What’s the team that you actually care about?
Um, what are you buying as gifts? Um, what are you buying for the family? Um, and how do we, how do we make sense of you as a customer? Um, so that we’re meeting your needs and with all those different sorts of hats on.
Phil: Very much.
Douglas: And, and we do. Yeah. And, and we do see that, you know, obviously there’s a strong correlation with hometown teams, but we also know that, um, fans shop for um, the, like you, the, the team of their city of origin, their school, where their alumni, um, any number of, of different reasons you were a, you were a fan of, of Terry Bradshaw in the seventies, and you’re still loyal to, to Pittsburgh for that reason. You know, there’s any number of reasons why people are, are fans of a team.
Phil: Terry Bracha, Louisiana person by the way.
Douglas: There you go. I knew that.
Phil: But it is, it’s just like in the days, and I’m sure you, you, you can appreciate this from, from Amazon. It took them a little bit to figure out when you were buying a baby present for somebody else versus buying baby goods because you have a baby in, in your house or on a on the way.
Mm-hmm. . So that whole, that whole context matters. And I, I’m, I imagine that you guys also have great insights into, and there are a lot of businesses, a lot of categories where it’s not like you’re just a NFL fan or just a Saints fan, or just a Seahawks or a Jets or Giants fan. You’re a football fan, you’re an NFL fan, you’re a college football fan, but you’re also an NHL fan.
And having all those insights, it creates a lot of, I think, challenge, but also probably a lot of opportunity around that whole notion of contextual relevance.
Douglas: Yeah. But the absolutely don’t disagree with any of that. But the most important context is you as an individual and we really strive to understand, um, who Phil Rubin is so that you know, when you’re buying Saints gear as well as Cubs and, you know, Sounders gear, we can make sense of all of that.
Um, because each fan and their rooting interests are, is unique. Um, you know, our president of DTC always says he’s probably the only you know, um, Cal Stanford, you know, fan there is, you know what, um, I’m getting his example wrong, but he’s like, I’m a unicorn. But we’re all unicorns and we have to get that right to serve our fans well.
Phil: It’s the Margaret Mead quote. Just remember, you’re unique just like everybody else.
Douglas: Exactly… Exactly.
Phil: It is remarkable though to consider given the breadth of Fanatics business, that the view that you guys have into fandom, into fanatics, literally and figurative is, is pretty unique. I mean, especially once you get outside of a, a closed loop, American Express type of insight, you know, data set mm-hmm. mm-hmm. That and, and clearly like as the business expands. And let’s talk a little bit about that cuz you guys are into, you know, I heard an interview with, with Michael Rubin, no relation to me unfortunately.
Um, the other day where he was actually, it was right after the Super Bowl and he’s obvi, he’s apparently an Eagles fan, not a Chiefs fan, but I think everybody was a, everybody in Fanatics was a chief’s fan on, on Monday after the game. Uh, all these new extensions create some really interesting opportunities that I imagine really sort of push on what you learned in, in Amazon’s expansion too.
Douglas: Yeah, I mean it’s gonna be very interesting, um, as we launch and integrate, um, these new business verticals to really think, you know, today we know Phil as a fan, as and as a sports consumer through his gear purchases. Um, but we’re gonna start to see a much more holistic view of you as a fan and as a person.
Um, and, and, you know, whether it’s the sports book or the collectibles business or any other, uh, vertical that we get into in the future, um, they may inform each other and they may not. You know, you’re collect, you may be a collector who’s in it to, to make money. Um, and you may not care what cards you’re buying or you may be a collector who’s in it for nostalgia.
And you care very much what cards, your cards you’re buying and how that correlates back to your fandom. And I think we’re gonna have a lot of work ahead of us to start to understand these different types of customers and how their behavior in each vertical informs their behaviors and the other, and, and what we, you know, the picture we start to put together of them as a, as a fan across all of them.
Phil: So interesting because it really does come back to data insights and you know that always that, that line from Nike know to serve, if you know them, you know how to serve them, which also pays homage to the Nordstrom, you know, customer service is, is the same thing.
Douglas: Right. And doing this well at scale is, is the hard part. In a way for a Nordstrom sales representative to maintain a book of clients it’s relatively easy. Um, it’s, it’s human scale, but for us to, um, really deliver an equally personalized, um, to throw the, you know, ever-present buzzword in, um, an equally personalized experience, you know, for millions of sports fans is… That’s much harder, obviously, especially when each one is distinct.
Phil: That, that Margaret me, that Margaret me quote, but mm-hmm. You know, if you pay attention to the customer and then you act accordingly, that’s sort of the definition of how you create loyalty and what loyalty marketing is.
Douglas: Yeah. To, to bring it back to reality.
Phil: Well, Doug, it, it’s so fun to talk about all these things with you under the, the broad topic of loyalty, especially sort of this, this, this arc that your career has had going from what was a legendary database marketing company.
You know, one point in time, no pun intended time.
Douglas: Right.
Phil: Uh, to, to Amazon, to Nordstrom, to Fanatics. Uh, first of all, congratulations. It’s really great to see that kind of trajectory. What’s your, this sort of close with my last question. We’re in this, we’re in this shift where there’s a growing recognition of the value of experience and relationship over a narrower view of loyalty that’s centered around what I, what I think we all sort of re.. refer to as transactional loyalty. What’s your sense of where the catalysts are and, and where you think that’s going? Especially being in a business that’s, that’s highly transactional, but built on these, these real brand loyal relationships.
Douglas: Yeah. Um, maybe I just think when we talk about so much about this, uh, shifting focus to experiential marketing and, and getting beyond the transactional, I have, maybe I’m thinking about this too narrowly, but I have a pretty strong almost negative reaction to that because I think that at least at Fanatics, we’ve done a terrific job of building a loyalty program.
For the fan gear business that does a terrific job of delivering value to our customers and delighting them, um, while at the same time driving real increase, uh, in frequency and revenue. For the company, which, you know, as you said, if the answer isn’t money, reframe the question. Um, we need to be delivering value to, to all of our stakeholders, customers, and the company.
And I think we have an really interesting opportunity to build on that successful base with our new verticals and create an enterprise loyalty value proposition. That even if it on its face sounds transactional, you know, with a strong focus on cross-selling, on leveraging fan cash, which is our currency, um, across our different verticals, um, I think that that in itself creates a strong experience for the customer.
And I, I think the fact that that experience is rooted in something transactional is okay. That’s what the customer’s coming to us for. They’re not coming to us just to make them feel good. They’re coming to us because they want, uh, their.. their Geno Smith jersey, and the best thing we can do is give ’em a great price and, um, fast delivery on the right size.
And the same thing is true, is going to be true with the sports book or with collectibles. Um, if we can enhance that experience for them, uh, they will be… you know, inclined to continue transacting with us, and that’s, that’s their happiness. Uh, and I think, you know, the interesting, the really interesting thing for me with Fanatics is that we can bring all of these services under one brand.
I think the brand will start to mean more over time, especially as there’s more to it. Um, and really have the potential for one and one and one to equal ten. Um, because we, we have a huge database of sports fans going in. I think, you know, Ruben talks a lot about that as our competitive differentiator is our ability to talk to fans that we already know.
Um, and within that, they’re all doing these different things already. Not all of them. Some are collectors and some are gamers or betters. Um, and all we have to do is put those pieces together for them and enhance the experience a little bit, and we’ll capture what today is for them. Um, a disparate experience where shopping at Dicks or betting on Fan Duel, like they don’t amplify each other, but Fanatics has the potential to do that, to have your betting experience improve your shopping experience.
And, you know, I don’t know exactly what that’s gonna look like in three years. We’ll have this conversation again, uh, because it’s gonna be an interesting journey to, to figure it out.
Phil: Wonderful. And, and I think I, I totally agree with you. And as somebody who’s a big advocate of moving beyond, you can’t move beyond transactional without maintaining it transactionally. Otherwise you can’t answer that question, right?
Douglas: Right, right.
Phil: Well, Doug, this has been so fun talking with you. Thanks again. Thanks a million for, uh, for, for joining us here and continue great success. It is, uh, it will be fascinating to see. And, and congratulations on, on, on all the progress at Fanatics.
Douglas: Thank you. It’s, uh, it’s been fun talking, Phil.
Phil: All right. Doug Glazer, Vice President of loyalty and gift cards at Fanatics. Thanks very much.
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