 Live from Las Vegas, Nevada, it's theCUBE. Covering IBM World of Watson 2016. Brought to you by IBM. Now, here are your hosts. John Furrier and Dave Vellante. Hey, welcome back, everyone. We are here live in the Mandalay Bay. This is SiliconANGLES theCUBE, our flagship program. We go out to the events and expect the signal noise. I'm John Furrier, my co-host Dave Vellante, our next guest is Basil Massoud, who's the Chief Digital Officer of Staples. Welcome to theCUBE. Thank you. So Chief Digital Officer of Staples, massive site. What kind of statistics do you guys do in terms of volume? I mean, how many hundreds of millions of visitors you guys get? Serious e-commerce, serious digital, digitize the business, what's the amount of stats? Yeah, so we're the fourth largest e-commerce business in the world based on the internet retailer rankings. Roughly 250 million unique visitors a year for Staples.com alone. And then we also have other sister sites, quail.com, staplesadvanish.com, staples.ca, Canada. So pretty significant in terms of size. We obviously have a very heavy B2B business. 85% of our customers are small businesses, small and medium-sized businesses, and the rest are consumers. So slightly different to what you see in the typical e-commerce landscape. Show my age here. I'll talk about some of the old IBM e-commerce. They called it e-business back in the day. They're on the web. Staples also had a web presence going back to the original web. But now we've evolved to the point where it's all-cloud, a lot of microservices, a lot of DevOps. Where are you guys at on that transformation? Obviously you guys are a lot of pressure. I mean, certainly it's hard to swap out from having a couple servers, build a data center, over provisioning a lot of bare metal to looking at a more horizontally scalable infrastructure as you guys have multiple brands, and a ton of traffic. How do you guys deal with that? What's the current state-of-the-art for Staples? Yeah, really good question, right? We still are a little bit recovering from the past, where as I would say, they're still based on a data center framework today. Quickly moving to the public cloud. Components have already moved over. So we're taking parts of our domains across the staples.com platform search, our taxonomy, taking our SKU pages, all moving to the cloud, and being a lot more agile. But at this stage, yeah, the pressure's on, and we've tried to create a lot of services, a lot of APIs inside of the platform, in order to release as quickly as possible every other week. So when people say, oh, just easy, just move to the public cloud, just lift and shift, whatever the, it's really hard. It is. Talk about how challenging it is. You kind of want to have a risk management approach. I get that, but it's just not it. Just press a button. There's no easy button for that. I wish there wasn't an easy button for that, but there isn't today. But again, a lot of the applications we run on need to be compatible in order to do that. So we're on our way, and we'll get there pretty quickly. Talk about the role a little bit. Just generally, and then specifically at staples, you've got a logistics background. Obviously, there's a technology component. There's transactions you've got to manage. You've got a big team. Talk about the role specifically at staples, and then sort of generally in the industry. Yeah, so great question. So I arrived about three and a half years ago, and my past experience was pretty much all consumer, coming into staples. And the role was originally termed Chief Digital Officer because it was a two-part role. One was the cultural digital, how do we go to digital? One was the, well, what do we do with all these assets that we have? So I'll talk about part one first. So when I arrived, as you can imagine, the company was a traditional retailer, B2B seller. So injecting that digital mindset, how the journey begins on mobile, and it can end anywhere else, we're agnostic to that. So really building out our omnichannel capability across the stores, across our mobile platform, and really becoming agnostic end-to-end for the customer to go and purchase anywhere they want. That was the single biggest, you could call it hurdle challenge, whatever, but it went really well. Now today, we're probably one of the most robust omnichannel retailers out there where you can accept returns, buy, pick up, do whatever you want. You can showroom, ship from our stores. Anything you want can be done within our stores or on our apps and our devices. As far as my role is concerned, it's pretty broad in the sense that I also own customer service globally, so we power all our sites and locations. My personal background, how I'd fit in was, in my career, I've, last 17 years, worked from traffic acquisition all the way to returns. So I think that's what Staples was kind of looking for, somebody who'd done every component of that. Customer, acquisition, transaction, pre-shipment, post-shipment, returns. Having done all of those components at other companies, it definitely helped with the role. In the mobile platform, is it predominantly or exclusively consumer-facing, or is there another mobile component for the supply chain? It's a really good question. What we found when I first got there was, although we have a very large segment of our population that's businesses on desktop, it's actually the reverse on mobile. And we quickly realized that, how are we going to manage to those customers? Because our store customers, 50% of them are consumers. So you can't not serve those customers. So we have to create an environment that's highly personalized and caters to exactly what they want. 50% of our customers are searching. They're coming in and they're hitting search. So our goal is to just give them that search with whatever accuracy and precise result so they can be in and out. So we launch Apple Pay, we've got Visa Checkout, we've got a lot of components to it to make it easier. The business side, for instance, at the stores, we use mobile apps to do a lot of our transactions. We shift from store, pick up at the store. A lot of those are on handheld devices. And is the forecasting component part of your organization as well? Or is that? It's, I mean, everybody's organization has some forecasting, but no, that lives on our supply chain team. Right, okay. Talk about the DevOps mindset. We were talking before we came on about Agile. You mentioned it just earlier on the segment. E-commerce with digital now, highly authorized around big data. Using A-B testing now, with analytics you could have, A-B-C-Z testing, variety of different campaigns. How do you guys optimize the user experience? And how do you guys handle the sprints? How did you bring that culture in? Just share some of the mechanisms that you guys have done. What would you like to share? That's another good question. So for us, the biggest thing that I wish, maybe I found to be the most largest opportunity at Staples is when I arrived, we were a very project management culture. So it was a one and done. There was no owner. And this is not just Staples. This is across all of retail. You don't have product managers. You have project managers. So the first thing that I did was when we installed the team, we brought a lot of folks from the outside who had worked for me previously. We installed a product management organization, essentially going from, let's go launch this feature and goodbye, we're never going to see you again, to there's a product owner for the homepage, for search, for mobile, for our launching marketplace, returns. They own the product. They get to down deep. They think about it. And they have roadmaps that go all the way out to 18 months to two years. So they've got a sprint schedule that's lined up, teed up with their technology partner. So we work in these pods where you've got the technology partner, you've got the product owner and you've got the PMO that work together. And that's kind of how we prioritize. One of the things I want to bring into, not to go down on a tangent, but one of the things we just had at the Grace Hopper Women Tech Celebration and the STEM was, everyone talks about they added the word A in their esteem for the arts. Talk about the role of the graphic artists because you're seeing that infiltrate because you guys have design criterias for user experience, certainly mobile. It's hard to get that footprint screen size to be elegant and relevant. So talk about the role of art and the art of design. Yeah, so we've gone back and forth on a couple of things. One is just adaptive, responsive, like how do you cater to that and then how does art sort of design show up on that? In the past, it was more about give the right context and text and price and everything else will come. We've spent a fair amount of time on creative. We have depended a lot on agencies for that just because it's nimble, it's faster, we can execute a lot more work out of it. We did acquire a company in New York called Maker, M-A-K-R.co. They are a design and an app company and they brought a lot of design talent with them. They've got over a million downloads of their app today. You can design your logo right on the app. And that creativity is kind of flowing through. We made a bunch of acquisitions. Those are helping us move towards more design thinking. And having a product mentality, the one and done scenario is not going to work in this kind of user experience expectation where it's always evolving. Absolutely, and one thing is the brand identity. Like we know that we have this brand that here's the brand guidelines, I get that. Then there's UX, but then there's UI. And the thing was when I came to Staples, the clarity of where the dividing lines were was not very clear. It was what creative doing this and who owns UX, who owns UI. So the big opportunity that I felt that Staples gave me and the leadership gave me was, go ahead and define this and then we'll help you. Break down those stovepipes or siloes and then agile makes things go much faster. Absolutely. All right, so how about this easy button? I saw a tweet from Ian Guilter, Staples CDOU explaining how Watson is powering the easy button. First of all, everyone wants an easy button in the cloud. So with data, you can make things easy. You have more access to potential predictive analytics, prescriptive analytics to create product experiences. What is the easy button for you guys mean for Staples and what's the role of IBM in this? You know, when I first saw the easy button and heard about the six million sold when I got there, first I was just shocked. Like, why are people buying these? Well, they're buying them because it actually means a lot to them and it was so iconic, right? It was so iconic in its nature. So the team got together and we said, how do we give life to this thing and make it useful? Rather than just a, you know, that was easy. Which is by the way, amazing, amazing marketing scheme. So the idea kind of generated from there and then we have such a strong partnership with IBM that when we described to them what we wanted to get done, it was literally, it was meant to happen. The ultimate goal for us is six million sold. A lot of them are assistants who use them. I don't know how they use them today but it sits on their desk. They press them. For us, it's a natural transition. Remove that easy, put the real one there and we'll take over all your tasks. So when we say with the assistance assistant, that's truly what we want it to be. So you guys are building in a kind of dynamic workflows, if you will. Underneath what you see as patterns. Think about a marketplace underneath. Imagine a marketplace where you have multiple service providers that are plugged into the easy system. Carpet cleaning, window cleaning, catering, restaurant. Imagine just fast forward 18 months. You know, set my alarm, tell me the traffic. What's the weather like? Order my post-its. Think of all those tasks that today somebody just drops off with John or Jackie. Hey, order this. Hey, can you get this? It's just one click and you're done. It's not just there. Our app will have the same functionality and you can text the same service. We believe that conversational commerce is going to be huge, not just in consumer, also in business. So the complete transformation of the experience for the consumer. You know, you envision sort of the state of the art last 10 years has been, you think of, you know, the wine site. You go to the wine, what kind of wine you want. You do the pull down. You're talking about a complete transformation of how I interact with that system. And that's coming soon? So our alpha is releasing next month and we've got our beta testers going out there after that. This is the actual button itself. And then soon once we get the results, and obviously Watson's going to play a big role in this, once the results start coming in and we learn more, we're looking at next year to do a full rollout. But our goal is to stay pretty open sourced, keep adding services underneath. And our objective here is to make the office of the future possible. If you roll back to when phones first came out, Microsoft tried to put the Windows mobile inside a phone and people don't use a phone like they use desktop, right? So it didn't work. Same with when the first TV streaming came out. It was very hard to navigate. In this use case, we're going to find out very quickly in six months, you know, what do they like? How do they want to interact? Do they want far field, near field? Do they want to click the button? Do they want to listen? We can get all those questions. And the funny part is on our app today, we already have bots running that are powered by Watson that are answering basic questions in seconds without having to pick up the phone, make the phone calls. So I think there's a lot to be learned here, very early stages, but we're happy to be here. How are you training Watson? How does that whole process work? It's a lot of training. So we've got the Watson tools and we're creating a tons of attributes within the tools, the entities. And obviously you can imagine for us, entities intense are, I want, I need, but then the entities are brands, products, think of color, size, dimensions, variations. We're loading all of that. And to be very honest with you, we're teaching Watson a lot that Watson's going to go give to other people. So there's a bit of a balance here, but we believe that it's the right thing to do. And if we don't coach it, it won't give the right results. Oh, I've seen that like Apple with Siri, everyone kind of can use that as a practical example. Voice activated and or automation underneath, and text is pretty easy if you have, frequently asked questions, you can go right, that's easy, that's low hanging fruit. Where do you see the dots connecting going forward on the automation? Obviously customer service is one. Customer service, so I run customer service. Predictive ordering, hey, you're going to run out of ink soon on the printer. I think much more than that. I think that the application of Watson, let's go beyond sort of the consumer for a moment, the end consumer. Let's move to internal enterprise, HR. You can profile your employees. You can look at their patterns of how they send emails, how they interact with other employees. Which meetings they attend, which ones they blow off. What are their calendars look like? What's their behavioral patterns? I can see a different application there, CMS. We see huge application for CMS. I think Watson can help us with CMS and content building for SKUs. We went from 30,000 SKUs to 2 million SKUs. We've had to build a lot of that manually because it's crowdsourced. Watson can help build that content for us. I see it as almost a sort of an operating system for e-commerce, if it's possible. We can actually create an operating system. The true digital assistant, if you will. It could power our search. It could power our taxonomy. It could create pages for us on the fly based on the behavior of the customer. There's a lot of opportunity. We're going to just keep testing and learning. I want to ask a personal question around your job and folks watching might be looking at it and saying, hey, you know what, you've been immersed in digital. You brought that culture to Staples around Agile, which is kind of taking shape obviously with innovation. And you got the Watson easy button, all kinds of other cool stuff going on. People are really trying to figure out right now, how do I digitize my business? It's pretty obvious from the top CXO level down. It's pretty obvious. We've got to get there. Bottoms up, it's always hard to move the inertia of existing, pre-existing, either legacy. But it's really clear that you can measure everything now in the first time in the history of the world that you got to measure everything. Advertising, gestures, customers. What advice would you give folks who are trying to figure out that digitization, roadmap, plan, playbook, best practice? That's a really hard question, but I still want to answer it. You've got one minute, go. I still want to answer it. I'd say have extremely thick skin because you're going to be shut down many, many, many, many, many times. Just because they say no doesn't mean no. Changing culture is very, very hard because it's institutionalized inside the organization. And the advice that I would offer is bring new blood into the company. Identify talent that's in the company that's no one's listening to, but they're super talented. And then just put some runs on the board. Because the moment you put some runs on the board and you can see the results coming in, it creates a lot of inertia. Get the ball rolling. Absolutely. You can't be looking for the Microsoft Vista to be launched 10 years later where nobody wants it by the time it's out there. Just launch the microservices, launch the small wins. So when people see you've got the wins, people come along. What does microservices do for that movement? Just gives them short, how does microservices translate to short wins? I think- Application compatibility? Yeah, I mean launching applications, taking simple things, for instance, when I first arrived, we had the entire homepage was static. There was not a single piece of automated content on that page. And we started introducing automation personalization on the pages and revenue started showing up immediately, right, through the A-B test. Those are the little- Wins. Wins that we're talking about. Then removing 14 clicks to check out to two clicks to check out. Improving images from 60 by 60 to 200 by 200. Taking search results from taking six seconds to two seconds. Login to half a second. These are things that immediately had results on conversion, customer experience, less negative feedback, more positive feedback. Sales, enabled by microservices. So it's a speed to value. Absolutely, absolutely. And the deployment cycle being shorter is also, but again, I want to go back to the product management culture is the critical component in making this out. If you don't have a product leader, very hard to have that roadmap and vision to go execute. And I think Staples leadership enabled that. Right, because you're right. Traditionally everything's a project. You do the beginning, middle, and end, and then you throw it over to IT to maintain it. And then when it crashes, oh wait, they've left. That's great to have your story here on theCUBE. Really appreciate it. Chief Digital Officer at Staples. Thanks so much for joining us. Thank you very much. I appreciate it. You're watching theCUBE here, live at the Mandalay Bay in Las Vegas for IBM's World of Watson. You're watching Silicon Angles theCUBE. I'm John Furrier with Dave Vellante. We'll be right back with more live coverage after this short break.