Today we’re going to look at the impact of social media on product demand and inventory management with Riikka Söderlund, COO at Katana. We’ll explore the double-edged sword of viral products and how sophisticated inventory management can serve as a crisis management tool.
Riikka Söderlund is the chief marketing officer at Katana Technologies, where she is responsible for demand generation and day-to-day marketing operations. From transforming how some of the biggest brands and companies utilize technology in their marketing, to using data driven insights to produce exceptional results for B2B SaaS and media groups, Riikka applies her expertise to holistically design scalable strategies that move the needle for Katana and its customers. Today, her knowledge helps small and medium-sized businesses uplevel their operations, contributing to the $2 billion in annual sales order volume that flow through the platform.
Resources
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Transcript
Greg Kihlstrom:
Today we’re going to look at the impact of social media on product demand and inventory management with Riikka Söderlund, COO at Katana. We’ll explore the double-edged sword of viral products and how sophisticated inventory management can serve as a crisis management tool. Riikka, welcome to the show.
Riikka Söderlund: Thank you for having me.
Greg Kihlstrom: Yeah, looking forward to talking about this topic with you. Why don’t we get started with you giving a little background on yourself and a little bit about your journey to becoming COO at Katana.
Riikka Söderlund: Of course, I’ve been I’ve been working in marketing for two decades now on both sides of the table with B2C marketing, but then more recently in this B2B space. And yes, now as the chief operating officer here at Katana and also overseeing marketing my baby still, of course, as well, and really found Katana through the mission that the company has that resonates so well with me with enabling entrepreneurs with small businesses in navigating this space of selling not just on social media, but on all the different channels that they now have at their disposal, and helping them navigate that complexity.
Greg Kihlstrom: Great, great. Well, yeah, so let’s, we’re going to talk about a few things here, but I wanted to start by just at a high level, getting your perspective on how you’ve seen the landscape of social media impact product marketing and sales.
Riikka Söderlund: Oh my gosh, it’s so so many ways. It’s a big question.
Greg Kihlstrom: I realize.
Riikka Söderlund: Okay, I feel that I’ve been in the industry for two decades. That means that I graduated like almost 20 years ago. So I came into the business, right when all the social media platforms were first being introduced. So the change was massive from the kind of more traditional marketing into, oh, all of this conversation is happening online, and customers all of a sudden have a voice. And all the way then into this world where we’re now at where social selling and not just the multitude of different channels that brands have to navigate, but also the different types of customer engagement points that they have there and different types of communication and opportunities to bring their brand and bring their products to customers. It’s just, it’s massive. The amount of complexity that brands now navigate Oh my gosh, it’s humbling. So that yeah, the change has been absolutely profound. And I also don’t think that it’s ending anytime soon.
Greg Kihlstrom: Yeah, yeah, agreed. Agreed. Yeah. And yeah, I mean, first, it was, you know, e commerce in general. And, you know, I remember early days of social media. I think a lot of brands were struggling to really understand even the best ways to market. And now we’re at the point where sales and social commerce and things like that are kind of the standard. So lots have changed. So let’s start here with this idea of the viral product phenomenon and talk a little bit about advantages as well as some challenges. I mean, it’s it seems like only good things for your product to go viral. But you know, there’s also some challenges along with it. So, you know, first, let’s start, you know, what are some of the immediate benefits when a product goes viral on social media? And you know, how does this sudden popularity impact company sales and brand visibility?
Riikka Söderlund: Yeah, exactly. I think I think it’s important to note that products going viral isn’t actually a new phenomenon. It just happens a lot faster in the social media landscape. So it’s really the speed of things that is making life a lot harder for retailers or brands when one of their products or one of their brands goes viral. obviously, it great news, you’re happy that the one product got that lift, and you’re able to sell, maybe even sell out with that one product. But that’s when then, of course, the problems start, if you sell out, then what, typically, manufacturing a product is a long process, like we’re talking months. So getting that back in stock, and still capitalizing on that momentum is extremely hard. But the way that there is more benefit to a brand is, of course, if you’re able to capitalize on the moment by creating a halo effect to your other products as well. So the biggest benefit is really on the brand visibility side, and making sure that all of your product portfolio is getting that viral moment and benefiting from it so that it’s not just tied to any one single product.
Greg Kihlstrom: Yeah, yeah. And then conversely, you know, you touched on this already, but want to talk about a little bit more is, you know, I’ve I’ve experienced this of that no customer likes to click on something, get excited about buying something and then find that it’s out of stock and not really, you know, when it’s a very large brand, it’s like you have some reasonable assurance that it’s going to be back in stock soon when it’s kind of a niche. or smaller brand, you don’t really know, because to your point, the manufacturing process is, you know, it takes time. So, you know, what are what are some of the, you know, some of the challenges from from the brand perspective? How does this affect the customer experience?
Riikka Söderlund: Yeah, exactly. I mean, and the customer experience obviously isn’t great if the product is sold out. But imagine that the customer most likely then also goes to a competitor. So actually, it is actually costing you if you’re not able to provide that information of when will we be back in stock. But for a small company, that is actually a really hard challenge to tackle to be able to tell when will they have the product back in stock. Because a product is a complex thing. It has components, it has ingredients, it has raw materials. It consists of multiple moving pieces. So it’s not just a question of, well, how long does it take to ship the product from my warehouse to the store or to the customer? It’s actually how long does it take for me to get all the different ingredients or raw materials that I need shipped from all the different vendors or suppliers that I have, and then actually manufacture the product and then actually get it to the consumer. It’s a multi-step process that gets infinitely more complicated when you have multiple sales channels to navigate as well.
Greg Kihlstrom: Yeah, yeah. And to your point, for those smaller, I mean, even for a large company, it’s still a challenge. But for smaller companies, there’s just more moving pieces, more things to keep track of. And this leads to the next point of inventory management. We’ve talked about crisis management on this show before, but from a very traditional standpoint of, you know, crisis communications, PR, media relations, all of that, but because we’re talking about this negative customer experience that might happen and We’re talking about social media. So people that are excited about buying something and all of a sudden, very suddenly disappointed that it’s not available with, you know, there’s a, there’s a crisis management component here, in other words, to inventory management. And so I want to get your, your thoughts on this, you know, how does an inventory management system like, like yours, like Katana provide solutions for companies that are dealing with this, uh, you know, rapid scale of demand and, you know, potential issues if, if they can’t deliver.
Riikka Söderlund: Yeah, exactly. I think the, the vital success stories that social media has brought, uh, with it are really bringing marketing and product and inventory closer. or at least they should be, because to your point, it is a customer relationship management challenge. You have to be able to communicate with your customers and provide the service of letting them know when it’s back in stock, letting them know if you had it, but you have backlog in shipping them, when will it arrive, and making sure that you’re able to fulfill customer needs that are ever growing is very much a communication challenge. But I feel sympathy for the marketers, of course, like they need to know, they need to have this information at hand. And for a smaller company who is just kind of experiencing this rapid growth, that information typically lives in spreadsheets, or even like Post-its and notebooks. And it’s it’s not centralized anywhere. What inventory do I have? What raw materials do I have? How long does it take for me to reorder things? And where do I reorder them from? It’s the complexity. that you can handle in a smaller scale with spreadsheets, and it works fine. But as soon as you start to grow rapidly, you will start to need this visibility into all of these different moving components in one place, instead of having it spread out in the manufacturing areas, in warehouses, in your sales office, everywhere. And that’s really what a system like Katana is providing for small and medium-sized businesses is that visibility to just know what you have and when you will need to reorder in order to be able to provide the customer service that your brand requires.
Greg Kihlstrom: Yeah, well, and I would imagine that. I mean, obviously, we’re when we talk about viral, you know, things taking off very suddenly, like the something like that is, is critical. But I would imagine it’s also just any any organization, large or small, but you know, a small organization not doesn’t have a lot of people Managing these things. So to your point, there’s, you know, how many spreadsheets depends on how many different outlets they’re working with and, and, and a few other factors. So I would imagine something like Katana would be helpful, even if, you know, even for those that are listening out there that are not are like, well, I, we’re not necessarily going viral, but we still have a lot of demand and there’s, it’s, it’s getting harder to keep up. I mean, would, would you say that’s true?
Riikka Söderlund: No, absolutely. We’re talking about the extreme example here of a product going viral, but the less extreme, totally predictable example is approaching fast and it’s called Black Friday. It is incredibly difficult to anticipate the demand that you will need and be sure that you don’t have stock outs during what is the kickoff to a high volume season. you can’t sell out on Black Friday, because you still have multiple weeks of holiday season shopping ahead of you. So this kind of fluctuation in demand, it’s business as usual in a social in an in an environment where social media drives so much of consumer behavior.
Greg Kihlstrom: The last thing I want to talk about is just, you know, the strategic planning aspect of this. So, you know, whether it’s viral product demand or, you know, to your point, the holiday season, there’s still going to be a spike and there’s going to be a lot of people looking out there on social media for products and gifts and things like that. So I wanted to start with you know, what strategies can companies implement to better prepare for and, and respond to, you know, sudden spikes in product demand when we’re talking about, you know, again, whether it’s holiday or viral or whatnot.
Riikka Söderlund: I think there are two answers to that question. And it’s actually kind of a chicken and egg situation in the sense that First thing obviously is to have all this information in one connected platform. And super important that that platform is actually then also connected to all your other systems. So things like your e-commerce, what uses your inventory information if it doesn’t connect to your e-commerce in real time and into all the social media channels in real time. or let’s say your accounting systems, again, having that real time visibility comes from connecting to the entire tech stack that you have at hand. So that’s absolutely crucial. That’s the first step. But then the second step that you are able to take after you have that system in place, you’re of course able to start to use technology and machine learning and even a sprinkle of AI to learn what the demand is going to be based on historical trends. So planning and forecasting your sales volumes and integrating that into your processes of when do I need to set, for example, reorder points, for some of my inventory, because I know that these fluctuations in demand will be occurring. So technology will start to actually help you more once you then actually get going. So it’s that the first the first step has to happen before you can then start to implement strategies that really help with these peak season.
Greg Kihlstrom: Yeah. And I, you know, I would imagine you’re, you have a unique perspective as well, being, you know, a marketer now in the role of a COO. So probably gives you a pretty good perspective on both the demand side and the, you know, the acquisition side, as well as the operational side. So I’m wondering if you could talk a little bit more about I know you’ve touched on this a little bit already, but how does a system like Katana enable companies to adjust operations in response to some of these unexpected changes?
Riikka Söderlund: Yeah, well, I think the clearest example, of course, is manufacturing. If you are manufacturing the products yourself, which often is the case, a product that actually goes viral, it’s something unique, something you can’t get anywhere else. So it is something that you yourself are manufacturing. That manufacturing process requires raw materials, but it also requires people, or perhaps it requires machinery or something in order to create those processes. to have all those different resources in sync at the same place at the same time. Not too much because you of course don’t want overstock either. That will be very expensive. Inventory is the most expensive piece in your P&L. So making sure that you have exact the right levels is really crucial. And the smaller the company, the more crucial that is because you simply cannot afford to make mistakes with your processes, inventory levels, raw materials, or human resources. So the planning piece becomes extremely crucial.
Greg Kihlstrom: Yeah. Yeah. And what about timing here? You know, how important is, is real time data in managing inventory and, you know, especially dealing with these, these spikes in popularity.
Riikka Söderlund: I think it’s everything. Viral product is the great example of you can’t have a system that, for example, syncs every day or syncs every 15 minutes. When you have a situation where consumers are trying to buy your products, every second. I mean, we all know this happening in a bigger scale with, for example, you know, concert tickets or again, Black Friday is a good example of this, but that’s what happens when a product goes viral. The amount of purchase orders that you get in is too big not to have real time data. That’s simply a reality in today’s fast paced world. It’s the speed of things that requires and forces also small companies to adjust to very quick operations.
Greg Kihlstrom: Yeah, yeah, yeah. And so I mean, I would imagine those those companies that are still operating on Spreadsheets, I mean, that’s, I mean, that’s next to impossible to keep up. Even if we’re not talking about a viral situation, if we’re talking about holidays, or just even just extra busy times, let’s say that just it becomes quickly unmanageable, right? So the real time just kind of, I guess it helps regardless of the demand and the capacity, right?
Riikka Söderlund: Exactly. I mean, it’s the times are long gone when you could actually work in a kind of a 24 hour cycle and where the customer actually walked into your store and personally spoke to you to give their order. I mean, that’s just now not how this omnichannel world works. Brands do need to adapt to this new reality.
Greg Kihlstrom: Yeah. Absolutely. Well, Riikka, thanks so much for joining today. One last question for you. Last thing I want to talk about is future developments and future trends. So, you know, you’ve been working in this space and certainly are seeing some trends in both the inventory management side as well as the social media marketing side of things. So, you know, what trends are you seeing at that intersection of those things right now?
Riikka Söderlund: I think the, the kind of the biggest trend that’s important, especially for the more smaller or medium sized businesses, not, not the big enterprises. is to really be close to the customer, really understand what is it that they are asking, what is it that they need, and be quick in responding. So kind of what I was talking about from marketing and product being close to each other, but also vice versa, bringing those market insights to products, because in many cases, products are the way to market, especially in social media environments. So Bringing that loop really, really tight will be key for brands to success in the future. And I do believe that AI can of course help not solve it for you, but at least manage the information flow as well as then the complexity that ensues. I guess, yeah, complexity is then the other big theme that I’ve been talking about throughout this, uh, this entire conversation. it’s not gonna get easier. We won’t have less channels to navigate, we won’t have less options for consumers. It is a game of managing complexity and the brands that are able to do that in an efficient way will definitely be the winners.
