After 20 years at Tower, Kevin Ertell heads east to start a new chapter
By Mary Wagner
Can a man who once played bass guitar in a rock band, flew waist-length hair and launched his professional life pushing vinyl in a Las Vegas music store find success as director of interactive marketing at a $4 billion company that happens to be the second-largest bookstore operator in the U.S.?
Borders Group Inc. thinks so. That’s why it hired 20-year Tower Records veteran and former senior vice president and managing director of TowerRecords.com Kevin Ertell for the job.
In a realm of retailing so new that it invents itself daily, convention isn’t necessarily the way to shine. Enthusiasm, smarts, a knack for connecting with people and twin passions for music and computers have been the guideposts that shaped a career path which started with a high school job two decades ago in a Las Vegas music store, and which in August 2005 landed Ertell in the newly-created title of director of interactive marketing, loyalty and CRM at the $4 billion Borders.
Computer virtuoso
Along the way, the mane was sacrificed and the band didn’t quite make it (though for one week, sales of its debut and only recording topped both Michael Jackson and Def Leppard at the Las Vegas Tower store). More importantly, Tower introduced computers into its stores—and this was the medium in which Ertell would prove himself a virtuoso.
Ertell had graduated from store associate to store manager as his interests grew beyond music to include the business side of store operations. In the mid-‘80s, he was managing a Tower video store in Los Angeles when the store hooked up its first computer to keep track of video rentals.
Fascinated, Ertell took to it immediately. He trained himself and soon developed computer-based merchandising and purchasing innovations that were adopted throughout Tower’s stores. “Before you knew it, I was training other stores in how to use the system, which led to an offer to work in the IT department at Tower’s headquarters,” he says.
Ertell joined IT as a project manager, implementing the company’s first corporate e-mail system and launching an electronic gift card system for Tower in conjunction with American Express. Eventually, when he developed an international point-of-sale system, that implementation took him to Tower stores internationally.
Board interest
As with many companies in the mid-‘90s, the emerging Internet and its possibilities didn’t initially get much attention from Tower corporate. The retailer’s first venture online was an AOL store, and its first dedicated web site followed in 1996. Both were the enterprise projects of a Tower exec whose main responsibility was Pulse, a magazine published by Tower at the time.
“He believed in the Internet, worked on the site on the side, and got it going,” says Ertell. “Then the Internet started to take off, Tower’s board got interested, and they decided to invest to make things happen.” That netted Ertell the job of head of technology for the new TowerRecords.com and eventually, a place on the executive management team overseeing the Internet deployment.
TowerRecords.com was becoming a world class e-commerce site, but as it grew, there wasn’t always agreement in the executive ranks about how it should develop. One such issue was that of music downloads. While it recently ventured into podcasts of music shows, Tower still does not sell music files online, though it was something Ertell had lobbied for strongly. “I believed there was a future with that, the CEO did not,” says Ertell. “It did play a part in my decision to leave, but it was the smallest part. After being there 20 years, it was just time to get some different experiences in my career.”
Ertell found the Borders’ position posted on an industry forum at about the same time he was contacted about it by an associate. “I saw so much opportunity,” he says. “So many things that could be done and be made really great. I liked the way Borders was transitioning, and still is, to improve the brand and do the right thing for its customers.”
Ertell spent hours before his first interview studying not just Borders’ web site but everything he could see about its marketing practices, its store operations—and its interactive kiosks. He arrived at his second interview armed with a 12-page list of questions, observations and suggestions on how Borders could leverage all of those channels.
Integrated perspective
That integrated perspective resonated with Borders Group senior vice president of marketing and e-commerce chief Michael Tam. “This was a position we were looking to fill for some time,” says Tam of a search than spanned more than 20 candidates over six months. “Borders is at an inflection point now where we can make a difference by doing some new things. We were looking for someone who would have the ability to think conceptually and innovatively about every aspect of an interactive platform, not someone who was simply an expert in building web sites or in e-commerce. Of all the people we talked to, we found that was best with Kevin.”
While at Tower, Ertell demonstrated the same ability over 10 years of interactions with Jupiter Research analyst Eric T. Peterson, who is now vice president of strategic services at web analytics company Visual Sciences Inc., Peterson says. “Kevin will be able to take a closer look not just at what a technology purports to do, but also will be able to understand what the technology actually can do and how the business can leverage that,” Peterson says. “With any sufficiently robust piece of emerging technology—personalization, mobile, RSS—the most important thing to figure out is the relationship between what vendors will tell you it is possible to do and what is truly valuable to the business. Kevin demonstrated he could do that at Tower. And nothing leads me to believe he won’t succeed in doing that now, in an even more competitive market.”
Ertell arrives at a turning point in Borders’ evolution, where his experience in store operations stands to come in handy. Borders’ web-enabled in-store kiosks are a key differentiator from competitors such as Barnes & Noble Inc. and Books-A-Million Inc., and they’re moving toward a central role in Borders’ interactive marketing program.
“Borders had not been taking full advantage of its interactive kiosks, though communication with customers, in-store, on a personalized, customized level is probably a better opportunity with books, music and movies then in any other category,” observes Tam. “That’s because we know intimately what motivates, interests and stirs the passions of our customers because of what they buy. It would be different if we were selling washing machines or sweat socks.”
Re-branded kiosks
Now re-branded as “Borders Search” from their earlier iteration “Title Sleuth,” the kiosks seek to leverage the web’s interactive capabilities in the space where the vast majority of Borders’ sales occur: the stores. So far, that functionality includes searching for titles and locating them in the store, listening to music samples, special order capabilities, and registering for or checking status on Borders Rewards, a new customer loyalty program launched in February and one of the first initiatives whose implementation was overseen by Ertell.
In the future, Borders hopes to push customer-specific, personalized communication beyond its monthly My Borders e-mail newsletters out to customers who swipe their Borders Reward cards at the kiosk, as well as out to other web-enabled customer touch points such as wireless devices. In yet another new role for the kiosks, Borders already is testing CD mix-and-burn stations, at which customers can download tracks from a selection of digital music files accessible at the kiosk, pay by track, and burn their own CDs right in the store. So far, one Borders store in Woodbury, Minn., is offering this service, but Borders is preparing to extend the experiment to three stores in Charlotte, N.C.
BordersStores.com, the company’s marketing site that does everything but e-commerce, which is handled by Amazon, is in line for an expanded mission as well. “The great value in the web sites of brick-and-mortar companies too often is ignored because they are treated like a store and measured on sales,” says Ertell. “But it’s a sales driver to stores and promotions, a research tool, and all of these other things that provide value to the customer. What I’d like to do, and there is a lot of support for this at Borders, is to make sure that we use the web site to drive people to the brand, period.”
New customer metrics
So to ensure that planned enhancements to BordersStores.com deliver on that, Ertell led the development of site metrics that go beyond sales. Among them are customer satisfaction scoring, with plans to implement the services of Foresee Results Inc. shortly. Key measures also will track the number of online reservations of titles in-store, track the online reserves through to sales, and determine how many attempted online reserves are denied due to insufficient inventory.
Ertell says site effectiveness also will be measured in the number of online coupons printed out and which ones are redeemed in stores. Other key measures will include conversion rate, defined as the total number of site visitors compared to the number who reserve products online or print coupons; a relationship conversion rate that measures total visitors against the number who visit events pages or engage in other relationship building activities; and a stickiness index that tracks the amount of time visitors spend on rich content pages.
With e-commerce sales conducted through Amazon.com, the Amazon relationship provides a major window on Borders for web-oriented consumers. That means that as Borders moves to beef up all avenues of its interactive marketing, working with Amazon to bring the e-commerce site in line with the new brand vision and mission developed by Borders Group over the past six months is also in Ertell’s charge. Simply put, that mission is “to create richer, more satisfying lives through knowledge and entertainment,” according to Tam. “Ultimately, that’s everything we sell.”
That’s a sentiment that clearly sits well with Ertell, which is likely one more reason he got the nod that brought him from Tower’s California headquarters office to Borders’ corporate offices in Michigan. “I’ve always had a passion for customer advocacy and trying to make a really great customer experience, and I certainly conveyed that during the interviews,” he says.
The long-time California resident and his family have quickly adjusted to life in Michigan—the fact that Borders’ home base of Ann Arbor is acknowledged as one of the Midwest’s most beautiful college towns hasn’t hurt. Ertell also finds his transition has been eased by the findings of three different personality tests administered during the interview process, a practice routinely outsourced by Borders in vetting executive candidates. “It helped me know in advance that I would fit in. We do work well together and I think that’s testament in a lot of ways to how they set up the process,” Ertell says.
Although those tests helped peg exactly how and where Ertell’s developed skills and strengths would fit into the Borders organization, the musical tastes that started it all remain wildly unclassifiable, running the gamut of jazz, bluegrass, classical and more. And if his recent choice of morning drive music on his way to his new office at Borders is any indication, while you can take the man out of the rock band, you can’t ever completely get the rock band out of the man. “This morning I was listening to a little metal,” he says.
