Meet Albert Chow, the Co-Founder and CEO of Silk & Snow, a digitally native retailer of thoughtfully made sleep essentials, ranked as one of Canada's top-growing companies by the Globe & Mail and Canadian Business and joining Endy and Casper as a recent addition to Sleep Country's fantastic roster of properties—a great story of inspiration and perspiration, a true Canadian eCommerce and soon-to-be physical retail success story.
Welcome to The Voice of Retail. I'm your host Michael LeBlanc. This podcast is brought to you in conjunction with Retail Council of Canada.
Meet Albert Chow, the Co-Founder and CEO of Silk & Snow, a digitally native retailer of thoughtfully made sleep essentials, ranked as one of Canada's top-growing companies by the Globe & Mail and Canadian Business and joining Endy and Casper as a recent addition to Sleep Country's fantastic roster of properties—a great story of inspiration and perspiration, a true Canadian eCommerce and soon-to-be physical retail success story.
About Albert
Albert is the Co-Founder and CEO of Silk & Snow, a digitally native retailer of thoughtfully made sleep essentials, which has been ranked as one of Canada’s top-growing companies by the Globe & Mail and Canadian Business for four consecutive years. Albert led Silk & Snow to an eventual acquisition by Sleep Country, and is now part of Sleep Country's senior leadership team. Prior to starting Silk & Snow, Albert led technology-driven change at some of Canada’s largest retailers, including Loblaws, Canadian Tire and TELUS.
About Michael
Michael is the Founder & President of M.E. LeBlanc & Company Inc. and a Senior Advisor to Retail Council of Canada and the Bank of Canada as part of his advisory and consulting practice. He brings 25+ years of brand/retail/marketing & eCommerce leadership experience with Levi's, Black & Decker, Hudson's Bay, Today's Shopping Choice and Pandora Jewellery.
Michael has been on the front lines of retail industry change for his entire career. He has delivered keynotes, hosted fire-side discussions with C-level executives and participated worldwide in thought leadership panels. ReThink Retail has added Michael to their prestigious Top Global Retail Influencers list for 2023 for the third year in a row.
Michael is also the president of Maven Media, producing a network of leading trade podcasts, including Canada's top retail industry podcast, The Voice of Retail. He produces and co-hosts Remarkable Retail with best-selling author Steve Dennis, now ranked one of the top retail podcasts in the world.
Based in San Francisco, Global eCommerce Leaders podcast explores global cross-border issues and opportunities for eCommerce brands and retailers.
Last but not least, Michael is the producer and host of the "Last Request Barbeque" channel on YouTube, where he cooks meals to die for - and collaborates with top brands as a food and product influencer across North America.
Michael LeBlanc 00:04
Welcome to The Voice of Retail podcast. My name is Michael LeBlanc, and I am your host. This podcast is produced in conjunction with Retail Council of Canada.
Meet Albert Chow, the Co-Founder and CEO of Silk & Snow, a digitally native retailer of thoughtfully made sleep essentials. Ranked as one of Canada's top-growing companies by The Globe & Mail and Canadian Business, and joining Endy and Casper as a recent addition to Sleep Country's fantastic roster of brands—a great story of inspiration and perspiration, a true Canadian eCommerce and soon-to-be physical retail success story.
Michael LeBlanc 00:35
Let's listen in now.
Albert, welcome to The Voice of Retail podcast. How are you doing this afternoon?
Albert Chow 00:41
Good. Good, Michael. It's great to be here. Thank you for having me on the podcast.
Michael LeBlanc 00:46
Well, thanks for joining me on the mic. Now, where am I finding you this afternoon?
Albert Chow 00:50
So, today is a Friday and it's very warm in Toronto.
Michael LeBlanc 00:57
It's all relative, though. I just got back from Orlando and it's not warm here, Albert, let me tell you, it's -
Albert Chow 01:02
Oh, wow.
Michael LeBlanc 01:03
And it's warm, I have friends in Texas, who, you know, they just passed like some crazy number of days above 100. So, it's all relative. Let's, let's, let's get past the weather report here.
Let's talk, let's talk about you, tell me who you are, a little bit about your background and what you do for a living.
Albert Chow 01:21
Yeah, so I am the CEO and one of the co-founders of Silk & Snow which is a leading digitally native retailer of thoughtfully made sleep essentials. So, a little bit about my background, I started in technology. One of my first careers was as a consultant for one of the largest technology and management consulting firms called Accenture. And for me, I always had a passion for retail. And I spent a large part of the last two decades consulting for some of the largest Canadian retailers on technology driven change, including Canadian Tire and Loblaws.
Albert Chow 02:01
So about six years ago, I met up with my co-founder, Kenneth, who is a longtime school friend of mine and he also spent a lot of time in Canadian retail and at the time, what we were seeing was a lot of sameness with the larger retailers, there was a move towards a lot of white labeling, mass production, fast fashion style of merchandising, and this is kind of what motivated Kenneth knight to found Silk & Snow in 2017.
We were both in the Toronto area, as I mentioned earlier, and we really discovered the mattress industry almost accidentally, as we found that the entire supply chain for the mattress industry was kind of right here in our backyards. So, we found everything from the manufacturers for pocket coils to textiles to people who make the comfort foams and cotton. So, so, there was really a small ecosystem of mattress manufacturers that was located within a five, five-kilometer radius within where we were located.
Albert Chow 03:06
So for us, we really decided to take this ecosystem of manufacturers to make 100% locally sourced and made mattress and by working with the heritage manufacturers and a local supply chain, what we felt was that we would create a higher quality product and we would be able to stay closer to them and, and ensure that there was a lot more thoughtfulness and sustainability in their processes and over the years we've really taken this model is partnering with other heritage manufacturers to expand our product line and sleep space. So, in the last four years, we've been consistently ranked as one of the fastest growing companies in Canada. And at the beginning of the year, in 2023, Silk & Snow was acquired by Sleep Country. So since then, we've joined the Sleep Country business as part of their senior leadership team.
Michael LeBlanc 04:00
Great bit great business, right, I mean, they've just been doing so well, you're not I don't think you're the only bright entrepreneurs that they've, that they've come into contact with and have joined the family. Let's, let's take a couple of clicks back. So, I think the origin is as well. I've got a bunch of questions. I think the origin, some of the origin is, did I read that you started with Kickstarter? Like how did you, I want to delve into that, like, so a couple of you obviously skilled in, as you said, more in technology with retail. So how did you come across, first of all, the idea that the sleeper category specifically was tired. Can we say that in the sleeper category, I guess that's been of a bit fun, but also, but, but also that, that you create a product and then and then talk about how you raise the money for it.
Albert Chow 04:47
Yeah. So I think the Kickstarter campaign that we ran was more out of necessity because what we were finding was that even as we approached these small batch manufacturing, you still had to run a decent size PO in order to get your first order and sure enough for us, we, we didn't know what this could be, we know that we could manufacture good product, we're very much in touch with the supply chain and, and we thought that we had a good product on our hands, but we didn't know what the reception from the customers would be.
So, we really use Kickstarter as a test like a lot of other entrepreneurs did. It's probably there that we really discovered how to become marketers, rather than people that knew how to build a website and operate a retail business and we really learned from that what the community wanted, how, how we could get the right messaging across to, to really explain the product that we were, we were producing and, and really got our first little start from, from that campaign.
Michael LeBlanc 05:56
So, let's talk about the scope and scale, now. You're part of Sleep Country now, but what did you get to, like, you've talked about some core product and product extensions. Do you sell within Canada, do you sell coast to coast, do you sell beyond Canada? Talk about that a little bit.
Albert Chow 06:12
Yeah, so we currently market within Canada and the US and we do a fairly good business on both sides. Over the years, like when we started, we were a mattress in a box company, and we were really in a very crowded space. Like we joined the, the, the mattress industry in 2017, a few years after a lot of the larger brands started. So, we, we discovered we were doing that well and that was probably a blessing in disguise. We realized that it was a very crowded space and there was a lot of sameness and one of the things that happened there was that it really forced us to think of how we would differentiate ourselves as a business. So, over the years, we've really been able to apply that heritage manufacturing and small batch principle to expanding our assortment across a number of different products. So right now, we, we do an equal amount of business in selling mattresses to bedding to furniture.
Michael LeBlanc 07:14
Yeah, I see that as bed frames. Tell me about who your customer is, who's, who's shopping and who's buying, what do they look like and what are they looking for and are they look for something different and how did you find the-, mostly tell me about your customers.
Albert Chow 07:27
I would say that for our customers, especially in our industry and this is a term that gets used a lot. A typical person that walks into a mattress store looking for a mattress, we consider a grudge purchase. So, they're typically customers that don't want to be there. They hate doing it, but they have to do it because there's trying to solve a particular problem. So, an example would be their mattress reached the end of life or they're having back pain, so it's very problem oriented.
Michael LeBlanc 07:57
They probably reached the end of life five years ago, now they're just grudgingly acknowledging it, right, that was the case, it was the case for my wife and I, we were like, how old's this mattress again, because it really doesn't feel good. Next year.
Albert Chow 08:11
You sound like a typical customer, they tend to try to stretch it out a bit, but yeah, I think for us, when, for us, we felt that, you know, that was a very unpleasant experience and we wanted to kind of focus on a different type of shopping experience. So, for Silk & Snow, we focus on more of an inspired purchasing experience where the customer really focuses on, on the aesthetic and the very thoughtful curation of, of our products and we want to be aspirational, and have the consumer focus more on the quality and the beauty of the aesthetic of our products rather than the fixing a particular pain point. So I don't know if it comes across on the site, but one of the one of those subtleties is that a lot of the products are a little bit more cohesive, we don't just randomly select colors that are on trend or, or that sell as individual products, we really want to focus on selling the entire space and curating a typical look so that the customer can come back and purchase the whole space rather than a particular product.
Michael LeBlanc 09:20
Yeah, I'm on your site now. It's great. It's quite well done. Not surprising, given your background but also the merchandising is quite, it's quite nice. It's quite evocative in terms of, you know, merchandising around as you said that one looks for the, for the room. So that's, that's super interesting and, and how do you build business in the States? That's a competitive market. So, tell talk about that a little bit and then I want to get to the, what you're planning for the future, but let's just hang on that for a bit, but how do you, you know a lot of people go to the states and it's a little bit of a pure play killing ground if you're not careful. So, talk about your success there.
Albert Chow 09:54
It is. It is and I think a lot of D to C's struggle with that, because the cost of acquisition is so high, the logistics of getting set up there and the volumes you require are a lot higher. So, for us, we, we've been able to inch into the US over the years, very gradually and I think what's kind of protected us is that we've been able to keep our cost of acquisition low. One of the problems with the mattress industry is that it's very expensive to acquire customer and a bigger problem is they actually, it's very difficult to get a customer to come back, like if your product is good, they're likely not coming back for another seven to 10 years to replace that mattress and if you're lucky, maybe they have a second bedroom, and they need that, but the repeat purchases are few and far between.
Albert Chow 10:43
And so, for us, in the early days of starting the business, we really made this conscious decision to focus on growing our brand through assortment and selling to the entire space and we, we, we do want to sell the mattress, but we also want to give you a reason to keep coming back. So, we do really focus on the aesthetic aspect and the curation aspect of our product lines ensure that, you know, once you have a Silk & Snow product or a Silk & Snow experience there's a reason to keep coming back and I believe that that repeatability of the customer and, and giving a reason for the customer to come back has really kept our cost of acquisition low. So yes, we do spend a lot acquiring customers, but we do have them come back and it's only helped us over the years.
Michael LeBlanc 11:35
So you're a digitally native vertical brand, I guess we could call it or digitally native retailer, talk about your thoughts around brick and mortar, I think I saw that you might be actually getting into physical brick and mortar. Of course, your partners, or Sleep Country has lots of brick and mortar stores, but what's your philosophy and how do you see brick and mortar fitting into your business model?
Albert Chow 11:56
Yeah, so we're, we're very, we've been very fortunate because we are digitally native, it's actually protected us a bit during the pandemic and allowed us to grow organically as a brand. With a digital focus. However, what typically gets lost in the digital brand is you do have your products a bit commoditized with the sea of sameness that you compete with, with other, other brands and as I mentioned earlier, we really play in a very crowded category. I believe that bricks and mortars is, is an important part of our growth strategy. A lot of our products are inspired purchases, and they are still very tactile in nature.
Albert Chow 12:42
Even though in our space, there's a lot of e-commerce companies, I believe that 85% of the purchases still happens in bricks and mortar and I just believe that on the e-commerce side, it's just part of the journey, what we're finding is that a lot of customers are discovering your brand online, but if they had a-, if they could choose they would rather purchase and finish the purchasing journey at a physical location. So, for us, I think it is an important part of our growth strategy and it is something that we are focused on, on growing as a channel.
Michael LeBlanc 13:16
I mean, it's interesting listening to describe how you think about bricks and mortar, because some would approach it as in, it's going to help me have a different cost of customer acquisition, right. So, it's hard to get a lot of leverage out of the platforms anymore, right, it's hard to do better than anyone else. So maybe you might find the right real estate in the right mall, and maybe that'll lower my cost of customer acquisition, because the mall basically has to pick up some of the heavy lifting to do that, or maybe on a main street or some might shake, say it's more showroom. It's more a media play to get people to buy online.
How do you, how do you look at those two things, is it, is it that, is it that and yes or is it, listen, I want people to come in here be inspired and walk out with a translation like is your key metric of a store or stores, you know, sales per square foot or do you have some other kind of metrics in mind that that tie more organically or holistically to customer acquisition and lifetime value?
Albert Chow 14:11
I think it's a little bit of both, like if I if I kind of break up the two points. I-, what we've been tracking is that people that do interact with our brand, on a physical level, they do convert a little bit better, or I shouldn't say a little bit better, they convert a lot better.
Michael LeBlanc 14:27
A lot better.
Albert Chow 14:28
So, a physical space to us is a, a conversion tool it, it definitely resonates with the customer more and it's, it's a much easier purchasing journey and so that's what we've seen in our data. The other thing is that, and I know Michael, you're from the Toronto area, so you must have come across like a mattress out of home ad from one of the other brands and they're-
Michael LeBlanc 14:56
One or a hundred, sure.
Albert Chow 14:57
That's right. That's right and, and I think That's a very expensive game to use traditional media, but,
Michael LeBlanc 15:03
Well, it's hard to win that. I mean, it's, you know, it's like a utility, almost, I mean, it's just very hard to win.
Albert Chow 15:09
Yeah.
Michael LeBlanc 15:10
Right.
Albert Chow 15:11
I think it's a, it's a tool that you can grow very quickly and gain awareness very quickly, but it is very difficult to and hard to measure to get a return on that, but I think on a physical store level, I mean, we're paying for at home ads the same amount that you would pay for some of these rents that we're considering at a physical level. So, we do consider it as also an awareness play, and then it does drive awareness for the brand, but on top of that, we have the added benefit of a conversion play as well.
Michael LeBlanc 15:44
So how many, how many locations would you use to see in the next 24 months in, in Canada? For example? Are you thinking a handful or major acquisition? Are you still kind of figuring out how many, what kind of physical presence is the right fit for you guys?
Albert Chow 15:58
Um, if I, if I gave my number, I might scare my Sleep Country colleagues, but I think for now, the way we're looking at it is that we are focused on opening up our first store within the next three months, but
Michael LeBlanc 16:11
That's great, you gotta start somewhere, right, got start somewhere.
Albert Chow 16:14
That's right. That's right and we really are looking at it to kind of test the model of what will work and what won't, but,
Michael LeBlanc 16:21
And you know, I mean, by this, by the work you've done in your past career, you know that running stores is a very different thing than running websites, like-
Albert Chow 16:30
Oh yeah, yeah, I think it's a much longer game, it's, there's much more of an operational aspect to it that needs to be scaled out, but I think it will take time, but ultimately, like, if we're just doing it for the one store, it's not going to be a success. The idea is that we do have a scalable model here, and that we figured out what's the perfect model to work with.
Michael LeBlanc 16:53
Fantastic Well, let's shift gears a little bit. Let's talk about product innovation. What innovation looks like product development. You know, great retailers are always having an eye on, on the future. How do you guys approach it? You know, what's your, your trade craft of creating the next popular product, do you have customer feedback, intuition, great merchants, the alchemy of all those things, talk about how you approach innovation and product growth and merchandising?
Albert Chow 17:18
Yeah, so I think we approach it in two ways. We never, kind of, go too far off from what's core to our business. So, we, every year, we have product roadmap that we continue to expand our product into the adjacent categories. So, we wouldn't be selling mattresses today and then selling suitcases, but we do try to move forward and kind of give a reason for customers to come back. I think for our, kind of what's core to our products is just the thoughtfulness that goes into each of the designs and especially the aesthetic and ensuring that it's cohesive, so that if they buy a so console product that when they come back and purchase another one that the aesthetic of the products do work together.
Albert Chow 18:07
And I think more importantly, one of the differentiators for us is just our sourcing, we tend to favor partnering with heritage manufacturers who have the history of making quality products and have a very ethical and sustainable manufacturing process. So, for example, our entire bedding line is actually manufactured in Portugal, and we don't use the same mass production manufacturers that a lot of our, our competitors use. It also allows us to stay closer to our supply chain and have better control over the quality and the end product, but sometimes it does give us problems and that these aren't, aren't manufacturers that can easily scale as well. So, we've had our share of supply chain issues with, with this type of model.
Albert Chow 18:07
Yeah, great, great, great country for textiles, right?
Michael LeBlanc 18:08
Portugal. Now I'm looking at your site, just since we're talking to product, I see flax linen. bed sheets. Tell me about, I've never heard of flax before, it's 100% European flax. So, what's the, just like, you know, get excited about the product, what's the, what's the features and benefits of putting flax into linen bedsheets, what's the, what do you get out of that and why did you make that choice?
Albert Chow 18:08
I think when it gets to the nuances of bedding, a lot of it is texture based. Flax linen is a a bit of a different type of material that is a little bit more airy, and textured and, and it also gives you this lived in look that a lot of our customers really love and it's very on trend, but on top of that, I think it's a very natural fiber and grows without a lot of usage of water and that's also kind of the eco consciousness that that goes into a lot of our product development is that it is a little bit more thoughtful and sustainable and something that, that is very much on brand for a lot of our product line.
Albert Chow 18:08
That's right.
Michael LeBlanc 20:00
And are you hearing that from the customer that they're looking for products that offer that because, you know, we, we read surveys where people say they're looking for certain things from companies and they seem to sometimes act differently, but do people care where the products made when, when they're talking to you, is that a big selling feature for you and is that a is that a sustain-, I don't know if it's sustainable, but is it a differentiator for you in the market?
Albert Chow 20:22
It's definitely a differentiator, because I think it's just so much harder to do, to be thoughtful about your supply chain, and really know where your products are coming from, and it requires you to be really direct with the relationship with the manufacturer. In terms of how our customers perceive it, I think, the black and white answers, they, they care if given two products, they, they would choose the one that's a little bit more thoughtful and transparent.
Michael LeBlanc 20:52
Too equally priced products, I mean, do you-, I mean, you're gonna get a price premium. I mean, you're not, you're a specialty retailer. So, there's a bit of a price premium in some way, shape or form, right, that your, that you need to get and that that you deserve, right?
Albert Chow 21:04
Yeah and I think the way we look at it is, it is going to be at as a slightly at a premium, but we will cater to the customers that are looking for something that's a little bit more unique and artisanal, where we probably don't want to play is kind of in that same sea of sameness, where if they're just looking for a commodity purchase, like,
Michael LeBlanc 21:26
Lots of places to shop for that.
Albert Chow 21:29
Amazon, and that's someone where we would never want to compete in anyways and I think it just kind of goes against our values of just being methodical and thoughtful about our products.
Michael LeBlanc 21:42
Well, you've had quite the journey. So, let's, let's move on to advice. So what, what advice would you have to fellow entrepreneurs and retailers listening the brands, and, and I'm going to frame it in a 'two starts' and 'one stop' and the kind of thing is, you know, start doing these two things and if you know, stop doing the following thing I've learned it either doesn't work, or I've seen other folks doing it and I don't think it's going to work. So just in the frame of, of giving advice, what should people think about and start doing?
Albert Chow 22:10
So, I think, with a lot of younger brands, I would probably suggest that they start thinking of themselves as retailers. A lot of young brands start off as e-comm these days and because it's a low barrier of entry and a lot of e-comm startups tend to think of themselves more as digitally native or tech focused and I feel that it.
Michael LeBlanc 22:37
Ask you if I could use that. That word.
Albert Chow 22:39
That's right.
Michael LeBlanc 22:40
Physical retail is like hey, no, I started this digitally native and we're not about retail, but I think it may be increasingly a distinction without a difference.
Albert Chow 22:50
Yeah, yeah and I think as you grow, you tend to encounter challenges that are what a typical traditional retailer would face and everything from growing your product assortment to looking at your business as more of an omni channel to how to get your customer acquisitions cost down to something that's a little bit more sustainable. So, I feel like there's a lot of B2C businesses out there that are reaching that point and it's probably good to start looking at that earlier, rather than just focused on one particular channel.
Michael LeBlanc 23:23
Right, that, and have that, have that mindset going in, okay, that's, that's your first start. Give me, give me a second.
Albert Chow 23:29
So, I would say, thinking about your brand identity, I know that it's saying the obvious, but it's important to have your, a real brand identity and know what your brand and product stands for. There is a lot of competition and sameness in any type of business and those that have, don't have, a brand identity will forever compete on price.
Michael LeBlanc 23:55
Okay. And I guess that's, that would be similar to what should they stop doing, don't compete on price, but any other tips or advice?
Albert Chow 24:02
Yeah, I feel like lately, this is more of an issue. A lot of D2C companies in the past have had access to very cheap capital and I would say stop worrying about what investors think at this point. I think every business should look at growing their business in a sustainable manner and as organically as possible. Being profitable never goes out of style and most, most acquirers these days, are looking at profitability and a path to profitability and consumers speak with their wallets. So, any profitable business would also suggest that they have a differentiated brand from the rest of their competitors. So, I would suggest that it's probably a good idea to just stop worrying about what investment or investors think.
Michael LeBlanc 24:52
Hmm, right on. All right, well, what's next, I mean, it's a funny question for i It's a funny question sometimes when they ask, fast growing and fast is moving retailers because it's everything's always next you've talked about looking to open a store, but you know, on your, on your whiteboard at the head office, what's next for you guys?
Albert Chow 25:11
Yeah, I think there's always like a million things you want to do, but you really got to prioritize what the team focuses on. So, I think for us having testing a physical presence and a physical store is probably the number one priority in the next three months, but I think outside of that, we just continue to look for interesting ways to expand our product line and we're constantly listening to the customer and, and trying to understand what they're looking for. So, over the next, I would say three to six months, we do have a number of exciting product launches that we're excited to get out there.
Michael LeBlanc 25:47
Well, I'm sure everyone will be excited to watch now they know a little bit more about the brand. Albert, thanks for joining me on The Voice of Retail podcast. It was great to meet you and hear your perspectives. Congratulations on your success so far and I look forward to that, that store opening up and that'll be a great new adventure for you and the team. So once again, thanks for joining me on the pod and I, like I said, wish you much continued success and a great rest of your summer.
Albert Chow 26:12
Great. Great. Thanks for having me, Michael. It was fun.
Michael LeBlanc 26:14
Thanks for tuning into this episode of The Voice of Retail. If you haven't already, be sure to follow on your favorite podcast platform so new episodes will land automatically each week and be sure to check out my other retail industry media properties Remarkable Retail podcast with Steve Dennis and the Global E-commerce Leaders podcast. Last but not least, if you're into barbecue, check out my YouTube barbecue show, Last Request Barbecue with new episodes each and every week.
I'm your host Michael LeBlanc, consumer growth consultant, president of M.E. LeBlanc & Company Inc., Maven Media, and keynote speaker. If you're looking for more content or want to chat, follow me on LinkedIn or visit my website meleblanc.co.
Safe travels everyone.
SUMMARY KEYWORDS
product, customer, mattress, retail, business, brand, years, sameness, manufacturers, retailers, brand identity, bit, growing, digitally native, mortar, store, focus, podcast, flax, joining