Is the eCommerce migration and replatform wave dead or alive and kicking?
I sat down with Xavier Armand, CEO at Vaan Group, to discuss his take on Magento and whether there is still an opportunity for brands to make the move.
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Describe what you do
I lead Vaan - an agency that creates the world's best eCommerce websites through our proprietary design framework: Brand Conversion Design.
As CEO, Iâm responsible for the excellence of our work and the commercial success of the business. This means I spend most of my time either reviewing the work that we do for clients or selling the expertise and process of the agency to new potential clients.
I tweet a lot. And today I got a reply that made me smile:
âSomething I really appreciate about you: you consistently talk about your work like doing a great job really matters to you.â from Andrew Faris (a very notable and well respected eCommerce consultant and leader)
I think itâs perfect.
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You recently said that â...every month that goes by that a brand stays on Adobe Commerce Magento is a month they are falling behind their competition on Shopify Plusâ - tell me more.
So this post was about AI and how I think it will impact eCommerce orgs. The assumption I didnât describe here is this: as software development shifts towards AI, Shopify's consistent datasets and APIs enable better AI application, because the quality of AI output depends on the quality and cleanliness of the inputs. Compared to a sea of one of kind implementations of Magento, a normalized data set from a large swath of Shopify merchants makes it better positioned to leverage AI.
And because of the rate of change in the space, each month is like 6 months, and hence those stuck on legacy platforms are falling behind.
My sense is that the great Magento to Shopify migration wave happened in 2017 - 2019. Tell me more about why you think there is still growth in this segment of the market.
Iâd agree that the surge was initially around the impending upgrade which forced people to migrate. But this was also during a zero interest rate environment. Money was cheap. Things have changed.
The current economic environment is forcing companies to examine their P&Ls. One of the fastest and most efficient ways to cut costs is to eliminate licensing fees from the business. In a bear(ish) market, cost of ownership begins to trump less tangible factors like âflexibilityâ, âcustomizabilityâ etc. So I think thereâs another wave of companies ready to migrate that are ready to give up some âcontrolâ if it means theyâre going to make more money.
It also helps that Shopify has changed its tune and is now very focused on the enterprise and releasing features that they need right in time with this.
Magento isnât completely dead. Why do you think a brand would consider Magento in 2023?
Iâd say Magento makes sense for the same reasons that I think headless can make sense - complex commerce use cases. In fact, Iâd argue that if youâre considering Magento, you may want to consider headless first.
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Magento versus Shopify used to be the number one platform debate. But I feel that has been replaced with whether one should go Headless or not. Do you agree? And what is your take on Headless / Composable?
Mostly headless is a solution in search of a real large scale problem. The theme of our year so far has been headless regret. Many of our biggest deals this year have been replatforming brands that were on headless onto a Shopify theme for the same P&L reasons as above.
My current take is that in 95% of cases a hybrid approach - theme plus some react point solutions get you 99% of the gain with 20% of the risk.
That said, I do think there are times when a true headless architecture makes sense. I call them complex commerce use cases. Weâve done headless a few times and in each case, itâs for a non-standard approach. A childrenâs gaming and commerce platform, a creator-led beauty marketplace with creator payouts, and an NFT-based membership eCommerce brand. Weâre currently working on one for a complex subscription box brand.
But these are rare use cases. I think a brandâs job is to create innovative and problem solving products and get them from point A to point B. I donât think brands wake up in the morning and want to be software companies - which is effectively what you become with such a complex technical infrastructure.
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Migration or replatform is a scary word for a brand to hear. How do you guys manage those client fears?
 It's scary to me too. It's painful. It's fraught. But like anything worth doing, itâs hard. Outside of the normal good business practices around minding data migration, SEO concerns, and customer data - Iâd say one thing that separates us is our commitment to the sitewide A/B test. As far as I know, weâre one of the only agencies to do this (or so weâve been told by some clients).
So we allay their fears by plainly stating that redesigns are not guaranteed to be a success. And anyone whoâs gone through a few knows that. We donât pretend that we have the magic bullet. So to de-risk the migration, weâll run a sitewide A/B test to validate the performance of the new site. Itâs a simple redirect test where we send 20-50% of all traffic to existing Magento site to the new Shopify site. Same visitor channel mix. We then monitor sitewide performance (particularly for new customers). This gives everyone tremendous confidence in the new site.
A story. We have one holdco as a client that we did 5 Magento to Shopify migrations for during a 24 month period. For each one, we ran this playbook. In 3 of the 5 cases, the new site outperformed the previous one, on day one. In the other 2 cases, we worked with the client to identify areas of improvement and rectified them before going live. It really drove home the value of this approach.
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What do you think Adobeâs acquisition of Magento (and Figma) will have on their potential growth?
I'm not really one to predict the future of companies. I don't pretend to know this type of stuff. That said, the acquisition of Figma felt obvious (Adobe needs the top design tool). The Magento acquisition did not seem so.
I have owned Adobe stock for years simply because I think it's the design suite for every professional. I think they'll continue to grow because digital design continues to grow and Figma feels like a juggernaut.
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My sense is that Shopify is and will be the dominant commerce platform for the next 10 years. Do you agree or disagree?
Agree. Turns out e-commerce software was winner take all just like Apple, Google, Shopify is the one. You can fight it. You can make edge cases but the market cap, the features, the brands, the volume and the growth are unfuckwittable.
Every week I meet with potential clients who think sbout e-commerce all wrong. Which is to say, they're mired in platform struggles that simple don't exist on Shopify.
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What Magento to Shopify success stories have you guys been involved with?
I mentioned a number of them above. Each one of those 5 migrations outperformed on the new platform with the metrics to support from the tests.
We migrated Earth Shoes to Shopify pre-acquisition. A home goods brand from Magento to Shopify. Shortly, we'll launch a huge Magento migration for a Top 10 jeweler in the US and a few months later, the category leader in audio electronics. 9 figure brands led by forward thinking technologists.
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Thanks, Xavier. Youâre a legend đ
Itâs tough out there. CACs are high. The barrier to entry to start a brand has never been lower. Consumer wallets are getting tighter and tighter. But donât worry, I got you.
I sat down with Liam Hooper, Senior Paid Digital Marketing Manager at Finisterre, to discuss his take on low hanging performance fruit.
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Describe what you do
I work for a great Cornish brand called Finisterre where I help grow the business through paid marketing, organic and data.
If I had to put it in a sentence it would be: To find and connect with the brandâs target customer through paid marketing.
This includes working closely with our great agency partners to be their soundboard/clarity giver through to measuring daily, weekly, and monthly success in the activity vs business goals.
I tend to spend much of my time outlining the future of the channels, enrolling agencies and brand personnel in the plan and then reporting on the success/failure of said plan.
I have quite a broad remit which is the great thing about working in-house.
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CAC seems like a simple equation. But why does it seem difficult for brands to measure?
The issues with CaC measurement come with data accessibility and agreement in the business.
Data accessibility is having a clear view on returns, COGS, and any direct costs. Agreement is then aligning on which costs go into direct costs and which costs go into your CAC calculation.
So, within the marketing channels, what are you classifying as acquisition and retention. For example, Google Ads brand search may be placed into retention costs.
Another agreement area is whether you want/need contribution on acquisition. For subscription, negative contribution (loss on first order) will be part of the game as you expect to make xÂŁ back in the following recurring orders.
In a mattress company, you will need to acquire with a gain on first order as the repeatability is low.
Iâd probably add that if you are that low repeat business then you are probably better using acquisition cost of sale (aCOS) instead.
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How important are trust signals? Why are they not table stakes when it comes to onsite performance?
In a world of so many brands doing the same thing for often the same customer, your current customer is the biggest lever you have. Â
Leaning into those trust signals can give a brand a unique message vs the market. Itâs the brand pushing the word of mouth.
It doesnât have to be a review, maybe itâs a creative focused on social comment. That creative could be UGC which mirrors that message.Â
Iâve been getting into the 0% alcohol market more this year and one place I check out before committing is reviews. I want to hear from the existing customers whether the brand's hype matches the experience.Â
Although you donât need trust signals, they are a great support to amplify the hype you are creating via marketing.
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In a post-iOS 14 world, what do you think are the best-performing channels? And what are some tactics youâve seen that mean they work?
Since iOS14, Meta has got their ducks in order which is great. After the initial hit there are many green shoots coming from that platform.
Google Ads is another staple channel and continues to be good for brands. However, the lower incrementality/lack of differentiation via Google typically means brands to lean on social over search.Â
Iâm mostly excited about other channels like YouTube, TikTok and Pinterest. They arenât the âbestâ performing when compared to Meta or Google, but that is often due to them being measured like Meta and Google.
In terms of tactics. There are two parts Iâd mention. Reduce account bloat and lean on social creativity.
Remove complexity, test creatives, and watch the account thrive.
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What do you think makes an excellent eComm site? And who do you think does it particularly well?
The eComm sites I enjoy give a straightforward experience and donât make me work.
That experience isnât 2-3 pop ups on landing, give me moment before you offer 10% off.Â
Itâs having the basic site experience from lazy loaded imagery with image sizing in the HTML to reduce site movement when loading. Itâs having the core information about the product and clear imagery; itâs showing the proposition (delivery/returns). Really there is so much to it.
However, the overarching summary is clarity in the brand, product, and proposition alongside a good site experience.
To be honest, I donât think any single site Iâve used has hit on all the bits. Some great examples though are Pangaia for their cross selling and On Running for their mobile experience.
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Tell me more about Ad Bank
Ad Bank was built to provide storage for creatives I come across in the wild. Instead of having loads of links or a google folder full of screenshots I decided to create Ad Bank.Â
I created it back in 2021 and started allowing users access to it. Over time, I did some dev bits like allowing users to save posts and share them. However, as I was doing it myself and havenât kept up with developing the platform like I wanted to.
I do have some plans for it, but it wonât ever be a foreplay or magicbrief type tool. Just a good place for creative inspiration.Â
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You recently suggested that brands should NOT use Shopify Ai to populate their product descriptions. Tell me more.Â
Now donât get me wrong, I love generative AI. I use it daily for all sorts. However, I really donât believe brands who want to have a distinct tone of voice should be using it.
Those brands that have a clear TOV target should be leaning into that instead of trying to find shortcuts through generative AI. If you are a business that just wants to sell products, then utilise the tool.
When you have so many similar brands, itâs the little details like imagery and copy that make the difference outside of price point.
Lean into your brand would be my suggestion.
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I get the sense that eCommerce user journeys are often overlooked when brands are thinking about performance. How important are they? And how can brands use them to inform their decision-making?
Brands seem to set out that they expect the user to buy when they first see an ad. Itâs like we forget how we buy ourselves.
User journeys should reflect how users discover and then move through to purchase. This can include creating ads which cover brand introductions, category pain points and solutions through to trading tactics to convert a user.
My storybrand by Donald Miller is a great resource. Brands should read and digest the supporting content. It outlines how brands should be the guide for the user through their journey to purchasing.
The goal of this is to think of the user, not the brand.
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Do you think brand loyalty can be artificially engineered (e.g. loyalty programmes)? Or are those tactics simply a way to amplify loyalty which can only be attained through the affinity has for a brand?
Iâm personally not a believer in loyalty programs as most see it, which is usually point/discount/incentive driven.Â
You either love the brand or the value it gives you. Value is usually price related and if you stop those discounts then the user will go.
The brands that I generally feel loyal to keep the desire going. This could be through collabs, new drops or limited runs. These brands give the users new things to be excited about and talk about, which then helps in other areas like word of mouth.
They arenât loyalty programs; they are just great brand moments that bring customers back. I listened to champagne strategy some time last year with Adam Posner as a guest, it was a great conversation around loyalty. I recommend people listen to that pod ep.
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LinkedIn is littered with get rich quick growth hackers, who do you suggest people follow (other than yourself) for insightful and useful content?
LinkedIn is a place I really enjoyed getting into in 2023.Â
Some of the people I really learn off are Ben Dutter (@ben-dutter) who talks all things measurement, Savannah Sanchez (@savannahsanchez) talks all things creative with a TikTok focus, Sarah Levinger (@sarahlevinger) who brings a psychology POV to marketing and a final one would be Jon Evans (@uncensoredcmo) who gives so many amazing insights from the work at system1.
I tend to have quite a mix of people that I follow which I recommend so you donât end up in an echo chamber.
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What brands do you think nail performance marketing?Â
True Classic are always spoken about. I agree they are nailing it with their clear message and proposition.
Creatively I think Smol is doing amazing things. Their creative is clearly styled for the social world alongside a very clear tone of voice and proposition that makes it easy to buy into.Â
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Thanks, Liam. Youâre a legend đ
Have you ever wondered what itâs like to pivot from founding the most delicious and successful donut business to a DTC food platform? I have.
So it was rad to sit down with JP Then, founder of Crosstown and Slerp, to learn all about it.
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Describe what you do
I am the Founder and CEO of Slerp. Slerp is a technology business built by hospitality operators for the hospitality sector. Our core objective is empowering restaurants and food operators by enabling them to directly connect and transact with their customers through their own digital channels. We are enabling them to grow their omni-channel offering and build stronger relationships with their customers.
We work with hospitality businesses, franchises and groups ranging from 2-5 sites up to 100+ sites, offering them a highly customisable online ordering and delivery solution. We're proud to have partnered with renowned brands across London and the UK, such as Pasta Evangelists, Ottolenghi, Eataly, JKS Restaurants and many more well-known names in the industry.
One of our significant achievements earlier this year was winning the Restaurant Marketer & Innovator Award for Best Technology.This recognition highlights our commitment to providing innovative solutions within the hospitality sector.
My primary focus is to support the business in every possible way to drive growth and improvement. This involves internal operations, externally engaging with existing shareholders and investors and prospective ones, and ensuring that the company is well-prepared to handle scaling.
Tell me where the original idea for Slerp came from.
It came when I was looking to take Crosstown online. We were very early adopters of marketplace ordering (Deliveroo & Uber Eats). It was great to see the traction of same-day deliveries, but Crosstown is also hugely popular for gifting and also pre-ordering, both things marketplaces donât fully offer. In addition, the lack of brand identity and transparency around data didnât make sense to me, or for our brand. It just made sense to diversify, or as we now call it, become omni-channel.
I had a strong belief in the potential of online ordering for the restaurant sector. Direct-to-consumer (D2C) models have already proven successful in other industries like retail and hotels, so it became clear to me that the next phase for the restaurant sector was adopting D2C methods as well.
Considering my own thoughts and experiences, I realised that if I could see this potential for D2C in the restaurant industry, others would likely be thinking the same way or would soon come to that conclusion. This sparked the idea for Slerpâa platform that would empower restaurants to establish their own direct online ordering channels, enabling them to take control of their customer experience and future-proof their business.
My sense is that hospitality in general is weathering the current economic climate better than other sectors. What are your general thoughts on this? And how is this translating to online hospitality?
It really depends on what the operators are actioning and how they are tackling the current climate. Those that are more progressive in their mindset are executing omni-channel strategies and learning how to build digital into their business. Those that arenât, will more likely struggle.
Forward-thinking businesses are recognising the need to diversify their revenue streams and meet customers where they are. This includes investing in direct digital channels, such as their own websites or apps. By enabling multiple ordering touchpoints and leveraging the power of direct channels, businesses can gather valuable customer data and provide a better overall experience.
The concept of direct-to-consumer (D2C) channels is still relatively new in the hospitality sector, with global players leading the way. However, SMEs and the mid-market players are starting to take notice and realising the potential benefits. The technology required to utilise D2C channels is also now more accessible without significant capital outlay, making it easier for businesses to diversify their ability to reach customers.
What do you guys think about aggregators like Deliveroo? Competition? Or do you see them as a necessary channel for a food brand?
Aggregators (or marketetplaces) have undoubtedly made a significant impact on the food industry, both in terms of consumer expectations and the competitive landscape.
They are an important part of the omni-channel strategy for many food brands, providing a convenient and widely accessible delivery option for customers.
But they are not without their flaws too. They introduce a new layer between the restaurant and the customer, potentially diluting brand visibility and customer loyalty. They control the customer data and have the authority to set the search algorithm, determining which restaurants appear at the top of listings. This can create a sense of dependency on the aggregator's platform. The introduction of ads within these marketplaces to be at the top of the listings just reiterates this.
Most Slerp Partners are on one or multiple marketplaces, but they also want a direct channel that gives them more configurability, more control and access to customer data. Ultimately, the decision to rely on aggregators or seek alternative ordering channels depends on how much control the operator wants.
How have consumer behaviours towards online food changed from 2021 to now? And how has the Slerp product adapted to these changes?
There have been a few notable shifts post pandemic and with the cost-of-living crisis having an impact. I think for us the key ones have been the following:
The decline in popularity of meal kits. As people's routines have returned to ânormalâ, the appeal of meal kits as a convenient option has diminished, people arenât finding them as convenient any more as time once again becomes more precious with the return of the commute and so on, so instead consumers are looking for more diverse and hassle-free choices when it comes to their meals. On the other hand, catering orders have been on the rise. With more events being hosted at home instead of going out to restaurants, the convenience of having food delivered for these occasions is on the up. Plus, as people are getting back to the office and feeling more comfortable making plans, the demand for office catering and corporate food deliveries has gone up too. A meaningful proportion of our orders are pre-orders and many of our partners offer corporate catering now, which is something most marketplaces just havenât tapped into in a meaningful way.
Another trend is the desire to support local businesses. This has become a prominent movement since the pandemic hit. Consumers have realised the benefits of ordering directly from their favourite local restaurants instead of going through online marketplaces. They understand that by buying direct, both the customer and the business can benefit. It's become the norm to seek out direct ordering options and support their community.
And we canât ignore the cost-of-living crisis. It has been great to see that our Partners are seeing year-on-year increases of 39% in revenue and a 55% increase in orders per store for both delivery and click-and-collect. This is reflective of the other trends mentioned, but consumers are becoming more conscious of their spending, who they place it with, and how. They want value for their money, but that doesn't necessarily mean going for the cheapest option, they're more selective with their spending choices and want to make sure they're getting both quality food and a good deal, hence why smaller businesses really need to consider how they build (and offer customer loyalty) and get those repeat visits.
Youâre also the founder of the UKâs best doughnut brand, Crosstown. How has this association helped in developing the Slerp product? Has it hindered in any way?
Being an operator has been vital to both identifying the opportunity and developing the product. Being on both sides gives us the unique position of understanding how to build a platform that really solves pain points for other operators. This first-hand experience has provided insights into the challenges and requirements of running a food business, which then has allowed us to define the ultimate playbook from all the Crosstown learnings. Our focus is now on how we channel that to other operators and continue to build on it to create the best possible products.
Overall, professionally it has been nothing but an advantage. Personally, as the co-founder of Crosstown it has been hard to step away and fully focus all my efforts on Slerp, but the opportunity and the potential for Slerp is so large, it was something I wanted to throw my full efforts into.
You guys have been picking up some excellent clients. Tell me more about your recent partnership with Kricket.
Our recent partnership with Kricket is one example of a great, premium partner who wants to become omni-channel. Whilst they remain on marketplaces such as Deliveroo,, they also recognised the need to establish their own direct-to-consumer (D2C) channel.
Kricket is leveraging a significant portion of our technology stack including utilising our digital loyalty programme and CRM integrations, allowing them to make the most of the rich customer data they can then collect. By implementing these tools, Kricket can enhance their understanding of customer preferences, behaviour, and purchasing patterns which in term means a data driven approach in personalising their offerings and marketing efforts, resulting in improved customer engagement and retention.
In addition to the D2C channel, Kricket will also utilise our platform for catering orders. This feature enables them to efficiently manage and fulfil orders for large-scale events or corporate clients, expanding their reach beyond the traditional restaurant experience.
One particularly exciting aspect of our partnership with Kricket is the implementation of nationwide shipping for their BBQ kits. This initiative also allows Kricket to capitalise on their popular offerings and reach customers across the country. This allows Kricket to expand their customer base outside London and generate additional revenue streams.
Overall, our collaboration with Kricket demonstrates the versatility and value of our platform and we are proud to be working with such a great brand in their journey towards becoming omni-channel.
There have been some hospitality tech casualties in the last six months (e.g., Mr Yum). Do you think this was inevitable?
I think the market will naturally evolve as we establish what a post-pandemic era looks like. We doubled down on the fastest growing order type which is delivery. It has been growing at a 10-12% CAGR continuously so an obvious opportunity if we could get the platform right for operators. It has been a lot of hard work and a real team effort but we are happy with the progress we have made, particularly on Slerp Dispatch where the operations team do an exceptional job and we get a lot of positive feedback from our partners. In terms of the business, our most recent quarter was three times up on last year, so the signs are all promising.
What would your advice be to somebody raising money right now? Would you advise them to go for it? Or hold off until the markets are a little more settled?
That is a really tough one as the fundraising landscape is not looking the best for early-stage start-ups. The buzz around AI is evident but many other sectors are lagging. If you have a strong product-market fit, a strong leadership team and you can show a big opportunity to investors, cheques will still get written.
But before committing it is important to always ask yourself, can you work with these investors for 5-10 years? Itâs important that the chemistry and commitment is there on both sides.
It would be remiss of me not to talk about Ai in July 2023. How are you experimenting with Ai and what impact do you think it will have on hospitality and/or food tech?
Weâre really excited by AI and starting to use it to enhance operational efficiencies and provide our partners with better experiences and tools. We are helping partners to elevate their marketing and in combining AI with our new Slerp CRM product this has seen an average of 15% uplift in GMV.
We are focusing on how we can use AI to practically help our partners. We don't make partners feel like they're using it, but we use it in the background to make fast, real time recommendations for them on products, discounts and promotions they can run. There are lots of other exciting things we have planned too, but I wonât say too much, you need to stay tuned!
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Describe what you do
I look at things in cynical ways and try to fix them. Often online. Often using whatever skills I possess. Sometimes being a bit too cheeky. Iâve applied this combination of cynicism, skills, and cheekiness to fixing how we measure success within ecommerce and looking out for the consumer. Weâve built a customer experience platform that measures retailersâ customer intent.
Why should we use customer intent to unlock personalisation?
Personalisation is hard to do, I admit. Data collection, accessibility, and management are making it harder, let alone the restrictions. But intent is the most human form of personalising. Itâs real, responsive, and in-moment. Itâs about listening more. B2B has been using intent data to personalise and prioritise their selling process for years, so why not B2C?
You recently wrote âThe hardest part about running a conversion rate optimisation agency? The stigma.â - tell me more.
Despite the evolution of the term âconversion rate optimisation,â stakeholders have found it difficult to move past the definition. The binary, reductive explanation of optimising a conversion rate. A retrospective, aggregated figure that defines results, not performance. We can change that perspective by changing the metric. Something that weâre trying to do at Made With Intent by moving from retrospective to predictive. From conversion to expected conversion.
Why does eCommerce need its Money Ball moment, and why is it important?
Our current measurement protocols neglect the very people weâre selling to. The problems that Moneyball solved in baseball are eerily similar to the problems that have existed in eCommerce for ages. 1. A myopic focus on the aggregate. 2. Reviewing metrics that focus on results, not performance. By virtue we focus on quantity, not quality. On competence, not care. On business, not customers.
What problems are you trying to solve with Made With Intent?
Retailers focus on the conversion, not the person. They often look so much at the 2% that do convert, they forget about the 98% that don't. This leads retailers to see all visitors as sessions to squeeze the most out of, overlooking personal needs and future value. It's a myopic focus on results, not performance; on quality not quality.
Your focus is eCommerce at the moment, but do you think there is scope for Made With Intent to branch out into other sectors? If so, what opportunities do you think there are?
Absolutely. The concept of intent is simply understanding more about what someone is saying and responding appropriately. Call that personalisation. Call that listening more. We do this in our day to day lives regardless; so bringing this very human concept online feels natural. B2B have been using intent for years for example.
What surprised you most when researching âThe Person in Personalisationâ?
The conflict. There was a clear 50 / 50 split in whether all 153 of my interview respondents thought personalisation was good or bad. Whether it was designed to be the hero or the villain. Whether it was even achievable or not. Let alone whether it should be spelled with an âsâ rather than a âzâ. Itâs an âsâ by the way; weâre not animals.
What brands do you think do an excellent job of personalisation?
Loads of brands do a great job, they just often go under the radar. The answer is any brand with an authentic purpose. A genuine reason to personalise. Gousto for helping people to discover food. New York Times for helping people to find relevant content. Bloom and Wild for communicating with their customers at a personal level with care. Notice how Iâm using words like help, personal and care⊠the clue is in the title âpersonal-isationâ
What other technologies, consultants or agencies do you rate in the conversion or personalisation space? Who are ones to watch?
Iâll recommend my arch nemesis turned good friend Rasmus Houlind, his book on personalisation (Hello $First Name) is a thorough, well-thought out appreciation of what personalisation should be. It was important for Rasmus and his co-authors to add value by dispelling myths, providing evidence, and combining sources of material to have genuine practical application. It wasnât the why, or the what that was important, but the how. A very good take on a complex subject in my opinion.
Of course, itâs sucking up a lot of oxygen. But Iâm curious what your high level thoughts are on AI and how it can be applied to personalisation.
*face palm*. I struggle with this question. AI will naturally make personalisation easier, requiring less effort, and, in doing so, that will propel it forward. Weâd all rather take the blue pill than go to the gym to lose weight. But, in doing so, I think it leads us down a garden path. It leads us down a path where it removes, or simulates, the very thing that personalisation is meant to be all about; creating relationships.
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Describe what you do
I'm Thomas, a co-founder at StoreHero, an ecommerce profit platform. My journey in the ecommerce world started at home, with my mother running an ecommerce business for over 20 years. I suppose that's just the house I grew up in! I launched some small ecommerce brands and later worked at Shopify for 3.5 years. I started in support and worked though a number of roles later as a Merchant Success Manager for brands in the ÂŁ25m - ÂŁ100m bracket. This was a phenomenal experience and really gave me a front row seat to see how the ecommerce industry really works.
I found that many ecommerce operators were leaning on accountants for financial advice who might not fully understand the specific demands of ecommerce, especially its unique reliance on paid marketing.
Recognizing this gap in the market and a pressing need for brands to understand their unit economics, margins, and profitability, I left Shopify and co-founded StoreHero. Our platform integrates all the core ecommerce, marketing, and financial operations to give businesses a holistic view of their performance.
In my current role as a co-founder, I wear multiple hats. I oversee sales and marketing, and I guide our product development with a strong focus on driving profitability at all times. StoreHero is here to empower ecommerce businesses, providing them with critical insights for making informed strategic decisions to drive profitable growth.
Why is it hard to aggregate customer data?
Ecommerce brands use a lot of tools to run their business. This was something I witnessed firsthand at Shopify, as I saw brands juggling their ecommerce platform, multiple apps, inventory systems, CRMâs, ERPâs, and many, many spreadsheets. Each of these generates its own data, and when that information is spread across different places, it becomes challenging to unify and comprehend what it's saying.
This flood of data can sometimes cause brands to feel overwhelmed and uncertain about what's crucial, complicating their understanding of the overall business. Having a clear goal or a specific KPI to focus on within each data set is vital. However, it's so important to also remain open-minded. There can be valuable insights waiting to be discovered, which you might not have initially been searching for.
Data has been touted as the new gold for many years. Do you think this is still true?Â
I agree, we're now in an era where data is abundant and the real challenge is making sense of it. Brands have access to vast amounts of information, but this can sometimes be overwhelming. The key is not just in having the data, but being able to interpret and make decisions based on it.
Brands often find themselves in one of two situations: they aren't gathering enough data, or they're accumulating so much that they don't know what to do with it. Therefore, the real advantage lies in knowing which data is valuable and using that to drive decision-making.
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For instance, understanding order level profitability can help a brand determine the makeup of its most and least profitable orders. Naturally you wonât want to see this every day, but understanding what makes up your most and least profitable orders can dictate your whole ecommerce strategy!
Using this information, businesses can strategically adjust their strategy â from site merchandising and discount strategies to deciding which products to promote in paid marketing campaigns.
I believe the future of ecommerce lies in the seamless collaboration between finance and marketing teams, working together towards the unified goal of business profitability.
How do you guys empower brands to make sensible decisions with their data?
StoreHero empowers brands by providing them with real-time, granular insights into their profitability at the order, store, and business level. This real-time view enables brands to make proactive decisions instead of reactive ones based on monthly management accounts.
We give brands an accurate understanding of their Marketing Efficiency Ratio (MER). By considering all variable costs at the order level and all operational expenses, we can determine not only the current MER but also the break-even MER. Having this data means brands can act more aggressively, and do so in the confidence that theyâre making profitable, sustainable decisions.
As online advertising costs continue to increase, it's essential for marketing and finance to work in synergy more than ever. StoreHero acts as a bridge between these two critical functions, aligning them towards the financial objectives of the business.
We recognize that many brands either overspend due to a lack of precision or underspend because they lack clarity on the levers that can drive profitable growth. StoreHero solves both issues by providing clear, actionable insights that guide brands towards optimal spending and maximized profits.
Why has order level profitability typically been hard to measure? And what benefits are there if one has a better understanding of order-level profitability?
Order level profitability has been incredibly difficult to solve before now due to the fragmented nature of ecommerce.
We allow brands to include their shipping costs (as opposed to shipping sales, think about the free shipping implications!), 3PL costs, packing fees and transaction fees and map these directly back to the order level.
Consider this: you purchase a product for ÂŁ20 and sell it for ÂŁ80. The presumed profit of ÂŁ60, however, doesnât account for other costs. Once we consider VAT at 23% (ÂŁ14.96), free shipping costs (ÂŁ5), third-party logistics costs (ÂŁ3.75), transaction fees (ÂŁ2.10), and a 10% discount (ÂŁ8), the actual profit (or Contribution Margin 2 - CM2) stands at ÂŁ34.19.
Understanding your order-level profitability helps brands understand the makeup of their most profitable orders and least profitable orders. Understanding this helps brands inform their overall ecommerce strategy, approach to discounts and site merchandising.
What are the advantages of a more robust contribution margin?
A robust contribution margin provides invaluable insights into true product profitability, accounting for all variable costs like shipping, transaction fees, and advertising. It enables informed decision-making, highlights profitable items, and assists in managing pricing strategies.
As businesses scale, maintaining a healthy contribution margin ensures increased sales translate into profits. Growth also boosts bargaining power, allowing businesses to negotiate better terms with suppliers and service providers, improving the margin.
Additionally, increased sales often lead to greater operational efficiency without proportional increases in fixed costs, further enhancing profitability. Finally, the contribution margin helps balance marketing spend for optimal returns.
Many businesses today are being acquired based on a contribution margin multiple!
Does a better understanding of your store's data really help manage higher CACs? If so, how?
Absolutely. Comprehensive data understanding is crucial to managing higher Customer Acquisition Costs (CACs). The key metric here is the Lifetime Value to Customer Acquisition Cost ratio (LTV:CAC).
By factoring in all variable costs, you gain a clear picture of the true customer value over time. Comparing this against the CAC helps assess the sustainability of higher acquisition costs.
We've noticed that brands successful at navigating rising CACs have a strong understanding of their margins and understand their maximum profitable CAC.
This insight gives them confidence and clarity when scaling marketing spend. Despite higher initial costs, understanding these metrics can guide a brand towards profitability, allowing a more aggressive yet informed approach to marketing expenditure.
Having detailed store data significantly aids in managing higher CACs and drives strategic decision-making.
Do you think the data challenges brands face gets easier as they scale? Or do the challenges get more complex as they grow?
While scaling up, brands typically face more complex data challenges due to the integration of more sophisticated systems like ERP and inventory management. These systems often introduce more variables, making data management more intricate.
However, ensuring that foundational dataâlike that in Shopifyâis kept current and accurate can substantially ease these challenges. Consequently, as brands grow and improve their data management practices, they can effectively turn these challenges into opportunities for improved decision-making and strategic growth.
So, while initially the challenges may increase in complexity, with proper data management, they can indeed become easier to handle over time.
Who are the people in the brand that typically use StoreHero on a daily basis? And what sort of roles or people should brands be bringing into their team to help them understand and interpret data as they scale?
StoreHero is typically used daily by key decision-makers such as founders, fractional CFOs, profit-oriented e-commerce managers, and marketing heads.
As brands scale, aligning marketing and finance becomes vital, given the rising ad costs. Brands should aim to foster a team where financial experts understand how marketing can drive profits, and marketers need to understand the unit economics of the business, including crucial metrics like the Marketing Efficiency Ratio (MER) and the breakeven point Return on Ad Spend (ROAS) at the product level.
Finance professionals often view marketing as a cost center, but with a deep understanding of the unit economics, they can make informed decisions, not risky ones.
Therefore, a data-driven, financially aware marketing team paired with finance professionals understanding the marketing's role in profit-driving is the ideal combination for brands scaling in today's digital ecosystem.
Finally, And it would be remiss of me to not end with a large language model question to round out this interview. How is AI impacting data aggregation, interpretation and decision-making in 2023?
Haha, I knew this one was coming! AI is revolutionizing the ecommerce landscape in 2023. Its rapid advancement is both awe-inspiring and a bit overwhelming.
The key contribution of AI lies in its capability to aid ecommerce brands in interpreting massive data sets and making informed, profitable decisions swiftly and accurately. The real game-changer is having a proprietary data set and using AI to analyze it. This would give businesses insights that are unique and highly targeted.
While I can't reveal much at this stage, I can say that StoreHero is working on an exciting development leveraging AI, which we are eager to unveil in the coming weeks!
Thanks, Thomas. Youâre a legend đ
...........
In this article, we dive into the recent tidal wave of social commerce to understand whether a revolution is on the horizon for B2C retailers, or whether social commerce is just another fad that is not worth the current hype đ„
First, let's explore the history of social media and how commerce got involvedâŠÂ
Have you heard of Sixdegrees.com? It was the first ever social media platform, which launched in 1997. It had about a million members when it peaked and was soon overtaken by Friendster, which is often thought of as the first âproperâ social network. It was founded in 2002 and had over a hundred million registered users. Then came the flurry of other networks - LinkedIn, founded in 2003, Facebook started in 2004, MySpace was also founded in 2004, and then Youtube arrived on the scene in 2005. Twitter joined the party in 2006 and then fast forward to 2010 and Instagram launched into the public domain.
Not forgetting the many others, like Pinterest, Snapchat, Foursquare and Vine - but since then, new platforms like Clubhouse and BeReal continue to break ground and although many platforms have come and gone over the last 20 years, very few have grown over the rate of TikTok. đ
A huge part of the success behind many of the social media platforms mentioned above is the engagement rate of their users - meaning, the more users who engage and spend time on each platform, the more data is being collected, and the more advertising that can be served.
Engagement of users can also be increased dramatically with the strategy of adding commerce features into a platform - and this is exactly what the majority of social platforms have added, or are adding soon.
Social commerce refers to the integration of social media platforms and eCommerce stores, combining elements of social interaction and online shopping. It involves leveraging social networks to facilitate the buying and selling of products or services.Â
âThe global social commerce market is expected to continue to expand, possibly topping ÂŁ1 trillion in annual sales in 2023!â Deloitte.
In social commerce, users can discover, share, and purchase products directly within the social media environment. This integration aims to provide a seamless shopping experience by enabling users to make purchases without leaving the social media platform. With users completing their purchases on the social platforms themselves, this feature provides valuable consumer purchase data to the platforms. Quite often, platforms wonât even share the full customer data set with the retailer.
One way to simplify the process of purchasing products online is through a âdirect basketâ. This involves taking the consumer to a retailer's storefront/website, where the desired products are already added to their basket. However, Facebook (Meta) have already announced they will be restricting this function and other platforms will likely follow suit, in an attempt to keep customers within their environment.
Unfortunately, brands who prefer to control the customer experience and product display, are forced to relinquish this control when selling on social platforms. This is a sticking point for many retailers who are protective over branding and CX.Â
But thatâs still not the whole story: because social media can drive commerce in more ways than ever before. Brand discovery is happening more and more on social platforms, especially for younger demographics - meaning that users are discovering brands on social platforms, then buying from them on other platforms (like Lyst.co.uk for example) - creating a halo effect on all sales channels and having a direct positive impact on new customer acquisition. Â
So if you look at a much wider definition of social commerce: the role social plays in the commerce journey as a whole. Taking a wider angle view makes it clear how much innovation is happening and where we are likely to see this trend develop. đ
The future of social commerce looks promising and is expected to continue growing. Here are some key trends and potential developments:
In my opinion, Social Commerce is not just hype - there are major opportunities for retailers to benefit from increased brand awareness. With millennials (born post-1981) and Gen-Z (born post-1997) beginning to take a larger share of retailers' order volume, and 50% of these generations typically use social media daily, it is a huge mistake to ignore social commerce.
]]>Â
Describe what you do
Head of Technology at Planes. I spend my days coaching through one-one pair programming, tinkering with side projects to keep myself fresh (especially in AI), doing all the admin/management tasks with running a tech team and 1:1âs, project planning and new business.
You guys wrote a piece that suggests ChatGPT is more than just a chatbot. Tell me more.
Weâve seen an influx of businesses in scrambling mode trying to figure out what ChatGPT is and how it could help their business. That, coupled with the noise on social media along the lines of âcheckout this ChatGPT promptâ, or âlook Iâve automated my entire job with ChatGPTâ, we noticed that many people arenât seeing GPT, the model, for the raw product ingredient that it is. They are seeing it as a tool for their day job, and not as a way of adding intelligence to their products or businesses.
For a long time building AI into products would have required a PhD in Machine Learning, but it is now a Product, Creativity and Engineering problem. Though I say it myself, all areas we excel.
How are you guys using AI internally at Planes?
In many ways, ChatGPT has improved our productivity. All developers have access to Github Co-pilot, which recommends segments of code. Writing blog posts has become far less daunting since creating a first draft is now trivial. However, we always craft the final version with our own tone of voice. Iâd say that ChatGPT is used in some way across every function of the business.
We are most excited about how it can be used in our client work. Currently, we are running workshops with a variety of businesses to understand how generative AI can be applied to real-world problems. So far, we have seen success in in-app personalisation by summarising previously data-driven screens into easy-to-consume reports, improving website accessibility by retrospectively applying alt captions to thousands of images on an ecommerce site, and building customised contextual search for a company with a large amount of data that was hard for users to consume and find what they were looking for.
Do you think the hype around AI is helpful or harmful?
I believe it's a bit of both.
On the harmful side, the hype around AI is generating anxiety and fear in people who worry that their jobs will disappear overnight because of technologies like ChatGPT. Fear-mongering is never helpful, although I do believe that AI will eventually replace many jobs. However, I think that our current understanding of what ChatGPT can do is slightly exaggerated, and many of the aspirational posts are simply seeking likes.
There are similarities to the hype around blockchain, but this time it's different. With the new AI technologies, there are no get-rich-quick schemes or scams (as far as I'm aware). However, it has attracted many of the same people who were involved in crypto, which in my opinion is a good thing, as we now have many builders creating things of genuine value.
On the helpful side, the hype around AI has sparked many great conversations. Although it's difficult to sift through the noise, there is a wealth of content to learn from. Most of the content and discussions are easily digestible for people working in and around tech, whereas before, AI content was mostly found in research papers.
Who is your go-to AI person or people?
I don't have one single source, but I subscribe to a couple of newsletters (Ben's Bites and tldr) that summarise things pretty nicely on a daily basis. However, I get most of my content from Twitter. I find that LinkedIn tends to pick up and surface concepts and new technology at a slight delay compared to Twitter.
How are you guys helping clients understand and apply AI technology in their businesses?
We conduct free workshops with clients to explore the challenges they are facing and to run exercises on how AI can assist in solving those challenges. It's particularly easy for us to utilise AI once we are already engaged with a client, given that our product teams are already on the front lines and understand current challenges. Running workshops with new clients has been an amazing way to build on our team's existing understanding by working through a diverse array of real-world applications - while also adding value by sharing our experience.
Do you think we need to be having a deeper conversation about the risks AI poses?
I tend to be optimistic, perhaps to my detriment. I assume that there are smarter people than me, with more influence, who are debating the ethics of AI. I hope that there is a balance in the debate around the ethics as well as the commercial and societal progression that AI can bring.Â
There are likely many ways in which criminals are already adopting AI to improve their efficiency and effectiveness, much like we are all doing in our day jobs.
I am most nervous about the societal impact that AI will have over the next few years. Although it may be unavoidable, I wonder how we can limit the negative impact. For example, AI may replace many entry-level jobs. How will the workers who are replaced find their place in this new equation?
Do you think governments are more aware of AI than social media? And do you think there should be more or less regulation?
You make a good point. The government has responded quickly to AI, likely due to its potential financial benefits. For example, they've allocated ÂŁ900 million in funding for AI and released a White Paper on AI adoption in business. However, I'm not aware of similar efforts for social media, particularly in regards to safeguarding and data privacy, despite it being a (potential) major issue.
I think we'll see regulations slowly being introduced. It wouldn't surprise me if there is an extension of GDPR that applies specifically to AI, if there isn't one already. However, these regulations should not hinder innovation in any way!
Whatâs your advice to somebody who wants to start using AI in a meaningful way?
To begin, it's important to understand machine learning models in their primitive form through APIs. Most API providers offer "playgrounds" where you can experiment with inputs and outputs of the models. Its a really effective way to understand the different models available on the market, many of which are free or available on a pay-as-you-use basis. One recommended option is to create an account on OpenAI and use their Playground to experiment with prompts. Note that this is different from playing with ChatGPT, as it is more stripped back but also more customisable. Another good couple of resources are [replicate.com](http://replicate.com/) and [huggingface.com](http://huggingface.com/), which offer a variety of models, such as text-to-speech or image captioning ones. Both sites provide a UI for interacting with the models.
If you are a developer itâs recommended to learn two additional skills: creating embeddings through OpenAI's API (or similar), which enables your content to be searchable and queryable, and LangChain (available in Python and TypeScript), a framework for building potentially multi-model AI systems that are great for building real-world tools. To tell you a little secret, most of the cool demos of AI you are seeing on Social Media are built using LangChain, so learning this will get you a long way very quickly as its very powerful!
Thanks, Henry. Youâre a legend đ
Describe what you do
I run four Australian ecommerce brands that Iâve been building over the past 12 years. The biggest brand specialises in technology products for seniors. The hero product for this brand is a seniors mobile phone we have developed, which we believe is the best in the market.
I used to manage The Oodie, one of the biggest online retailers in Australia. Now I work as an advisor to the CEOs of a few ecommerce companies and create content to help educate others in the industry on LinkedIn.
How would you surmise the Australian DTC market right now?
Australian DTC brands are struggling to adjust to the post lockdown world, where capital has dried up and acquisition costs are rising. So many are shifting focus to profitability and retention.
Without the same revenue from new customer acquisition though, they are finding it challenging to cover the same fixed costs and are having to make difficult decisions. There is still a lot of opportunity though, my own DTC brands for example have almost doubled revenue year on year.
What are the key challenges brands in Aus are facing? And how are you helping them navigate the current market volatility?
All my clients that I advise are having challenges with talent. I help them by assessing their current team then designing roles including employer branding and crafting an attractive job. Also tapping into my network, because itâs difficult to find talent currently.
But I am finding thereâs so many people not actively applying but open to considering new opportunities presented to them . Then I work with my clients to create an interview process and show them how to assess candidates including setting up test activities. Finally, establishing an onboarding, training and performance review program to retain the talent they hire
What are the big opportunities for brands in Aus?
So many brands took off during COVID and have big, loyal followings. With customers returning to shopping in the offline world and rising costs of customer acquisition, I think there is a big opportunity in omnichannel retailing.
For example, did you know one of our sleepwear brands Peter Alexander has $400m annual turnover primarily from physical stores? To translate that to the UK, on a per capita basis they would be turning over more than a billion dollars or ÂŁ540m.
Think about the sleepwear brands that launched during COVID that could compete in this space. They may not have the strength in physical stores, but they definitely know how to attract and retain customers.
What are the best things about working in the Aus DTC / eComm space? Whatâs the most challenging?
I love the community, they are so generous with their time and network. Capital raising is a challenge for all of the founders I speak with at the moment.
Who are your favourite Aus brands and why?
Itâs a bit controversial, because they are not Australian owned and have a sketchy history with worker rights, but itâs Amazon Australia.
They have come a long way with their very limited product range since they launched and demonstrated it by growing sales 48% in the past year in Australia. Their market penetration is still nowhere near the US, but no one can compete with them on delivery. The fact that I can order on Saturday and get it on Sunday, no one else does that.
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Another brand in Australia I love is FAYT. Even though Iâm not their target customer, I love how their founder Brittany is crushing it on TikTok.
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What piece of advice would you give to somebody starting a brand in 2023?
Teach yourself content creation and media buying. Otherwise youâre going to be paying an agency to do it for you and youâre potentially wasting limited money on a business that isnât proven yet. Once your business model is validated, you may want to hire an agency. Youâre going to struggle to hold them accountable though if you donât understand how media buying works.
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Also - just get started and start small, validate and ask for help. I speak to so many people that have an idea and spend years working on it in secret, perfecting all the little details like the website.
My websites are not beautiful but Iâve found a market for my products and my campaigns convert. Even after 12 years thereâs so many things I want to improve in my business, if I had to wait for the right moment I would still be waiting.
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Thanks, Brennan. Youâre a legend đ
~ With Brenden Rawson.
Describe what you do
I'm the CEO and Founder of Andzen, a Customer Journey agency based in Australia with a global team supporting clients around the world. We execute high level marketing automation and ecommerce martech integrations for ambitious merchants looking to do complex digital marketing. Specifically at Andzen, I spend my time developing new markets and productising the latest tech from an agency service model perspective.
How would you surmise the Australian DTC market right now?
Right now, we're coming off an incredible boost to eCommerce DTC channels on the back of COVID. The market has been expanded and there is a tonne of new brands and old brands alike competing for views, clicks and purchases.
What are the key challenges brands in Aus are facing? And how are you helping them navigate the current market volatility?
Acquisition isn't working like it once was. Privacy concerns and tech limitations are reducing volume and increasing acquisition costs - that cheap pokie/slot machine of acquiring constant new customers isn't paying out like it used to and global economic pressures are meaning consumers are more conscious of their discretionary spending.
So we're reminding brands that customer retention and brand messaging are always key but in times like these, you need to turn your customers into repeat customers and you need to turn your repeat customers into brand advocates. Brands need to consider all touch points with a customer from site browse and cart abandonment to transactional emails and customer service.
These are all opportunities to reinforce your brand and continue to build a lasting relationship with your customer. We help brands do this through effective customer journey marketing.
What are the big opportunities for brands in Aus?
Centralised customer data management. There are so many customer touchpoints spread across countless platforms like email, SMS, loyalty, reviews, returns and POS. Marketing automation can be so incredibly powerful when all that data is fed into a Customer Data Platform (CDP).
In 2023 data is open and connected. You can choose the best-in-class platform, connect and centralise all your customer data and make smart and relevant marketing decisions to engage better with your customers and subsequently increase their spending with you.
What are the best things about working in the Aus DTC / eComm space? Whatâs the most challenging?
Due to Australia's smaller population size, a brand needs to go global to achieve relative success compared to those operating in the US or EMEA. This means Aussie eComm brands are ambitious and open to trying new tech to achieve greater international growth and in my experience generally more sophisticated than a US brand that can do similar numbers in their local county without much effort at all.
The challenging part is that it cuts both ways. Getting traction outside of Aus where other brands are well-established and funded takes a lot of work. You need to take risks, experiment and spend money - this applies to an agency like Andzen as well.
Who are your favourite Aus brands and why?
Personally, I'm pretty vanilla when it comes to what I like - I order the same AS Colour plain black tees in bulk that I wear most days. But some Aussie brands that I appreciate are:
TradeMutt, as they're doing great things in the trade industry that they sell to with their community counselling service TIACS.
Muscle Nation, as they embody the 'build and support a community' model.
Moana Bikini, as they have embraced body positivity in a truly genuine way and have grown its international customers by developing products and marketing campaigns that are true to that community.
What piece of advice would you give to somebody starting a brand in 2023?
It's a global market and the tools available mean it's easier than ever to get started. Find a niche market that you feel drawn to. Become a part of that community. Work out what products and brands speaks to them. Build on that, be influential and provide value, and that community will support your brand. There are over 5 Billion people online now, you don't need to have a high street location to service your niche global community.
Thanks, Brenden. Youâre a legend đ
Iâve been thinking a lot about Shopify moving into the enterprise space. To me, they are becoming a serious beast. And this growth poses a bunch of interesting questions. To be honest, I could tackle each of these in their own post (which I might at some point). But for the moment, letâs break it downâŠ
First off, why? Iâm not privy to Shopify boardroom discussions and to be honest, Iâm not a SaaS platform strategy specialist. However, it seems pretty obvious to me. They dominate the start-up and SMB platform sector, and sure theyâve made some horizontal M&A moves into supply chain but they need a new carcass to feed off. And according to TechNavio the enterprise eCommerce market is worth $5.6 trillion USD, so getting some of that enterprise pie seems logical.
But is it real or just marketing fluff? Will a brand generating $500m in GMV transition its entire stack into the Shopify ecosystem? Probably not. But if Shopify can entice even a couple of massive brands (e.g. Mattel) then it serves as the foundation of an enterprise brand growth flywheel. Whatâs more, if it can place even a small amount of doubt into big mid-market or upper mid-market brands (Gymashark et al) from moving away into MACH land or elsewhere, then job done.
Business case and marketing fluff aside, another interesting discussion to sprout as a result of their move into enterprise is the question of identity. How can Shopify arm the rebels like HunkyBill but provide ammunition to the $500m Goliaths? It's blasphemous! But other tech companies have done it. Salesforce, Atlassian, Microsoft, AWS, Hubspot, Slack etc all have Start Up, SMB and Enterprise clients. So why is Shopify any different? As a Shopify romantic, I get it. I liked it in circa 2016 when it was a community of outsiders and only powered cool D2C innovators with sick branding. But weâre living in different times. Those glory days of D2C are behind us.
So if it makes business sense and Shopify OGs can stomach this new paradigm, what are the opportunities?
From an agency perspective, there are a few interesting moves that may play out. First, as Shopify moves upstream it will naturally elevate SMB agencies into the mid and upper-mid-market. This is cool for them, so long as they have the internal infrastructure (legal, operations, team) to weather the procurement process storm of handling such clients. At the same time, bigger agencies will likely pivot away from platforms like Magento, SFCC and Hybris to Shopify. Of course, this means more competition. Which I agree will be challenging. But this new paradigm of Shopify offers the current community a new array of potential niches; B2B Shopify Only, Headless Shopify Only etc.
From a platform perspective, whilst Commerce Tools (backed up by the Mach Alliance gang) and Shopify duke it out in the technology cage, I think opportunities for newer players to take some of their lunch are possible (see Commerce Layer and Centra). Not easy. But possible. I also see an opportunity for a new Mach Alliance competitor. Who represents the brands that arenât big enough, and potentially a little too cool, for Mach? Shopify? Or could a new alliance of smaller platforms and vendors combine? The Headless Club is a good visual example of this.
So whilst itâs interesting to explore the rationale behind Shopifyâs move into the enterprise space and the impact it has on the community, I think the bigger question is - who can stop the Gorilla?
]]>We get the scoop from Tom (founder at WIRO agency) on everything that went down at Shopify Unite London 2022âŠ
What were your top takeaways from Shopify Unite?
Shopifyâs approach to their recent London Unite was very much developer orientated. The feedback from Team WIRO was that it was great to discuss challenges and understand the âwhyâ behind the features that Shopify are releasing. The main highlights for me wereâŠ
Updates from âEditions' and the opportunity brought to Partners, as well as insights around 'how to build better Shopify apps'.
An incredible evening of shenanigans, hosted by Rachel Jacobs of Ecommerce Partnerships sponsored by Klaviyo, Okendo, and Loyalty Lion. It was great to meet so many Shopify partners, agencies and tech partners from within the Shopify and ecom ecosystem!
Checkout, Scripts & Functions - overlapped with current ways to customise checkout with checkout.liquid and Shopify Scripts. The branding API, Web Pixels + Checkout UI extensions are replacing checkout.liquid and Shopify Functions are replacing Shopify Scripts (in time).
Headless with Hydrogen + Oxygen - described by Shopify themselves as ideal for merchants seeking unique CX/huge speed gains and who are willing to invest heavily with a great technical competence.
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Direct experience from our agency peers sharing stories of success and challenges is always great to discuss and learn from one another.
Whatâs your take on the new Markets Pro feature?
It is an upgrade to Shopify Markets, which first launched in Nov 2021, to help manage overseas sales and related complexities; compliance, tariffs, conversion, shipping etc. Built within the admin dashboard, Markets Pro, is an expanded integration with Shopifyâs existing partner Global-e, (end-to-end cross-border solution) that makes it possible for customers and merchants to buy and sell internationally.
Would you recommend Shopify Unite to other agencies?
Absolutely. Itâs a perfect opportunity to network with the entire Shopify community and chat directly with Shopify advocates and engineers!
How do you think Shopify Unite could be improved?
Perhaps splitting it into multiple events throughout the year. I feel a lot of agencies used it more for the meet-and-greet and social aspect instead of utilising the development angle. So they could host development focused events AND more social networking. A two or three day purely developed orientated event would be awesome!
Thanks, Tom đ
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]]>Demystifying the world of Headless Commerce by unpacking the who, what, how and why with agency and tech leadersâŠ
With Nick Raushenbush, Co-founder of Shogun đ„
How would you describe Headless to an alien?
Ha! Interesting question. Even ecommerce merchants on earth(!) have a tough time with headlessâthere's so much jargon and many competing definitions out there.
But it's actually simple: headless commerce refers to when a merchant uses an ecommerce platform to run backend functions, and uses a separate, specialized tech for their frontend; the part of the site shoppers see and interact with.
What are the top three pain points Headless solves for a brand?
Unlocks total design control (and eliminates the design vs. site speed tradeoff): Today itâs critical that your brand delivers a differentiated ecommerce experience (think: Apple.com-esque) without compromising load times or performance. This has historically been very challenging to do. Merchandisers havenât been able to add rich design to sites without bogging them down with code bloat and sacrificing load times. But itâs become clear that exceptional design cannot continue to compromise performance. Moving to a flexible frontend (as part of a headless solution) finally unlocks rich visual merchandising and you can reap the speed benefits progressive web app (PWA) technology offers with select vendors. With a headless PWA you get sub-second page load times that boost mobile conversion rates.
Helps with content management, at scale: There is an undeniable need to go beyond the basic CMS functionality of metafields, especially for multi-site/multi-store capability. Brands are looking for complex, site-wide content updates, faster. When you go headless, you can scale a high-volume of collections/content on your storefront, and (pending your vendor) you also gain the flexibility to arrange your content management or CMS however you like. Ultimately, when your site has headless architecture, there are often fewer barriers to the internationalization of your store (multi-language and currency become much easier to execute).
Enables your web teams to execute quickly: To influence revenue via promotions quickly, better web workflows are needed. Empowering your non-technical team members to iterate on site updates fast is key to competing at pace, all while keeping developer costs and reliance down. If you implement a flexible frontend thatâs low-code, you can give control over the shopping experience back to your team.
When is a good time for a brand to consider a move to Headless?
A few questions you could consider as you explore your online storefront strategy and readiness for headless for the remainder of 2022 and beyond include:
How are we differentiating our web experience from our competitors? How are we delivering differentiated shoppingâstart to finishâthat makes our brand memorable/engaging/etc.
Are we constrained by the out-of-the-box features in our ecommerce platform for visual merchandising (content creation) and content management (metafields)?
Are even a couple additional seconds of load time costing us a considerable amount of money?
Are we staying agile? Are we future-proofing our tech stack in how we optimize the storefront?
Do our (non technical) team members feel empowered to iterate on our site to impact revenue quickly?
Are we amassing considerable developer costs for simple store changes / updates?Are product launches delayed due to constraints?
How does your agency or tech fit into the Headless ecosystem?
The typical path to headless flexibility (with its DevOps, middleware, and multiple licenses) is very slow and dev-focused. With Shogun Frontend though, you can say goodbye to cost, complexity, and multiple vendors for faster time to value thanks to:
A visual experience manager. An industry first, the visual experience manager is the core of the platformâempowering low code PWA frontend store creation.
A Native Content Management System (CMS). Designed intentionally for ecommerce, Shogun Frontendâs CMS is the central source of truth for your content, simplifying workflows and improving efficiency.
Low-code creation tools for a more efficient business. With pre-built templates, sections, and reusable code, brands can get a head start on a store that balances shopper expectations and performance.
Progressive Web App (PWA) Technology. Transform your site output to become entirely different to a traditional website. PWA tech helps you deliver exceptional site speed, for more conversions.Â
Whatâs your go-to Headless stack?
Shogun Frontend and the ecommerce platform of your choice.
What factors do you see contributing to the recent popularity or âbuzzâ around headless?
Before diving into the pain points that headless addresses, I think itâs worth taking a look at the factors that contributed to headlessâ sudden rise in popularity among scaling SMBs all the way to mid market and enterprise brands.
Shopper expectations for richer online experiences (especially on mobile devices) increased rapidly over the past two years.
Technology emerged to address mobile experience pain points (e.g. the progressive web application framework).
Ecommerce platforms like BigCommerce and Shopify embraced rising interest in headless technology, and opened their platform to third-party providers.
COVID-19 caused ecommerce to surge, accelerating the need to optimize online channels.
Venture capitalists took notice of all the aforementioned, and started funding tech companies aggressively. Funding was converted into go-to-market dollars, and the "headless" term started showing up everywhere (in many cases to leverage its popularity).
Thanks, Nick đ
Demystifying the world of Headless Commerce by unpacking the who, what, how and why with agency and tech leadersâŠ
With Jason Greenwood, Founder & Lead Consultant at Greenwood Consulting đ„
How would you describe Headless to an alien?
I wouldnât but here goes: headless is a specific architectural approach to building web experiences. One where the back end administration software/layer is separate, or decoupled from the customer experience software/layer.
What are the top three pain points Headless solves for a brand?
Depends on the brand but generally speaking: improved site/experience speed, ability to deliver highly custom UX requirements and keep in-house devs fed with endless work
When is a good time for a brand to consider a move to Headless?
Depends on the brand but unless they can realistically spend around $1m on the initial implementation and at least $250k/year on maintenance, theyâre probably not ready.
How does your agency or tech fit into the Headless ecosystem?
We donât. Weâre an architecturally agnostic consultancy. We donât do implementations so have no dog in the fight. We help merchants marry their requirements (and help them define them) with the best fit architectural approach at the time.
Whatâs your go-to Headless stack?
We donât generally recommend headless for our clients as itâs too immature and costly still. But weâre consulting a client right now that may go with BigCommerce, Shogun Front End and Bold Checkout as their headless stack due to their unique requirements.
Any final thoughts?
We believe that one of two things is going to have to happen for âheadlessâ commerce to really go mainstream - especially for B2B merchants. And for good reason. Headless is still much more complex, slow to implement and expensive to build and maintain than monolithic implementations. So, either: (a) the major eCommerce platforms go headless with their own storefronts (eg: Shopify hydrogen/oxygen approach), or (b), affordable FEaaS (Front End as a Service) becomes the norm.
Thanks, Jason đ
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Demystifying the world of Headless Commerce by unpacking the who, what, how and why with agency and tech leadersâŠ
With Geo George, Director of Product and Strategy at The Vaan Group đ„ - a design and technology agency that focuses on eCommerce.
How would you describe Headless to an alien?
Oof. Do aliens even have heads? Would the terminology make sense? I'm joking, of course all aliens are anthropomorphic. But really I've come around to the idea that "headless" is an oversimplification. At the core, Headless is about giving brands more options in how they connect to consumers and sell their products. It's kind of like why there are so many types of transportation. A car can get you from point A to point B, but a high end sports car may get you there faster with more style. And that's not even considering a private jet, or an FTL spaceship.
I think the need for it is a cyclical response to monolithic CMS's that forced sites into templated, repetitive frontends. So the idea of a "headless" site is to not use that prescriptive frontend (the "head"), and instead leverage the underlying technologies (APIs) to build a new, custom frontend (also a "head"). In the end, dear alien, you can't get far without a head, turns out.
What are the top three pain points Headless solves for a brand?
Site speed: A well engineered PWA will typically outperform most frontends on templated CMS's. This is getting to be table stakes, and if your site isn't performing well you will spend more on acquisition.
Design Flexibility: This is intentionally broad. I tend to focus on design, where the lack of templates means that there aren't arbitrary platform constraints of required pages, structures or presentation. Content and products can live side by side and look radically different. And you can have content that doesn't fit neatly into the prescribed boxes of most CMS's.
Best-of-Breed Architecture: An advantage of monoliths is that you don't need to make a lot of decisions. A disadvantage of monoliths is you rarely get to make a lot of decisions. The world is certainly not your oyster...decision-making is constrained by what works well on platform, and adjustment is constrained by the particulars of the implementation. Does the app you're using for reviews provide the data in a fully customizable JSON? Does the search provider give you an inflexible filter implementation? Headless (more correctly, composable commerce is appropriate I think) can give you the ability to pick the best fit for the problem you're trying to solve...though it may be more complicated to build what you want.
When is a good time for a brand to consider a move to Headless?
Tech Maturity: Going headless means that at some level, your brand now has technology as a key pillar. Whether that's internally managed, or with a close partnership of an agency or other service provider, headless requires the ability to solve technological problems efficiently and well.
Not just about speed: This might seem to go counter to my point on the benefits of headless. Speed is a necessary thing on the Internet; there's enough data about slow sites negatively impacting sales. But I haven't (to date, non-exhaustively researched) seen data around the impact to sales for small increments of performance past a certain threshold. So getting to 2 second load times can be phenomenal if you were at 8, but getting to 1.5 when you were at 2? Less confident in that.
I think if a brand has the internal maturity/workflows and business needs aside from just performance that highlight complex requirements, headless or composable commerce are worthy of consideration.
How does your agency or tech fit into the Headless ecosystem?
Our agency hangs our hat on solving unusual problems. Every headless project is an unusual problem. We architect solutions to solve the specific requirements leveraging platforms, custom development, and strong partnerships in the ecosystem. At the same time, we take the creative freedom offered by headless very seriously, looking to push the bounds of what the design looks like. Not judging anyone, but we are not interested in making a site that looks like a generic eCommerce store but sitting on a headless architecture.
Whatâs your go-to Headless stack?
We are definitely an opinionated shop, so we don't really have a plethora of tools that do similar things, and we hire and train to that internally. We love the React framework, and find it to be the right tool to achieve our clients' goals. That in mind, our headless stack goes Next.js and Vercel Hosting. We are a bit less prescriptive in terms of CMS, but most recently we've found Contentful to work very well for us. Generally we use Shopify for checkout and as an OMS, but we've also been working with Chord and have had a very positive experience. We also have a great relationship with the team at Nacelle. Our go to for custom app hosting is Heroku.
Any final thoughts?
I personally struggle with the term "headless" (I like composable commerce). Specifically, I think it focuses on the wrong thing. If all you are concerned with is the frontend, then you may not be accounting for the complexities this shift will have in terms of integrations, future roadmap, or even editing experience. Shifting from monoliths to unbundled solutions is overall a cycle in technology for decades, and it becomes very vogue to lose sight of the reasons why the monoliths disrupted the unbundled solutions in the first place. I would advise any brand considering this kind of a shift to be diligent in not just understanding the short term benefits and challenges, but what the prognosis looks like for 6 months, 1 year, and beyond.
Thanks, Geo đ
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Demystifying the world of Headless Commerce by unpacking the who, what, how and why with agency and tech leadersâŠ
With Marcin Nogal, co-founder and Design Lead at Shopstory  - a visual builder for Headless eCommerce. It empowers product teams to build new content pages in hours, not weeks.
Prior to founding Shopstory, Marcin led an eCommerce agency Commerce-UI. He has over 10 years of experience in the DTC, helping brands like Oura Ring, Rolex or Liftfoils shape their digital presence.
How would you describe Headless to an alien?
Headless is a way to separate the visual layer (how your eCommerce looks) from the eCommerce backoffice (managing products, stock, prices, orders etc.). By doing this you open up for modern web technologies used by companies like Nike, Tiffany or Warby Parker.
What are the top three pain points Headless solves for a brand?
Limited visual flexibility, performance issues (my website is slow) and inability to move fast (I canât keep up with my competition).
When is a good time for a brand to consider a move to Headless?
From our experience, it used to be $2M+ ARR, but with new tools (like Shopifyâs Hydrogen + Oxygen) the barrier of entrance is getting lower every month. Soon itâll be as simple as building a liquid Shopify (or even simpler) store and for any ambitious brand itâll be a new default.
How does your agency or tech fit into the Headless ecosystem?
We came from the software development world, where technologies like React or next.js (used in Headless) are already an obvious choice. Itâs what all big brands like Netflix, Ikea or Nike use. Going headless was foundational for us, even though it wasnât an obvious path a couple of years ago. With Shopifyâs rollout of Hydrogen and their investment in headless CMS Sanity we have no doubt that it was the right choice.
Whatâs your go-to Headless stack?
React, next.js, Shopify Plus, Sanity + Vercel/Netlify.
Any final thoughts?
We think the term Headless is unnecessarily complex and focuses too much on technical aspects, whereas problems it solves are familiar for any eCommerce brand today. There is some movement around coining a new term âcomposable commerceâ, which seems to be more accessible for non-technical people.
With Tom Rees, Founder of Wiro Agency đ„
WIRO are an award-winning and industry- leading ecommerce agency delivering long term, high value growth for their clients. Services include CX + strategy combined with Shopify Plus development, to create awesome D2C ecommerce sites.
For a short period WIRO are offering a FREE quick win, including analysis, enhancement suggestions + a design concept to one key ecommerce area, based on industry-leading, best UX practice. Simply head to their site:Â wiro.agency/free-quick-win
1. What is Shopify Editions and what are your first impressions?
Shopify Editions is where twice a year Shopify showcase 100+ updates across all of the platform. Including new and exciting features, changes to functionality, new abilities for partners in their eco-system, merchants and customers.
Thereâs some really exciting features, both on the consumer side (which previously had issues and lack of function surrounding pre-ordering functionality, the ability to receive multiple discounts at checkout and many more customer frustrations). Itâs exciting to see new functions solving these issues, as well as on the merchant side, with new and improved admin abilities, including Shopify Functions, Checkout Extensibility and enhancements Metafields!
There looks to be lots of Shopify Plus exclusives, which is awesome for some of the enterprise level brands. However, Shopify have done an awesome job at rolling most updates out to the wider eco-system so that those on the lower Shopify plans can benefit from the updates.
2. What are your top 5 feature developments and why?
Discount Combinations â Finally, you can now combine discounts on the same order, making it easy to launch promotions that win new customers, get repeat business, and increase conversions This has been a frustration of mine, personally - as well as many of our clients on Shopify, so a great move to finally deploy this as competitors like WooCommerce, have been doing similar for years.
Pre-Ordering â Shopify has recently introduced various Shopify Checkout supported apps for: Pre-orders, subscriptions, and try before you buy - that are fully integrated into its platform. Allowing brands to sell more and give your customers the flexible purchase options they actually want. For years, partners, agencies, merchants and our clients have struggled with pre-order functionality and finding workarounds within Shopifyâs standard platform. Theres no single solution for pre-orders for merchants therefore Shopify have made the wise choice to partner with the partner ecosystem and host a bunch of apps on the app store, 2 good options are Pre-Order Manager and Purple Dot. In my opinion, Iâd prefer to see this built into Shopifyâs platform directly, without the need for third party apps, allowing you to tailor the preferences, similar to discount codes.
B2BÂ â You now have the option of running both sides of your business (D2C & B2B) from a single online store (for both your direct and wholesale customers). Shopify now also allows you to choose to manage your wholesale channel from a dedicated expansion store thatâs customised specifically to your B2B business and only used by your wholesale customers. Whichever you choose, you can manage it all from the same place, saving you time, resource and obviously money. With new âCompanyâ customers, you can provide B2B customers with distinct contact permissions, payment terms, price lists, and tax exemptions. For your more complex buyers, you can assign multiple contacts and locations to a single profile, with different permissions. Personally, I love this. Itâs something we get asked all of the time from clients, I would like to see this introduced on the Advanced Shopify plan instead of being a Shopify Plus Exclusive, even if some of the ability was restricted or limited.
Hydrogen + Oxygen â Shopifyâs Headless Solution and Stack allowing partners and agencies to build fast storefronts with a React-based framework. Hydrogen gives you pre-built components, web-hooks and utilities that map directly to Shopifyâs APIs, to accelerate the development process. Allowing to deploy with one click on Oxygen, (Shopifyâs Headless hosting solution). Again, another Shopify Plus exclusive, but an awesome one! The Headless approach to ecommerce is becoming more common and often the solution is one explored when rebuilding or re-platforming from other ecom providers.
Shopify Functions â Shopify Plus brands now get exclusive abilities to create and write their own âFunctionsâ and distribute them to their store in a custom app. So, if a specific use-case isnât yet available in the Shopify App Store, or if the use case is too niche or advanced for the general public, Shopify Plus brands can simply build the functionality that they need themselves. Essentially, unlocking the backend of Shopify to allow developers to extend or replace key parts of Shopifyâs backend logic, with custom code. Providing the flexibility of open source, which has limitless possibility... but does for me, brings extreme risk to Shopify with the potential of falling in the trap of other legacy ecommerce platforms.
3. Are there any limitations of Shopify Editions?
Duplication Content Pages â A common thing we get asked by clients is, âwe used to be able to duplicate our content pages and targeted landing pages on WooCommerce, can we do it on Shopifyâ. I still think theres room for growth within the simple page and navigation section within the online store within Shopify for both merchants and for partners to quick duplicate content pages. We get asked to regularly generate and create landing pages from clients from partner agencies, where most of the content is replicated, only changing the CTAâs, but without it being a âproductâ you simply cant âduplicateâ.
Limitations to Product Variants â A common frustration among our developers and when working with clients is around the limitations to product variants, when it comes to customisation of product options. As a team, we need to get creative when it comes to solutions that accommodate how our clients businesses systematically operate, therefore having limitations to variants (when trying to create product builders, if only using variants) instead of a custom app or solution, becomes difficult.
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