Originally aired on September 29, 2020 @ 4:30 PM - 5:00 PM EDT
Clarus Commerce helps retailers build premium loyalty programs and customer experiences. Derek Sasaki, CTO of Clarus Commerce, will be in the spotlight to share their journey with Cloudflare.
English
Birthday Week
Customer Spotlight
Hey everyone, my name is Derek Yee. I am part of the product marketing team here at Cloudflare and I am joined by Derek Sasaki for today's customer spotlight on Claris Commerce. Welcome Derek. Thank you Derek. Thank you for having me. Excellent. So you're going to be the first customer that we have in our spotlight series as part of our birthday week series. So welcome and why don't we start a little bit, tell us about yourself, who you are, your role at Claris and I would love to learn more about Claris Commerce in general. Sure, I'm Derek Sasaki. I'm the CTO at Claris Commerce. I've been at Claris for about two and a half years although I've worked on and off with the company for many years. My background is primarily in e -commerce. I've worked at stock photography companies online, medical media company, on the energy sector too, so sort of bounced around but played a lot on online web and e-commerce there. So Claris Commerce is the only company out there focusing solely on premium loyalty programs. So what I mean by premium loyalty, these are paid subscription loyalty plans that retailers have to take them to the next step. You know, most companies these days are looking at free loyalty plans. They may be sort of these points based. I think if you ask most people, they probably have a handful of loyalty cards in their wallet or on their phone and they don't really know how many points they're earning, how they use them and those programs are ubiquitous but they don't actually drive as much loyalty. So premium loyalty is a paid version of this but you get real-time benefits. There may be discounts in store, online, it could be free shipping, it could be premium access to different services and it really helps drive companies to bring people back to the site to increase visitor retention and maybe AOV, average order value there too. You know, we're starting to see more premium loyalty type programs come out there. Of course, there's Amazon Prime which most people think of as just, I get my two-day shipping but that really is a loyalty program that's driving you back there and now they've added additional benefits with video in there. Walmart Plus was just announced recently, restoration hardware. So we're starting to see some more attraction around the premium loyalty side and that is sort of what we live and breathe. We've been doing it for many years and we provide sort of full service for our retail partners. Got it. So when you think about a retailer, right, so like the department stores, you know, yes I feel because Amazon's introduced Prime and like so many more consumers are shopping online, it's really sort of the perfect storm to be able to like learn as much about your customers more so than just typical walk-in traffic. So you see more and more retailers when they're recognizing that yes, this is valuable to do. Is there a tendency for them to try to build and develop this themselves versus going to a company like Claris to be able to build and maintain and support that for them? So it's sort of a mix there. I think what is interesting is as more traffic has gone online, it's much easier for a visitor to just click to a competitor or go somewhere else. So as companies are going more online, they're really looking to loyalty and how to get people to come back to their site. So a lot of the retailers though, this isn't their main focus. They're on procurement, fulfilling of their products and selling to their customers. So a lot of retailers don't have much in-house knowledge. So they do come to us because we can provide the full service. So everything from helping to design their program, we support the full technology stack. We even do the customer service calls. We will help with branding and design. We have a full in-house graphics department that can be online. It can be print. So people who are in stores, we build banner ads and things that they can showcase in their takeaways by their POS system if they need to do that. Likewise, if someone does have some internal experience or department, we can then just support them in their initiative and provide our background in the service. So we really customize depending on what our client's existing capabilities are and what their needs are. Got it. So you guys are really in, when you talk about building a loyalty program, you can do everything nuts to bolts as far as providing the back-end infrastructure to support it, doing anything that's front -end facing in terms of branding to integrate with a customer or retailer's existing sort of website and such. You guys really kind of deal with the whole part and parcel offerings. Exactly. And so some of our partners came to us with just sort of the general question of not knowing much about loyalty. So starting sort of ground up versus other companies that may have had a free points-based program and now want to go to the next level. And now we're looking for us to support their existing system and then add a premium loyalty program on top of that. So all of that, when we do our systems, we support the full portal and we integrate back into with their system. So it's a seamless user experience. And we try to do a lot of the heavy lifting on our side. We know retailers, internal IT departments tend to be very busy, again, focusing on selling the product and procurement and shipping. So the more that we can do to make the onboarding process as easy as possible is really sort of how we attack each of our partnerships. Great. Now, as we sort of enter, I say enter into, but I think it's been almost six months or more since we've kind of moved into sort of this new reality where we are in a pandemic era as such. I know when Cloudflare first went into looking at sort of the surge in Internet traffic that's happening in terms of the types of sites and what we see happening online, and we see more and more people, I mean, as if they weren't already shopping online, you guys probably serve as a great vehicle given that you have sort of measure visibility into what our retailer sites see. And have you guys noticed any increase in the past six months that's above average? We have. Almost all of our retailers have seen increase on online sales, even ones with large retail brick and mortar presence. A lot of them went to buy online, pick up in store, and those things were still happening online, the initial transaction, but the actual delivery was in store in that hybrid. So we saw a very large pickup sort of early on in the COVID time. It's leveled off a little bit, but depending on which industry analysts you sort of subscribe to, they're saying it's a three to five year acceleration to online. So we're definitely foreseeing that this trend is going to continue from now holidays and beyond. So it's something that has also started to bring more sort of inquiries into our business because the retailers are seeing this move online. Maybe retailers that weren't considering it as much now really have to, because if they were just brick and mortar and weren't able to take credit cards or orders online, they were really hurt by everyone going work from home in the COVID pandemic. And the need's even more compelling to really establish loyalty. So when you think about brand loyalty, I mean, unless there is a product that they can only get from one retailer that doesn't exist anywhere else, I mean, shoppers today have just become so, I wouldn't say the word, desensitized into which particular retailer or vendor they're buying things from because blame Amazon or however you want to call it. I mean, they're shopping based on price. I mean, they don't even know who it is that they're actually purchasing these things from. So. Exactly. So by having these premium loyalty, it really brings the customer in closer to that brand. And not only is it just price, but the service level of it can be increased too. So some of our partners by being a member of the loyalty program, they may offer a dedicated 800 number so that you can get in to customer service or order, reorder quicker that way. So I think that's also been one of the challenges. People feel that when they go in store, you have a more personalized touch and experience with someone and you lose some of that online, but a premium loyalty type of program could add those same benefits. So you get a higher touch, better quality experience for your premium members. Yeah. So you look at your role and you guys really provide, help provide the infrastructure, the underlying web infrastructure for a lot of these retailers. As you start seeing surge and traffic and transactions that are taking place online in your role, since you are sort of the oversee of everything that's happening over at Plaris and ensuring uptime and availability, et cetera, what are some of the key challenges or issues and whether that's due to the pandemic or just in general that you think would, yeah, you guys probably experienced and you're pretty much darn well bet that there's other people like you that may have experienced some of the same types of challenges. Sure. So because we tie to the retailer sort of seasonality, we do have a pickup. So we're getting, going into our busy time of year. So it's we're sort of really ramping up and if focus, it seems like we may be starting early for November, but this is the time to make sure all of our ducks in a row to really plan for that big ramp. Amazon just announced that prime day is the 13th and 14th this year. So that's later. And that's kind of compounding onto the normal holiday season. Normally it's in July. And some people feel like that's actually going to be the kickoff of the holiday season this year when after prime day launches. So a real seasonality type of business is always tough because you have to build for that spike peak, which may only be a couple hours of a couple of days a year, but you need to have that full infrastructure so that the user experience is same, whether you're coming in on a, you know, just a regular day or you're coming in on a black Friday, cyber Monday type of event sale, when everyone is trying to take advantage of the sales and offers out there. And from a retailer's perspective, I mean, they're doing everything they can on their end to make sure that they're all buttoned up and ready to go. They can't afford to be the loyalty part of the program is being a thing that is sort of the missing link if something falls through. So they're just more concerned overall with the entire experience of the consumer as they go through their site, right? Exactly. So we're the service provider for their loyalty program, but it needs to be a seamless experience. So we have to have the same uptime and availability and experience that the retailers have on their main site. So it's a, you know, we're coordinating with them on all the time. We have a full client services team that's dedicated to each of our partners so that we can work with them and we'll know, Hey, they're doing an email blast on this date and time. And then we can just make sure that everything is situated properly to handle the increase in orders and transactions and logins for them. So we're in constant contact with our partners, making sure that the user experience is optimal for everyone. Got it. So speaking of user experience, so you guys have been with Cloudflare for, I want to say maybe about a year, maybe less than that. Talk to us a little bit about the journey of what brought you to Cloudflare. Sure. So we did start doing our proof of concept a little less than a year ago. And then we finally transitioned everything over in January, February of this year. Again, that holiday time period where we couldn't change anything during our peak season, but we switched from, we started doing our testing early on, making sure everything was lining up before we actually did the full migration there. So since we do support these portals for all of our retailers, we have over a hundred URLs that we're managing. Before we migrated over to Cloudflare and we were hosting DNS somewhere else, then we had a different web application firewall system. We were looking to consolidate. Also Cloudflare is best in breed there. This is our perimeter. So we want someone that that is their main focus is making sure that everything is up and running and smooth. So those were sort of our main initial reasons for looking at Cloudflare. What we found was Cloudflare's customer service was much better than our previous experience. We love the ability to have universal changes like blocking IPs and things before we'd have to go into each individual URL and apply some of these changes by being able to make global changes because we've got over a hundred URLs. This just made it much easier from a management standpoint there. So that was another big benefit for us when we moved over to Cloudflare. And to piggyback on that, as we onboard new clients, we are able to lift a lot of the configuration that we had in the global Cloudflare configuration, rather than standing a new site up and then having to step through our whole checklists every time to onboard a new client. So that really was another good time saver for us. Got it. I always find it's interesting when we speak to the outside world about what Cloudflare does, usually the first word that comes to mind is CDN. And obviously you guys are using our standard caching capabilities. I think that's just sort of part and parcel of what we do, but it sounds like the big driver for you initially was from a manageability standpoint, you've got several domains that DNS was just an easy way to be able to bring this into a provider that can migrate that for us. And the fact that integrated into that is this sort of first layer of protection that the WAF provides that really sort of gave you ease to onboard the fact that you can apply global settings and just makes it much easier to maintain in the longterm. And it sounds like you didn't really have that with your previous provider. Exactly. So as we grow and scale, this is something that I'm focused on is trying to keep things simple. So bringing DNS and the web application firewalls, CDN all in together, one place to manage it. And the Cloudflare UI is also much easier than our previous vendor. So it's much easier to go in and find the things and oversee it. So as we double, triple, hopefully 10X our number of partners there, we're not having to add 10X staff to support it because the tools in the interface are great. Our system is primarily in AWS and also bringing on a new site is actually a lot easier to integrate with AWS than our previous provider, where it was a two-step process. And there was sort of timing things that we had to work out. Here, we can go in, like you said, you have DNS, the site is all set up as a quick way for us to cut things over if we need. And then the edge cache, of course, you guys have just tons of locations, pushing it out there really helps with overall site performance for our end users. Got it. So I know what we had talked to earlier about some of the things that you're doing with Cloudflare. So we're seeing a lot more traction when it comes to some of the investments we're making with serverless and specifically around Cloudflare workers. Given the position of what you do, so you guys are actually maintaining these sites for various retailers that host their loyalty programs. What are some of the things that you're doing with workers that might be worth sharing on today's call? So it was very exciting for us to be able to take care, take advantage of workers for a large deploy that we were doing. So we were migrating one of our flagship sites and decided to try to mitigate the risk by doing a canary deploy. So the idea is rather than just cutting over 100% of traffic to the new version of the site, this allows us to just sort of direct a certain percentage of traffic to the new site. And that way we can sort of start seeing any issues, whether they be server issues, site performance issues, business issues, and really test the water and slowly increase the amount of traffic that goes on. It makes a much better user experience and de -risks the whole process for us. So what we were able to do is use the workers to actually do that determination of how we're funneling the traffic to the different websites. It was great because we didn't have to do it in the back end code. So the engineers could focus just on building the best website that we need to build. And by it being right at the edge there, serverless, it was quick. I mean, we were looking at the stats and it's 10, 15 milliseconds added to the overall load versus if we did on the back end, it probably would have been a much higher payload to go in. So the worker just comes in every request, it generates a random number, stores it in a cookie, and then depending on what our percentage of cutover is, it directs to the correct farm of web servers. So far, so good. We're still in the middle of the actual deploy, but it's been a really great experience. The amount of code has been very small. And again, we've kept that outside of our main infrastructure and websites. So it's something I think we'll definitely use again in the future. Oh, that's awesome. I've heard similar scenarios where you talk about what our customers have done. It's just simple A-B testing, say for specific pages, but now you're taking this to an entirely new level where on one level, yes, it's providing a level of A-B testing, but this actually allows you to have the new site actually up concurrently with the old site, and you're just completely randomizing the request traffic that comes through. And then you're basically cookieing that person. So we know that every experience that they have is directing to that specific server that's hosting the new. So this is sort of your test deployment. And that way, you're actually getting real-time live traffic coming to that site versus just doing like testing in a staging environment as such. Exactly. And it allows us to easily, if we had to roll back, thankfully, we haven't had to do any of this, but it's not a whole, we have to redeploy the old version of the site, roll back all the code and everything. This really allows us again to just move that needle as we need, and we can just step it up as fast or as slow as we want. So if along the way we find something that's concerning, we just sort of pause a little bit, investigate, and when we understand what's happening or fix anything, we can then start moving forward to get to the full 100% deploy. So it's been a really exciting process for us, and this is the first time we've done it. And I think if we hadn't had the workers, I don't know that we would have been able to do it because it probably would have been a fairly significant lift to do on the back end there. Yeah. I mean, I've heard that time and time again too. It's like a lot of people like going to workers because this is infrastructure that it's basically infrastructure less in some levels because you don't really need to have to manage that. You're simply writing a logic function that sits on Cloudflare versus you having to build something out on the back end, which it's a far more disruptive process to be able to have to build, maintain that over the longterm. So it's really just on the fly being able to spin this up. Exactly. It's sort of that separation of concerns. The website shouldn't know there's another version of itself there and how to direct the traffic. We push that all the way to the edge and that decision-making is independent of the websites. The websites just focus on doing what they need to do. Got it. Now you mentioned that you're using cookies to be able to track this. I know we kind of talked a little bit about this given that just yesterday, I know you were paying attention to some of the birthday week announcements. DurableObjects was one that sort of struck your attention. You want to share some of your thoughts on that? It's not released yet. It's still in beta, but what are your thoughts about the workers DurableObjects? I think that's super interesting as we were chatting earlier. I wish it had come maybe a couple months earlier. It could have been something we integrated in with our Canary deploy here. The idea of having some session-like object in there so we can track and monitor some of these things a little better. I think we could have incorporated that into the Canary deploy process, but by having DurableObjects, it does, I think, bring the workers to that next level where you can build a little bit more sophisticated processes right in the serverless and it's right on the edge there. So it's super fast, both for the client side, but also from a backend server side that it's really helpful for building these different solutions that may come down the road. So I'm excited for it. I haven't really shared it with the other engineers on the team because I just saw it earlier today, but I'm sure it's going to come up in our next ARC session as, hey, now I think people are going to start thinking about this as maybe something that could be used in a future build. Are you guys doing much with serverless in general, whether it's Cloudflare or maybe Lambda or any other type of provider or technology? Is this something that you guys are looking more closely at as far as further investments? It is. So we do have some Lambdas in AWS going. And similarly, they tend to be very narrowly focused areas here. So as we expand a little bit more into serverless, these are things that we're going to take into consideration. We do want to, as I said, our traffic is very seasonal. So the idea of having serverless to help with the scaling is something that's very interesting to us in the long run. But the state managing sessions and things definitely makes it a little bit harder to just jump full into serverless. So that's where the durable objects is interesting. Got it. So again, let's talk about, so great, there's stuff that's coming on with workers. As you saw, today's announcement was around web analytics. So maybe we can spend a few minutes just talking about the premise of that solution in general, and maybe how that can impact Clara's columns. Is that something that you guys would be interested in? I think it is something interesting. I took a look at the blog this morning. I think it's interesting. It reminds me a little bit of the old urchin web analytics days where you processed your daily web server logs to get these statistics. So right now with Google Analytics or Atelium, something like that, you're doing it on the client side. So there's all this potential for things not firing or where you're collecting that data. You're going to the server logs is great because you know exactly what the server is serving. However, now if you're doing caching of a form, your server logs may not actually be completely accurate. What you guys are doing by putting on the edge is again, everything, all the traffic is hitting your system. So you're able to really log and capture all that information. So I think it's definitely something that we're going to consider. We're going to talk to our marketing operations department about that. They tend to live and breathe these analytics and I think it's something they're going to find very interesting that they can go in and dive into the different areas of the website. So I definitely see it as another tool that we're going to use when we're looking at all of the different data that we're getting for the different websites. Yeah. And in particular, I mean, I think we've come to an age where, you know, privacy on the Internet about how data is collected. There's more and more sensitivities around that that existed maybe even like a year or two ago. I mean, we know there's a prevalence of GDPR, you know, California has their own sort of data privacy laws in place. And I think one thing, and I don't know if you guys have seen this or if you can measure this is, has there been any kind of drop off in terms of the average consumer now has become so attuned to tracking cookies, things that are being used online. We know the prevalence and the increase in prevalence of things like ad blockers, which again could potentially, if you're talking about millions of users now implementing those types of things, that it's going to actually skew if you're using solely dependent on client side sort of tracking for these analytics, right? I don't know that we have a firm, you know, percent of how much it is affecting, but we do know it's affecting our analytics and other tools there. You know, as you mentioned, ad blockers are one of them, but they're more just a home, you know, computer privacy tools that users are doing to block cookies or change their experience there. So we are seeing it, you know, we are GDPR compliant and CCPA, you know, we do work in the UK and, you know, California did just come up this past year. So we are dealing with that and we are hearing that there are concerns out there around privacy and data. So it is something that is bubbling up on our radar and something we are addressing sort of across all of them. So this is a way that we can make sure that we are, you know, it's one less thing that we have to worry about with data potentially getting outside of our network and control. So we know these numbers are, you know, completely free of any of the PII that may be, you know, covered under GDPR or CCPA. Got it. All right. So we got a couple of minutes left. So maybe a couple of questions I'd kind of throw your way is given that you guys, you know, within a year have sort of recently signed on with Cloudflare, I understand holiday season is coming up. So there's a lot of lockdown that's in place in terms of adding anything new because you want sort of like you have a resilient, you know, predictable environment. What are some of the things that you guys are exploring beyond what you're doing today with Cloudflare that potentially maybe 2021 would be some areas that you'd be investigating? So security as we've gone work from home. So we went full work from home starting March 13th. You know, it's really sort of expanded sort of where our sort of, you know, threat vectors can come in. So, you know, we are really looking at cybersecurity endpoint type security out there. And then just there've been a general increase sort of in overall web, you know, attacks and hacking going on. Maybe it's because more people are home and have more time to do this. So I know that's something that you guys focus on a ton. And we really love being able to leverage all the work you guys are doing, because it seems like they're constantly, you know, coming up with new ways and new attacks to try to go after people and websites. So I'd say we're spending a fair amount of time on that. As I mentioned, sort of earlier on, you know, the trying to simplify things, I think, you know, in this age where there's just so many different options out there, you can look at AWS and Azure, all the different features and services that they offer. It's so easy to just start trying to pull everything off the shelf. And now you're trying to stitch together and hold together this very complex system and architecture. So where are those real key, you know, services that you can really leverage to get the most bang for your buck there. And it goes back to Cloudflare, where we're getting DNS, we're getting edge caching, you know, we're getting the web application firewall workers. So that is simplifying our overall environment, helping us to sort of reduce our maintenance as we look to scale. So I think those are probably two areas that I'm really sort of focusing on as we go probably the next 6-12 months. All right. All right. So one last question for you. Here's a pop question, sir. You're at a, whenever we get back together, you're networking with your peers, you're talking to maybe a CTO from another company, and they're asking, oh, so you guys are on Cloudflare. So why did you guys use Cloudflare? Like, why did you sign on to them? What would be your answer? My answer would be just the simplicity, the focus on getting it right out on, you know, protecting the web and, you know, edge caching there. So it's just, it's been a no-brainer for us to bring others. I've already recommended to other CTOs and businesses to use Cloudflare. And then customer service, I'd say, is also that, you know, quick follow -up there. All right, Derek, that's all the time we've got. Appreciate you joining us today, and we'll hope to have you again soon. Perfect.