How Yelloh! Stays Fresh as a 70-Year ‘Startup’ With Consumer Insights and Personalization

One 70-year-old company isn’t showing its age, embracing and operating as the startup it once was. In an attempt to better connect with consumers, optimize delivery, and personalize product recommendations, Yelloh! (formerly Schwan’s Home Delivery), has utilized machine learning, personalization engines, bidirectional communications, and more, to better resonate with both customers and employees. By hitting the ground running with an agile, single-year effort, the company has learned quickly — seeing what works, changing on a daily basis, then expanding and adding components as necessary. In this edited version of the webinar’s transcript, learn from Kevin Boyum, Yelloh’s chief strategy officer, about how to leverage data and technology transform delivery and end-consumer experiences, to keep a brand youthful and resilient. Lisa Johnston: Welcome to “Inside Schwan’s Home Delivery (now Yelloh!) Digital Transformation”. My name is Lisa Johnston, editor-in-chief of CGT. As you might have guessed from the title of this webinar, frozen food delivery company Schwan's Home Delivery, now Yelloh!!, is undergoing a transformation, both from a brand standpoint and a technology one. The company has rebranded itself as Yelloh!, and are making deep investments in innovation strategy and capabilities. As part of this, they're also investing in consumer insights and personalization to grow and meet the needs of today's consumers. To talk about this evolution, we are joined by: Kevin Boyum, chief strategy officer of Yelloh!, and Justin Honaman, head of worldwide retail and CPG go-to-market at AWS. Justin, I’ll let you kick things off. Justin Honaman: I can't wait to unpack the story of Yelloh!/Schwan's Home Delivery. Working with them this last year has been incredible and a lot of fun. We’ll share how they're taking an amazing brand and investing in it to bring a better customer experience. I'm going to share, at a high level, some of the trends around the digital space and consumer goods, and then Kevin will dive into Yelloh!. At Amazon, the vision is to be the most customer-centric company in the world, and in consumer products, we're focused on how we can help customers like Yelloh! go further, faster. We like to say we have the agility of a startup and the experience of an enterprise leader. Many of you know most of the big trends in the industry or you wouldn't join this discussion. Related to digital experience, the one big area that's trending is around this idea of unifying the shopping experience. The areas that we're going to spend time on are around digital commerce and the idea of the AI-powered contact center, or next-generation of contact center, which has become hot again. For those that have been in the technology industry for years, you had the old days of the call center, which calmed down and now it's back again. The second big bucket of focus from many customers is around creating meaningful customer connections. In the case of Yelloh!/Schwan's Home Delivery, the customer is the end person at home buying products and having them delivered, but they also have an internal customer, which is the drivers that are out taking trucks around and delivering products — we'll dive into that shortly. We’ll cover how personalization, analytics, and consumer insights is being leveraged in new and different ways, as well as how to have a connected ecosystem to be able to engage with the customer. We think of this as a connected front office. There are elements of this that we're doing today with Yelloh!, and there are elements of this model that we're not doing, but are with broader customers worldwide. Kevin, for those that don't know Schwan's Home Delivery (now Yelloh!), can you give a sense of the overall business, the scale, the scope, geography — bring everyone up-to-speed on the business. Kevin Boyum: Sure, I love to talk about Yelloh! and the great things we're doing to reintroduce ourselves to customers and introduce ourselves to millions more. For over 70 years, Schwan's Home Delivery has brought quality frozen food directly to the homes of American families. It’s a great American story that started when not enough customers were coming to the family dairy in a small Minnesota community. Marvin Schwan, our founder, brought the dairy to customers — it was the last mile before last mile was cool, and mobile retail before mobile retail was cool. Over the years, the product selection went from milk to ice cream to frozen pizza, and now there are more than 300 curated products for customers to order online, from a mobile app, or — this is the unique part of what we do — directly from our mobile retail store and local teammates. We operate in the lower 48 states with 300 local fulfillment centers. There are 3,000 mobile retail stores that serve almost 25,000 zip codes, which is about 25,000 neighborhoods. We also serve the lower 48 states with a unique frozen direct fulfillment method. We've done this for 70 years, but I'm excited to share how we're changing what we've done for 70 years to be more relevant for 70 more years. Honaman: When we first met, you were in the CIO role and you've since been promoted. Can you provide some sense of the technology landscape at Yelloh! — some history of that and where you are now — you've made some big decisions there. Boyum: First, it's important to understand that Yelloh!, for many years, was the start of what became Schwan's Company. Schwan's Company started with Schwan's Home Delivery and then branched off into consumer packaged goods and other markets. Yelloh! was a part of that company and separated. When we separated, we had a builder culture that built the majority of our unique capabilities to deliver our unique services. The technology landscape is a builder culture with a unique, custom-built mobile point-of-sale device and mobile point-of-sale delivery mechanism, as well as customer relationship management system and inventory management system. Over the last several years, first with the separation and now with our rapid digital transformation, we’ve made sure to leverage what we've built, where we can differentiate and innovate, and embrace that builder culture. While also not embracing that builder culture where it doesn't make sense, where we can leverage other partners, other platforms, and we can move in a mindful way from an on-premise data center, which we had for decades, to the cloud. That's the transformation we're on from a technology stack standpoint, but everything we do is less about cloud transformation than it is a business transformation. It's far less about building things for the sake of building them, than building them for the sake of relevance — for customers and to continue to transform this unique 70-year-old business so that we thrive for 70 more years. Honaman: One of the things I was impressed and surprised by was the engagement from all of the business leaders at your company as you start to undertake some of these different initiatives. Many joining know that's a challenge and struggle with the “siloism,'' if you will, of their own business, as well as gaining alignment with the business and leadership engagement. Spending time with the team and seeing their interest in leaning into something new, has that always been the case at Yelloh!/Schwan’s? Was there some factor that determined you were going to go all-in and be willing to innovate? What did that look like? Boyum: We have a unique situation where we have silos — every company has silos — we have silos within the silos. One silo that we haven't had is between business and information technology. We have a well-integrated team, and Justin, I hazard a guess that when you've been in the room with us, sometimes you can't tell who's from IT and who's from marketing, operations, or finance. It's a well-integrated team from that standpoint, and we operate that way because everyone in the business values technology as an enabler for the business. From an overall transformational standpoint, we had a history of innovation. There were times in the 70s where we had all the facilities connected by satellite, there were handheld computers in the hands of all the direct representatives in the 80s and 90s. As part of that larger entity, sometimes we forgot about that innovative spirit. We became slow to pivot, slow to take risks, and the silos would build bigger walls between them. We often say silos aren't necessarily a bad thing. You have to have them connected though, and integrated to achieve a common purpose. In the last three years, under the leadership of Paul Schwan, the son of founder Marvin Schwan, we have been able to reinvigorate that innovative mindset in a way that we rally towards common purposes, common strategies, and break down those silos — or at least better coordinate and integrate the silos. It's not easy. I can't say it was a switch that was flipped and all of a sudden the silos are gone, but it's essential. Technology transformation for the sake of technology transformation does nothing. It's for the sake of the business, and for our businesses, for the sake of relevance for customers. Once all of us rallied and aligned to that and worked with AWS, especially over the last year, to crystallize that and focus our attention, that's when our reignited innovative spirit, our focus for customers, and our ability to blend technology and business has taken a new route. We're moving at warp speed, sometimes maybe even challenging you. Honaman: That's a good situation to be in. Thinking about the actual customer experience, what did you know about the customer? What was the selling process? Let's talk about some of that process and how you're looking to change that. Boyum: Again, this started as a milk delivery route and evolved to offer a well-curated SKU selection of mobile inventory, which thrived for 70 years and has loyal customers and employees. That process, that evolution, hasn’t always made it easy for either customers or employees. About half of the time, customers today engage in a traditional e-commerce delivery experience where they order online, using an application or the contact center, and we fulfill the order. The unique thing is that many of those customers choose in-person delivery to have the opportunity to interact with our local teammates — sometimes they even add to the order in the moment, thanks to that curated mobile inventory. Now, fully half the customers, regardless of age demographic, interact by that mobile retail method. Half of our customers, about half the time, embrace that on-demand nature of our mobile retail inventory and that 70-year experience to order in the moment and change what their needs are. People are busy, we all realize that. They forget to order something or their plans change, and they value that true on-demand experience. That's what's helped us for 70 years. However, that experience requires an increasingly mobile customer, whose plans change, to meet a mobile store at the right place and the right time. For years, that has been increasingly difficult and, far too often, inefficient. If you're connecting that mobile store with that customer half the time, you may miss them half the time. You may connect with them half the time, but it may not be the right time or the right time for their needs. What we're doing now with AWS is putting our mobile retail store in the right place at the right time more often, by using data to let customers know that store is in the area through a personalized experience, thanks to data. Then, put customers in control before we take the time and give them the opportunity to decide if they’ll order today, or if they catch us driving by and want to see what we have to offer for them to order. A truly real-time, on-demand, mobile retail experience. Simply, we would physically knock on doors to drive demand and connect. Now, through machine learning and understanding the right purchasing patterns of customers, we can gauge their household storage, consumption, and seasonality patterns, allowing us to connect digitally. We moved from physical door knocking to digital door knocking, from a pure push model to using data and personalization. The total experience blends push and pull from a marketing standpoint. We can cut through the middle at times being a pull or at times being a push, and always be relevant for the customer. It's an exciting time. Honaman: We've had fun talking in the last couple weeks on this topic, there's so much potential. What makes it interesting and fun is not the innovation part, but you have a chance to impact the actual experience. I did a route ride a couple of months ago and had the experience of the delivery model — the engagement with customers, the upsell, the cross-sell, the ordering — and had a chance to see that. Afterwards, we discussed how the end customer is a customer, but so is the driver. Part of what you're doing is making his or her life more efficient, better enriched for the engagement with the customer. Can you talk about that a bit? Boyum: It's absolutely essential. That's another part of our uniqueness, we own our trucks. Our employees, our drivers, we control that experience. We can control the consistency of that experience. It's essential that we keep them safe and happy, our drivers, our local teammates. Think about that concept where a mobile retail store is trying to connect to an increasingly mobile customer — you miss them a lot, that's pure time. You're taking time. It's some frustration and physical wear-and-tear of getting in and out of a truck when you don't need to get in and out of a truck. In the span of our reach, getting in and out of a truck could be 110 degrees in Phoenix or -20 degrees in Sioux Falls, South Dakota. It's very important that we increase the odds of success for local teammates to connect with customers by using machine learning to put the truck in the right place, but also to offer up those options and experiences to get between push and pull. With that, we're not waiting for the customer, rather being relevant to them, using data, offering options, offering experiences. To your point, we're making the days much more productive, effective, and efficient for local teammates and drivers. Going back to the concept of happier employees are tenured employees, drive better experiences, which drive more loyal customers, it's essential. It's part of our total value proposition. A part of our flywheel of success is making sure we make our RSRs, drivers, and local teammates successful. Honaman: If you are out there working for major brands and have operations, but have never spent time in your own operations – find a way to do it. You will have a whole new perspective and view of how things work, some of the challenges and opportunities, and also some of the great things about operations and manufacturing. Johnston: Kevin, I'd love to learn more about how the technology is being used by the drivers. Can you talk about what the onboarding process has been like for drivers? Are you finding that an easy adoption? Boyum: That's the interesting part: change is hard. It's very hard. Regardless of whether it's change for the positive or negative – it's different. What we found, and it’s part of the reason why we're moving much faster than we anticipated, is that it immediately resonated. Put simply and clearly: we win when we're relevant for our customers and we win when we're relevant for more customers with less waste. We often have days where we can put that driver in a position to connect with 35 customers, but only make about 45 attempts. That means there's only about 10 times where they missed the customer, it wasn't quite the right time, or it wasn't the right moment for the right product. Six months ago, or in areas where we don't operate this way, it's 35 out of 75 attempts – think about that sheer difference in a day of being relevant and effective. For local teammates and drivers, we explain that using the data will increase the odds for success, or ensure the customer wants to connect with them and put them in a position to use our unique advantage, personal relationships. That’s what Justin experienced in real life. Our customers are loyal to our brand and our products, but they're also loyal to our employees. We can put them in those places with a higher degree of confidence and those drivers immediately get it. It's still hard because it's different, it’s a change. We're using data instead of intuition, and at times, that data could be wrong, however, more often than not, it's right and the employees that experience it see that. We discovered early on that it made sense to customers immediately. They loved to be in control, to understand that our mobile store was open more often than they realized, and that they could get products and services far more often and within their control. The change management is not easy and we are early in the process, but the sheer effectiveness of it helps. Johnston: You mentioned before that there's no magic switch to busting down silos – I'm pretty sure if there was, we could market that. Could you talk about how Schwan/Yelloh! is working together across business and technology to make the customer's experience a priority? Boyum: This is in no small part thanks to working with AWS. It starts with the customer, you always have to always start with the customer. We drive 70 million miles a year to serve almost 2 million customers, that’s 65 million transactions a year. You don't do that without being operationally effective and having a passion for operations. However, we were too operationally focused too often. We've become more customer obsessed, and through that obsession working with AWS, it's become a rallying point for different functions to come together for a single purpose. In my career – I was the CIO before I took this role – I have done transformational efforts, global CRM implementations, single-year merger and acquisition standups. Things large and small, tech-related or not, and I have boiled it down to two things, in my experience, to really transform an organization. They may seem far too simple, but to execute a large transformational effort and begin to bridge those silos, it's about alignment and backbone. In terms of alignment, it needs to be a clear alignment upfront, across the organization, and down through all functions of what you're trying to achieve. That is essential. You have to have clarity and alignment of purpose, and that purpose has to resonate throughout the organization. The other is backbone. It's hard. Every meeting, every moment, every decision, there are going to be individuals that want to revert back to the old way or want to build a new wall for a silo. It takes some backbone in the moment. You have to empower leaders to have candor. You have to empower individual contributors to put their seat at the table and feel comfortable to say what they have to say. You have to build a culture where it is okay to disagree, but then come together and move on. That's a process that we do every day and every week. There is no magic switch, which is why I distill it down to alignment and backbone. The backbone part is hard too, but that's what I've found in what we continue to do as a company, a “70-year startup” is what we like to say. We are re-embracing who we were that day 70 years ago when Marvin Schwan decided to create a business, run it, and operate it by always changing and having a small team work together to achieve what was necessary to solve a customer problem. They did it in ways where sometimes mistakes are made, but at least if you do that quickly, you move on. We're embracing that every day. Johnston: Justin, I'm wondering, can you respond to that based on what you hear or see with other companies that you work with in similar situations? Honaman: What Kevin said couldn't resonate more clearly. We see customers that are on all ends of the spectrum from alignment and backbone – having a plan, an actual strategic goal, or a vision statement element around change. Even with companies that are moving to cloud, there are a couple things that have to be in place: Alignment at the executive level An actual strategic element that we're going to go and do something To have a plan – an actual project plan with the details around it, someone managing it, etc. Having the right people that are actually going to go do that with metrics around it. What you see here is how these things come together, especially as you think about the digital experience, but that's not always the case. There are many examples where you have one or two of those, but not all four, or even none. You’ll find examples all along the spectrum, but those are important things to have, especially in terms of going and testing and learning. We’ll also discuss the deployment approach. This wasn't a two- or three-year project, or a multimillion dollar budget that overruns halfway through. This is something we were able to test out quickly through a test-and-learn method and then commercialize. Johnston: I'm glad you brought that up because I would like to dive in a little deeper. I believe you have some metrics that you can share on how this worked for Yelloh!. Can you talk about the deployment approach? Boyum: As Justin mentioned, this wasn't a multi-year effort. It was very iterative, agile – small a, not large A – of trying things and standing up small components, in this case with AWS in the cloud, seeing what worked and then expanding on them. In fact, we are still in that mode. Honestly, it's different for our company. We were used to the culture of doing an RFP, picking something, taking a year to implement it, and then regretting it – either because it was the wrong thing or because the idea that it was supposed to support wasn't necessarily the right idea or entirely correct. This flips that notion completely on its head. We're talking about small components in a single facility running this way, with a single route. We could start with a single route, a single driver, a single local teammate in a single facility – we see what works, change it almost on a daily basis, and expand then add another component. We were talking concepts in November and December of 2021, doing initial pilots in January and February of 2022, and as we're talking right now, we are on the tipping point of all 300 of our facilities being live, and the proven elements of this by the end of this month. We went from concept to the nation in under a year, completely learning as we went. The flexibility of the nature of AWS services was essential in that because it reduced the level of commitment per service or per capability. It enabled us to test with relatively low risk, and enabled us to see what resonated with customers' and employees, then once we had confidence, to expand and scale. Across all the capabilities that we've discussed today, we are using machine learning, personalization engines, bidirectional communications, the beginning of what will become a connected contact center experience, and it’s all driven by data and a far better understanding of the customer. Honaman: My background is varied. I've been at different places where we would come in with something that seems small, then it would become a long-term big investment. Most of our customers, especially in the digital experience space, are expecting to be able to try something out, test it quickly and easily without requiring a lot of resources or a big consulting contract, and then be able to make a decision. Our approach is unique. In one of our first meetings, Kevin said he expected us to bring about 85 slides and a Gartner chart to say why we should partner. Instead, we came in with industry use cases and had a working session, a workshop. For those in the tech space or the consulting space, that's a way to differentiate and put the customer first – don’t show them 48 slides of all that you do before they even get to some value. For us, customer obsession is top priority, and then beyond that we pinpoint how we think about the end customer experience and invest in that, as well as share some ideas around how to make it better. Johnston: Kevin, can you talk about how – looking ahead – you plan to leverage these consumer insights across the enterprise? Any future ambitions you can share? Boyum: When we rebranded ourselves as Yelloh!, it's more than a rebrand – that's our mantra. It is meaningful because we intend to do even more dramatic things. We are an omnichannel business and have our direct-ship mechanisms. However, part of the insights, part of the uniqueness of our business is that we value our customers. We value their loyalty, our ability to connect directly with them, and we value the data that allows us – that data about customers, their households, and who they are, and we protect that data – to better leverage it for the customer's benefit across all of our fulfillment mechanisms and the way customers can engage with us, including new customers in new markets or markets that we do not serve. We believe we can be far more relevant in all of those 25,000 zip codes that we serve today, but we also believe there are other zip codes that we could serve with our unique experience. The power of the data, power of our unique relationship and direct connection with customers, is product relevance. We've talked a lot about service and experience relevance, but we are also offering food – food is important to American families and the act of being around a table. We can use the data for better insights and better personalization to expand beyond what we do today, which may mean not just frozen, but cold products; not just Yelloh! branded products, but other brands of products; not just products that are similar in all of our 300 facilities, but maybe based on regions and based on seasonality. There’s going to be power in data using our unique capability to connect directly with customers, to offer more relevant experiences, and then offer more relevant products to those customers in those experiences – some of which also flip the notion of the 70-year-old startup, the 70-year-old frozen food company being something more than a frozen food company. Johnston: Kevin, those are some great words to leave us with. Justin, do you have any final thoughts that you can add? Honaman: There was one more question around the actual tech that’s being leveraged for some of these use cases – it's Amazon Pinpoint, Personalize, and Connect. More than anything, thank you, Kevin, for setting aside the time and being collaborative with us. We enjoy working with you and the broader team, and appreciate the partnership. Johnston: Thank you both for your insights, we really appreciate it. We're always thrilled to share these stories. Thanks to our speakers for joining, to the audience for joining, and to AWS for sponsoring today's webinar. Enjoy the rest of your day.

Related Topics