>> Announcer: From the Cosmopolitan Hotel in Las Vegas, Nevada, it's theCUBE. Covering Coupa Inspire 2019, brought to you by Coupa. >> Welcome to theCUBE, at Coupa Inspire '19. I'm Lisa Martin on the ground, at the Cosmopolitan in Las Vegas, and we're pleased to welcome to theCUBE Michael Van Keulen, Global Procurement Director of Lululemon Athletica. Michael, welcome to theCUBE. >> Thank you. >> I'm a big Lulu fan, have been for many, many years. If anybody doesn't know Lululemon, this is a three plus billion dollar designer, distributor, and retailer of really cool technical athletic apparel. You've been there for a few years now, came from a finance background. One of the things that I love about Lululemon is the inspirational messages on the bags. Anytime I'm in a grocery store and you have to bring your own bags, and I'm nearsighted and I can spot a Lululemon bag from a mile away. Talk to us about just one of the examples of this procurement transformation that you helped initiate, when you came in and found something really interesting about this iconic bag. >> Sure, yeah, so when I joined the company you start to do your basic spend cube analysis and trying to figure out where the big spend items are. And given that the bag is so visible for everybody, I figured that's really a big volume, lots of spend, very visible, and very important to our business. So I started to dig in to our shopping bag as a category. And I uncovered that it was single-sourced with one factory in Cambodia, with a nine month lead time. But nobody in the company really knew that. So when I was put in front of our senior executives to talk about where do I feel there's opportunity, there was some pushback on me digging into our shopper and there was even perspective in the senior executive teams that I didn't really understand how important our shopper is. And then when I asked the question, where does the shopper come from? Where is it made? How is it made? What's the lead time? What's the cost? There were lots of unknowns, and when I threw that on the table and said, "Well, it's single-sourced, "one factory, in Cambodia", you could immediately see a lot of people going like, "Wow, that's very interesting." And they started to realize that procurement is not just about saving money, which we also did, but it's also about de-risking our supply chain, being more nimble and more agile. >> Yes, I was going to say that what you discovered was a massive risk to the brand. I think the bag, is the number one brand asset? >> Michael: Totally. >> It's very visible. But that was really the tip of the iceberg of some of the things you came in saying, "You know, as procurement, "there is a massive, massive, many massive, "impact elements that it can have on the business." >> Michael: Right. >> So going from sort of a tactical to a strategic approach. How was the bag, as an example, able to start helping you transform the culture of Lulu to be more strategic and start looking at all of the other ways in which this business can derive value from a number of the other elements besides the bag. >> Yeah, so we started to identify, what are some of our core principles when it comes to how we source, and how we procure. Those are things to me, like fact-based decision making, analytics, knowing what you buy, how you buy, where you buy, competitive pressure, making sure the suppliers realize that we have options in the marketplace. I mean, those are some of the key components of running a competitive department that drives a competitive advantage. And that's really what we focus on at Lululemon in procurement. >> Some of the disruptors that we see in procurement and finance today are consumerization. Rob Bernstein talked about it this morning with some of the things that Coupa is now doing with the Amazon Marketplace. But as consumers, whether we're consuming Lululemon products or software, we have choice. We also have this expectation that we can go somewhere and find anybody that's selling this particular product, I can see the prices, I can see, the pricing pressures put on, I can see all the different suppliers. So the consumerization sort of disruptor, is really interesting to every industry. How are you leveraging that to, to really drive much more value. Not just saving costs, but even things like impacting shareholder value for Lulu? >> Yeah, I think table stakes today is just managing spend, right? Knowing where your money goes, and trying to make sure that we stretch the dollars as much as we can, I think is what every procurement function does. I think what distinguishes the world class from the let's say, the middle of the pack, is are you able to contribute to top-line growth? How are you able to innovate? Are you able to innovate through your suppliers? And so one example, this is how we implemented third-party gift cards at many grocers across North America. That was an idea generating from procurement, tying into gift cards that we already source and that we now have third-party gift cards at the Kroeger's and the likes. That just drive more traffic to our stores. And that's just through a really exciting, cool idea, that wouldn't necessarily come from a procurement, traditional procurement function, but one that really wants to contribute to future growth. >> One that wants to contribute to future growth, that has a strategic vision. When we look at the Coupa community, there's now $1.2 trillion of transactions going through that. There's a tremendous amount of data, and we go to so many conferences at theCUBE every year, and we hear very commonly, data is the new oil. >> Michael: Totally. >> Data is gold. It is those things if you have the right, if you have visibility and the opportunity to extract value from it and act on it immediately. Talk to me a little bit more about the third-party gift card approach, and was that something that you said we have so much more visibility, into our data, into our consumers, into our suppliers. There's an obvious low-hanging fruit opportunity here. How did that data help you make that decision? >> Yeah, no this was more an idea where you start to look at what value can procurement drive other than just managing and reducing cost? And every other big apparel retailer is already in this third-party space and Lululemon is not. And the power of our company is we are vertically integrated. You can only buy our product at Lululemon, and some select strategic partners. But opening up the doors for people to be experiencing our brand in a different way, through purchasing a gift card or being gifted a gift card, I should say, and that audience then now comes into our store. It just could potentially be a completely new guest. And that is what is super exciting. >> So let's talk about some of the business impact of that. So, I would like to be on the receiving end of the Lulu gift card, for anybody who's watching my birthday's in March. (Michael laughing) But in terms of what are some of the things that you've seen map back to top line impact from that. Increase in new customers acquired, increase in customer lifetime value, what are some of those big impacts that procurement has made with what seems like an, aha, this is a simple idea, we should be doing this too. >> I think what Lululemon does better than any retailer on the planet is our educators. Right, our educators in our stores. And so, it's my job is how do I set these guys up for success? So I think one way we're now doing and leveraging the Coupa platform, is taking away administrative complexity. So the lesser the administrative burden is on our stores and our educators, the better they are with engaging with our guests. And educating them on our product, why we make it, what it does, so that our consumers that we call guests, ultimately, not just make the transaction, but also buy the right product, they know what the product is supposed to do for them. And how it's supposed to fit and how it's supposed to help them in their daily lives. And so what procurement really does is just take away that complexity that they have today, so that they can focus on what they do best. >> So walk me through who within, so one of the things that Coupa does, is more than I think any of their competitors, is it's procurement, it's invoices, expenses, payments. Tell me about all the different ways in which Lululemon is leveraging Coupa and walk me through kind of an average user experience. This is somebody, like an individual contributor in marketing or finance. Give me a little bit of a taste of that. >> Yeah, so we use Coupa for sourcing, contracting, requisitioning, purchase orders, and then flip that PO into pay, so we use the full suite of solution. The biggest focus for us is on the downstream, as we call, Procure to Pay. So it's a lot of people placing requisitions, and that can be in marketing, it could be in the store, it could be in any part of our business, really. And the downstream is the most important element, because that's where the visibility comes. And then from a procurement standpoint, we use the Sourcing and the CLM platform. But the downstream is where the magic happens. >> So is every business unit within Lululemon on the Coupa platform? >> So we launched North America on February 4th, we're live in 18 stores as a pilot, and we're going to roll out all of North America, the entire fleet, in August. >> So just February of 2019, so just what, five months or so ago. And the impact to the business that you've seen with just these first 18 stores? >> Yeah, it's not just the 18 stores, it's inclusive of our head office and our distribution centers in North America. We just now focus on supplier enablement, more suppliers on the platform, more spend through the portal, and with the stores it's a pilot. It's going really well and if the stores are going to get it I'm pretty sure they will be very pleased. >> So, we talked about kind of the consumer, the guest experience, supplier centricity. What have you achieved with respect to supplier centricity, using Coupa, and how is that affecting everybody up to the C-suite in your organization in terms of, wow, procurement is really a business engine, here we do invest in. >> Yeah I think our, if you look at our journey when we started three years ago where we literally had no real procurement as it is described today, we're still in that journey of maximizing our supplier relationships. And through our supplier relationships, really drive innovation. I think we're not entirely there yet, I think that is one of the next iterations, is how do we take procurement to the next level. >> And if you look back at the last few years, what surprises you about coming from a finance background, now being in charge of procurement for a major global brand. What are some of the things that surprise you about this future of procurement and where Lululemon is setup to be successful? >> I think the biggest surprise is that people never intentionally do business with a company that we may or we should be doing business with. People never intentionally do that, it's just because they don't ask the right questions around ownership structure and risk and sustainability, and reputational risk and environmental risk, and just cost aside. And what I think what procurement helps to do is to actually ask all those questions. So that we end up with the right company, with the right pricing, the right quality, the right specs, the right everything. I think that's what surprised me, is that missing link that procurement brings to the table. >> So if you had to give your peers, in any industry, some advice would it be first of all, help establish a culture that is willing to ask questions. 'Cause there's that whole thing too, right? We always think, well maybe it's a dumb question. Have that culture that is, no question is a dumb question, ask, ask, ask. >> Yeah and Lulu is, fortunately enough, such a young company so I had a lot of great stakeholders, I still have them today, that are highly supportive. It's never just me or my team, it is collaboration, it's cross-functional. Everybody has to have something in it, right? So Lulu's a very young company. So if you're a very, maybe mature organization where people are set in their ways it just becomes a little. So I used to work for VF Corps, which is a slightly more mature, been around for 100 years. There it required more convincing than maybe at Lululemon where, again, people are just, the population is much younger. And we needed more structure and people recognized that. >> The appetite was there. >> The appetite was there, for sure. >> Last question for you, Michael. Some of the things that are being announced this week at Inspire, we heard this morning about, we mentioned a minute ago about the size of the Coupa community. The amount of data, the value that it's driving for customers and for suppliers. Also they talked about this Amazon Marketplace that they're expanding this relationship so that IT folks can have this full suite of visibility. What excites you most about the direction that Coupa is going in? >> I mean, it's the data, it's the native integrations with Amazon and the likes, absolutely. What excites me the most in terms of the different modules is Coupa Pay. I've been wanting to go after dynamic discounting, that's what Coupa Pay is going to enable us to do. Virtual pay is another big opportunity where we can start flowing a lot of our payments through a virtual payment system, our payment cards, that excites me. But it's the data, and it's how do we as a community start to leverage our spend, I think will be absolutely awesome. I look forward to that. >> Yes and that collaborative spirit this morning was really palpable. Well, Michael it's been a pleasure to have you on theCUBE today. >> Thank you. >> Congratulations on what you've done at Lulu, and for Lulu being a Coupa Spendsetter. >> Thank you. >> For Michael Van Keulen, I'm Lisa Martin, you're watching theCUBE from Coupa Inspire '19, thanks for watching. (upbeat techno music)

>> Woman: From the Cosmopolitan Hotel in Las Vegas, Nevada. It's the Cube. Covering Coupa Inspire 2019. Brought to you by Coupa. >> Hey you, welcome to the Cube. Lisa Martin coming to you from Las Vegas Coupa Inspire '19. I'm excited to be welcoming to the Cube for the first time, Ravi Thakur. The SVP of Business Acceleration from Coupa. Ravi welcome to the Cube. >> Thank you Lisa. Appreciate it. So day one, everybody had started the day off. The general session was lots of information from Rob. We heard from Malcolm Gladwell. One of my favorite storytellers. If I could master telling a story the way he does that would be awesome. We've also heard from some customers today. We had the Lululemon staples, KPMG, Deloitte. People are excited about the innovations and how Coupa is really helping to transform the CPO, the CFO and help these guys and girls become much more strategic. >> Ravi: Right >> Lots of change and lots of forcing functions too like consumerization and pricing pressures and and all these things. But something that you guys announced back in, I believe November 2018. Just about six months ago, was Coupa Pay. Talk to us a little bit about Coupa Pay in the spirit of this events theme of Spend Smarter. Together. What is Coupa Pay? What were some of the gaps in the market that you guys saw? And thought we can help B2B customers uncripple themselves. >> Yeah, absolutely. Thanks for those questions Lisa. I've been with Coupa for over 12 years now and throughout that time I've have had thousands of conversations with Spend management professionals across all different topics. But whenever payments would come up there's always a sense of it's kind of a nightmare, it's a mess for us let's not talk about that. (laughing) And what we've seen is that. A lot of large companies have multiple ERP systems and when you have multiple ERP systems trying to get a hold of the data and be able to control the funds going out can be a little bit of a challenge. Then when you start mixing in that there's so many different ways to pay suppliers. Weather it's a credit card or a digital cheque or cross-border payment. Whatever it may be. It becomes a big conglomeration of a big nightmare. And so when we started looking at payments. We wanted to figure out well, how can we simplify this experience for our customers? Because we already have best in class procurement best in class AP automation. Adding payments was kind of an easy decision. >> Lisa: Natural evolution. >> A natural evolution of how we were progressing or kind of move into business spend manager categorization of Business Spend Management. And so when we started the journey we made the decision maybe about 18 months ago to actually start getting into this a little bit. And we started off as you mentioned last November with announcing virtual cards on purchase orders. We've started adding other things like early pay discounts. Which are kind of a financing type of solution and just yesterday, actually just today Rob announced general availability for invoice payments. Which is really the workhorse of payments. It's taking all of your invoices that you have as a company and how do you pay your different suppliers. >> Lisa: I can imagine a company would have multiple banks that they're dealing with to pay different suppliers different suppliers, probably had different preferences and then what's the percentage of invoices that are being paid by cheque by paper cheque still. >> Ravi: Yeah, I mean in the U.S. I think I had a statistic from 2016. It's a couple of years dated but it said 51% of payments in the U.S. is still via cheque. It's crazy. And I had a meeting earlier today with a pretty large customer. And they're telling me about how their treasury the woman that runs treasury for them. She walks around with the key fob of 12 different key fobs, for two-factor authentication to log in to 12 different banks, all over the world. And a lot of that is very painful it opens themselves up to a lot of inefficiencies to risk, to potential fraud and with the payment solutions that we're offering that we're actually now generally available with. We're able to solve a lot of those challenges it's really exciting for us. >> Absolutely. And driving up the efficiency of accounts payable by having all of these options. Can imagine from a customer's perspective all of the elements in that business they're going to get tighter going to get more simple and where it's going to really be an enabler of an organization's overall digital business transformation >> Right, it's one of the last areas of transformation we see in Business Spend Management. We've already as mentioned the procurement process AP automation, where we handle expense reporting and now when you're starting to look at payments and doing it at the scale that we're looking at doing. There are a lot of payment solutions out there a lot of payment providers. But none of them have the backing of the procurement process None of them have the rich invoice data that we bring to the table. Let alone the ability for us to send payments due payments domestically, across the globe. Which is a very unique differentiator for us. Along with being able to pay out cross-border payments in hundreds of countries. Now the other thing that we've seen from organizations especially as the the way that the economy and organizations have evolved. You're not just paying a supplier that has ACH information They're not willing to provide you with their bank account information. Might be a five-person flower shop that you need to buy flowers from occasion. It may be temp labour that you have hired for certain projects. Or contingent workforce for certain projects. Or maybe even paying back your employees through expense reports. And so as we've architected our payment solutions we've looked at all of these together and figure it out what are the different optimal ways to do that. As a matter of fact we're announcing a partnership with PayPal. So in order to now send payments via PayPal from a business PayPal account from our customer to the PayPal accounts of their some of their smaller suppliers. So that's a unique way that we're thinking about what are the common use cases scenarios in the consumer world and bringing that into the business environment. >> Yeah, that consumerization effect is so interesting because we're all consumers every day. Weather we're shopping for some beach wear for a backyard barbecue or something on Amazon or whatever happens to be. We have this expectation, culturally we're trained we can find anything. We get anything, we can see all the suppliers and the different prices and select. Read all these reviews. Because we're so conditioned to that in our everyday lives those people that are doing that then have buying decisions and buying roles and their company's expect the same experience. >> Ravi: Right >> And you guys are listening to your customers and enabling that which is huge hugely impactful to every industry, right? Manufacturing, Retail, Health Care you name it. >> Any business that has employees which is every business in the world. It's a great point. I mean just a consumerization of all of these different aspects of business and that's where, when we started Coupa and as we've continued to grow throughout our expansion it's just really listening to our customers listening to the vibrant community that we've created. I met a lot of meetings today and I met with another customer a couple of hours ago and he was super excited about how he's been on our Coupa Community. We have a portal for our customers. They can put in their ideas and talk about and have conversations. He just loves the way that we've been able to react and be able to implement a number of his solutions that have made his life easier along with the broader community of buyers that we have. >> All the marketing material talks about this BSM community that is developing together and that was one of the themes I felt that I heard from Rob this morning during his general session is this. Not only is this community incredibly rich with data 1.2 trillion dollars of spend they are going through this which is a 5X multiplier from I think you should have said this at 2016. But it's also encouraging, suppliers that are in there customers that are in there are able to to learn and save from each other. The collaboration element was really, I thought quite potent and it sounded like quite a differentiator to me. >> Right, absolutely. I think Rob talked about what we're calling prescriptions. >> Yes, 18'000 so far? >> Exactly, and you know the ability to take a look at it's not just $1.2 trillion worth of spend. It's 5 million suppliers. It's not all of them have catalog items but a lot of them do have catalog items. It's looking across millions of purchase order millions of invoices across the system and being able to rationalize and look at data and look at all of these different trends that no one's able to do and really it's just the beginning of the power of what we're doing. We've introduced our business spend index. Which is a leading indicator of how the economy and businesses are operating. We're really just starting to scratch the surface in this area, I mean a thousand customers is great. But as we continue to grow and expand and multiply our customer base. We're going to be able to help things around broader supply chain initiatives. Help things around sustainability. Help organizations figure out are they working with suppliers that are not only suppliers that are risky which we do today. But what about tier two suppliers or tier three suppliers that have a potential risk in their supply chain. And as we start to accumulate lot more data we're able to do things that really no one's ever been able to do, ever. >> Lisa: Thinking back that the 12 years that you have at Coupa and the massive transformation that you've seen in every industry. All of these different disruptors. Like we talked about earlier, all of the changes that are really forcing CPO's and CFO's to become sort of those fraud detectors and those strategic thinkers. Because they can see there this isn't just about buying and sourcing. There is tremendous business potential by having that visibility where all your Spend is in one platform. That's absolutely transformational. >> What do businesses do? They spend money or they sell goods or services and we have half of that equation and we're doing it at a scale that hasn't been seen before. So yeah, the ability for us to over what we've seen over the past 12 years. Not just what's happening at a macro economic level that's a big part of it. But just in general. What's the thinking of the CPO's? What's the thinking of the CFO's? How are they starting to look at things? How are they starting to feel the empathy for their employees. The empathy for their suppliers and making business decisions. And we're now part of that conversation. We're part of that equation as these companies are looking at these things. >> And have you seen the roles of the CPO and the CFO start to change, to start embracing emerging technologies embracing AI and machine learning and understanding how that can really once they have the data and they can apply intelligence and train the machines, how much potential they have. Are they receptive now? >> Ravi: It's just a start. it's just a start. I mean, when I joined Coupa 12 years ago Salesforce is really just starting to get going with the whole SAS thing and it's been a phenomenal change. We had the opportunity of lunch with Malcolm Gladwell today as an executive team and one of the things that we talked about was Silicon Valley and what's happening in general with technology. And he put it very clear, he said we're in the first minute of the technology revolution. It's still super early and how things are moving and transforming in this world We're at the forefront today and we want to continue to be there as the world changes. >> Lisa: So lots of exciting news today you mentioned PayPal. What are some of the other things that are going to be coming out this week that are exciting to you and your customers? >> So a lot of things that are coming out for payments specifically, we're going to be announcing a number of partnerships in the morning. I'll be announcing a number of partnerships on the main stage. We're doing, as mentioned, something with PayPal. We're going to announce that Citibank has joined as a virtual card issuer on the Coupa Pay platform. They're one of the largest global issuers in the world. We're introducing TransferMate as a strategic partner for money movement. And kind of one of the more unique things is when you think about payments and when you think about our community of buyers and suppliers. It's buyers and it's suppliers. And so we want to start spending more time and more focus at least from a payment standpoint on how can we make it easier for suppliers to do business with our customers. We're also going to announce an integration with Stripe. So Stripe is one of the, the bigger Fintechs in the world One of the darling Fintech companies around. And what they're doing is because of their capabilities around the card processing standpoint. Not to get into too much the details but we can now enable a super or a higher level of efficiency for card acceptance for suppliers that hasn't been seen before through our Virtual Card capabilities. So we're really excited about these partnerships and there's a lot more to come over the next several months here. >> To borrow this from Malcolm Gladwell the fact that he thinks we're in the first minute of this technology revolution, is like oh! Shocking. But all I've heard all day today is customer centricity, supplier centricity. Ravi thank you so much, for stopping by the Cube and giving us some of your time on this very exciting day. I know day two will be, probably as action-packed. Tomorrow, but we appreciate your time. >> Thank you very much. >> My pleasure >> Appreciate it. For Ravi Thakur, I'm Lisa Martin. You're watching the Cube from Coupa Inspire '19. Thanks for watching (upbeat music)