The digital transformation recipe for Tekmovil
Although it’s a huge advantage by itself, technology needs a strong and conscious strategy to power a digital transformation – Tekmovil can attest this.
Tekmovil is the current distributor of Xiaomi in Mexico and it has a short, yet incredibly interesting history. As they ventured into a B2C model and into ecommerce territory, they chose VTEX to support them on their journey. Cristian Serrano, as Head of their Ecommerce Business Unit, was instrumental in both this partnership and in the overall digital transformation of Tekmovil. Recently, we sat down with him to dive deeper into Tekmovil’s successful digital transformation. Read on for a sneak peek inside his thought process, learnings and story with Tekmovil.
VTEX: Let’s start by exploring the company background and the ecommerce project. Did Tekmovil have an ecommerce site before VTEX?
Cristian: No. Basically, we are a start-up. We were founded just two years ago by four people who used to work for big telco companies – Samsung, Huawei, Blackberry, and Motorola – in high-level positions like CEO for America and VP of Procurement. They founded Tekmovil to partner with Xiaomi and to manage their relationship with Telcel, which is the most important phone carrier in Mexico and in Latin America through América Móvil. Tekmovil used to be a company that mainly focused on B2B, but just three months ago they decided to go into the B2C model through the ecommerce channel as part of a digital transformation. Therefore, they invited me to create the Ecommerce Business Unit.
VTEX: So Tekmovil is more than a retailer given it partnered with Telcel?
Cristian: Yes, it’s like a distributor, the middle point that manages the relationship between brands and consumers.
VTEX: And how did you get involved with the project? What was your background?
Cristian: I’ve been doing ecommerce and digital for the last 10 years. I used to work in Mexico for Martí, a big sporting goods retailer that is also a VTEX client. I was part of the team that started the ecommerce and digital areas. Then I got into Julio, which is a Mexican fashion retailer, and l led their digital transformation – we were among the first VTEX ecommerce stores in Mexico. Afterwards, I joined Reed Exhibitions, the owners of Comic Con, to help create the first big ecommerce event in Mexico. They understood that in Latin America ecommerce started to exponentially grow, so they wanted an event focusing specifically on that vertical. I became the founder of ECSE, the Ecommerce Summit & Expo. Next, Under Armour invited me to join as the Ecommerce Country Manager for Mexico. After a year, I launched their Marketplace Business Unit in the Latin America region, and then I left for Tekmovil.
VTEX: Wow, that’s an amazing journey. After all this, why did you join Tekmovil?
Cristian: I joined because Tekmovil gave me full control over the process of digital transformation and I saw that as a great challenge. They told me upfront that although they were experts in telco and knew the key stakeholders, they didn’t know how to sell B2C or how to operate ecommerce.
VTEX: That’s amazing. Could you tell us a bit more about Tekmovil’s B2C area, the one you’ve come to develop?
Cristian: At this point, the only B2C point of contact we have is ecommerce, because we don’t have retail or physical stores – we only sell products to Telcel or to other wholesalers and retailers. But we are now preparing to launch our physical stores, which is the second phase in our B2C strategy. The goal I have in mind is to create a truly omnichannel concept. These days, everyone is talking about omnichannel, but sometimes people don’t understand what an omnichannel operation actually is. I proposed VTEX to Tekmovil in order to connect all the physical stores, allowing us to sell from store, ship from store, and have cross-channel exchanges. We wanted to have a very strong platform that supports us in this roadmap. And this is just the beginning of our B2C model.
VTEX: Do you work like a normal company in terms of structure?
Cristian: Yes and no. We as an area have been up and running for just three months and our team is small, with only seven people. We are divided in five different areas. The first one is Commercial, which handles product margin, sell out and inventory management. Then we have the Conversion area, which is basically UX/UI. Thirdly, we have Digital Marketing, which is more focused on performance. Next, we have Payments, concerning everything in terms of PMO and CIP. Lastly, Operations covers warehouse logistics and the customer service call center. But we also work with a cross functional area of supply chain, which eases our daily management of these areas.
VTEX: Since the nature of Tekmovil is B2B, why implement a B2C operation?
Cristian: I see it as part of Tekmovil’s expansion plan. Specifically with Xiaomi, they saw a big opportunity: in China, Xiaomi is the third biggest ecommerce site, after Alibaba and JD. They are in the Top 3 despite being just one brand, unlike Alibaba and JD. That definitely caught Tekmovil’s attention, because they were thinking to leverage Xiaomi’s success in China and bring it to the Latin America region. That’s when they started to look for someone that understands the industry.
VTEX: And what do you perceive to be the main challenges of a Chinese brand entering the Mexican market?
Cristian: Sometimes it’s very hard to explain to big brands that the behavior of the consumer in another region or country is completely different from what they are used to. It’s a different maturity stage of the industry and the brand has a different position in the market.
VTEX: So there is also an internal process of adapting to this new model, right?
Cristian: Yeah, totally.
VTEX: Talking about B2B, is it operating on the traditional model of sales reps?
Cristian: Yes, mostly because our most important client is América Móvil. But we need to be prepared for the B2B. That’s another reason why I chose VTEX. I mapped all of the advantages that we have with such a platform so that I can go at any point of our strategy and see what we can gain. For instance, we can have a sales force of people, similar to Uber drivers, who only need a smartphone to sell our brand. They are not our employees, yet they are making money through word of mouth. We are actually looking to implement this in phase four.
VTEX: How would you evaluate Tekmovil in terms of digitalization? Is it a digital-first company?
Cristian: With the current digital transformation, Tekmovil is on that path. One thing that I need to praise our C-level about is their honesty and openness. They said they will unconditionally follow my direction because they are not experts in that area. I think it’s amazing that they are so transparent, and this liberty helps me a lot. But it’s also a lot of work.
I joke that I am preaching the word of digitalization, like an evangelist. So I need to explain everything. Not just the technology, but the thought process behind it. We are doing baby steps, we are trying to set up some “town halls” so that our own team can learn what ecommerce and omnichannel mean. But, as a company, we are very open to these new ideas and to these transformations.
VTEX: Such an environment and culture are highly important for undergoing a digital transformation at Tekmovil, you’re definitely lucky to have them! How many people are working at the company right now?
Cristian: Around 80-100 people. We are present in seven different countries: US, Mexico, Peru, Chile, Bolivia, Colombia, Dominican Republic. Our headquarters are in Miami.
VTEX: An awesome expansion for such a young company. What about the evaluation process, were you evaluating VTEX against other platforms?
Cristian: No, actually. I had the opportunity to work with, for example, PrestaShop, VTEX, Demandware, Magento, Shopify. So I already knew the biggest players. A personal opinion is that in the end, the platform is less important. Because the most important thing is to have strategy before technology, and I had a clear vision that I wanted a cloud based platform.
What is more, I also knew that for the next three, four years, we want to operate everything with an omnichannel mindset in order to deliver an authentic 360 consumer experience. I didn’t have to research a lot in terms of platforms – I already had a really good relationship with the VTEX team in Mexico. We’ve been part of the group that have been pushing for the industry to grow in the last 10 years. So I`ve already known Roney Almeida and Alex Colin.
I also knew the tool, I had the chance to implement it while I worked at Julio and since then, I was following VTEX’s development process very closely. I was very clear from the get-go that Tekmovil should have a platform that gives its digital transformation all what VTEX has.
VTEX: And, once the contract was signed, how was the kickoff process?
Cristian: It was a seamless kickoff. Because, again, we have known the team for a long time. Ever since the first presentation, I’ve explained the strategy, the roadmap and its different stages, my plans for B2C and marketplaces, our own .com, the way I wanted to manage the inventory and to oversee the business model from our end. Our partner agency, Vinneren, which is a certified partner of VTEX, was involved in the conversation and the negotiations since the beginning. They also have a great relationship with the VTEX team, so it was all very smooth. We did the kickoff, and five weeks later we were up and running.
VTEX: Did the pandemic play a role in your going live so fast?
Cristian: Actually, no, the time remained the same since the beginning. Our time to hit was the Hot Sale, which is one of the most important commercial moments in Mexico. I planned to go live then so I could announce to the world that we arrived. It’s the moment when the consumer is more aware of purchases, so I wanted to leverage it. On our end, we created the front end experience and the UX/UI that we wanted to deliver to our consumers, we handed that to our agency and we said “guys, we have five weeks, it’s in your hands”. And that’s basically how we launched the project.
VTEX: Did you work with an MVP mindset?
Cristian: There was an MVP that we called the 1.0 version. We brainstormed with the agency about how to clearly explain our expectations and compare those with VTEX’s feasible outcomes. We found our middle point, the MVP, which we stressed is non-negotiable.
On a daily basis we are constantly upgrading and adding all the functionalities that we desired. But from Day 1, the experience was the one we always wanted to deliver. Most importantly, it’s very seamless for the consumer to buy. We also planned everything with a mobile-first concept and went one step further when thinking about the PWA. In short, we try to design our mobile site with a look and feel similar to an app. For example, our menu is on the bottom on mobile.
We are currently in version 1.2, but we are working to release the 2.0 in a month and a half, because the next country that we are looking to launch in is the US. There, the consumer is more experienced, so all these improvements and enhancements we’ve been doing are towards one that fits such a different market.
VTEX: So the plan is to launch in the US before Black Friday?
Cristian: Yes, that’s the idea, but we actually plan to launch in six different countries this year. Our launch dates keep in mind the most important commercial moments in every country, such as Black Friday in the US and Cyber Monday in Chile. I believe these key dates to be the most important acquisition campaigns in terms of consumer and databases.
VTEX: And how did the Hot Sale and the launch go?
Cristian: Compared to our normal days, we grew 10 times. On top of that, we had a 200% attainment of our forecasts. It was great.
VTEX: Even VTEX had an increase in website traffic during the Hot Sale, so retailers won a lot.
Cristian: Yeah, it was crazy. There are some studies that show a growth of 900% compared to last year’s Hot Sale, and this trend is important given the cost of the pandemic. There are a lot of new consumers going into digital, so the results are great for the industry.
VTEX: How do you measure the performance of your Business Unit?
Cristian: We are measuring five or six important topics. There’s revenue, of course. Other main KPIs include average order value, traffic conversion, bounce rate… But then for each area we have different KPIs. For example, for Operations, we are measuring the delivery date.
The next step is to take a deep dive into the consumer behaviour. I consider myself a customer experience freak. That is why I always try to analyse the data obtained from the call center. For instance, I saw that 80% of our messages were related to “Where is my order?”. As such, we started over communicating to the consumer; they receive around six or seven messages and emails to offer them more visibility regarding the status of the order.
I think that every commerce, every retail, every operation is totally different, therefore there are no written rules that you necessarily need to follow. In our case, however, perhaps we don’t need more and more traffic, nor more and more people. Instead, I think it’s better that the people already on the platform convert more.
So I’m very, very focused on customer experience and finding solutions to particular problems. And I also want to share this kind of knowledge and these working principles to the entire team so that in the future they can continue to put the consumer first.
VTEX: In the context of results and KPIs, how often do you look at dashboards?
Cristian: Daily at some, hourly at others. Every morning, I have a 15-minute touch point with my conversion and commercial managers to review results and understand customer behavior. For instance, we noticed last week that, on a day without any promotion whatsoever, the revenue increased three times. Something must have happened, like the product temporarily going into a lower price. These meetings help identify these events.
VTEX: What tools are you using to gauge these discrepancies?
Cristian: We use Google Analytics and the VTEX back office. My opinion is that it’s not necessary to have 20 different tools connected to thousands of data if you cannot handle and manage and leverage that information. So what we have right now is more than enough.
VTEX: Where is Tekmovil investing right now as they are looking towards the short term future?
Cristian: Tekmovil is investing in a continuous digital transformation, which I think is the most important. As a matter of fact, in our last so-called town hall, our C-level declared that the future is digital. They are aware of that. As a company, we are also trying to win more space with our partners in digital, but a brand always wants to be in the physical points. As an industry, we represent between 6-10% of the total retail revenue in Mexico, so there is room to grow. But while we invest in all these things, the underlying focus remains on digital.
VTEX: And, looking back, what are the main learnings Tekmovil derived from this first phase of digital transformation?
Cristian: Firstly, I got a confirmation about my previous point that strategy is more important than technology. Secondly, clarity and communication across all cross functional areas is needed, cause sometimes you may talk to people who do not know the industry processes or terms and maybe your expectations might not be aligned with what they understood and will deliver. Thirdly, I received validation that we are on the right path. We are learning everyday based on our mistakes and our opportunity areas. We will keep pushing and we will continue to prioritize our consumers.
VTEX: Amazing. Thank you so much, Cristian, that was incredibly insightful.
Cristian: You’re very welcome. Thanks for having me!