Host Intro (Gene Kim)

So one of the things I mentioned yesterday was that one of the goals we have within the program committee is to better understand how we span the business and technology divide. You heard from Courtney Kissler, CTO of Zulily, about why this is so important to her. We also heard from Jason Cox on how he's getting business leaders to thank his teams for helping them achieve their goals; from Luke Reading on his experiences at Target in merchandising capabilities; from Paul Gaffney and his experiences at The Home Depot, Dick's Sporting Goods, and later Kohl's.

So I'm going to share with you the story of how this next talk came together to give you a glimpse of how much we rely on connections within the program committee and how the CFP evaluation process works.

During the CFP process we got this fantastic submission from Randeep Arora, Director of Operations for Enterprise Application Services at Mattel, the legendary toy company and one of the largest in terms of revenue. He's responsible for the back-end fulfillment systems, which include everything from warehouse management, supplier management systems, loyalty programs, consumer data.

We loved the talk, but Courtney Kissler said — and she's famous for doing this — "This would be even better if you could speak with his business counterpart, just like the amazing team from American Airlines."

Then she went on to say, "Hey, I know their VP who was in charge of e-commerce, who was awesome because we worked together at Nordstrom. Let me send an email." And so this is how we met Alexis Hoopes. She joined Mattel also in 2020. In her role, she is responsible for driving forward all of Mattel's global direct-to-consumer strategy, deepening Mattel's connection with consumers, growing consumer loyalty for Mattel's brands. So I am so excited that they're sharing how technology is enabling some of the most important and visible strategic initiatives for this company that likely played a large role in most of our childhoods. Here is Alexis and Randeep.

Alexis Hoopes

All right, good to see everybody, and thanks for having us, and thanks for the warm introduction.

So we're with Mattel and we make toys. We are an IP-driven toy company and we have some of the most amazing brands in our portfolio. I hope many of you here in the room have played with our toys, have kids who play with our toys, but it's just this amazing company with incredible history and a really strong brand portfolio.

When I joined the company, I joined right at the end of 2020, and one of the very first things that I learned about the toy industry is that there is such an art to creating toys. These are some great posters that we sell that are about the art of engineering a Barbie or a Hot Wheels, and the detail and the design that goes into toys is just truly something that I learned for the first time is really, really remarkable.

But making toys takes a lot of time. On average, it takes about two years for us to bring a toy to life at Mattel, and this is what the business is built around. We have to plan what toys we want to make, we need to design them, then we have these really cool people who prototype them. We get them in front of kids to see how they react. We get them in front of our customers to see how they will respond. And so we do a lot of testing around our toys, and then ultimately we move those into the manufacturing of toys.

So this takes a long process, and for those of you in the room — most of you are technologists — this is a very familiar process, a very waterfall approach to a business.

But we also innovate. We make toys, but we also innovate. Here is our one-pager of our strategy at Mattel. We've been on this journey of transformation to be really an IP-led toy company and really change what that means for us internally as well as for our consumers.

You can see here in the middle there is a box around advancing our e-commerce and DTC business. For a wholesale manufacturer of toys, just putting this on your strategy of what the whole company is focused on is transformational, and that's where we come in and the story comes into play. I lead our direct-to-consumer and e-commerce businesses across the globe.

Randeep Arora

I'm Randeep, and I help the business in terms of supporting their towers: supply chain, e-commerce, financial labs, as well as helping the test center of excellence within Mattel.

Alexis Hoopes

So our leadership put forward, "This is our strategy. This is what we're going to go after," and asked me to come in and our teams to come in and really bring this to life. But this is transformation.

Randeep Arora

And our challenge, basically — if you guys can relate to it — used to be, how do I get Alexis from screaming to smiling? That was basically the objective.

Alexis Hoopes

And why the company focused on this particular element of transformation and building this DTC business is, like all of us in the room, the consumer has changed. The consumer journey has changed. What was first slowly changing over time, as they say, happened all at once through COVID. Our brands and how consumers find our product: it used to be walking down the toy aisle. Now it's more and more shopping the endless aisle online.

What you decide to buy has changed. You want to read reviews. Your kids will still ask for the toys, which we love, but as a consumer, there's more and more information that you can find about our toys. And then how we show up as a brand has really changed. The first brand experience now is often at the doorstep versus being in a store, where you see all our packaging, you can touch and feel our toys, and we can bring our brand to life. Now what happens when the consumer opens the door and experiences our brands and products for the first time — this is a big transformation for us as a brand.

This creates a ton of opportunity for us to think about how we can engage in each of these tech touch points, this digital-first experience, and unlock a whole new way of connecting with our consumers.

That was our goal: as we build our DTC and e-commerce platforms and these digital experiences, it's creating more of those direct relationships with our consumers, deepening that connection and engagement with our brands and our content and our products, but ultimately driving them to purchase, because we're all in this to drive those sales. But as we do this, and we do it more and more online, with the advances in technology as well as the changes in marketing, we can collect more data about our consumers, and then that starts to unlock whole new capabilities for us to reach them in new ways, create new products for them. It's a whole new world for a company who's traditionally been a wholesaler.

So we're asked to take on this challenge when I came in at the beginning of the journey, and we're asked to do not only something revolutionary and transformational for the company, but also do it at scale. We wanted to launch globally across many different countries and continents. And we needed to do it fast.

We needed to think about going from more of this two-year approach, which the whole business runs on, to how do we do something more like in months than in years? This challenge in and of itself, the timeline that was put out, I'd say was a transformational goal overall for the company.

Randeep Arora

Plus, you have to put an additional layer of complexity on the top, which is you have to make sure that the consumer experience in different sites — we have multiple products — becomes a uniform journey. It doesn't appear segregated, as if you go to mattel.com and you get an absolute clean experience with Barbie, and you go to Fisher-Price and it's like, "hey." We had to make sure that your transition, your navigation, and the speed, all of it appears cohesive.

Alexis Hoopes

So this is our challenge given at the beginning of 2021. And this was our tech architecture.

I came in and we had many different sites on many different commerce platforms. This is our kind of placemat of the technology. Right when you start something and you're about to transform, you want to document all of it. I'm sure there was even more that we had that wasn't on here. I wanted a basic conversion funnel to see my data of traffic versus conversion. I think up in the upper right here is about 20 different apps. It also told different things about our data and our customer experience. It was messy.

Randeep Arora

Yeah, and like I said, we just had to make sure that amongst all these web platforms, when you join or when you navigate through your flows, they just don't seem broken. They don't seem as if you have one set of color scheme on one and then another one at a different place.

The whole idea, the whole transformation of "let's think segregated, let's think fragmented, let's plan fragmented, yet expect the final outcome to be integrated" — that needed to change. We had systems all through the landscape that wouldn't really talk to each other. You would have order processing that would come in from multiple channels. Those multiple channels would then somehow be flown into our one single legacy WCS platform that would ingest these orders. So now you have 10,000, 10,000, 10,000 — that's just a number — always coming in per hour, when your funnel here is 2,000. Suddenly you have business saying, "My orders from yesterday aren't showing up in WCS. What is going on?"

So we had to make sure that we become agile, we become nimble, yet we still have the legacy horses to run on.

Alexis Hoopes

That made it a little more complex. Similar to one of the earlier presenters, just thinking about the culture of, "Oh, the technology's complicated. It's hard to get anything through." Well, this is hard when it looks like this, yet we're being asked: go fast, go global, scale quickly, get it done.

So what do we do? How do you start? You're with this challenge, the consumer's moved really quickly, the leadership is aligned, the board is aligned and invested in this project. Where do you start?

My experience after many years in retail is you always start with your consumer. When you focus on the consumer — what's important for them? — it will start to clear a very clear path to where you need to go.

So we identified two consumer segments that we're going to go after. The first is our collectors, which are adult fans of our Mattel brand. Hopefully some of you in the room are also collectors. Yep, which I love. And for them, what we wanted to do is, again, really with the consumer-first lens. They need something different. They want a premium experience where all of our cool collectibles can come together. They want to know the latest. They want to really connect with our designers behind the scenes of our brands.

So one focus was on them. And then the second was on our shoppers. Those are adults who are going to be shopping for the kids who love our brands and thinking about what shoppers need. Largely, you can buy our product at all of our retail partners, and we want that to continue. But we know consumers are doing more research. As a parent, you want to know a little bit more about the products you're putting in front of your children. And then as a grandparent or an aunt or a friend, you know the child you're buying for might like Hot Wheels, but what should you buy them? We can really help solve that problem with focusing our efforts on the gifting experience and helping find the best of our brands. When you need a gift, we have that for you.

So really the first step was very quickly: let's identify who our consumer is, and then from there we create the product roadmap to go deliver against it.

Then the second thing was, we've got to simplify fast. I'm coming in, looking at this map, trying to figure out: okay, how can we do this? We need to go and we need to go fast. So what we looked at, in partnership with the technology team, is what part of our ecosystem is going to be the easiest for us to take and simplify and go fast on, and just truly disrupt and transform. We focused the first step on the front end.

So we very much simplified our architecture, our partners that we worked with, and really focused on making it easy, making it global as well, and scalable. This is now our front-end placemat, which looks very different than what we just showed. This is from a business lens, so I'm sure there's a lot more than this, but that was one of our first steps. And that not only did simplify it, it reduced a lot of our costs as well too.

Randeep Arora

Of course, when we started off with multiple of these sites on .NET, Java — you name it, we had everything going on. Then we had to somehow make sure that slowly, functionally, in a non-destructive manner, each one of these gets spliced away and then we move towards the consolidated e-commerce platform for Shopify, and we started using their peripheral apps.

Now we have moved our functions, like Alexis was saying, from using old search base to search functions on, I think it's called Searchspring on Shopify. We started using more of the Salesforce integrations to track most data from the sales coming in. We have moved from paid payment systems, where it made sense, to open source platforms where it could be easy for us to manage those. Our CMS has moved over to Shopify. A lot of these changes have made sure that we modernize our digital platform and move all our fragments from nearly, I think entirely, from on-prem to cloud.

That was a big question mark because, like I had earlier said it jokingly, the fact is, if we're not enabling the business, then we're not part of the solution. We're part of the problem. We had to make sure that it becomes part of the solution for business, and business views our partnership as enablement, not as a dependency.

For that, most of my efforts were two-dimensional. One was to make sure we follow along with the transformational journey, yet we had to make sure that all our legacy stacks keep operating, keep functioning, and somehow we create this landscape where you go on your transformation path uninterrupted, unhinged, yet your day-to-day operations while you're doing it will sustain.

As part of that, we had to make sure our key piece in "fix the rest" — if you could move on to the next slide, you'll see — how do we make sure that the environments, the test data, all get cohesively combined together so that we don't have our older front end from Shopify, yet on my middle tier, on my OMS, on my WCS, which are the legacy supporting apps still until we complete the transformation, we're not able to give them a view of: here is your order-to-invoice view; here is when your consumer goes and buys; and here is my ERP where my dollar sign shows up; or here is my warehouse management system that is now going in preparing for your shipment.

We had to make sure that all that test data, all the old test data for all that had happened, gets cleaned up, but to make sure that we create virtualized test environments for our transformation programs while our older platforms continue to use the on-prem ERP systems, so that we don't violate the licensing constraints that we had with Oracle, of course, and we go ahead and give them what they needed, and yet make sure that, like our CTO says, "Don't put me behind bars."

We had to make sure that we carry on with that. We had to make sure that the planned releases — if you look at the graph, it's a very standard graph that gets depicted across, wherein we miss deadlines time after time, test cycle gets elongated, test cycle goes ahead and impedes over into the integration, goes ahead and kills the UAT, we miss testing, UAT starts screaming, we start screaming. So we had to put an end to all this and do this entire red bug that you see shifted left.

That's where the whole concept was: let me make sure that I get my data virtualized. Let me make sure I control my test data. Let me make sure I provide enough test environments, yet not violate the licensing policies. We partnered with a couple of companies, with Delphix being one of them, that helped me in the previous and in this one to get those virtualized environments going at a very high speed.

In fact, we brought down our operational costs by about 70% on the storage. My database refresh and restore on the test side is probably at about four to five minutes. If I need to now spin up, minus the approval workflows and whatnot, the actual spin-up time is 45 minutes down from probably six to eight hours.

So it's given us the boost and the capability to give Alexis the options of multiple flash sales, making sure we automate and cast at least a safety net on those automation sales going on so that we can tell her, certainly if there is going to be a potential publishing error, if there is going to be a potential workflow error. That is the capability that we partnered in, making sure our environments get automated and making sure everything is basically to enable business in getting to the consumers faster.

Alexis Hoopes

So we did it. We did it and we did it fast. This journey started, I'd say, January of 2021. July of 2021, we launched MattelCreations.com for our collectors. This is an amazing high-end site where our collectors can come. We do product drops almost every day around 9 a.m. I don't think we have something dropping today, but tomorrow we do. We surround all this great product for our collector brands around content and community. We had San Diego Comic-Con in July, and that was our target. There's nothing like a big goal and a really high-profile event to drive a transformation through the whole organization.

Then in December, we launched shop.mattel.com, which is our shopper site, where we bring all of our brands together, create these digital destinations. We then followed that with launching in Europe and 14 other countries, and their consumers can buy a great gift. Being direct from the brand, we surround that gift experience with this really cool unboxing for the kid, a virtual greeting from one of their favorite characters, and then a fun thank-you note as well too.

So we stood up our platforms in less than 12 months, doing something truly transformational.

In the summer, we had something really interesting happen. I don't know how many of you in the room follow fashion, but you might see the color pink that I'm wearing. Next summer will be the launch of the Barbie movie, and all of a sudden we saw this groundswell in fashion around this movement called Barbiecore, which is really all centered on pink. It was popping up everywhere.

Which is such a cool moment for our brand, to be leading and be one of the key things in pop culture. But remember, it takes us two years to develop product to get it ready. So here we are as the brand, like: this is a moment. We've got to maximize the trend. What can we do?

Well, we now have our sites, and we stood up a whole new capability to create, produce, and manufacture on demand a whole new product line of shirts, hats, mugs to respond to this Barbiecore trend. This is something that took us two weeks. So we've gone from two years to two weeks to respond to a consumer trend, partnering with our technology providers to do something we've never done before and truly prove what transformation can start to look like in a company when you lay this foundation and then just continue to innovate, but really being focused on what is it that that consumer needs. Then that will guide you to what you need to develop next and how you can respond in ways that I think we never thought possible before we started this journey.

There's also a Kencore trend too. We don't discriminate here, but we've got some Kencore as well going on.

Largely that's our story of transformation. We're a toy company, we do make toys, but we also innovate and we're on this journey of transformation. I'd say, just summarized, it's about, for me, for sure: as a business, focus on the consumer; simplify; actually pick some big challenging goals to rally the team around; and then this tight partnership between business and technology, really together challenging what's possible and showing new ways that a company can work and connect with our consumers.

So that's what we've got. Thank you all. You can contact us for any questions or follow-ups.