The Vitamin Shoppe's Andy Laudato on Building a Culture of Innovation

nnovation can be an architect of transformation, helping to build bridges from aspiration to accomplishment. A single misstep, however, and the entire structure can come tumbling down. With that in mind, how can leaders ensure their teams feel safe to take a chance, share their out-of-the-box ideas, and weigh up the risk versus the reward when it comes to innovation? In this episode, we talk all about this tricky topic with Andy Laudato, chief operating officer at the Vitamin Shoppe. In addition to his leadership role, Andy is also a published author, who has brought his 20 years of experience as a CIO to create a collection of lessons learned – and mistakes made – in the tech industry in his book, Fostering Innovation, How to Build an Amazing IT Team. Later in the episode, we touch on the recent insights shared by Andy on personalization and omnichannel, delving into practical steps for creating a supportive environment and nurturing a culture built around the three pillars Vitamin Shoppe lives by: quality, expertise and innovation.

Listen to learn:

•Why creating a culture of psychological safety is so important in retail and CPG.

•How The Vitamin Shoppe approaches personalization initiatives catering to its diverse customer base.

•How innovation extends beyond technology to products, processes, and the supply chain.

•How The Vitamin Shoppe builds a culture of quality, expertise, and innovation.

•The Vitamin Shoppe’s plans for AI-driven one-to-one personalization.

•How The Vitamin Shoppe is balancing both front-end and back-end enhancements for a smooth customer experience.

•Why failure is a valuable learning experience – sometimes more so than success.

•Why Q1 is a more important time of year than Q4 for the Vitamin Shoppe.

•How the Vitamin Shoppe shows its ongoing commitment to evolving technology for an integrated shopping experience.

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Excerpts

On pillars of innovation: “At the Vitamin Shoppe, we have three pillars that we all live by: quality, expertise, and innovation. So, innovation is built into our culture. It's one of our pillars. We talk about how important it is to innovate and innovation is in products. It's not just about technology. It could be about a new ingredient, new packaging, a new form factor, or a formulation of multiple ingredients. It could be a new process that we innovate with. In our supply chain, we have continuous improvement.”

On psychological safety: “For people to have a culture of innovation, one of the things that you need is called psychological safety. People aren't going to be willing to take risks if they're being punished. Now, that doesn't mean that we do nonsense. All the risks we take are well thought out. They're sensible. And every single thing we go into, whether it's product innovation, whether it's tech innovation, we only do things that we feel really confident are going to be successful.”

On purpose and pride: "One of the nice things that we have going for us is we all have pride in the mission. Health and wellness is really something that we feel great about delivering. And at the vitamin shop, we call our employees health enthusiasts, and that's all of us in the corporate, in the stores, in the distribution centers. We're all health enthusiasts and everyone's on their own health journey. We hire and people that care about the mission. They care about what they're doing. And so it's not just about some kind of technical solve or process solve. It's about understanding why.

Who are we serving? We're gonna make someone's life better, make it easier to buy products, make it easier to get good quality information. It's part of the expertise pillar. And so anytime we start something new, we put a team together and really focus. Simon Sinek said it best, start with why. We really focus on the why."

On omnichannel shopping: "Now we're evolving beyond omnichannel. At the Vitamin Shoppe, we have our website, vitaminshop.com: traditional, direct-to-consumer. We have all our stores across the US. We have buy-online-pickup-in store. We have curbside pickup. We have a drop ship program with an extended assortment. We have endless aisle. We just got voted, tied for third of omnichannel capabilities. We're so excited about that. But the next step is thinking of omni as meaning many channels is to evolve this seamless experience where these things all work in harmony."

On personalization: "When we get into technology, it's an exciting time to talk about personalization because it's evolving so quickly. I would say that we're in the early days of personalization with grouping different messages for different groups of customers. But we're spending a lot of our energy on understanding what's emerging with AI, where we're going to get to that one-to-one personalization. [...]

When you buy something at Vitamin Shoppe, you're gonna get an email, whether you're in-store or online, and that email's gonna be all about you. It'll have your loyalty and your loyalty points where you are and how much you need to spend to get to the next coupon. So we're already doing personalization, but I think it's just really going to explode to the whole next level. It's an opt-in world, and we believe in that. And so we don't ask customers for any data that they don't want to share with us that's going to benefit them the best."

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