How OluKai scales the Aloha experience with Sierra.

Building an authentic brand

Founded in 2005, OluKai stands out as the only Hawaiian-inspired brand crafting lifestyle and footwear for discerning, active consumers. OluKai created the category of premium leather sandals, and has since broadened its product catalog to include an innovative and versatile array of men's and women's footwear.

The company’s sustained growth accelerated as OluKai began a strategic pivot to direct-to-consumer (DTC) distribution. This shift, complementing their robust wholesale operations with a strong e-commerce presence, aimed to create a digital customer experience mirroring the brand’s core values: Aloha, Ohana, and uncompromised quality.

After 2020, the DTC channel surged to drive a significant portion of the company’s revenue. Currently, OluKai is transitioning into a dynamic omni-channel brand, growing through wholesale, brick-and-mortar, and ecommerce across owned channels and Amazon.

Creating the Aloha Experience

As OluKai grew its online business, the company made a strong commitment to ensuring every digital interaction with customers was excellent. This led to the creation of the Aloha Experience, an end-to-end journey for customers that makes sure every contact, whether through ads, social media, the web, email, or phone, aligns with OluKai's vision of connecting the world through Aloha.

To make the Aloha Experience real, OluKai brought its customer service team into the marketing organization under Melissa Ziegler, VP of Marketing, and renamed these service team members as Day Makers. Day Makers do more than just respond to service inquiries; they aim to build long-lasting relationships and create delightful experiences with each interaction. Whether replacing a sandal chewed by a dog or responding to unique customer needs, every interaction is a chance to deepen that connection with customers.

How do you scale Aloha?

At OluKai, customer service inquiries come through phone, email, and social media. As the company continued to grow, the increases in volume were making it difficult to maintain its targeted response time. John Elkins, the Aloha Experience Team supervisor, notes, "75% of the requests are common issues like missing orders or return requests. We try to add a personal touch, but it can get monotonous.”

Melissa wanted to shift the Aloha Experience Team’s focus from handling repetitive tasks to enhancing customer loyalty. “We’ve always encouraged our teams to take their time and understand the customer. If a customer had a big life event, I want you to meet that person with the appropriate level of enthusiasm.”

Like many service teams, the Aloha Experience Team had already standardized in-app responses to common customer inquiries. OluKai had implemented and quickly decommissioned chatbots, finding them lacking in speed or efficacy. Melissa reflects, "Chatbots frustrated our customers more than they helped. Direct email interactions proved to be more satisfying."

With the company scaling faster than ever, it was time to try something new.

Building the OluKai AI agent

Melissa, John, and the entire Aloha Experience Team ventured into the realm of AI, using Sierra to develop OluKai’s first AI agent. The AI agent would be able to apply the power of LLM natural language processing and reasoning to OluKai’s customer service, using the information, policies, brand and culture that make OluKai unique.

Melissa was cautiously optimistic about the AI's capabilities, “AI will probably be able to read our policies, but will it understand how and when to make exceptions? To give that personal touch?”

Post-launch, the results were remarkable. “Observing the AI agent respond empathetically to customers, mirroring the approach of our human agents, was astounding,” Melissa reflects. “AI has significantly reduced our team's workload on repetitive tasks, letting us to focus on the more impactful customer interactions,” adds John.

This advancement greatly helped the internal team. John explains, "With the AI taking on routine questions, our Day Makers can concentrate on more complex cases. This helps us create moments of delight, and also makes our jobs more rewarding and fun.”

Smarter, happier returns

OluKai provides several return options for customers, including offering to send a prepaid shipping label or the eco-friendly, cost-effective Happy Returns service. Many customers, however, aren't familiar with Happy Returns. OluKai's AI agent works to promptly educate customers about Happy Returns and suggest the nearest location.

Unlike a human agent, who would need to manually search for this information, the AI agent streamlines the process, making it quicker for customers and less cumbersome for staff. Derek Bradley, VP of Operations, notes, “Sierra can explain the value of a Happy Return and share nearby locations instantly, creating a better consumer experience while helping us save costs with a more efficient return.”

The AI agent also excels in understanding subtleties and nuances. For instance, OluKai has a 30-day return policy, but they are willing to make exceptions. “Being 5 or 6 days late is a gray area. Generally, we approve the return and educate customers on the policy for future purchases,” Melissa Ziegler explains.

The AI agent effectively adopts this flexible approach, “reconciling our stated rules and policies with gray area exceptions.” This capability demonstrates the AI's proficiency in not just following policies but also in adapting to individual customer needs with understanding and care.

Measuring the success of AI

To evaluate customer reactions to the OluKai AI agent, the Aloha Experience Team tracks customer ratings for each conversation and monitors them on a performance dashboard. Sierra currently delivers a Customer Satisfaction score of about 4.5 out of 5. “We have very high expectations, and are aiming for 4.75,” shares Melissa. “We think improving personalization and encouraging the AI to deliver moments of delight will get us there.”

OluKai also tracks and monitors average handle time and average response time. Aloha Experience Team members will typically respond to a customer inquiry in between 2 to 48 hours, depending on the busyness of the period. “Conversely, AI is immediate, with your first response time and total average handle time dropping to virtually nothing,” says Melissa. “And, if you're a consumer like me who remembers something at 2AM, I can get a response from an AI agent 24/7/365.”

Finally, OluKai measures the resolution rate of the AI Agent. Approximately 50% of the time the OluKai AI Agent is able to resolve a ticket or inquiry without human intervention. “Clearly understanding resolution rate allows me to make decisions between where we're investing our resources.”

For example, the shift to AI has adjusted the targets of the Aloha Experience Team (AXT). John Elkins, AXT Supervisor, shares, "Previously, our focus was on closing 150 tickets daily. With Sierra, we've reduced ticket volume expectations, allowing our team to concentrate on more complex cases with empathy and care."

The future of the Aloha Experience

"Retention is the new buzzword in consumer e-commerce, but it has always been a cornerstone for Olukai. Taking care of our loyal consumers, and treating them as members of our family is part of our brand ethos," says Melissa. "The idea of a computer, taking over such a critical part of our marketing mix, was scary at first. Then watching AI learn, grow, and behave in ways that take months to train human agents, was a lightbulb moment for me in working with Sierra."

With Sierra now handling 70% of OluKai’s service tickets, the Aloha Experience Team is looking for new ways to innovate with the OluKai AI agent. “How do we surprise and delight customers, and engage them proactively?” asks John Elkins, Aloha Experience Team Supervisor. The team is exploring ways to share travel tips, or proactively message customers who might have experienced a delayed delivery.

“We want to use our Customer Data Platform (CDP) to personalize the experience for customers,” explains Dan Kaparski, Director of Digital Products. “Then use the AI agent to deliver an experience to a long-time customer that is above and beyond what we might deliver to a first-time buyer.”

Melissa elaborates, “If I’m chatting with a customer who has bought a pair of sandals 6 times, I might want to offer a code for a free pair of sandals that she can send to a friend. That’s an incredible experience, and helps perpetuate a lifelong relationship.”

The team is considering how the OluKai AI agent could drive revenue. Melissa considers, “We would love for the AI to share product information that helps customers make buying decisions, or engage someone before they abandon a shopping cart… the possibilities with AI are very exciting.”