DM Magazine January 2021

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VOL. 34 • NO. 1 • JANUARY 2021

THE AUTHORITY FOR THE DATA-DRIVEN BUSINESS

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FULFILLMENT & DELIVERY

Vol. 34 | No. 1 | January 2021 PRESIDENT Publisher & Editor-in-Chief Steve Lloyd - steve@dmn.ca DESIGN / PRODUCTION Jennifer O’Neill - jennifer@dmn.ca

DATA & PRIVACY

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302-137 Main Street North Markham ON L3P 1Y2 Phone: 905.201.6600 Fax: 905.201.6601 • Toll-free: 800.668.1838 home@dmn.ca • www.dmn.ca EDITORIAL CONTACT: DM Magazine is published monthly by Lloydmedia Inc. DM Magazine may be obtained through paid subscription. Rates: Canada 1 year (12 issues $48) 2 years (24 issues $70) U.S. 1 year (12 issues $60) 2 years (24 issues $100) DM Magazine is an independently-produced publication not affiliated in any way with any association or organized group nor with any publication produced either in Canada or the United States. Unsolicited manuscripts are welcome. However unused manuscripts will not be returned unless accompanied by sufficient postage. Occasionally DM Magazine provides its subscriber mailing list to other companies whose product or service may be of value to readers. If you do not want to receive information this way simply send your subscriber mailing label with this notice to: Lloydmedia Inc. 302-137 Main Street North Markham ON L3P 1Y2 Canada. POSTMASTER: Please send all address changes and return all undeliverable copies to: Lloydmedia Inc. 302-137 Main Street North Markham ON L3P 1Y2 Canada Canada Post Canadian Publications Mail Sales Product Agreement No. 40050803

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Understanding Canada’s New Privacy Rules in the Making

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Striking the Balance Between Customer Privacy and Intimacy

COVID-19

The Future of Order Fulfillment and Delivery: Technology to the Rescue An Interview with Michael Zahra, CEO, Drone Delivery Canada

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Mining eCommerce Data Gold for Fulfillment

INTERVIEW ❯❯22

Digital Darwinism: An Interview with Brian Solis, Global Innovation ❯❯8 An Extraordinary Year for Canadian Evangelist, Digital Marketing Under COVID-19 Salesforce

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Brian Solis is the Global Innovation Evangelist for Salesforce and a Renowned Digital Prophet and Author

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The Last-Mile Challenge in Canada JANUARY 2021

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DATA & PRIVACY

Understanding Canada’s New Privacy Rules in the Making BY MAIREAD MATTHEWS AND ROB DAVIDSON

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he federal government introduced Bill C-11 in November as its first major attempt to change Canada’s privacy laws in decades. The proposed Consumer Privacy Protection Act (CPPA) is expected to modernize and, in some cases, toughen privacy and stiffen violation penalties for the digital age. The Liberal government hasn’t committed to a timeline for the bill to become law (an election promise), but the Ontario government decided to conduct its own consultation on privacy in August to October 2020. In response to its request for input, the Ottawa-based Information and Communications Technology Council (ICTC), a national centre of expertise for the digital economy, submitted feedback on the major tents of Ontario privacy proposal, the CPPA, and privacy legislation in Europe. Here is a summary of that feedback. Why now? COVID-19 health measures pushed entire communities online in a matter of weeks in early 2020, normalizing digital telehealth, teleworking, and virtual learning. New digital tools became part of Canadian lives. People now spend more time online than ever before, which has privacy implications, so there has never been a more pressing time to improve Canada’s privacy laws. While this is a national issue, Ontario is a key player in Canada’s increasingly digital economy. The province has a burgeoning tech industry, the country’s largest health and education sectors, and nearly 15 million people. Privacy ❱ DMN.CA

laws is a core pillar of a modern economy. Done right, a privacy-law redo will create certainty for business and protect the fundamental rights of consumers, patients, students, and individuals. Legal context Privacy in Ontario is governed by a collection of federal and provincial privacy legislation. Public sector and healthcare activity are addressed by various provincial Acts, while private sector activity is covered by the federal Personal Information Protection and Electronic Documents Act (PIPEDA). Significantly, non-profits and charities in Ontario are not covered by any current rules. Nor are unions or provincial political parties. In its consultation, Ontario wants to expand the scope of privacy legislation to include these categories and replace PIPEDA with provincial private sector legislation. In this provincial effort, it will be important to recognize the specific needs of different types of organizations and their ability to comply with new regulations. A tiered system of requirements and penalties based on resources and capabilities could help address some of these challenges. Ontario will also need to effectively coordinate their efforts with the federal government and relevant privacy commissioners to avoid conflicting or overlapping regulation. Legislative overlap is even more important now with the introduction of Bill C-11, which provides many of the same measures proposed by Ontario last summer. Key issues The following measures are some core areas of Ontario’s privacy discussion:

Enhanced consent – Ontario proposes new provisions to allow individuals to revoke consent at any time and require an “optin” model for secondary uses of personal information. While allowing individuals to revoke consent at any time might sound like a move in the right direction, ease and enforceability will be the real tests of this proposition. If individuals are forced to engage costly legal representation to force compliance, for example, enhanced consent provisions will not have helped. Data and consent in other legislation – PIPEDA possesses relatively strict consent rules, whereas legislation like the European Union’s General Data Protection Regulation (GDPR) is more flexible. The GDPR outlines six cases under which data can be legitimately processed and only requires consent in one case. If passed, the proposed federal CPPA rules would move meaningful consent toward GDPR interpretations, making the need for consent more flexible. The right to erasure – Ontario proposes giving individuals the right to request the deletion of their personal information, subject to limitations. The argument is that if personal data has been altered, misused, or otherwise negatively impacted, people should have the right to lawfully erase it. This is especially important for minors and other vulnerable groups. Rights to erasure and deletion are already afforded by the GDPR, the California Consumer Privacy Act, and recently proposed Québec legislation. This isn’t the case under current Canadian privacy laws. The proposed CPPA would implement a clear and explicit right to erasure. De-identified personal data and synthetic data – Ontario

proposes specific requirements for de-identified personal data. De-identification and other privacy techniques such as synthetic data are valid processes that allow for data use without compromising personal privacy. The proposed federal CPPA clarifies that any direct identifiers of specific individuals need to be protected. The EU model incorporates a Data Protection Officer who is certified in the proper use and monitoring of emerging, industry standard de-identification techniques. A similar model would improve Canadian privacy law reform. Safely sharing data through data trusts – There is no “magic bullet” for all data-sharing challenges. New tools like data trusts can generate significant inroads and enable the innovation potential of Canadian businesses. When designed and implemented properly, a data trust can balance the competing needs of responsible data access, individual and group privacy, management of sensitive data such as medical and social services research, and development of commercial products. MAIREAD MATTHEWS is a Research and Policy Analyst at the Digital Think Tank by ICTC, a national centre of expertise on the digital economy. With the Digital Think Tank, Mairead brings her longstanding interest in Canadian policy to the conversation on technology and 21st century regulatory challenges. Mairead’s areas of interest include internet policy, data governance, and the social and ethical impacts of emerging tech. ROB DAVIDSON,

Director, Data Analytics at the Information and Communications Technology Council of Canada (ICTC), a national centre of expertise on the digital economy. The responses included in this article are a select portion of ICTC’s entire consultation submission. To read more visit www.medium.com/ digitalthinktankictc/ JANUARY 2021


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DATA & PRIVACY

COURTESY BRANDQUANTUM

Striking the Balance Between Customer Privacy and Intimacy

BY PAULA SARTINI

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hough the role of the marketing department appears to have evolved significantly over the past few years, fundamentally it is still about building relationships. With the rise of social media and other digital platforms, this has increasingly meant that relationships are based less on human contact and more on personalized digital communication. Consumers are aware of the inevitable trade-off between privacy and personalization, aptly termed the privacy paradox. Earlier research into the paradox of what consumers say and do was attributed to consumers simply not knowing enough about the pitfalls of sharing personal information too readily. More recent research in the US shows that many consumers have resigned themselves to the fact that their information has been traded as a commodity, yet privacy concerns remain a key consideration when disclosing online. This is supported by the Digital Marketing Institute (DMI) which states that privacy is a top concern for online consumers with 86 percent taking steps to ❱ DMN.CA

improve their online safety. With this in mind, companies need to prioritize customer privacy and control by implementing security and privacy standards as well as customer control over their personal information and communication preferences. As marketers have traditionally been responsible for establishing relationships with customers and implementing initiatives to build trust, they also need to take responsibility for customer data. This includes customer data protection as well as providing customers with means to control their own data — regardless of where in the lifecycle of the relationship they may be. Whilst Information Technology (IT) teams can and should be held accountable for ensuring that customer information is not compromised by data breaches or intrusions into the company environment, it is marketing’s responsibility to ensure that customer information does not “get out” and is treated with the utmost respect. This is also supported by the DMAI which states that marketers have a responsibility to take good care of consumer data and cannot

take this for granted. There is a difference between security and privacy and more often than not, these terms are used interchangeably.

as well as implement security measures along every step of the process of data acquisition through to use and storage. This is an important first step to

Accenture says 75 percent of consumers consider personal data as their second biggest concern. Securing customer data IT has the responsibility of keeping data secure and ensuring that data cannot be accessed by potential hackers. A key responsibility is to prepare for possible security breaches and ensure that there are security measures in place to protect customer data. According to the Institute of Digital Marketing, IT departments need to focus on where data is stored

keeping customer data secure and meeting customer expectations. This is a big responsibility as according to an Accenture study, 75 percent of consumers consider personal data as their secondbiggest concern after increasing costs. However, according to PWC, 75 percent of consumers do not believe that companies handle their data responsibly. So whilst consumers expect companies to JANUARY 2021


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DATA & PRIVACY keep their information safe, they don’t often believe that companies do. This gap is a trust gap. Customer privacy Over the years, marketers have collected massive amounts of customer data to provide positive, personalized experiences. While customers have come to appreciate the personalization, they are concerned about their data falling into the wrong hands. For this reason, marketing departments need to take responsibility for customer data and how it is handled. The Federal Trade Commission states that marketers are legally obligated to treat customers’ private data respectfully and fairly. Based on this customers require transparency in how their data is being used for marketing activities. A key concern is that many marketing departments outsource various initiatives to third-party agencies which require that private customer data is shared with companies outside of the business. According to the Financial Post, if companies transfer private customer information to third parties, the onus remains on the company to keep the data safe. With this in mind, customers are reliant on the relationship they have with selected companies to keep their data secure regardless of whether they use third party companies or not. While marketers may trust their partners and suppliers, it is important to verify them and confirm how they use the data you provide them with as well as understand how their data policies align with regulatory

requirements. After all, if your customers trust your organization and their data lands in the wrong hands, you will ultimately be left with holding the bag. Customer trust According to the DMI attitudes towards data may be evolving, but trust remains the constant and key factor when it comes to understanding what people feel is most important about data. Adding to this, brands that fail to take responsibility for their customer data ultimately lose customers, goodwill and shareholder value.

customer data which limits the number of employees that can access the customer data. However, beyond internal measures, companies would benefit from empowering customers with verification tools to protect themselves from potential threats such as email verification tools that can help prevent customers from falling from spoofing or phishing emails. Trust is earned. It takes time. It’s only through repeated interactions that trust is built. It is also fragile and easily lost. Just because customers share information does not mean they trust the

If organizations want to build trust, they need to visibly show the evidence of the measures they put in place. Based on this, trust is the most valuable component in the customer relationship. Before a customer will give you their data, they have to trust you and believe that you have their best interests at heart. Once they have given you their data you have to prove that you are trustworthy and will use their data as agreed. This can be achieved by putting measures in place such as permission-based access to

organization or that it is an open invitation to receive unsolicited communication. It is merely the first step in a journey. Customers should always feel that they are in control. If organizations want to build trust, they need to visibly show the evidence of the measures that have been put in place to ensure that customers remain in charge of their information. This includes, but is not limited to privacy policies, customer control

over the personal information they have provided, how it is stored and its deletion. This should also extend to behavioural data. In all your interactions with your customers, your brand tells a story, it says whether or not you’re consistent and trustworthy or flighty and unreliable. By focusing on brand consistency across all documents, presentations, emails, and more, customers establish trust and believe that if you are willing to focus that much attention on the smaller details, you are credible and will pay attention to the bigger issues such as customer data security and privacy. While secure IT infrastructure is a key component to keeping customer data secure, customers expect more than adherence to regulations and the latest technologies to help protect their data from falling into the wrong hands, they are relying on the brands they trust to live up to their expectations and put measures in place to ensure that their data will be used responsibly and safely. Without customer trust, brands will not survive. PAULA SARTINI, founder and CEO at BrandQuantum. BrandQuantum focuses on creating consistency of brand. Its software solutions have been designed with security at the core and provide one platform for complete brand consistency. BrandQuantum helps leading local and global companies to deliver brand consistency across key customer touchpoints by helping employees to meet brand compliance standards in every email, document, spreadsheet and presentation. For more information about BrandQuantum visit www.brandquantum.com

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COVID-19

An Extraordinary Year for Canadian Digital Marketing Under COVID-19 As the pandemic clouds the future, marketers and agencies need to be agile and bridge their strengths BY STEVE LEVY

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n 2020, our social culture shifted from a fear of missing out (FOMO) to a fear of going out (FOGO). Today, people share “air hugs” and send their kids to “Zoom school”. Since COVID-19 emerged, life and business changed in this outlier of a year. In the first five weeks of the New Year as the pandemic spread, we saw trends I’ve never witnessed in my career. Canadians reporting a threat to their personal health, finances and even the country, grew four-fold in this short span. For marketers and agencies, these seismic changes have accelerated the shift to digital and added more complexity to the marketing mix. This makes it evermore challenging to plan for what may come next and what will stick. These conditions showed up in our 14th wave of the Canadian Digital Marketing Pulse survey. We have shared our views on the “digital” world every year since 2006 based on an ongoing monitor of what client-side marketers and agencies are thinking and doing. Our objectives have consistently been to: measure familiarity and usage of digital marketing components/tactics amongst client-side marketers and agencies, gauge their sentiment on the current and future state of digital marketing, and integrate consumer perceptions. ❱ DMN.CA

In 2006, we considered 10 tactics under the digital umbrella. Over time, this number has changed and indeed some of the tactics have changed to reflect the market. In 2020 we considered fourteen tactics. You can see the full report on the Canadian Marketing Association’s website. We surveyed a wide cross-section of client-side marketers and agencies as well as 890 Canadians. I’ll review the highlights and spotlight some key findings here. How COVID-19 disrupted outsourcing cycles While almost everything in marketing these days could be perceived as digital, we have seen a pattern of agency dependency over the past decade that resembles a pendulum — where dependency swings back and forth between bringing tasks in-house on economic tides, outsourcing to agencies as headcount issues arose, and using a hybrid model. However, in this pandemic year, marketers’ reliance on agencies (both digital and creative) plunged by nearly half (from 50 percent in 2019 to 28 percent in 2020). That was lower than any other year in the past decade. For a quarter of marketers, COVID-19 has fundamentally changed the way they approach digital marketing. A third went dark for the time-being and another third made a shortJANUARY 2021


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COVID-19 term pivot from traditional to digital. In this circumstance, there were some patterns associated with how marketers operated. Activities more core to their businesses (email marketing, website, social, branded content and SEM) were brought in-house — primarily to save money and time. Newer or more specialized tactics (eSports and gaming, wearables, programmatic, augmented reality and perhaps digital audio) were more likely outsourced with expertise being the main reason. This reinforces the specialized knowledge that agency partners can add value and growth. Still, the opportunity for a hybrid model where clients and agencies work together remains. This means that agencies and clients must build dynamic partnerships to ensure they maximize the synergies between them. How the pandemic and other factors shape the marketing mix How digital components fit into the marketing mix depends on several factors, not the least of which is its perceived effectiveness. Six in 10 marketers rate their digital initiatives as effective and this is largely attributed to what has been happening at the top end of the funnel — increasing awareness. When it comes to tactics and spending priorities, a few themes are playing out for marketers. Overall, we’ve seen a continuing shift away from “traditional media” with print taking the biggest hit. Outdoor media buying has also fallen since the onset of COVID-19 following two years of increasing familiarity and usage. Social apps like Instagram, online video and search are seeing the most obvious lift in spending intent. However, use of influencer marketing by agencies declined sharply, likely due to the growing lack of authenticity and concerns regarding new regulations. While some tactics are mainstay, the marketing community continues to hold its breath on more technical options - augmented reality, wearables and digital audio. Social Media marketing has become part of the glue of marketing — it is pervasive among both agencies and marketers. This is in spite of negative press and bans we saw in 2020. And yet, among Canadian consumers, JANUARY 2021

nine in 10 are very worried about privacy and security of their personal information, seven in 10 have not changed their social habits and just one in 10 consumers stopped using social media in protest of the lack of regulation. At first glance, these two sides of the coin just done seem to jive. However, we did see some change in 2020 — it seems that fewer consumers are joining or liking a campaign or sharing a product ad or information through a social networking site. This suggests that perhaps social is starting to become more a one-way engagement than it has been in the past. Email Marketing, while arguably the most mature digital tactic, continues to be healthy. It is used far more frequently by marketers than agencies (81 percent versus 52 percent). This is partly a function of outsourcing and partly driven by privacy related concerns/needs. Most consumers say they’ve received promotional emails and nearly six in 10 claim that they have responded. But their willingness to receive email marketing is showing signs of fatigue with the plethora of messages hitting their inboxes during the pandemic. Search is still a favored tactic for 80 percent marketers and 69 percent agencies. It’s trending up amid COVID-19. Online video is another growth area with 78 percent agencies and 61 percent marketers using it frequently. It is a must component in the digital media mix now. Digital Signage usage slipped this year, particularly among marketers. Just 39 percent of companies say it was in their marketing mix, down from 52 percent a year ago. No doubt a function of the fact that consumers are staying home. But with location-based technology, privacy concerns may also be a factor. Influencer marketing also took a hit in 2020. Frequent usage by agencies fell from 44 percent to 36 percent with brands at 35 percent. With its close tie to experiential marketing and sponsorship, which clearly saw a downturn in the pandemic, this no doubt had a negative impact on the use of influencer marketing. But perhaps there is more to this downward shift. It seems that there are

growing concerns about lack of transparency and, authenticity, fueled by some cases of outright fraud. Some marketers anecdotally express concerns about how little control they have over what influencers may say or do. Augmented Reality was integrated into the Digital Pulse research program in 2018. Familiarity is small but growing for marketers and holding in the high twenties for agencies. Because of its high cost and uncertainty about what it provides in terms of ROI, it’s future as a growing tactic is questionable with a key question being whether AR is scalable. It doesn’t help awareness when this tactic is baked into other solutions that marketers aren’t aware of. COVID-19 has had a massive impact on the marketing and agency world. As marketers and agencies gear up for 2021, we should expect budgets to continue to shift to digital accelerated by COVID with emphasis on short term. While online video, email and social tactics continue to have momentum, marketers will need

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to better understand AR, wearables and digital audio in terms of where and how to use them and if they can become scalable. They also need to work harder to understand how to best make use of influencers. With this increasingly complex menu of digital tactics and speed of change, marketers and agencies will need to consistently evaluate and educate to get the most out of their investments. Until a coronavirus vaccine is widely implemented, we’ll still face uncertainty. That will require ongoing vigilance and agility to pivot as necessary. Marketers and agencies that stay close to the consumer will have the best chance of seeing their efforts pay off. STEVE LEVY is Chief Client Officer, Ipsos

Canada. Steve leads Client Organization at Ipsos Canada. He is the author of (among other things) the Most Influential Brand Study (Globally), The Digital Marketing Pulse, and Developing the Long Middle story. Steve is a board member at the Canadian Marketing Association, a frequent public speaker and contributor to publications across Canada. He writes on marketing, loyalty and related topics.

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t’s been over 30 years since Kathy Asling found an old puppy on the street. She 8-weekAs an animal rescue immediately called possible link to the pup’s group every in her local newspaper. owners and ran an advertisement microchip pets. You cannot we know how important it is to predict what will A reporter who Kathy to write happen in the saw the ad called future so we always advise a cover responsible pet an appointment Although no owner story. owners to for was ever located, procedure. It’s better this quick and painless 5 minute make calls to adopt the she received almost puppy. (or less) to be safe than 200 options sorry. With other adopters and conducted She instinctively screened out there, we also expensive prospective know that home visits. Kathy not to proceed but had names decided on with micro-chipping many pet owners decide and their pets because provide a loving numbers of several families she a home price. That is why TAGS initiated home to a dog. felt would saving of the a cheap way to The next day she local shelter and a good amount microchip, visited started ‘match of people who had making’ by contacting the The revenue goes toward money (instead of paying $90 called her looking and up). a good cause the need through to adopt. The Animal Guardian – helping dogs & cats in Society. How We Use Your Money 100% of your donations goes to helping the program as we animals in our have far is the veterinary no paid staff. TAGS’s largest expense by bills. We want are healthy, and to be sure that all our dogs sometimes this means expensive or surgeries that medications cost hundreds or even thousands In addition, all TAGS dogs are of dollars. spayed and microchipped prior to adoption. or neutered, vaccinated to receive some While TAGS is donations of dog fortunate purchasing quality food, we also spend Identifying the dog food to feed need for someone money Other expenses to our dogs in of good dogs from to step up and include the production foster care. save the lives being put to death, and promotional created the name of training, educational material. The Animal Guardian Kathy and her daughter To donate visit of 1987 the first Society (TAGS). Durham Region our In March org based or see our donationwebsite at www.animalguardian Kathy set out to meet with individualsrescue was formed. . information https://www.canadah guide her into developing a program who could mentor and elps.org/en/dn/13492at Canada Helps integrity and ethics that that would promote would operate with our community humane education and find homes to for displaced animals. Vision Statement Perhaps the most relationships with difficult task in the early days ❯ To sustain the was creating operation of our Animal Controls. a foreign word, program and Rescue in those continue to serve and the constant days was and protect the from death and our community. animal citizens research labs becamestruggle to save animals of emotionally and ❯ To never see a task that proved physical draining. any animal abused, to be this was not the It abandoned or unwanted. job for one person. soon became evident that left ❯ To continue Kathy needed help. Now 30 years to provide medical later and thousands homed, she has care and training animals in our of dogs successfully yet care. to rework closely with to stop! Kathy and her corps ❯ To construct of volunteers a shelter that will animal shelters, community to provide safe housing humane societies, for animals until improve the lives permanent homes and the of canine citizens. ❯ To ensure that Today, TAGS is are found. a charitable non-profit our shelter offers not receive any a centre for learning and education organization and government funding. to does public donations ❯ To see no animal our community. We are entirely for funds. Other reliant on put to death in TAGS needs other than monetary municipally run shelters because donations, pet care items like they are overlooked beds and blankets, good quality dog of space. or due to lack leashes and collars, food, dog We also need other ❯ To encourage winter coats, dog those items toys, etc. The Animal Guardian like building materials and dedication to animalswho profess their love and services. Society’s microchip to take a stand a popular tradition, participate in the to educate and offering inexpensive clinics have become pet owners in the ❯ To see the day cause of rescue. Toronto and Durham microchip services for when rescue will no longer be necessary, as all Region area. animals will have 2 safe, loving homes. 2021 GTA Giving Guide foundationmag.ca

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The Animal Guar dian Society

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t’s been over 30 years since Kathy Asling found an old puppy on the street. She 8-weekPerhaps the most immediately called possible link to difficult the pup’s every in her local newspaper. owners and ran an advertisement relationships with Animal task in the early days was creating Controls. A reporter who Kathy to write saw the ad called a foreign word, and the constant Rescue in those days was a cover from death and Although no owner story. research labs becamestruggle to save animals was ever located, emotionally and calls to adopt the a task that proved she received almost physical draining. puppy. to be 200 this was It soon became adopters and conducted She instinctively screened not the job for evident that prospective one person. Kathy home visits. Kathy Now 30 years but had names needed help. decided on later and thousands and provide a loving numbers of several families she a home homed, she has yet of dogs successfully to stop! home to a dog. felt would work reThe next day she local shelter and closely with animal Kathy and her corps of volunteers visited started ‘match shelters, humane people who had making’ by contacting the community to improve called her looking the lives of canine societies, and the the Today, TAGS is to adopt. Identifying the a charitable non-profit citizens. need for someone not receive any of good dogs from to step up and organization and government funding. save the lives being put to death, does We public We are entirely created the name Please feel free welcome your feedback reliant on The Animal Guardian Kathy and her daughter TAGS donations for funds. Other and your questions. of to contact us than monetary 1987 the first Durham needs other pet Society with any questions donations, care items like General information or comments Kathy Region based rescue (TAGS). In March beds and good quality dog you have. blankets, leashes set out to meet about our program was formed. food, dog and collars, winter with individuals or volunteering: We also need other guide her into coats, dog toys, tagsinfo@animalgua developing a program who could mentor and items like building Telephone: 905-263-TAG To donate visit integrity rdian.org materials and services.etc. that would operate and ethics that our website S (8247) our community and would promote humane educationwith org or see our donation at www.animalguardian find homes for . to https://www.canadah information displaced animals. elps.org/en/dn/1349 at Canada Helps 2

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t’s been over 30 years since Kathy old puppy on Asling found an the street. She 8-weekimmediately called possible link to the every in her local newspaper. pup’s owners and ran an advertisement A reporter who to write a cover saw the ad called story. Kathy Although no owner was ever located, calls to adopt the she received almost puppy. 200 adopters and conducted She instinctively screened prospective home visits. Kathy but had names decided on and provide a loving numbers of several families she a home home to a dog. felt would The next day she local shelter and visited started ‘match people who had making’ by contacting the called her looking the to adopt. Identifying the need for someone of good dogs from to step up and save the lives being put to death, created the name The Animal Guardian Kathy and her daughter of 1987 the first Society (TAGS). Durham Region In March It is our mission based Kathy set out to to companion animals provide re-homing and medical meet with individualsrescue was formed. care to displaced and guide her into education, behaviour to support the community developing a program who could mentor and in areas of humane counseling, the integrity and ethics that promotion of ownership, and that would promote would operate with the needs of animals.responsible pet our community humane education and find homes to for displaced animals. To donate visit We welcome your feedback and Please feel free our website at www.animalguardian your questions. to contact us org or see our donation information General information with any questions or comments . https://www.canadah about our program you have. elps.org/en/dn/1349 at Canada Helps tagsinfo@animalguardian or volunteering: 2 .org

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t’s been over 30 years since Kathy old puppy on Asling found an the street. She 8-weekimmediately called possible link to the every in her local newspaper. pup’s owners and ran an advertisement A reporter who to write a cover saw the ad called story. Kathy Although no owner was ever located, calls to adopt the she received almost puppy. 200 adopters and conducted She instinctively screened prospective home visits. Kathy but had names decided on and provide a loving numbers of several families she a home home to a dog. felt would The next day she local shelter and visited started ‘match people who had making’ by contacting the called her looking the to adopt. Identifying the need for someone of good dogs from to step up and save the lives being put to death, created the name The Animal Guardian Kathy and her daughter of 1987 the first Society (TAGS). Durham Region In March It is our mission based to Kathy set out to companion animals provide re-homing and medical meet with individualsrescue was formed. care to displaced and guide her into education, behaviour to support the community developing a program who could mentor and in areas of humane counseling, the integrity and ethics that promotion of ownership, and that would promote would operate with the needs of animals.responsible pet our community humane education and find homes to for displaced animals. We welcome your To donate visit feedback and Please feel free our website your questions. to contact us org or see our at www.animalguardian General information with any questions or comments donation information . about our program https://www.canadah you have. tagsinfo@animalguardian or volunteering: elps.org/en/dn/1349 at Canada Helps .org 2

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FULFILLMENT & DELIVERY

The Last-Mile Challenge in Canada

I

t’s time to jumpstart the evolution of the delivery ecosystem Canadian consumer and retail businesses are facing a challenge in their efforts to differentiate themselves and stay competitive in a tough market. It’s no longer enough to compete on price, quality, or even on the seamlessness of the customer experience; today, companies must also compete on the speed and convenience of delivery of eCommerce purchases. The last-mile matters more than ever. Yet in an environment where free delivery is becoming expected and waiting any longer than two days for delivery can be a dealbreaker, costs are rising fast — and there’s very little, if any, margin on delivery. Adding to the stress, existing off-the-shelf logistics and order management software just doesn’t have the cutting edge functionality needed to meet the increasingly insatiable delivery demands of today’s consumers. We recently conducted research into how these influences on last-mile delivery are affecting Canadian companies. We found that online retailers are responding to consumers’ growing demands. But to make last-mile delivery truly sustainable, new investments in people, process, and technology are essential. As eCommerce grows, delivery expectations rise Canadian eCommerce sales reached nearly $43 billion in 2018 — or 9 percent of total Canadian retail sales — and they’re expected to rise another 25 percent by 2023, to reach $55.4 billion. Several factors have contributed to the growth of eCommerce: improvements in web and mobile technology, investments in delivering a seamless omnichannel experience, free returns, and consumers’

❱ DMN.CA

The state of last-mile delivery in Canada To better gauge current last-mile delivery practices among Canadian consumer and retail companies, we conducted an online survey of 57 companies in a variety of industry categories, including apparel, electronics, grocery, specialty, and mass merchants. Some of the findings surprised us. The majority of retailers offer free home delivery Nearly two-thirds (63 percent) of the companies surveyed offer free home delivery, while same-day grocery home delivery is available to consumers in major urban areas. Those who don’t offer free delivery levy a standard delivery charge about $8, on average. Apparel and electronics retailers are most likely to offer free delivery Eighty percent of apparel retailers and 73 percent of electronics retailers offer free shipping, while only 45 percent of grocery retailers do so. Lead times vary substantially by retail category While most companies surveyed required lead times of one to three days to deliver, it varied greatly depending on the retail category. Grocery retailers — especially those dealing in fresh products and other perishables — provide the fastest lead time, at less than one day. Apparel retailers, in contrast, offer between three and five days. Minimum free delivery spend also varies greatly Consumers typically

COURTESY DELOITTE CANADA

BY RYAN ERNST AND MARTY WEINTRAUB

changing preferences and greater comfort with shopping online. As eCommerce sales have grown, consumers’ preferences and expectations for delivery have also increased — though their willingness to pay for shipping has dropped. Sixty-four percent of Canadian shoppers don’t want to pay extra for two day shipping, according to our research, which suggests that consumers expect two-day free shipping as the norm. Expectations for same-day shipping are also on the rise; in some US cities, leading eCommerce companies are even moving to onehour shipping. Demands for faster, cheaper shipping are combining with other factors to put significant pressure on retailer margins. Consumers can now choose to get their purchase in a variety of ways: home delivery, ship-to-store, ship-to-locker, or reserve online and pick up in-store. Returns can now be made in-store or by shipping the product back to the retailer. Linear supply chains have given way to complex, interconnected supply chain networks. And the subscription services offered by a growing number of retailers often subsidize or waive delivery fees, making it incredibly easy for consumers to place many small orders instead of a few large ones. The result? More — and more frequent — orders, a sharp rise in demand for expedited delivery, an eCommerce logistics market with a compound annual growth rate (CAGR) of 20.4 percent, and rising costs for retail and consumer goods companies. Online shopping titan Amazon is able to meet consumers’ demands by spending 15.6 percent of its net sales revenue on shipping costs and an incredible 27.9 percent on combined fulfilment costs. Canadian retailers, by comparison, spend about 8 percent of revenue eCommerce fulfilment on average; in the current retail environment, it would be hard for them to cover more of the delivery costs and still stay profitable.

need to spend from $20 to $50 to be eligible for free delivery. Grocery retailers have the highest minimum spend requirement, at an average of $96. For apparel retailers, it’s $55. Most electronics retailers, in contrast, will ship for free with no minimum spend. JANUARY 2021


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FULFILLMENT & DELIVERY

COURTESY DELOITTE CANADA

to the network of delivery agents and identify the best option for a particular delivery based on factors such as price, route, and mileage. Similar technology also needs to be able to share information smoothly between shipper, driver, and customer so that visibility into the order status is clear and accurate. The outcome is more efficient, more cost-effective delivery — and an improved customer experience. To fully unlock the operational efficiencies inherent in this new mode of sourcing delivery, consumer and retail companies will also need to adopt a more order-centric approach to managing transportation. Current transportation management systems tend to focus on shipments and assets rather than orders, which makes it challenging to meet current delivery demands. Smaller shipment sizes and different service level commitments can place enormous strain on routeplanning efforts; changing traffic patterns, urban congestion, and a patchwork of municipal regulations only exacerbate the situation. An order to be delivered in five days and another one to be delivered in two days must be handled differently at the ordermanagement level, so that each order follows the optimal path from store or distribution centre though the last-mile and into the customer’s hands.

Last-mile delivery is changing fast As consumers’ delivery-related demands increase — as does the cost and complexity of meeting those demands — new, nimbler options are arising to enable retailers to outsource last-mile delivery to the gig economy. Amazon Flex and Walmart’s Spark Delivery enables independent drivers to deliver online purchases to the retailers’ customers. Other Canadian start ups have also launched, signing up agents and drivers to serve as a flexible contingent delivery service for consumer goods and retail companies. This web of independent, free-agent-powered delivery services is swiftly creating a thriving last-mile ecosystem. The fast-evolving transportation ecosystem connects resources by common platforms that map real-time availability and costs, enabling packages to be tendered to the lowest-cost option available at that moment. This real-time information can enable companies to optimize the capacity of their delivery fleet, the inefficient use of which is one of the reasons today’s last-mile delivery is still so costly. To connect to and make the best use of this expanding delivery ecosystem (or make more efficient use of their existing delivery capacity), consumer and retail businesses need to upgrade their systems and technology. This includes harnessing realtime data from Internet of Things connected devices to connect JANUARY 2021

Responding to the challenge To successfully meet the challenge, Canadian consumer and retail companies must let go of traditional delivery supply chains, connect to new and emerging delivery ecosystems, and digitize the last-mile. That means investing in the technology needed to enable a flexible digital supply network, one with an advanced transportation management system (TMS) at the core. However, even the most state-of-the-art

off-the-shelf TMS software, once properly configured, is likely to only address 50 to 60 percent of a company’s needs. Adding on micro-services and agents— some of which may need to be custom built—might extend this to 80 percent of its needs. Moving beyond this point, 80 percent, poses additional challenges. To do it right, businesses need to adopt flexible, connected cloud technology, integrate it into the emerging delivery ecosystem, streamline processes, and bring onboard people with the knowledge and skills to understand and act on data-driven insights and information. Where should consumer and retail companies begin? The following are our key recommendations. 1. Invest in the technology that best supports delivery. Many retailers and carriers are already investing in the technologies needed to facilitate the sort of connected transportation ecosystem we have described. Companies should continue to make these investments to develop linkages across the ecosystem, customizing the technologies where appropriate to create signature capabilities that differentiate them in the market and meet customer requirements profitably. Data collection is the first important step, but organizations need to be more forward-looking to ensure the technologies implemented today will be able to support tomorrow’s last mile delivery options, such as with semi-autonomous or autonomous vehicles. Today, for example, drones are being used to deliver high value medical supplies to parts of the world that are difficult to reach using standard transportation methods—in the next 10 years, robots and drones are expected to play a pivotal role in getting packages to customers in less remote areas in more densely populated areas, reducing lastmile delivery time and cost. FedEx, for example, has been testing its SameDay Bot, known as Roxo, in a number of US cities. 2. Build processes that streamline delivery decision-making. To

maximize the value of their technology investments, companies should create processes to draw immediate insights from data being collected across their last-mile delivery ecosystem. Using predictive algorithms to make automated rerouting decisions, for example, could be a major differentiator. 3. Develop people capabilities to support strategic delivery sourcing. As companies invest in data analytics and other data-driven technologies, they’ll need to ensure they have people with the skills to work with these technologies and be able to rapidly analyze and act on the information collected and the insights generated. This may involve recruiting or developing the necessary expertise in house, or employing the talent of third party technology solution providers. It’s time to embrace the future of delivery The last-mile delivery ecosystem is changing fast as companies strive to address the many challenges involved in getting customers’ purchases to them quickly and cost-effectively. To remain competitive, Canadian consumer and retail businesses will need to make room for ongoing technological change—and to get comfortable with having less margin for error. They’ll need to align customer expectations with geographic considerations by deploying a flexible, scalable, responsive ecosystem of distribution partners. They’ll need to invest in technology that facilitates integrated online marketplaces to source the optimal final-mile solutions for every customer order. They’ll need to collaborate with ecosystem partners, sharing data and other information to achieve greater efficiency and better customer service. And to ensure the company thrives over the long term, they need to start doing all this today. RYAN ERNST is National Supply Chain Leader

Partner and MARTY WEINTRAUB is National Retail Leader Partner at Deloitte Canada. With contributions by Elizabeth Baker, Anwesh Dayal, Z Zakaria, Ish Habib and Shiladitya Ray. DMN.CA ❰


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KICKER

Drone Delivery Canada, operations centre.

PHOTOS COURTESY DRONE DELIVERY CANADA

Michael Zahra is the President, CEO & Board Director of Drone Delivery Canada and was previously President of Staples Business Advantage, President of Yahoo and President of Schlumberger RMS with prior positions at Motorola and Alcatel. Drone Delivery Canada is a publicly traded, disruptive, pioneering, technology company focused on designing, developing and implementing commercially viable, drone-based logistics systems for government, commercial, industrial & retail customers globally.

The Future of Order Fulfillment and Delivery: Technology to the Rescue An Interview with Michael Zahra, CEO, Drone Delivery Canada DM Magazine: A neighbour across the street asks you what business you’re in. How do you describe it? Zahra: Contrary to the name, we’re not a drone company in the sense of selling a piece of hardware. We offer a turnkey drone solution, ❱ DMN.CA

a managed service, so certainly drones are part of it. And we’ve got three in the fleet. There’s some other ancillary equipment like depots that the drones fly between, an automated battery management system and a software system that wraps it all together. So essentially, it’s a drone logistics solution that

we provide as a managed service to a company who wants to then use it to do deliveries themselves, either for their own internal use, like a mine, or a mine might use it for purely for their own products. A courier company for example might use it as a service, or a transactional service for their customers.

DM Magazine: If that’s your answer to the neighbour —and I imagine you’ve done a lot of these — what’s your pitch to an investor? They’ll obviously get the concept of managed services and the concept of drones, but where’s the uniqueness when you’re JANUARY 2021


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FULFILLMENT & DELIVERY

The Sparrow drone.

pitching an investor to say this is a once in a lifetime opportunity to put some money into a growth category. Zahra: I’m not allowed to recommend the stock. But if I were talking to an investor, or talking to somebody who is talking to investors, or analysts, I would say number one, we’re of the opinion that there really isn’t anybody, certainly in Canada, who does what we do. I don’t want to sound arrogant or naïve but there really isn’t anybody, even globally, who has the breadth and depth of what we can do. Two, we are fairly far along in our solution and we are not a start-up, we are fully commercialized, and fully operational. We have routes flying as we speak; we’ve got a rather robust funnel of opportunities. Some we’ve announced over the last little while, as you can see on our press releases on our website. Three, I would say, if you do your due diligence on the industry overall, you’ll see this is not a fad. Some people might not think this industry has got legs and traction. We do, of course. The unfortunate and sad circumstances of the pandemic have raised the profile of the company as well as the industry overall. We’d rather not have had it happen this way. Our sympathies go to those affected so deeply. But it means the benefits of drone delivery are going to grow exponentially. It’s a nascent industry. So, it’s an opportunity to get involved in what I see as an inflection point where it’s starting to, or we envision it starting to rapidly increase. DM Magazine: Give me a peek into the future growth of JANUARY 2021

The Robin drone.

eCommerce and the use of drones. Amazon has publicized the concept of drones for last mile delivery, pushing the idea of getting packets dropped off by drone. It has certainly has that futuristic concept. Someday will we see a sky with drones crisscrossing across the country? Just how do you how do you see that playing out? Zahra: Right now, we’re more focused on B2B. Regulations don’t allow for delivery and flying over high pocket, high density populations. For retail and consumer-based applications, the current ideal is moving goods from a warehouse to a store, because a customer waiting in the store for something they don’t have in stock is a B2B application when it helps the consumer. Deliveries to the home, I don’t know that I can see those happening in the next little while. They will start in rural areas. There might be things that are more healthcare and have social value, like defibrillators and medical emergencies versus a widget delivered to homes, or a pizza delivery to the home five minutes faster. The way the industry is progressing is from remote to rural to suburban, mostly B2B. And then we will definitely see urban and B2C home deliveries, but I think it’ll start with rural residential and more urgent things like healthcare, and then eventually, higher density areas, commodities and that sort of thing. Our industry is always governed by regulations and the technology is always going to be ahead of the regulations. It’s true for many industries. Ours

has been evolving, starting in rural applications with smaller drones like the Sparrow. Our first projects were more remote. Then it migrated from remote to rural, and rural to suburban. Now larger drones, like the Robin and the Condor. DM Magazine: Either way, it’s going to be a certainly a much bigger and larger and more interesting marketplace five years from now than today. Zahra: Absolutely. And we can deliver cargo to a residential area today, from a technology point of view. The regulations don’t allow it but if you really want to push it out, there are a number of companies that are focused on it now, even some looking at doing unmanned flying taxis. Uber Elevate was one. I think they sold off that business unit to somebody else, but maybe we will see in our lifetimes. Most of those applications are quite a few years away, at least in Canada, in the US and in Europe. It’s quite a long time in the future where we’ll look up and see unmanned flying taxis. DM Magazine: Can you explain your business model in more detail. How do you make money as a managed services company, how does that system work? Zahra: At a high level, there are four use cases. Two existed before the pandemic, and the pandemic has actually generated two more use cases. Pre-pandemic, the use cases were areas that where difficult to access. They are communities that are distant, for example, First Nations communities that are

particularly remote and distant. We have a few projects like that, where access is difficult in remote communities, remote Indigenous communities, but also industries like mining. Mining tends to not be downtown Toronto, but in very remote areas. They need to move things around the mine’s operations or in and out of the mines. Oil and gas tend to be in remote areas, especially oil rigs, off the coast, we've got shore to ship applications — anything where access is difficult. We have seasonal roads in Canada, creating major traffic issues for emergency delivery of blood for example. In Peel Region, we’ve done two defibrillator projects, where, outside of rush hour, it could take an ambulance five minutes to get somewhere but during rush hour, it could be half an hour to reach the same location. Lives could be at stake. There are circumstances where time is critical. So maybe you can get there, but you can get there faster by drone and in social applications like health care, time could be lives. So, where time is critical is number two, commercial or healthcare. Number three, which is a result of the pandemic, is limiting person to person contact, but keeping the supply chain open. For instance, you may have a hospital campus that’s made up of multiple buildings. They’re moving things around buildings, they’re moving things back and forth between medical testing labs, they’re moving things back and forth to a senior’s home etc. And you want to prevent cross contamination. Or it could be a first nations community and they’re particularly susceptible to the virus because of a variety of DMN.CA ❰


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FULFILLMENT & DELIVERY healthcare related issues. So they want to try to self isolate. So there are instances where you want to prevent a virus coming into your community or you want to prevent cross contamination, these kinds of situations. Drones are perfect for that. It’s the first of the two that came to light as a result of the pandemic. The fourth one is general disaster recovery and business continuity. So when events like this happen, people tend to dust off their disaster recovery and business continuity plans, and whether it’s a pandemic and natural disaster, an extended power outage or these sorts of things. They may realize they don't have a backup to certain elements of the supply chain. Here’s a case where drones can be an element of disaster recovery, business continuity. It depends on who we’re talking to, if we’re talking to the government about delivering vaccines to remote communities, that’s one unique business model. If we’re talking about a courier company, they probably have last mile deliveries that are very painful, very expensive, or you’re not reaching a lot of last mile communities because you can’t economically. So last mile, first mile, middle mile to a certain extent, but last mile, first mile, cost savings efficiencies are a factor for logistics companies, or even potentially incremental revenue. Maybe you’re not going somewhere as less an LTL, or a courier company, and maybe now you could with drones, or maybe you could offer a premium service. In retail, where your readers are more concentrated, there are some premium services that a retailer could offer. So for instance, you forgot to buy a birthday present for your son or your daughter, you’re in Best Buy, and what you want is out of stock at that location. You could run around to a bunch of stores or you could try to buy it online and have it delivered late unfortunately, or for $10.00, they could ship it to you from the warehouse to the store right now while you wait and do your in store browsing. These are some premium services that a retailer could do. There are a variety of applications like that and they vary from one extreme to the other, ❱ DMN.CA

depending on who we’re talking to. Are we talking to a hospital, are we talking to a local courier company, are we talking to a mine, it really varies. So a client would come to us and explain that they’ve got these areas that are very expensive to deliver to and they want to help cut costs, be more responsive, maybe incremental revenue, or premium services, or areas which at the moment aren’t economical for deliveries. We look at how those use cases can work to put in a system, a system that serves your customers. Our clients would then translate our fixed monthly fee for managed services into a transactional fee, five bucks a pound, five bucks a flight, five bucks a kilometre, a fixed rate with clients who might use it regularly. That’s how our model becomes our clients’ model.

the customers we’re talking to have very high value cargo. We could be moving raw diamonds out of a diamond mine, or monetary instruments. They can be very high risk, like narcotics or pharmaceuticals. It could be something that’s a little bit of both like the vaccine and we need to make sure it’s safe and secure. We can do temperature control with all three of our drones too. We also recognize there are instances where we’re going to fly to a destination that does not have any infrastructure, like flying a defibrillator to somebody who’s having a cardiac arrest in the field. They’re not going to have a drone spot set up at every house. There’s really nobody doing large scale residential deliveries today, mostly for regulatory reasons. At the moment, our focus is on

The solution is that we fly to the home, lower to a safe altitude and drop a specialized medical box that has a defibrillator in it. Or it could be an EPI pen, it could be an insulin pen, a snakebite kit, etc. if you’re in a tropical country, it could be anything, then someone would administer that. So that’s an example of “Anyspot” where there is no infrastructure at the destination, humanitarian relief, etc.

business-to-business and rural, remote, and suburban. We have the ability to deliver somewhere where there is no infrastructure, so we call the depot to depot a drone spot, and flying to where there’s no infrastructure, we call that “Anyspot”. We’ve done projects in Peel Region where an individual is having a cardiac arrest possibly in a rural community and an ambulance is going to get there in 30 minutes. For every one-minute delay, the likelihood of survival drops by 10 percent and in 30 minutes, the person is 300 percent more likely to die. If I can get a drone with a defibrillator to the location in five or 10 minutes, we can save lives. Obviously, there’s no drone spot at the victim’s home.

What was your vision at running business advantage for the role of drones within your business? Were you were playing with that idea at that time? And, and the second part, now that you’ve been in this in this role for a couple of years, what did you learn that might have changed that initial vision that you had for how it can help Staples.

DM Magazine: Remarkable concepts. Let’s come back to the commercial markets, to touch on the regulatory aspect of this before we finish this conversation, because that’s a key. You ran Staples for about sixteen years, and you were doing some business with Drone Delivery Canada as well.

The Condor drone.

DM Magazine: Talk a bit more about the fleet of drones of various sizes, maybe just explain it just a little bit. Imagine you’re describing it to sell local sort of delivery service, it is a localized service to that extent. Do you envision that fleet size expanding to give you ever range ever growing capacity carry greater payloads than you’re currently moving? Zahra: The first part of your question, our preferred model is to fly from a depot to depot, (we call the depot a drone spot) which is basically a mini warehouse, or a mini airport. It’s got access control, security cameras, and it is a very safe and secure environment. We can deviate from it, but many of

Zahra: It was actually a North American initiative, not just in Canada, and at the time, we were looking at a number of automated systems and automated robots within the warehouses similar to what Amazon does with Kiva. At Staples, we had a lot of customers who were rural or remote, First Nations communities, coastal JANUARY 2021


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FULFILLMENT & DELIVERY

The Paramedic AED drone.

communities, and even non First Nations Communities that happened to be distant. We were looking at the drone logistics three years ago. We actually did the first drone-based eCommerce delivery in North America from a real company to a real customer for a real order. I am pretty sure we did the first real one in North America. We were looking at it from a thought leadership point of view, examining efficiencies down the road for logistics, because we had a couple of hundred of our own trucks. We also heavily relied on the services like Purolator and Canada Post in a variety of LTL (Less Than Truckload) and owner-operator types and large and small couriers for applications that were outside the high-density areas. It made sense to look at drones, but we ended up not moving forward with it for a variety of internal reasons. But the courier companies that we used at Staples are certainly ones that we are currently talking to. DM Magazine: In terms of a customer segment, a significant one for you is logistics providers. You already have some of them since it's just an extension of what they do. Zahra: Absolutely. We are in conversations with all of the logistics companies, the big ones, the small ones, Canada Post and other postal and delivery organizations globally. DSV is an example of a project that’s running literally as we speak. That’s a very large global logistics company. We had some LOI’s (letters of intent) announced recently with various companies such as Apple Express, etc. Some of them are three PL, some of them are very large logistics, LTL, or trucking kinds JANUARY 2021

of companies, logistics companies and last mile and first mile are a big segment that we would address. DM Magazine: You’re a nascent industry, emerging, there’s got to be a lot of category building that has to go on here in terms of writing an understanding of the market capabilities itself, never mind your advantages as a business. But it strikes me that those logistics providers all must see the value proposition quite clearly. Zahra: Correct, we are in rather robust conversations, I would say with all of them. There’s different categories of them. There are some very small regional logistics companies that are very, very small and there’s obviously the big UPS, FedEx and Purolator kind of companies, as well as Canada Post. Then, there are the three PL type logistics companies like DSV and OEC, and these kind of companies that operate, globally, so, absolutely, we are in conversations with all of them in terms of use cases, and where there’s a fit either to save money or incremental revenue. DM Magazine: Is the business case an easy one for you to present? Is it more of saying to potential clients the future is going to catch up with the concept sooner rather than later, so be prepared for this new world that we’re entering? What’s the pitch to them? Is the business case easy to make? Zahra: It depends on who you’re talking to. We’re limiting our conversation at this point strictly to logistics companies. They need time to analyze their data, and some of these large logistics

companies deliver to hundreds or thousands of communities and they have to work through their data to see where there is an opportunity to cut costs, and where are their pain points, where’s their incremental opportunity, and that sort of thing. So, there is a bit of economic modeling that we work with them to do. That’s part of the exercise. Then looking for the use cases that fit within the regulations, finding what makes sense for us and for them. Nothing is a slam dunk. You still need to go through the exercise. But, to your point, depending on who we’re talking to, it’s obvious that there’s an opportunity. Some want to do it immediately, some are very visionary and progressive, DSV is very much an early adopter, thought leaders, industry leaders. And then there are others where there might be use cases, however, they’re cautious. They don’t want to be first necessarily. So it really kind of varies on how progressive the company is. DM Magazine: You describe yourself as a managed services logistics company and not as a drone delivery technology company. Why that distinction? Why not see yourself as a technology company with a proprietary advantage? Zahra: The reason we describe ourselves as a logistics managed service is to differentiate ourselves from somebody who’s selling drones, because there are companies who sell large drones for cargo or inspection and security with moving sensors, which we can do as well. But they’re just selling hardware. On the small consumer equivalent, it’s like buying a small toy DJI drone. We want to differentiate ourselves from people DMN.CA ❰


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FULFILLMENT & DELIVERY who are just selling hardware, because there are those who sell just a drone that individuals use to manually fly it around their farm or their mine for inspection or mapping or other applications. That’s not what we do. DM Magazine: Right. So the proprietary technology aspect is that it actually enables you to do the deliveries effectively. Is that correct? Zahra: Yes. All of the intellectual property is ours. We’ve got multiple patents today and expecting more to come that are that are pending. So in that regard, the IP is the secret sauce, whether it’s the hardware, which is ours, or definitely the software, which wraps it all together. DM Magazine: There are competitors indirectly and directly but you have first mover advantage here. What’s your statement to the marketplace? You’re the only company that does this? I’d be curious to know who your main competitor might be on the horizon, which you’re up against. Zahra: I don’t want to sound naive to say we don’t have competitors, or we won’t in the future or, that we’re the only game in town. It depends on how you define a competitor. Is a small local courier a competitor to FedEx? In some way, but probably not on FedEx’s radar to worry about that courier’s future. Maybe those couriers take one percent of their share, but they aren’t competitors. There are people who are, I would say more dabbling in this industry and still piloting and experimenting. We segment the market based on sizes of the drones, as well as the vertical markets like mining, oil, gas, healthcare, etc. If you look at the small drone — such as Amazon or Google Wing to use them as an example — they are in a very, very crowded commodity space where they’ve got a drone that moves two kilograms for seven miles or something like that. That’s cool, It makes for a wonderful YouTube video of dropping off a coffee and muffin, it’s lowered on a string in a little cardboard box, however I don’t know if that’s going to cut it JANUARY 2021

for temperature controlled vaccine delivery going 200 kilometres. So are they a competitor? Not really. There are a lot of companies in that crowded space. I would say these are not just my words, this is what I’ve heard from regulators and other countries, and government officials who have come to visit. They say we’re probably three, four or five years ahead of our closest competitor because the difference is, a lot of our competitors have decided to focus on the drone, (which is ultimately a commodity) and not the system. I wouldn’t call Purolator a truck company because they’ve got lots of trucks. Purolator would never say their trucks are their competitive advantage. So, for us, the drone, to a certain extent, is our advantage, Purolator would say it’s their artificial intelligence. It’s the logistics, it’s the people. It’s the network they’ve designed, it’s the customer relationship. For us, it’s the whole solution. From the beginning, we took a solution approach as opposed to a hardware approach. We’ve got more breadth of hardware but we've also got more depth of what we can do. DM Magazine: Given everything you’ve described, it seems to me you’re selling reliability, adaptability. What are the key words you would use to summarize effectively what you’ve been describing. This idea of scalability, that you can adapt to any given set of circumstances, and with complete confidence know that the product is going to get delivered reliably particularly in situations where there perhaps is a perishable date to something or whatever the circumstances may be. What would you describe is the essence of your brand? Zahra: When you mentioned those first two words, I was going to add scalability and you added that, so I think that those three would be accurate. I would say flexibility as well, because there are people who are operating in this industry doing a fantastic job in very niche applications. There’s a company that operates in Africa, they do blood delivery, from a central location to remote hospitals. It’s

a big drone, a fixed wing that gets shot out of a catapult, and drops the cargo, it doesn’t land. You only have cargo moving in one direction, it flies back, and is caught in a big net. That’s very good for what they do, however, I don’t see that operating in an urban environment where you need cargo moving in both directions. There are organizations which do a very good job in a very near narrow niche. That’s why I think flexibility. And when I said in the beginning, like nobody has the breadth and depth that we do. DM Magazine: You got a head start, in many respects, is that a sustainable advantage for you for now? Or are you looking over your shoulder, anybody that might come along and sort of try to emulate that? Is your proprietary system going to give you that edge going forward? Zahra: Any tech company, in our position is going to always move forward. We’ve got in-houseengineering, we’re always doing R&D and we are always looking forward. One of your questions you asked was “What’s after the Condor? Will it be longer range and heavier payload?” Absolutely, we are working on things that are longer range and have heavier payload than the Condor. Although the Condor itself is very much a game changer in the industry globally, we’re not arrogant enough to think that we don’t need to continue moving forward. We’re a tech company. We’re always making enhancements to existing solution elements, as well as what’s next. DM Magazine: And you’ve got a pretty good partner in Air Canada cargo. They can presumably help quite a bit. That relationship continues to evolve, I presume? Zahra: We signed a 10-year deal with them about a year and a half ago, so we are about 18 months into the partnership. They did their due diligence on other players in the drone industry. They’d been looking at the industry for a while and we think this is it going to take off, no pun intended. They’ve done the competitive analysis that

you mentioned, and then chose us exclusively. They don’t deal with anybody else in the drone space. Definitely they bring to the table a lot of expertise and a global network for opportunities for us. It's a great partnership. DM Magazine: The regulatory framework comes from Transport Canada and I gather they are progressive in working with you. Give me a sense of current state and how that’s likely to change going forward. Just the regulatory restrictions, if you will. Zahra: We have a very long standing relationship with Transport Canada and to a certain extent NavCanada, but it’s Transport Canada who writes the rules. We’ve got people on our staff that are ex Transport Canada, ex FAA, ex NASA, ex military, a broad range of experts who allow us to do the right things that the regulators want to see in Canada and globally. We’ve flown in the U.S. as well with FAA a couple years ago. They all genuinely want to move the industry forward. They’re coming out with new regulations to clarify other applications. They’re talking to us about what can we do next, to push the envelope to gather data and these-sort-of-things. They are very data focused, as they get more and more data and more and more level of comfort than they, for lack of a better word, relax the regulations to help the industry as a whole move forward. We’re not just building the business, we’re actually helping to build the industry. They see this as an industry that is around to stay and going to grow. So they need to evolve with it. DM MAGAZINE contributing author Steve Shaw

spoke with Michael Zahra for this interview, a long conversation about the many aspects of drone-based delivery and logistical services. The interview delved into aspects of these services which extend beyond the pure commercial aspects of customer-driven retail operations and examined the role that this brand new industry can have in improving the lives of Canadians by extending medical services and speeding up the movement of products across the country in general. We thank Steve and Michael for the insights and the added coverage. Steve Shaw is Chief Strategy Officer for Kenna. DMN.CA ❰


2021 ISSUES & EDITORIAL THEMES

January Issue theme: Fulfillment & Delivery

Vendor Report & Profiles: Loyalty Providers & Managers

Editorial deadline: December 23, 2020

Editorial deadline: January 29, 2021

Issue theme: Inside Analytics Vendor Report & Profiles: Data Sources & Specialists Editorial deadline: February 12

June

Issue theme: Future of Loyalty Programs

Vendor Report & Profiles: Influencer marketing

March

May

February

July

Issue theme: Transactions: Payments, Points & Data Vendor Report & Profiles: eCommerce Platforms & Processors Editorial deadline: March 15

August

Issue theme: Frontline Customer Experience

Issue theme: Staffing, Work & Workplace

Vendor Report & Profiles: Contact Centres & Virtual Platforms

Vendor Report & Profiles: Recruitment & Payroll

Vendor Report & Profiles: GIS, GPS & Analytics

Vendor Report & Profiles: Shipping, Courier & Delivery

Editorial deadline: May 14

Editorial deadline: June 15

Editorial deadline: July 19

October

November

December

Editorial deadline: April 15

September Issue theme: Lead Generation Tools Vendor Report & Profiles: Dimensional Tools Editorial deadline: August 13

Issue theme: Branding for Response

Issue theme: Location Analytics

April

Issue theme: Marketing Awards

Vendor Report & Profiles: Agencies, Advisors & Creative

Vendor Report & Profiles: Meeting Spaces & Event Organizers

Editorial deadline: September 15

Editorial deadline: October 15

Issue theme: Last Mile Operations

Issue theme: Facebook, LinkedIn & Twitter Vendor Report & Profiles: Social Media Agencies & Experts Editorial deadline: November 15

* Special vendor profiles are available

DM Magazine is your partner in leveraging editorial opportunities. We can facilitate your advertising needs, as well as developing online campaigns, editorial roundtables and more. For advertising and editorial opportunities contact

Steve Lloyd, steve@dmn.ca


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FULFILLMENT & DELIVERY

Mining eCommerce Data Gold for Fulfillment BY KRISTI TOMASIN

Home is the new frontier Home. Family. Community. Throughout successive lockdowns, protective of what unites us, we have been comforted by the authenticity of belonging. According to Accenture survey research, we’re entering the decade of the home. Retailers must adjust their approach and meet consumers locally. 53 percent of people who never worked from home previously now plan to do so more often. 56 percent of consumers say they’re buying more locally sourced products, with 84 percent of those saying they plan JANUARY 2021

to continue to do so long term. The Canada Post 2020 Canadian ECommerce Report reinforces this finding, indicating that, besides planning to shop more online, more Canadians plan to shop locally. Accenture’s Oliver Wright says home has “become the workplace, the schoolroom, the place to try new hobbies, the place to socialize and a safe sanctuary — so companies must account for

buyers who’ll be receptive to their brand messages? The answer is hiding in plain sight. Canada’s online retailers are already sitting on data gold. With first-party customer data as their guide, marketers have direct access to the insights that will help them reach the right audiences with relevant, timely, personalized messaging to create memorable and engaging customer experiences.

this reality.” He advises them to think beyond traditional tactics and be more creative to engage consumers. Companies like Heinz are following his advice. At a time when home-bound audiences had more time on their hands, and less appetite for staring at a screen, Heinz Canada wondered about reinforcing nostalgia in a fun, relevant way. So it launched a pandemic-inspired social media contest with promotional puzzles sent to 57 winners’ homes. The puzzles’ 570 pieces are the same monotone red. The irony wasn’t lost on at-home audiences. The campaign went viral, effectively linking the lockdown pastime to Heinz’s slow-pouring ketchup. This engaging idea boosted emotional connection by bringing together context, marketing and customer experience. The puzzle was so successful that ketchup sales in Canada increased by 18 percent.

Picking and packing the right data Mining data for the most relevant, useful and actionable information takes careful consideration. Without applicable insights, marketers are left dealing with dead-end data. Mining the right information will transform data nuggets into commercial success. The quickest route to meaningful transformation and growth lies in an effective data checklist that links business goals, customer expectations and media channels so that retailers can meet audiences at significant, defining touchpoints throughout a customer’s journey. Marketers already have that data, contained, for example, in online interactions with eCommerce websites and social media channels. There are insights to be gained from store visits too. Be on the lookout for: ❯❯ Shopping preferences: Do marketing strategies reflect changes in buying habits? ❯❯ Category trends: Does marketing content echo emerging shopping needs? ❯❯ Geographic clusters: Are marketing messages positioned in the right places? ❯❯ Purchasing volume and

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frequency: Are there add-to-cart opportunities needing a nudge? Demographic indicators, such as life stage and lifestyle: Do generational shifts in behaviour need to be addressed? Product rankings: Is media planning and spend aligned with product performance? Changes to channels: Are customers rerouting their journeys? COURTESY CANADA POST CORPORATION

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ver the course of one week in March 2020, Google saw search volume for “curbside pickup” grow by 70 percent. Jean-Philippe Gauthier, Head of Digital Marketing Transformation at Google Canada, knows the value of that famous search bar. It captures a lot of customer intent. In this case, the insight was a graphic illustration of how fast change happens. Before 2020 shifted our outlook, regulatory changes and new technologies were already transforming Canadian eCommerce. And then, in the space of eight weeks, digital adoption skipped five years — with some companies reporting year-on-year surges of as much as 400 percent. According to Gauthier, “Canada’s eCommerce moment is now. It’s as simple as that.” Canada Post research in October 2020 shows that one third of Canadians now shop more online than in store. As the eCommerce landscape evolves from transactional to relational, this inflection brings with it a wealth of marketing opportunities. ECommerce retailers across Canada are sitting on data gold, and marketers with clear intentions — who mine the right information at the right time — can use that data to inform effective marketing strategies that fuel business growth.

Connecting with the right audiences The advice is clear. But how can marketers be sure they’re connecting with browsers and

Showing up in homes With all eyes on at-home audiences, marketers have been gifted the perfect opportunity to optimize the mix by using a proven media channel that is already well known for its connections with at-home consumers. Capitalizing on the new energy and agility of direct mail media, marketers can create renewed advantage. With direct mail in the mix, they can tailor messaging, timing, products and offers to meet customer needs and local market conditions. Integrating mobile, first-party and geolocation data improves local targeting. Targeted media can be used to amplify standardized mass media with localized offers. In addition to the first-party data insights mentioned above, marketers can incorporate thirdparty postal code data to reach brand users in precisely targeted, personalized and integrated ways. This data can be used to optimize geographic and psychographic targeting. Brands can reach out locally, using physical media to encourage customers to buy online. With interest in local shopping and sourcing increasing, postal codes are an invaluable DMN.CA ❰


Reach marketers & financial executives Our magazines are must-reads for key executives in core corporate competencies.

Can you help our readers: • Create a strong financial structure and healthy economic ecosystem to ensure capital and cash flow keep their engines running? • Determine who their customers should be, how they can reach them most effectively, and how they can turn data-driven marketing into profitable sales? • Build efficient and effective financial systems to enhance payments and billings between their companies and their customers and vendors? • Convert all the data and information they collect from every contact point into tangible benefits that increase revenue and reduce costs? • Equip their companies with the tools, technology, systems and hardware needed to manage their operations, to create new services or products, and deliver them to their market? • Manage their customers with smoothly functioning support departments that are properly staffed and equipped to solve problems, foster loyalty and retain customers? • Make any or every step in that chain better, faster, cheaper, and more profitable?

We can help you tap into the ecosystem at the points that will drive your campaigns. To advertise or get more information and media kits:

Steve Lloyd 905-201-6600 ext 225 | 1-800-668-1838 | steve@dmn.ca Visit our websites:

DM Magazine, www.dmn.ca

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Total Finance magazine, www.totalfinance.ca


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FULFILLMENT & DELIVERY asset in the marketing data stack. Connecting data to direct mail and integrating it with other media channels makes local adaptation more effective and relevant. Unified shopping experiences The lines between online and offline marketing, retailing, fulfillment and distribution are now less distinct. Trading places, brick-and-mortar locations have become media channels — to drive interest, enquiry, engagement, loyalty — while online interactions take on the role of store. Reilly Stephens is Director of Insights at Retail Prophet. For her, unified commerce is the frictionless shopping experience customers expect. Data doesn’t lie, and a unified approach makes it easier to allow that information to drive decision making and connect media channels. It has never been so important to understand the customer journey and remove points of friction. Stephens explains, “Building a truly integrated online/offline ecosystem allows retailers to connect all the dots of their business through a single platform, offering a single view of inventory in every channel — website, mobile, brick and mortar — while plugging into consumer behaviour. It integrates with buying history and personal data to create a seamless and personalized experience.” It’s important to think about how customers experience marketing data decisions. Smalldata projects are relatively easy to deploy and can quickly improve marketing effectiveness. Creating a customer-centric strategy that clearly outlines what data is needed, and why, can get small data working quickly. Sourcing stable third-party data can close gaps in customer insights. It’s important to work from clean, well-structured, integrated data sets. ECommerce data that marketers already possess can be invaluable in connecting media for a more impactful customer journey and a unified shopping experience. Fulfilling the connected shopper A unified shopping experience isn’t about all channels all the time. Instead it describes how someone can choose the single, most appropriate channel (online JANUARY 2021

or offline) that fits their lifestyle, expectations and shopping category exactly when they want it. It’s important for marketers to take a closer look at how they connect the marketing mix to sales, and brand to channel experience, in a way that captures customer interest and delivers value. This requires rethinking the role every channel can play in the mix of interactions. Unified marketing strategies Unified shopping experiences demand a unified approach to marketing. While direct mail media is often thought of as a linear channel, meant to take someone directly to a sale from a call-toaction, it can also play a highly adaptive and contextual role in the channel mix. It can bring our online, out-of-home and at-home contexts closer together. While direct mail has always been data driven, now it can be seamlessly plugged in to digital channels and mobile data in ways that make it more connected within the customer journey. Direct mail media sits at the intersection of marketing, customer experience and shopping — giving it a unique ability to connect, captivate and convert. It can take on a customizable role throughout the customer journey. It matches key CX (return on experience) metrics by being memorable, emotionally engaging and promoting time spent. Beware last-touch attribution because it often hides the assists. It’s not always the channel that immediately precedes a sale that did all the work. What’s important is to recognize all the channels that move a shopper towards the buy button. ❯❯ 51 percent of consumers either purchased a product online or in-store as a result of direct mail. ❯❯ 88 percent of Canadians visit a store or go online after receiving a direct mail piece. ❯❯ 68 percent Canadians are likely to share advertising received in their mailbox. Direct mail can turn brands into at-home experiences, increase shopability and amplify community connections: ❯❯ Engaging an audience in authentic, multi-sensory brand experiences and stories; ❯❯ Qualifying and personalizing the brand shopping experience

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with data relevance; Acting as a portal to the brand ecosystem and creating connected shopping; and Amplifying digital content by extending it into the physical world.

We know that free shipping, speed, quality of shipping experience and convenient returns all have a big impact on purchase conversion and customer retention. However, online retailers have the opportunity to dial up that impact. When the focus shifts from order fulfillment to emotional fulfillment, direct media becomes an integral part of delivering a customer experience that promotes retention. Data-driven programmatic mail Programmatic mail is the physical equivalent of digital remarketing, combining the best of online and offline. It enables brands to stand out by matching CRM data with pre-set business rules to engage with customers. Literally putting brands in the hands of consumers, programmatic mail combines the timeliness of online media with the sensory appeal and proven results of direct mail. Based on data that indicates a customer’s activity and intent signals, it’s possible to create, automatically print and deliver personalized direct mail to the customer in as little as 48 hours. Aiming to attract new users and increase conversion, Wayfair, a data-driven and testing-oriented retail business, teamed up with Canada Post to find its best channel mix. Using data and Canada Post Expert Partners to conduct the tests, the Wayfair programmatic mailing resulted in double the response rate vs. digital-only efforts (online and email re-targeting). Using qualified data sets (eCommerce index/cart, postal code) to test adding direct mail (postcards and mini-catalogue) to its digital media mix, Wayfair’s aim was to attract new users, as well as increase conversion by nurturing prospects who had abandoned their carts. The result was a 90 percent lift over the control created from the demographic look-alike group. Like other media, you can use postal code data to understand audience coverage and composition, enhance reach and meet targeting goals. Combined

with first-party data (customer service, store, email, social media and website) postal code data can improve omnichannel targeting. Thanks to programmatic technology, brands can now turn digital traffic into addressable households. With increased tracking capabilities through address matching, it’s a faster way to close the marketing-salesretention loop. Canadian sports retailer Golf Town has successfully deployed direct mail to turn online browsers into in-store shoppers. Traffic to golftown.com is strong and steady. And Golf Town stores are where visitors can hit balls, putt on greens, road-test prospective purchases and get expert advice from sales associates. Could online visitors be converted to in-store shoppers for the peak golf season? To find out, Golf Town launched a triggered marketing campaign. After identifying the most popular product categories (clubs, balls, shoes, apparel and bags), Golf Town mailed promotional offers within three days of a visit to those web pages. The resulting sales revenue was worth $158,000.00. “We were able to determine that retargeting doesn’t need to be seen as an online only marketing tactic,” said Fred Lecoq, Vice President of Marketing and ECommerce. The edge of opportunity Nobody would deny that the seismic eCommerce shifts of 2020 led to a whole new collection of marketing challenges. Now, with the benefit of hindsight, and an adaptive approach to the rapidly evolving marketplace, Canada’s marketers are poised on the edge of opportunity. Sitting on a wealth of data, those online retailers who pause to mine, analyze and segment their own information — using the insights in service of both commerce and consumer — are the eCommerce businesses who will reap the greatest benefits. And those with the foresight to fully integrate the marketing mix — combining multiple channels to create an impactful and unified shopping experience — stand to be rewarded with a clear competitive advantage. KRISTI TOMASIN is Director, Smartmail Marketing, for Canada Post Corporation. DMN.CA ❰


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INTERVIEW

An Interview with Brian Solis, Global Innovation Evangelist, Salesforce

COURTESY SALESFORCE

Digital Darwinism:

Brian Solis is the Global Innovation Evangelist for Salesforce and a Renowned Digital Prophet and Author BY STEPHEN SHAW

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STEPHEN SHAW is the Chief Strategy Officer of Kenna, a marketing solutions provider specializing in delivering a more unified customer experience. Stephen can be reached via e-mail at sshaw@kenna.ca

❱ DMN.CA

hen the pandemic first struck, most businesses were stunned by the severity of the impact. Seeing people storm online for essential goods made them take stock of their digital readiness. Alarmed by how unprepared they were, they fast-tracked their digital transformation plans. Up until that moment, those digitization efforts had plodded slowly along, mainly concerned with finding quick wins by increasing efficiency and productivity. Improving the customer experience was often a more distant goal, modest in ambition, meant to fix the broken parts. If a business was imaginative enough to dream up bolder ideas, those plans invariably got pushed into the future, since there was no pressing urgency. Now those same businesses are scrambling madly to catch up to their customers, compressing their digital roadmaps from years into months, worried about losing ground to challenger brands or more agile competitors. Already the pandemic has mowed down many bricks and mortar retailers who were slow to adapt to an omnichannel world. Other sectors too have been caught flatfooted — travel, hospitality, apparel makers, out-of-home entertainment, just to name the worst hit. The businesses that have managed to pivot

quickly are the ones with the foresight to have invested intelligently in digital transformation, and were ready to absorb the sudden surge in eCommerce traffic. Even with a vaccine in sight, businesses are likely facing a slow recovery and a populace whose habits and attitudes have been deeply affected by months of internment. Just how enduring those changes are likely to be is on every marketer’s mind right now. Of course, digital prophets like Brian Solis have been warning about this moment of reckoning for years. As the bestselling author of such books as “Business As Usual Is Not an Option”, and the prescient “What’s the Future of Business”, he has been a leading voice for holistic digital transformation. He has long argued that society and technology have been evolving much faster than businesses’ ability to adapt, leading to what he calls “digital Darwinism”: the speed at which companies evolve to survive and thrive in a digital economy. At the start of this year, even before the pandemic hit, Brian wrote that “digital transformation will start to become synonymous with business modernization and innovation”. Competing for the customer of the future, he predicted, will become “mission-critical”. Clearly, we’ve now reached that inflection point, JANUARY 2021


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INTERVIEW much faster than even he might have thought possible. Facing the biggest disruption in living memory, we’re entering a “novel economy”, as he calls it, meaning the old playbooks are of no use anymore. SHAW: Who in organizations should take the lead in reimagining the customer experience? SOLIS: Customer experience has never really been owned by any one group. Even if you have a Chief Customer Officer, that person’s mandate doesn’t necessarily cover the entire experience. We have to rethink the entire model of what it means to invest in customer experience. We need to humanize the conversation — see what the experience is from the eyes of the customer — switch our thinking from how do we do this, to why are we doing this? Approaching it the way we do today, as yet another cost of doing business, just leads to silos, budgets, and constraints. An experience is simply an emotional and intellectual reaction to any moment. How did someone feel? How did someone react? What is the memory that someone takes away from that moment, and how do those moments add up over time? With that knowledge we can reconstruct the entire brand relationship. From there, anyone who cares about human beings can lead the charge for bringing together the organization in a much more cross-functional way, that's productive, that’s optimized, that’s customer-centered, that’s joyful even, and then we can start fixing the broken things and start innovating in the areas that we’re not investing in today. So, it’s complex, but it’s possible — we just have to shift perspective. SHAW: This global crisis has awakened a sense of urgency amongst businesses that change is required. Does business simply accelerate digital transformation, or is a total reset required? SOLIS: Adapting to what I call the “novel economy” involves passing through three phases. Phase One is just about surviving: How do we adapt to what’s JANUARY 2021

happening right now? Customers have been emotionally affected, psychologically affected — they’re spending differently, or they’ve reduced their spending, what they’re buying is different — all of that has changed radically since we’ve been hit with this pandemic. Phase Two is an “interim normal”, after we’ve got past the post-apocalyptic scenes we see everywhere today — like plexiglass, and masks, and horrible news headlines every single day. At that point we can start to rethink the customer experience — how we can deliver joy, how we can deliver “wow moments”? And then we build the muscles, build

they don’t see the world changing or evolving or being disrupted, it’s very difficult for them to create a sense of urgency and drive change. If you’ve ever watched that show “Undercover Boss”, every executive who’s walked in the shoes of their employees and their customers leaves a more informed and enlightened person, a more driven and inspired person, and everything changes after that. So COVID, for better or worse, has given every executive that “undercover boss moment”. Now the question is, what are they going to do about it? And this is where true competitive advantage is forged.

SHAW: Beyond the faster adoption of eCommerce by people — the realization that we can get whatever we want shipped overnight — beyond that change in habit, will there also be a permanent shift in people’s attitudes toward business, toward social interaction, toward life in general? SOLIS: Steve, these are great questions. People have already started to change, and this is one of the reasons why I became, in the ’90s, a digital anthropologist because you could see how the internet at the time was starting to

What executives have to do is take advantage of the fact that customers have now become digital-first. the expertise, build the intellect to set the stage for Phase Three, which is to thrive. So, once we start to come out of this, once we start to think about the world in a post-COVID way, there’s no going back to normal. Today a lot of companies are just looking at ways to cut costs, to save resources, to coast through these tough times, when in fact history shows us that any time of major disruption — health-related, or economic-related — is the best time to innovate. SHAW: You’re suggesting that this crisis is something not to waste – that businesses need to use this time to catch up to where customers are. But coming out of this crisis, aren’t customers going to change even more? What will force businesses to make the deep changes they've been very resistant to making in the past? SOLIS: Well, there’s that famous saying, never waste a good crisis. The problem with change is that it’s hard. Oftentimes change is limited by the vision of those who are making the decisions, those in charge of the organization. So, if

SHAW: What do they do about it? SOLIS: What executives need to do is take advantage of the fact that customers have now become digital-first. And that’s due to about a decade or so of customers with smartphones, on social media, using their favorite apps. We’ve now seen ten years of eCommerce evolution happen in a matter of weeks. Most companies were unprepared for it. So, it’s an incredible opportunity for executives. What they have to do is say, “Let's ditch everything we knew about the customer — or what we thought we knew about the customer — and start over.” What are customers doing? What’s important to them? What are the questions they're asking? Let’s focus on the touchpoints that are broken. Let's focus on the touchpoints that are missing. And let's also focus on how we talk, how we brand, how we market — everything can now become much more empathetic, and empathetic in a true sense, not in the buzzword, marketing sense: truly understanding who that person is and what they’re doing. This is our chance to learn from them.

give people experiences that they just didn’t have before. And once you had these new and incredible experiences, it makes everything else before that seem obsolete or outdated. So you crave the convenience, the personalization — all of the attributes that set the standard for what a great experience should be. So now, it’s not just that people have become digital-first, it’s also they’ve become emotionally affected by these times, whether they know it or not. And when you look at it from not just an anthropology perspective but also one of psychology, you see that this is very much a somatic marker that has united the entire world around this great stressor of the pandemic. We are now are much more anxious, stressed, we’re worried about our health and the health of our loved ones, we’re worried about the economy, we’re worried about our own safety and our own income, our own stability — add to that, especially for those in the United States, this incredible politicization of the disease. People are angry, and worried, and scared, and so those are factors that go into the behaviours that DMN.CA ❰


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INTERVIEW play out, partly in consumerism, and partly just in humanity itself. Understanding that is what empathy is really all about. The customer is also becoming much more informed — and equally misinformed. Now is the time for a brand, a marketer, a CX strategist, to reimagine how to be the light in this world of chaos. It’s going to be like this for at least 18 months, even after we get a vaccine, because it’s going to take time to establish herd immunity. And then we also need concerted leadership, whether that comes from brands or politicians or anybody, really, to start to calm people so that they can feel better, and be more focused on creating not only a better world but a better self.

conscious consumer. You don't buy to define who you are — you buy who you are. It’s a total reset of the brand-consumer relationship. This pandemic is actually a CTRL-ALT-DEL for life. This is a real opportunity to recentre who you are and who you want to be. And brands are going to have to contend with that, in how they want to build relationships moving forward. There was a great article in BuzzFeed (“I Don’t Feel Like Buying Stuff Anymore”) which talks about that change of heart. You also have concern over sustainability, which was already a factor. And not getting a lot of attention is this idea of minimalism where the Marie Kondos of the world are getting us to rethink our relationship

You can find out what’s broken just by looking at the data, listening and talking to customers. SHAW: I love that expression, “a better self”. I wonder whether people will revert back to traditional consumerism, or whether they’ll realize that you’re not what you buy. And that is a heretical notion for marketers, who’ve spent half a century convincing people to buy stuff. It’s just so hard to imagine marketers taking a reformist position when those principles aren’t close to their heart. Effectively, you’re calling for a new generation of marketers to come onto the scene. SOLIS: I am calling for it — I have been calling for it — simply because the behaviours that you’re seeing now, Steve, are accelerated behaviors. They’re not new behaviours. Digital life has always been a gateway to a new world of possibilities, a new world of aspirations. So, yes, you’re beginning to see a much more ❱ DMN.CA

with stuff and what we need to sustain happiness in our life. So, all of these things are just being accelerated. SHAW: There is a darker side to this, and you alluded to it — a pervasive mistrust that exists. Truth and trust go hand in hand — it’s a precondition for a genuine customer relationship. How do brands prove their integrity and not be simply seen as poseurs? What do brands do to become more relatable? SOLIS: When you’re trying to relate to people you think to yourself, “How do I get this person to like me?”. But the other way to ask the question is, “What’s important to this person?” And can what’s important to this person inspire me to align with their values, beliefs and aspirations? Brands have to be human in these times. And you can see the

inhumanity when at the start of this pandemic every commercial, every ad, sounded and looked the same: “We’re all in this together, in these uncertain times”. I get it. Brands have to sell their stuff, but they can do better. SHAW: What new consumer attitudes are you seeing that will fundamentally change the character of the brand relationship? SOLIS: We’ve already seen a massive shift in what people want. For example, 84 percent of customers said — according to a Salesforce report that just came out recently — that they’re going to value brands more for the experience they deliver rather than their product or service. That’s huge! Then you look at another study, from Accenture, that said customers are judging brands by how well they’ve treated employees during this pandemic. So, to your question earlier, we are absolutely talking about a new dawn of brand and marketing. SHAW: So how does marketing take the lead? You’re not going to get leadership from operations, or from finance, or from any logistical end of the business. It’s got to come from marketing. Yet in most enterprises marketing does not have a strong strategic influence. SOLIS: We have to think about it the way a start-up would: What is the market opportunity? And what does our investment in that opportunity yield us in the short term and in the longer term? And what is the opportunity cost of not doing these things? We need to make the case that investing in relationships is a competitive advantage. We need to build a culture that puts the customer first across all facets of the organization. We know that companies with a strong culture of customer-centricity do better financially, they have greater margins, the CEOs make more money, and are more famous and liked by the public and also by the media. And the shareholders get greater returns. So the ROI is there. Leadership has to embrace

the idea of having better customer relationships with “Generation N” — for novel. It should recharge leadership. But if leadership doesn’t want to embrace this idea, if they’re stuck in the panic and the chaos, then you’re not going to be able to make the changes required. But if you look at ways to deliver light to the customer, you will find a way one step at a time. SHAW: Where do you start? SOLIS: I always believe that pilots are a great way to start. Right now, the focus has to be on eCommerce and also on customer support: those are two Achilles heels right now in the pandemic. You can find what’s broken just by looking at the data, listening and talking to customers, capturing a “before state” and capturing an “after state”, say in a matter of weeks. You could show quick progress and then expand that exact thinking across the whole customer journey until it becomes a way of being. SHAW: We’re going to be dealing with a new wave of technology in a few years which will change the way we interact, not just with each other, but with business. Is that going to be the true transformative force, not the pandemic, but this coming wave of technological change? SOLIS: Oh, man. There is no quick answer to this. But this is where we got into trouble twenty years ago: The consumerization of technology. We tend to lean on the technology first as an enabler for scale and efficiency and cost savings and not for the experience that it can deliver. So if you take everything that we talked about — if you had insights, if you had empathy, if you knew what was going to matter to people — and then you apply technology to that, then you’ve got what I call multimodal digital transformation. You have digital business model innovation that’s relevant and modern and awesome for customers, and also employees, and then you have it all connected through humancentered design. That’s the path to true transformation. JANUARY 2021


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What the Experience Renaissance Means for Your Business

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3. Expand the experience agenda across the organization. Thanks to BX, companies can say goodbye to siloes once and for all. Businesses must flip the focus from engaging their customers at individual touch points to rethinking the entire customer journey ahead in new and exciting ways — and from the perspective of every department. A company-wide mandate ensures BX sustains momentum and drives results, and BX leaders are 53 percent more likely to hold this collaborative mindset. Through this cohesive and customer-obsessed lens, companies can start to dream big and reimagine complete industries. Think about shopping in the digital age, with virtual runways or showrooms for in-person and online clothing retailers alongside frictionless delivery and return processes. Additionally, consider what streaming giant Netflix has successfully done through revolutionizing, and effectively owning, the business of home entertainment. These initiatives aren’t just to the credit of the company CMO or COO. Experience is quickly becoming everyone’s business, with great success.

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4. Sync the tech, data and human agendas. A majority of companies (74 percent) say they are rethinking their processes and operating models to be more resilient in the post-pandemic landscape. To advance their progress, 61 percent of leading companies have figured out which technology platforms they need to leverage in order to remain relevant with customers and competitive in the market, compared to just 27 percent of CX businesses. But maximizing the success of experience relies on more than just the latest and greatest platforms. Businesses should strive for agile technology infrastructure, with cloud as the foundation, to link people and data together in newer, faster and more creative ways. With the savings cloud architecture unlocks, and by once again combining the best of the best emerging technologies and manpower, businesses can reinvest in data, powered by AI, to unlock performance, pattern recognition and additional efficiencies around experience goals. The emergence of BX ultimately presents a once-in-a-generation opportunity to reinvent the way companies work and the way their customers experience 13-07-04 10:43 AM them. It’s a significant mindset shift — and one that will need to be taken on by every team within an organization in order to realize maximum potential — but it’s also a much-needed push that will allow every company to ignite growth and deliver for their customers, their businesses and their people at this critical time. GREGOR BARRY is Managing Director and Accenture Interactive Lead – Canada.


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CUSTOMER CENTRICITY

What the Experience Renaissance Means for Your Business BY GREGOR BARRY

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ith every new year comes new resolutions intended to shape how we will live, work and interact with others — but this isn’t an ordinary year. The ongoing COVID-19 pandemic has upended people’s lives, inspiring unique and rapidly changing consumer attitudes and expectations that brands must satisfy in order to secure business and future loyalty. However, fulfilling customer needs alone has never been enough to make a company stand out. What really sets businesses apart is the customer experience (CX) at large. With so much at stake, it should come as no surprise that we’re experiencing a total Experience Renaissance — one where CX is transcending beyond tradition to become a north star for the entire enterprise and the entire C-suite. Companies striving to lead in 2021 and beyond will need to focus both their workforce and business strategy on one common goal — operating as a Business of Experience (BX). This new holistic approach to boosting business through CX is already making real impact, as recent research from Accenture Interactive has shown BX companies were more likely than their CX-oriented peers to grow year-on-year profitability by at least six times in the past one, three, five and seven years. Experience is paramount — for both success and survival BX bands together a new category of emerging business leaders that are reimagining and expanding their view of existing touch points to elevate experiences. The imperative to be experience-led has only been strengthened as a result of COVID-19 and technological breakthroughs — many of which have been accelerated by the pandemic. Every single experience is being revisited and redefined, with little room for error. Many of us now approach life differently, working exclusively from home, meeting with friends and family virtually, or receiving goods via curbside pickup and delivery — and it’s crucial to consider that many of these new behaviours may be here to stay. Accenture research suggests around 80 percent of consumers who increased their digital usage of a variety of channels during the pandemic expect to sustain these levels moving forward. Leading businesses are already responding accordingly — 77 percent of CEOs say they will have to fundamentally change the way they interact and engage with their customers to drive business growth. More than ever, experiences must be time-sensitive, purposeful and adaptable and help consumers solve problems and answer questions. Businesses that miss the mark risk losing key opportunities to become indispensable parts of their customers’ lives and safeguard revenue and relevance. BX is not just about helping companies stay competitive; it’s also ensuring they survive the constant flux and flow of government restrictions, economic instability and — perhaps most importantly — gold standards set by their customers around safety, convenience and overall experience. ❱ DMN.CA

Four winning ways to activate the power of BX To begin unlocking the full promise of BX, businesses across all sectors can take four simple actions to help orient their whole organization — from the C-suite through to HR and supply chain — around creating extraordinary experiences. 1. Obsess about customer needs – and use that as a compass. Becoming a BX leader starts with uncovering consumers’ unmet needs through investments in data and consumer insights. By taking a broad approach to data collection and exploring the context that informs their customers’ lives and choices, businesses can pave a clear path forward with better trend forecasting and tracking capabilities. Leading companies are also twice as likely as others (55 percent versus 26 percent) to say they can translate customer data into actions across every function of the business. To maximize impact, these actions should connect to the brand purpose. There is great demand for companies to stand for something greater than the products and services they sell. In fact, Accenture’s research shows the leading 20 percent of companies are most likely to be establishing and managing brand promises that connect directly to customer experiences. McDonald’s recently acknowledged its customers’ needs were constantly changing due to the pandemic and a multitude of other factors, alongside a demand for the company to demonstrate responsible values related to the environment and diversity. The chain has since announced an “Accelerating the Arches” initiative and “Serving Here” campaign aimed at beefing up its drive-thru, delivery and digital efforts with tailored marketing to provide the best possible experience. 2. Make experience innovation an everyday habit. Understanding your customer is a long-term commitment, but it’s also the key to being able to innovate at scale and create a true culture of experience. How fast and fully you can help your customer achieve their biggest goals and, subsequently, experience their greatest outcomes determines your value-add for customers and your return on investment. More than half of leading companies (53 percent) say their customers expect them to continuously innovate with more relevant products, services and experiences to meet their needs at any given moment, versus just 31 percent of their peers. Fortunately for brands in every sector, knowing your customer, coupled with continuously seeking new ways to innovate around experience, can uncover exciting opportunities — including being able to instill new desires in your target audience and expand your customer base. CONTINUED ON page 25 JANUARY 2021