The Candid Voice in Retail Technology: Objective Insights, Pragmatic Advice

Retail IT Veteran Supports Vitamin Shoppe Transformation Without Sacrificing Basics

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Andy Laudato, retail IT veteran, became EVP and CTO of The Vitamin Shoppe at the start of 2019. His goal is to be part of the team that helps reinvigorate the chain’s business, and towards that end, he heads up both IT and the Supply Chain. I sat down on the phone with Andy, who I’ve known and seen at retail events over the years to see what his plans are, and how he hopes to support renewed growth.

As a former CIO talking to a current CIO, I found the conversation to be an absolute delight.

Andy Laudato, EVP and CTO, The Vitamin Shoppe

Here is some corporate backdrop for those of you who don’t know. The Vitamin Shoppe started out hot as a pistol. The purveyor of private label and branded nutritional supplements was “the” place to buy those products for several years, and went public in 2009. It reached a valuation of a billion dollars pretty quickly and its stock price was still up at $46 dollars in January 2014.

While I didn’t get into the specifics of why it happened, the stock price has fallen dramatically since then, losing more than 90% of its value. No doubt the encroachment of competitors from all corners: from drug stores to big box retailers to Pure Formulas to Amazon contributed mightily to revenue shortfalls and negligible profitability. Andy is part of a new management team, brought in to transform the retailer into a serious competitor again. The company is re-invigorating its technologies, has launched a wholesale initiative with NEXCOM (The Navy Exchange Service Command), and is putting a re-focus on the quality of the products, the in-store and online experience and educating and empowering its associates with technology. The category of health and wellness is growing, so significant opportunities remain for retailers with the right product and messaging.

While I might have expected frenetic energy and panicky rush to transformation, what I found instead was a consummate IT professional, who understands that quick wins and IT basics are as important as massive, long term transformations. For me, that was a breath of fresh air in a world that seems to always look for magic bullets.

First, let’s say a few words about Andy’s background in his own written words. “With more than 25 years of retail experience, Laudato has honed a relentless passion for the customer. With experience across many specialty categories, he’s found the perfect fit at The Vitamin Shoppe. As a health enthusiast himself, he knows that each customer’s health journey is unique and personal. His goal is to curate systems and services that are so good, his customers brag about them.”

I asked Andy how he prioritizes the way he and his staff spend their time. I am paraphrasing him here, but here is the gist of what he said.

Andy always makes sure that the lights are on (in IT terms, production systems are running consistently). He, like Brian and me, feel like the basics of IT have been lost in a flood of promised magic bullets. From day one on the job he worked on firming up the foundation of people, processes and understanding the technologies that are extant in-house and available in the field.

Once this is in place, he put emphasis on making sure his staff is focused on the up-to-fifteen key initiatives that support the corporate agenda.

Equally important, he puts a big focus on “Quick wins.” He surveyed his internal customers to help figure out what their biggest frustrations were. He found the ones that were easy to fix, and all his direct reports had a chance to pick from among those quick wins.

Here’s an example: A click-and-collect transaction used to take forty-five minutes to go from order entry to hitting the store for picking. This was problematic, since the ubiquity of Vitamin Shoppe stores made it likely that the customer would arrive before the order had even showed up! Some system changes have reduced the time to less than two minutes, and Andy has a goal to get it down to ten seconds. He solved a big problem with a resolution that will ultimately yield great rewards.

Andy’s IT group has a three year roadmap that they developed internally. As a kindred spirit, he prefers to hire individuals over firms and likes to bring in specialists to fill in needs (this was my MO as well).

Finally, Andy understands what it takes to really understand the idiosyncrasies of his new retail vertical. He deep dives into the business by working in the store a day each month. As a man after my own heart, he spends time trying to break the company website (this used to be one of my favorite activities…bug finding). He also works in the fulfillment center. As he said, unless you go out and work on in the stores, you don’t really understand the meaning of delays. In your office, a 30 second transaction delay is an academic exercise. But if you’re in a store, you appreciate how embarrassing this can be. Thirty seconds is a lifetime at a cash register. He encourages his associatesto do the same.

The long and the short of it is Andy is thrilled to be at The Vitamin Shoppe and believes it’s a perfectly sized company for him. I think the company is lucky to have someone who ‘gets’ the basics and the possibilities for IT and the Supply Chain. And of course, we all wish The Vitamin Shoppe the best of luck with their transformation efforts.

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Articles & Opinions May 21, 2019
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