Financing's AOV Impact, a Sexy New Store, and BFCM Prep
In this episode:
The Unofficial Shopify Podcast
10/20/2020
Kurt Elster: All right. So, I discovered when we talked about sneakers as this hype update, or as this hype approach that people should replicate, that there were some sneaker fans, and a lot of people were like, “Oh, did you get those LEGO sneakers?” Yes and no. So, the way they do those drops now to prevent abuse by bots is when you essentially prepay… You preorder in a raffle and then you find out. I don’t know if they authorize your card or not. And then there’s a 30-minute window. Then they just go, “Sorry, you didn’t get it,” or, “All right, it’s on the way. Order confirmed.”
And so, I didn’t get those. I got a pair of Yeezys that I ultimately didn’t like. I gotta throw those on eBay. And then ended up cracking and buying the hyped up Adidas LEGO sneakers on eBay for about 100 bucks more than they retailed for. So, I completely, having explained how the false scarcity works, then fell victim to it myself.
Paul Reda: This is extremely stupid. In fact, it’s like an escalating level of stupid.
Kurt Elster: Oh, and it’s gonna get worse. I now have a calendar of other shoes I intend to try to buy and then as I get them, decide keep or flip, and so we’ll see how this idiocy goes.
Paul Reda: This… You’re shoe flipping.
Kurt Elster: Yeah. I enjoy a little casual retail arbitrage for fun and profit.
Paul Reda: I don’t-
Kurt Elster: I don’t need the money, but-
Paul Reda: In our time apart, I feel like we’re… I feel like there’s a chasm opening between us. It’s like I don’t even know you anymore.
Kurt Elster: I believe I always liked buying dumb crap on the internet.
Paul Reda: True.
Kurt Elster: Yeah. That’s always… That’s been there.
Paul Reda: And you like weird, overly complex schemes.
Kurt Elster: Schemes.
Paul Reda: You always were into that.
Kurt Elster: Yes. Yeah. I just rub my hands together, scheming. So, yeah, that’s my sneaker update for the 12 period who were interested. You said, “Oh, a chasm has grown between us.” I think we could agree that vinyl wrapping my wife’s car was totally sick, Paul.
Paul Reda: All right. Yeah. The car is sick. It’s a gold car. It’s a shiny gold car.
Kurt Elster: It’s like a satin finish. I prefer mustard yellow, but it kind of color changes a little bit.
Paul Reda: It’s a C-3PO car.
Kurt Elster: Yes.
Paul Reda: I mean, that was the object of it, and you achieved it.
Kurt Elster: Yes. So, if you’re unfamiliar, now you don’t… If you want to change the color on a car previous, you’d repaint it and it was very expensive, time consuming, and didn’t always have the best results. Now, you literally get vinyl wrap, which it’s contact paper. It’s sticker sheet. And a professional wraps the entire car in sticker sheet, effectively changing the color, but you’re not limited by what paint can do, and it protects the paint underneath and after five years you peel it off.
And I enjoy material sciences. I watch a lot of How It’s Made and Modern Marvels and that crap, like that’s the level of dad dork I am. And so, choose… And my wife picked the color and then I found the guy that did it. And the unfortunate part is I really loved it, so now I know like I’m gonna have to blow the cash to do this a second time on another car in the future. It’s gonna happen.
Paul Reda: I mean, it’s true. It’s pristine. I saw it. I have a boring grey car that’s boring and grey, and I-
Kurt Elster: Well, that was the problem, is this car was boring and silver. I prefer the grey over silver.
Paul Reda: I mean, yeah, I saw it and I was like, “Ooh, this is sick.” Like, “I wonder what colors I can get for my car?”
Kurt Elster: I’ll give you the swatch book. My neighbor across the street has… He owns six motorcycles. He’s down from 16. He has a barn. They’re all stuffed in a barn. And he was like asking me questions about it and then I gave him the swatch book. He’s already like, “Oh, I got this Harley, it’s gonna get carbon fiber.” I was pretty thrilled to spread the madness of vinyl wrap, so please send me your vinyl wrap questions. I’m happy to answer them.
All right. Clearly I’m a car guy and bored with a little… Our vacation budget has been properly just blown on stupid things now.
Paul Reda: Well, yeah. You’re not spending any money on vacation.
Kurt Elster: No! No, not at all. And you… So, we’ll wrap up our cold open after this one, but I have to know. I want to know. Tell me about Star Wars Squadrons, the game I can’t play because I don’t have the hardware to do it.
Paul Reda: I don’t know why it doesn’t work on your PC. Your PC should be good enough.
Kurt Elster: We’ll figure it out eventually.
Paul Reda: To do the thing. But no, you know, as a nerd of a certain age, X-Wing and Tie Fighter, the PC games, were landmark events in my childhood, and Tie Fighter perhaps the game I’ve put more hours into than any other, so-
Kurt Elster: Oh, really?
Paul Reda: Yeah. I mean, it’s like Civ 5, Tie Fighter, Borderlands 2. I don’t know. Fallout. All the Fallout-
Kurt Elster: What year would Tie Fighter be?
Paul Reda: Tie Fighter was ’95. ’95, ’94. X-Wing was like ’93.
Kurt Elster: So, there’s some nostalgia here. What’s this new game?
Paul Reda: So, the new game is Star Wars Squadrons, which is like the first flight, Tie Fighter-type flight sim in Star Wars that they’ve made in an extremely long time, since like X-Wing Alliance in 1998. And so, I was just like, “Ooh, I’m gonna buy this game.” And then they announced, “Oh yeah, it has full VR support, so you’re sitting inside the cockpit and looking around while you’re flying.” And I’m like, “I’m buying this game!”
Kurt Elster: So, you heard that, and you just went like the full nerd, the nerd alarm went off. You’re like, “I need this! I need it!”
Paul Reda: Yes. But yeah, so it’s crazy. If there’s any VR game that’s gonna make you barf it’s that one, because you’re sitting stationary at your desk holding a joystick while you’re moving the joystick in your spacecraft and wearing the VR headset, so it’s just like whirling in three dimensions, but your body is like, “I’m not moving at all,” which causes your brain to be like, “We might have to vomit.”
Kurt Elster: That’s the funny thing about VR and why whenever I demo it for someone new who’s never done VR… We did this with my father-in-law recently. And I strap on the helmet, and then we have them do a game that is essentially a fear of heights simulating tech demo called Richie’s Plank Experience. There’s a 2x4 sticking off the side of a building. Go ahead and walk out on it. The graphics aren’t even that good.
Paul Reda: No, the graphics are very rudimentary. They’re not great.
Kurt Elster: Yeah. And even with that, every single person, like 9 out of 10 people, their brain tells them, “You know it’s not real. It feels real enough that many of us can’t do it.” I didn’t walk out on the damn thing.
Paul Reda: I mean, I sent you the video of my dad. My dad was having like a semi-meltdown and ripped the helmet off, because he-
Kurt Elster: Well, it turned out that also, that was literally one of his recurring nightmares is being trapped on the ledge of a building.
Paul Reda: Yeah, I didn’t know that.
Kurt Elster: And you unknowingly were like, “Hey, here it is in a semi-realistic fashion!” We brought it to life!
Paul Reda: Yeah. I really-
Kurt Elster: Poor guy.
Paul Reda: I traumatized him, which you know, it’s payback.
Kurt Elster: We’ll let people unpack that one on their own.
Paul Reda: But yeah, Star Wars Squadrons, I got thoughts about it because I’m a cranky old man, like, “It’s not the same as when I was-“
Kurt Elster: Get off my lawn!
Paul Reda: It’s not the same as when I was 14, which you know, that’s a good reason to complain about something.
Kurt Elster: Yeah. It’s been some time. So, buy it or skip it?
Paul Reda: Well, it depends on how much of a dork you are, whether you got VR setups, whether… You know, I don’t know.
Kurt Elster: I’m just looking… Just give me… Just grade the game so I can move on.
Paul Reda: It’s all right. It’s pretty good. I’ll give it a pretty good.
Kurt Elster: B-plus?
Paul Reda: No. B.
Kurt Elster: B? Solid B?
Paul Reda: It’s a B.
Kurt Elster: All right. I’ll live with that. And I still need to play it. Okay. No more video game talk. We have a show about eCommerce to do.
This is The Unofficial Shopify Podcast. I’m your host, Kurt Elster, and I’m joined by my cohost, Paul Reda, who is going as Elvira for Halloween this year.
Paul Reda: I got-
Kurt Elster: I can’t wait.
Paul Reda: I got the height and the boobs.
Kurt Elster: I know it. Wow. It’s gonna look amazing. Are you shaving your chest for this? Or… Today on The Unofficial Shopify Podcast, we are gonna discuss some interesting finance data, some research that Paul pulled from… What was it, like 170,000 transactions?
Paul Reda: I don’t know.
Kurt Elster: It was quite a few.
Paul Reda: I can pull up the spreadsheet if we’re gonna talk about it.
Kurt Elster: We’re going to talk to our designer, Tom Siodlak, about a sexy site launch we did last week that’s really, really cool. I really like it.
Paul Reda: It was across 172,000 transactions.
Kurt Elster: Wonderful. That sounds statistically significant to me. And then we’re gonna run through the BFCM, Black Friday Cyber Monday crash course, some thoughts on there. Some housekeeping items, the holiday email guide for 2020 is now live. I updated it. It is bigger, better, badder than ever, and it’s 29 bucks right now, and I think I’m gonna do tiered pricing. I don’t want to reward the procrastinators anymore. You can procrastinate, but now it’s gonna cost you $20 to $30. So, it’s 29 bucks right now. On November 1st, I’m gonna make the guide $39, and then on November 15th, I’m gonna jump it to $49.
Paul Reda: I like that.
Kurt Elster: Yeah. Why not? Let’s reward the people who are gonna do… Who are on the ball and are gonna do this thing early and on time, and alternatively I think it becomes as you get closer to Black Friday and you need to send out the emails a guide that is essentially a shortcut to research and prep becomes worth more. That was my thinking there.
Paul Reda: Sounds fine to me.
Kurt Elster: And we do lifetime updates on it, so if you buy it this year you get it.
Paul Reda: Yeah, I don’t like that.
Kurt Elster: You don’t like that?
Paul Reda: No.
Kurt Elster: We should resell it every year?
Paul Reda: Yeah. What the hell? Listen, I was in your garage looking at your gold car and your… That’s like a three, you could fit three cars in that garage.
Kurt Elster: It is a three-car garage, yeah.
Paul Reda: If we charged every year, you could get three cars in that garage.
Kurt Elster: Right now I own one car and it’s so… It’s freeing.
Paul Reda: And it’s gold?
Kurt Elster: And it’s gold. That’s 3M’s Satin Bitter Yellow, thank you.
Paul Reda: But yeah, no. We shouldn’t be giving these people freebies every year. What are you crazy?
Kurt Elster: Oh. I’ve committed to it. Well, we’ll reassess next year. Next September, tell me not to do it. But for this year, anyone who buys is getting the lifetime updates, and then I think next year it’s gonna change.
Paul Reda: I was just joking. I’m fine with it.
Kurt Elster: No? No, because I’ve had other people who are like, “Are you kidding me with this lifetime updates?” Like colleagues. Like, “What are you doing?”
Paul Reda: Well, it’s like we get enough people every year that buy it, so it’s worthwhile for us to do it. If it ever gets to a point where it’s like, “Well, no one bought it because everyone who would have bought it already bought it and is now getting free updates,” then we’ve really screwed ourselves.
Kurt Elster: Well, we’re still reassessing next year. And then I’ve got that Ezra Firestone Black Friday episode dropped. That was a real hit. And in I think next week or the week after, Kurt Bullock’s Facebook approach for BFCM’s gonna drop. So, we got some good Black Friday prep resources for people coming up, including this episode.
Lastly, without getting into politics, there is an election in the United States coming up. What do we think, if any, its impact will be on eCommerce sales? Do you think that week’s just… It’s over? Like it’s gonna be a slump? It’ll be unchanged? I guess it depends on your category, I suppose.
Paul Reda: I mean, I don’t think that affects it. I think a better gauge would be whether Congress ends up passing another stimulus bill.
Kurt Elster: Yeah. No, I 100%...
Paul Reda: Like that-
Kurt Elster: That’s what kicked off the first eCommerce boom.
Paul Reda: That’s what kept everything going bonkers. Yeah. So, if we get… If somehow that happens the next 3 weeks, I think everyone’s gonna have a merry Christmas. If not, and unemployment keeps going up, I don’t know what’s gonna happen.
Kurt Elster: Let’s move on to this financing data you pulled.
Paul Reda: Yeah! This goes back to a couple weeks and it’s always a consistent topic within the group is people want to know like, “Do these financing things work? Does it increase average order value?” You know-
Kurt Elster: Is it ethical?
Paul Reda: Is it ethical?
Kurt Elster: And the last time we talked we discussed that.
Paul Reda: All these sort of things. I have one question before we delve into the numbers. I thought I saw on another group or something, who… Does the merchant get less money? If a merchant sells something for $100 and the person buys it with Afterpay, or Sezzle, or whatever, does the merchant get $100? Or do they only get $95?
Kurt Elster: Get this. I literally have no idea how payouts with financing apps work.
Paul Reda: God damn it. Well, how are we supposed to educate people if we don’t know how it works?
Kurt Elster: Sezzle merchant payout. Charges the merchant a set percentage and a small processing fee. There’s no signup or setup costs.
Paul Reda: All right, so they do take a cut. They take a processing fee, which you get-
Kurt Elster: Yeah, so like a standard payment gateway.
Paul Reda: Which you’d get everywhere, but then they also take an extra fee it sounds like.
Kurt Elster: A set percentage and a small processing fee. Yeah, we… Well, that’s like AmEx, where it’s like a quarter per transaction plus 2.x%. So, no, and it’s gonna depend on… It sounds like it’s dependent on category.
Paul Reda: So, it’s any other payment processor. They’re not taking an extra cut.
Kurt Elster: Yes. And then how or when do we receive the funds? They transfer the funds from an order to your Sezzle account when the order is placed.
Paul Reda: Oh, wow. You get the money right away.
Kurt Elster: It sounds like yeah; you get the money straight up.
Paul Reda: And again, the people that are buying this pay pretty much zero interest.
Kurt Elster: It is zero.
Paul Reda: It’s zero interest.
Kurt Elster: Yeah.
Paul Reda: Which again, hell of a lot better than their credit card.
Kurt Elster: Oh yeah, absolutely. Credit card being like 12 to 20. What did you do here? What’s this research you pulled on financing?
Paul Reda: Well, I looked at one, two, three, four, five, six, six stores that are like six of our bigger guns that are our clients that also have some type of after-payment solution.
Kurt Elster: So, Affirm, Sezzle, Afterpay.
Paul Reda: Yeah. That are using them. And so, I did like a median, because some of them are a lot bigger than others, like one has 116,000 transactions, one has 1,300 transactions.
Kurt Elster: Oh, geez.
Paul Reda: And like money, like one does $3.6 million in revenue during these last 90 days, one does 300 grand, so literally 10 times revenue differences and all this other stuff. So, averages get weird, but at least the median, 2.4% of the orders used some type of afterpay solution, so not very many of the orders. However, those orders had 27% higher average order value.
Kurt Elster: Whoa!
Paul Reda: So, if the median order on this store was $120 across this cohort of stores, the Afterpay people ended up spending $152.
Kurt Elster: Wow. So, if I’m going to-
Paul Reda: And this is against the standard Shopify, use Shopify, enter your credit card number type stuff.
Kurt Elster: Yeah. Using Shopify Payments, or Stripe, or Authorize, whatever the heck.
Paul Reda: Yes. Just to be fully transparent, the way the revenue report works, at least the one I have access to, it broke out all of the stuff that’s like Apple Pay, PayPal, those types of stuff, so like those are not part of these numbers in any way. Either in the-
Kurt Elster: So, the Shop Pay, the dynamic checkout buttons are not represented here.
Paul Reda: And Shopify Payments where you’re already cross-store logged in.
Kurt Elster: Okay.
Paul Reda: You get that.
Kurt Elster: Shop Pay. Yeah.
Paul Reda: Yeah. Shop Pay. So, like none of that is included in either side of these numbers.
Kurt Elster: I love Shop Pay. I’m always disappointed when I go in a store and I put in my email or phone number and I don’t immediately get the Shop Pay prompt. Yeah. It just makes it easier to log in. It’s kind of enabled my spending problem.
Paul Reda: It’s a thing to be mad about.
Kurt Elster: Well, it’s just such an easy… It’s literally a checkbox, and so for the merchant to not take advantage of it, it’s like, “Okay, clearly just no one told you. You’re just unaware. Because why would you not do it?”
Paul Reda: Yeah, so it’s a relatively small number, but on some places it’s not. I mean, we have one that sells very expensive car parts where the average order value is $1,000. 9% of their orders are using Affirm.
Kurt Elster: So, if we have… Yeah, so what we noticed here was average order value and financing usage correlate directly.
Paul Reda: Yes.
Kurt Elster: So, if you’ve got a store, the store with the lowest adoption rate also had the lowest average order value, and the store with the highest adoption rate had the highest average order value.
Paul Reda: Yeah. Which makes sense just to-
Kurt Elster: It makes sense.
Paul Reda: Just thinking about it.
Kurt Elster: Yeah, like I don’t… The higher the amount, the more likely I am to use financing, because I don’t want to give up the cashflow. Cash is king, gimme gimme. I want to keep it. And so, financing can be a very practical thing. The other… All right, so those are two key takeaways. Well, and the other, the third is the average order value if you compare that Shopify AOV versus the financed AOV, people spend more when they finance. Presumably either it’s a mental thing where it’s like, “Well, I’m kicking the can down the road so I can spend more.”
I think it’s more because there’s an application process, so it’s like, “All right, if I’m gonna go through this and finance a thing, it’s going to be a bigger order.”
Paul Reda: I’m gonna make it worth my while?
Kurt Elster: Yes. Rather than like, “I’m going to do multiple of these purchases separated out.” I’d rather just wait-
Paul Reda: Get it all done?
Kurt Elster: And put it all together in one larger order. This one’s a hypothesis.
Paul Reda: I think it’s the other way. I think it’s like, “I want to buy $1,200 worth of stuff and it’s easier for me to justify to myself that I’m gonna buy $1,200 worth of stuff if I do the payments rather than paying $1,200 right now.” Versus them not-
Kurt Elster: Oh, so it’s just like-
Paul Reda: It’s like, “I want to buy this $1,200 worth of stuff. I can’t do it. It’s 1,200 bucks.”
Kurt Elster: You’re right. I’m looking at it the wrong… I’m looking at like I’ve decided to use financing and then deciding what goes in the cart. So, in my head it was like I add my $800 item, decide I’m gonna do financing, and then add $400 in items. Versus you’re saying, “Hey, they decided they’re gonna blow 1,200 bucks and then financing just made that convenient.”
Paul Reda: Yeah. I think the alternative to spending $1,200 in financing is not spending anything.
Kurt Elster: Right. Okay.
Paul Reda: Yeah. I think it’s picking up people that maybe otherwise wouldn’t have purchased or would have deferred their purchases down the line to where they felt more comfortable about it.
Kurt Elster: That 0% is just very attractive. Like if you think about what spurs house sales and car sales, it’s when that interest percentage goes down.
Paul Reda: Yeah. I paid off my loan on my car and my car loan was like 1.8%, so it was just like, “Oh, this is free car.” I mean, I’m paying the amount for the car but it’s not like I’m… It’s spreading the payments out over the three years didn’t cost me a thing.
Kurt Elster: Yeah. It cost you very little.
Paul Reda: Well, it cost me literally one extra payment.
Kurt Elster: Yeah, which worth it to keep it the cash.
Paul Reda: Yeah.
Kurt Elster: Okay, so I think the answer here is if you’ve thought about offering financing, you should probably offer financing.
Paul Reda: I think this is an unmitigated win. I know I think in any way… I don’t think it hurts you in any way, and I mean we have put together a giant grouping of stats here where in every case, it is getting used, and it is increasing average order value, and it’s especially for… You should definitely look at it if you have a higher average order value. I mean, even over like 60 bucks. I mean, we have a store that the average order value for Shopify Payments is $63 and for their Sezzle payments, it’s $116.
Kurt Elster: Whoa.
Paul Reda: It’s 83%, the average order gets bigger.
Kurt Elster: All right, and of the financing solutions, my preference is Sezzle because I know those guys. And we’ve run it on a bunch of stores, and it works really well.
Paul Reda: Yeah.
Kurt Elster: And they offer if you hold your money in their account, they’ll pay interest on it. Like instead of issuing the payout to your own account, you let Sezzle hang onto it and then they pay interest that’s way higher than what you’d get in any savings account.
Paul Reda: Which is weird.
Kurt Elster: It’s weird and fantastic, like it’s just such an odd… I will look for any way I can add passive income to a business, and that one sounds good to me.
All right, moving forward from financing, we launched a site for Vex Clothing, VexClothing.com, who sells… Laura, the owner founder, has been on VH1 for the show Styled To Rock, and she’s done a bunch of celebrity styling, she’s made a bunch of stuff for Lady Gaga, including the most recent VMAs, and she sells really couture, high fashion, latex fetish wear on direct to consumer on this Shopify store. And we wanted to elevate it and make it something really special, and so we gave it… The creative direction I gave our designer was like, “Take an editorial style, like Vogue, and apply it to this content.” And the end result came out extraordinary, so I wanted to call him and see if he had any thoughts on it. I don’t know how it’s gonna go. Let’s find out.
Paul Reda: Yeah. Yeah, Laura is extremely cool. She in fact grew up in the same town we grew up in, went to the same high school you went to, and of course obviously left there very quickly to go become cool somewhere else.
Kurt Elster: Whereas we stayed in the suburbs.
Tom Siodlak: Hey, Kurt.
Kurt Elster: Oh, Mr. Siodlak. How you doing?
Tom Siodlak: Good. How are you? Is Paul there, too?
Kurt Elster: Paul is here as well. He forgot to put on his headphones.
Paul Reda: Yeah, apparently I’m supposed to be wearing headphones this whole time. Hey, Tom. What’s up?
Tom Siodlak: Hey, Paul. Doing good. How about you?
Paul Reda: Good.
Kurt Elster: So, we’re recording right now for the show, and we… I just talked about Vex Clothing. You did the work on Vex. Really, I was like, “Here’s the creative direction,” and you ran with it and did an extraordinary job. I cannot-
Tom Siodlak: Thank you.
Kurt Elster: It may be one of the sites that we have designed and developed. Tell me about it. Open ended.
Tom Siodlak: Yeah. I mean, I loved this project. It was high fashion. Everything is custom, beautiful. She works with really big names in the entertainment industry, so if you go on there and you look at the celebrity news, you’re gonna notice Lady Gaga and a bunch of other people. We just didn’t want to do a theme that felt like a template because her stuff is so custom and out there, so it was a long process to make it something really unique, and we started with just black and white wire frames. So, we laid out basically the homepage, the about page, and the product layouts, where we want everything to go, and one of the things that was important was like I said, to not make it feel like a template, so we do have different elements where we’re breaking the grid, the traditional grid, and we want things floating to the side, we have things overlapping to just look more artistic and editorial. Almost as if you’re looking into any fashion magazine.
And we worked with Laura, our client, to make sure she was happy with the direction, and when we were good with the wire frames, we moved into the design phase, where we brought some color into the layout and then brought in her great images, and the color was very fun to work on, because we had a lot of flexibility in the direction we could go, and Laura was great because she’s an artist, so she gave some input and I had some ideas, and then she had some ideas, and it was just a nice effort of working together, and once the designs were done, I loved that she printed out the entire website and had it all on the ground and then made notes about, “You know, I think this could overlap a little bit more, or let’s stack the text, the headlines.”
And it just clicked. I feel like it really just elevated the design, that we were just able to work with the client so smoothly.
Kurt Elster: 100%.
Tom Siodlak: Yeah, and there’s just like a bunch of really cool things that we did with the website.
Kurt Elster: Give me some examples of the cool things.
Tom Siodlak: We have a really nice mega menu at the top of the website. If you hover over the three main collections, which is women’s, men’s, and custom, and it looks very different than what I’ve seen on any other site. So, you’d have to take a look, and when you hover over any of the links, we have a little animation where a little arrow kind of pops the link over, which I just thought was just like a little effect thing where we could add any little effect to bring some joy to the person that’s browsing.
We have a huge hero video when you first come to the website.
Paul Reda: Yeah, that hero video is nuts.
Tom Siodlak: Kurt did a really good job reducing it without degrading the quality.
Kurt Elster: I use HandBrake for that, and then we embed the videos with HTML5 on the site and it works really well.
Tom Siodlak: And as you scroll down the website, we’re fading things in just so it’s more like an experience, so it’s not just every element’s already been loaded. It waits for you to get to that section. I mean, like for me, it’s important to let the customer know that this is all hand crafted by the artist, so we have a section on there about Laura, and we got a quote from her. I just wanted to make the website very beautiful. I mean, we have different-
Kurt Elster: Well, it worked.
Tom Siodlak: … different shapes.
Kurt Elster: And I was gonna say the shapes, like if you break the site down to its basic elements, it’s like color blocking and really careful layouts, and then simple shapes, and so there’s no single element where you go like, “Oh yeah, that must have been really hard to do.” But when you apply everything and it’s so detail oriented and done in such a careful presentation, where there’s not like widgets, and like, “Whoa! 37 people are looking at this product right now,” kind of stuff. It just gives it such a clean and professional and high-end look, and that’s what we were looking for with this.
Tom Siodlak: Yeah, and we’re breaking it up with quotes, so she has quotes in the middle of the site, and just different ways to tell the story, and then like on the about page, we start with an introduction paragraph, then we go into more behind the scenes, then we have a quote, then we have the section about the magic, which is just showing some behind the scenes of her brand, because it really makes-
Kurt Elster: And they pop in, too, which is cool.
Tom Siodlak: … it more personal. Yeah, there’s a little bit of like a parallax on them. I made them so they fade in and they fade out.
Kurt Elster: Yeah and while you’re talking through it I’m actually recording a screencast and scrolling through it so that people can-
Tom Siodlak: Oh, cool.
Kurt Elster: So on the video version, people can see what you’re talking about.
Tom Siodlak: And I’m not sure if you want me to touch on the development of this, but so we started with an out of the box theme, but then I completely ripped out the header and the footer and… Sorry if you hear some background noise, and the homepage, all those sections were built custom, so you can go in and still edit any of the text and images, but because it has the foundation of the theme that we started with, you still get access to all the default sections. So, if you wanted to put a Google Map on the homepage, you could do that.
Kurt Elster: So, this is built on top of Turbo by Out of the Sandbox, right?
Tom Siodlak: Yes. Yep, that’s our favorite to use.
Kurt Elster: And those like core sections-
Tom Siodlak: Because they’re just so flexible.
Kurt Elster: The sections, and so the theme settings, most of it still works, so you have the end result is a fully custom theme, but you have still kept a lot of the features and the flexibility that you would get with a premium theme.
Tom Siodlak: Yes. Exactly. We still have the framework there, so all the original sections are still intact if you wanted to add any of those in, or any of the other page templates that come with the theme, those are still there.
Kurt Elster: Cool.
Tom Siodlak: Everything that I built was all just done custom to keep that stuff there if… Who knows? Down the road she may want-
Kurt Elster: Right. You never know what is gonna come next with a site, so it’s nice to not give stuff up.
Tom Siodlak: I don’t want to rip those out.
Kurt Elster: On the product detail page, she’s got this really cool color swatch thing. I imagine that’s an app. Do you recall how that works?
Tom Siodlak: Yes. That is an app. I would have to look up the name of that, but it does allow like the different colors to be shown. I don’t think we have it so-
Kurt Elster: So, it’s got like color swatches of… There are photos of each latex material to define the primary color of each item, and it looks really good and I’m sure it prevents issues with returns. It’s nice. And I also noticed there’s a link to the size chart that pops open in a modal window, but also the size chart is a photo, and then to add social proof, because a lot of the stuff gets worn by celebrities, so like I picked vinyl tube top and one of the photos is a woman at a Fox, as in the studio, a Fox red carpet event, where you could see she’s wearing the full vinyl outfit. It’s cool.
Paul Reda: I think the app we’re using on this is Bold Apps Product Options.
Kurt Elster: Oh, okay. Good. Sweet.
Paul Reda: For that. Yeah. I was looking on the celebrity thing, if anyone watched Watchmen, the HBO series version of Watchmen that was out earlier this year, and remembers Lube Man, who was like this weird superhero that was very slippery, and he was wearing a full silver body suit, Laura made that full silver body suit.
Kurt Elster: Oh, I didn’t know that!
Paul Reda: Yeah.
Tom Siodlak: That’s so cool.
Kurt Elster: That is cool.
Tom Siodlak: I know. I’m like after we built it, I’m getting more starstruck. You know, just seeing like who she has worked with, but then there are already made pieces, so some of them may have already been worn by celebrities, which is very cool.
Kurt Elster: Oh, no way.
Tom Siodlak: And those could be shipped out, and then some of the other ones that are made to order, there is a… I’m not sure if you could find one of the examples. It’s anything but the ready to be shipped, those all have an estimated shipping date, and that’s just done with some Liquid, so it will check today’s date and then give a little buffer of a couple weeks. That way when people order it, they know that-
Kurt Elster: I’m gonna go back and look. Oh yeah. Oh, at the top of the product description. You’re right. It says, “This item is handmade and will ship by Thursday, November 12 if you order today.” So, that’s a Liquid statement stuck in there that does that.
Tom Siodlak: Yeah. That’s a Liquid thing. Anyone that has a handmade product that needs a buffer could do that. It’s just some Liquid code you’d have to just put in there before the description and I think it just helps with some… Reassure the person that when they would get it. I think putting a date is just really great for getting people to add to cart.
Kurt Elster: That’s really smart.
Paul Reda: Tom, I remember we talked about injecting video into the collection grid. Did that ever end up happening on any of the collections, do you know?
Tom Siodlak: On the women’s and the men’s, we have just a static image on the second row left column.
Paul Reda: Oh, there you go. Yeah.
Tom Siodlak: Yeah. So, I mean it’s just to replace, to break up the products, so technically you could use that as a call to action if you wanted to, or it could… You could direct people to a page, or a specific product. We’re just showing a… It’s a static image, but video would be another option if you… That would give some movement to the page.
Paul Reda: Yeah. We did that on Asutra.
Kurt Elster: Yeah, we got Venus Williams using the product that’s shown directly next to the video and we used portrait video and the photos are portrait. Looked really cool.
Paul Reda: Yeah. And I’m writing a theme for us right now that the current plan is that every collection page will have a specific video on it in a certain slot. So, that… Yeah, you’re right. It’ll be really cool to have a lot of movement. It’ll make a collection grid page a little more exciting.
Kurt Elster: That’s cool.
Tom Siodlak: I really like 360 videos where, like we have on one of the other projects we’re working on, where it’s they’re modeling the garment and they just do a 360, they walk into the frame, they spin around, and they walk out. I think that would be awesome for-
Kurt Elster: Oh, on STAYkini?
Tom Siodlak: Yeah.
Kurt Elster: Yeah, the STAYkini video is really cool. Yeah, they want-
Paul Reda: Especially if it loops perfectly, where they leave-
Kurt Elster: Yeah. They walk in and out of the frame.
Paul Reda: That’s sick.
Kurt Elster: But it looks like it’s the product video.
Paul Reda: Yeah.
Kurt Elster: That’s really cool. And we’ve seen a few. I think Gymshark did that.
Paul Reda: There was a couple. There was a teardown we did that did that.
Tom Siodlak: Yeah. This was great. I’m happy to share some about the project with you guys.
Kurt Elster: No, I appreciate it. I like the background and I love how much love you put into it, and it really shows, and it’s such an unusual and beautiful and well-executed site, and certainly, like there’s no way it would have achieved this look or we could have managed this without having extraordinary content from the client. And like over and over, that’s the thing that makes or breaks people, like we need the content, and the content needs to tell a story, like if you don’t have that, I can’t design my way out of it. So, no, you did-
Tom Siodlak: I mean, we try our best. We’ll dig in and be like, “You know, we need a little bit more personable information about your staff, your business, or why did you invent this product,” because usually it’s like if people haven’t heard of the brand before, the about page is just so important. Anything we can do to just get people to click with the brand. And yeah, she did that, she gave us a lot of great copy.
Kurt Elster: No. Yeah, it worked. Yeah. We’ll include that. People should check it out. And you know, if you need… If you’re looking for some unusual gift items, certainly you can find something here. We have… My wife has custom Minnie Mouse ears, like a headband, that’s all latex that Laura made that is like one of the coolest things we own.
Tom Siodlak: Oh, that’s awesome!
Kurt Elster: It’s a prized possession.
Tom Siodlak: Yeah.
Kurt Elster: I’ll send you a picture of it. It’s neat.
Tom Siodlak: That’s awesome.
Kurt Elster: All right, thank you, Tom. We’ll let you go.
Tom Siodlak: Okay. All right. Thanks, guys. Bye.
Paul Reda: Thanks, Tom. Great work.
Kurt Elster: Lovely.
Paul Reda: All right. Now that the fun time’s over, I gotta say something and Tom’s gone.
Kurt Elster: All right.
Paul Reda: I don’t get this website. It does not excite me in the slightest.
Kurt Elster: And you, as a man who does not appreciate latex couture fetish wear, that’s why. And I think that is okay and that is a sign of a really strong brand. It should polarize people, especially something niche like this, where we’re gonna show up and we have presented it so well, you immediately go, “This isn’t for me.” That means we did it right!
Paul Reda: Yeah. You’re right.
Kurt Elster: I don’t want you to show up to the site and be on the fence. I want to be like Pit Vipers, where that website’s gonna slap the Oakleys off your face and you’re either gonna go, “This is ugly,” and quit, in which case great, we’re not gonna waste our time with you. You were never our customer. Or you’re gonna land it and immediately go, “I’m listening. Show me more of these fine latex stockings or pencil skirt.” I don’t know. I’m not buying a pencil skirt.
Paul Reda: Yeah. I really crushed your dreams because you sent a link to me when it was in beta. You’re like, “Check out this thing Tom did! Look how good it is! Oh my God!” And I was just like, “Ehhh. This is good?”
Kurt Elster: This is good. This is fabulously good.
Paul Reda: I care a lot about fashion, Kurt. You’ve seen me wear the same outfit for 10 years.
Kurt Elster: Shorts, your favorite flip flops, and a Minor League Baseball tee. That’s the Paul uniform. There’s nothing wrong with that. But no, you’re just not shopping for a $200 latex dress.
Paul Reda: I will concede I’m not the target market.
Kurt Elster: So, yeah, I think it works in that sense. Okay. We got Black Friday Cyber Monday coming up. It is around the corner. I have mentioned it more than a few times here and before we know it, it’s gonna be here. Can we put together in 10 to 15 minutes a crash course in like here’s high level, here’s what you need to do, here’s what’s gonna happen?
Paul Reda: Email.
Kurt Elster: 100%.
Paul Reda: That’s it. Just email people.
Kurt Elster: Yes. Well-
Paul Reda: Have a good sale. Have a good… Value add is not the word I’m looking for.
Kurt Elster: Promotion?
Paul Reda: A good promotion. Yeah, a good thing that you’re gonna be giving people. Discounts, free gift, something.
Kurt Elster: All right, so it’s gotta be… You gotta go big or you can’t separate signal from the noise. So, my ideal is exclusive limited product, either via a new product launch or free gift with purchase, or a bundle, whatever it is. But barring that, site-wide sale. And with a handful, like we got some distressed inventory we want to get rid of? Okay, sell it at cost.
Paul Reda: Doorbusters.
Kurt Elster: Yeah. Door bust. Get rid of it. But there’s so many other people offering amazing sales, it can’t be mediocre. It can’t be lukewarm. So, I think those are really your only two options. So, you’re right, first we gotta start with the offer. That works.
Paul Reda: And then just email everyone until they hate you.
Kurt Elster: Well, you segment it.
Paul Reda: And you want them to hate you, because isn’t the rule it’s like if you don’t… If you’re not consistently seeing people unsubscribe, you aren’t emailing enough.
Kurt Elster: It would be weird if you sent out a broadcast email and no one unsubscribed. That I would find extremely suspicious.
Paul Reda: That would be bad, like it means that no one opened it.
Kurt Elster: Yeah. There’s just no way anyone has written an offer that compelling that no one unsubscribes as soon as you’re asking for their money.
Paul Reda: Yeah.
Kurt Elster: So no, I think email is going to be your primary channel. That is the owned channel. Right now, because of political ads, and because of people shifting spend away from traditional media to promote a website as opposed to a retail store that could be closed or at limited capacity, Facebook ads and PPC ads in general, the costs are way up right now. So, I already saw two people this morning emailed me and were like, “Hey, are you seeing any other clients with terrible or declining ROAS right now?” And the answer is yes. And it’s because people are likely gonna slow down on spending because they know Black Friday’s around the corner.
And the dark secret of Black Friday is a chunk of those sales that you make, not all of them, but a chunk of your holiday sales are really sales deferred from October and late September.
Paul Reda: Yeah. We know-
Kurt Elster: That’s the dark truth.
Paul Reda: We know that that’s true.
Kurt Elster: Yes. So, you’re going to see… Things are gonna be a little soft right now and your ad costs are gonna go up, and then on top of it, you’re competing against huge brands like Walmart and Target who aren’t open on Black Friday this year and instead are gonna shift people to their website. Well, to promote that, they’re gonna do the most obvious thing. They’re gonna go to the traffic store, Facebook ads, and buy their traffic there.
Well, that’s gonna mess you up. So, right now I think you need to be focusing on building those owned channels. Your SMS list, your email list, and your remarketing list. And if you collect those emails, Klaviyo will let you sync them to a custom audience in Facebook and then remarket to them. I don’t want to be buying traffic right now. I don’t want to be sending cold traffic if I can avoid it during… Especially in the back half of November.
So, I think focus on owned channels, focus on having a really good offer, and then I think the other thing you need to be doing is… Well, email more than you think. I know Ezra said he does 50 to 60 emails.
Paul Reda: I mean, if you have not-
Kurt Elster: Per person.
Paul Reda: If you have not listened to last week’s episode with Ezra where he breaks everything down, you absolutely need to listen to it.
Kurt Elster: Oh, it’s so good.
Paul Reda: It is 100% a must listen. He makes millions of dollars every single year and he’s just like, “Here’s exactly what I do. I’m just gonna open my little box of secrets and tell you all of it.”
Kurt Elster: Yeah. No, guy is an open book.
Paul Reda: He’s totally fine with it.
Kurt Elster: Oh, it’s great. A rising tide lifts all ships. So, yeah, send more emails than you think, and then I think the final piece is this year, Black Friday we normally have like… It’s 25 to 30 days between, or like 20 to 25 days. How many days do I have between Black Friday and Christmas?
Paul Reda: It’s gotta be more than 25.
Kurt Elster: All right. 25 to 30.
Paul Reda: Let’s call it 30. I don’t know when Thanksgiving is.
Kurt Elster: This year, it’s 26 days.
Paul Reda: It can’t be 26 days.
Kurt Elster: No?
Paul Reda: Well, if Christmas is the 25th, is Black Friday November 30th?
Kurt Elster: Oh yeah. No, I can’t do arithmetic. Uh oh. Oh no! But the shipping dates this year, like the shipping cutoff dates look the same as last year. So, we have… But Black Friday comes a little earlier this year.
Paul Reda: All right, so Black Friday would be November 27th, which means 28 days until Christmas Day. Obviously if you’re selling stuff on Christmas day, it’s not getting shipped before Christmas.
Kurt Elster: Yeah. And like really by December 15th is when we’re gonna start hitting those cutoff dates.
Paul Reda: Okay.
Kurt Elster: So, that’s your window in which people can buy online. Not that big. So-
Paul Reda: But I think it’s crazy to put the focus on Black Friday anyway, because isn’t there some crazy stat that like half of all Christmas shopping is done by Black Friday at this point?
Kurt Elster: There are people who start their Christmas shopping in October. I have already purchased several gifts for my kids, like we establish this is the gift budget, let’s make the list, and we already started getting it out of the way. At least for some… Like LEGOs, we know they don’t go on sale, so if I can get 5% off from Target, I’ll just buy those and get it out of the way right now, and then I’m not… Giant credit card bill doesn’t show up in January. Just space the stuff out.
But yeah, I think the smart money’s on starting earlier this year, and the way you do that I think is gonna be early bird sale, where you do like, “Hey, you’re a VIP,” or you email your whole list, “Hey, if you want to know about the sale early, sign up here.” Or, “Hey, you’ve made a purchase in the last 12 months. We appreciate that.” Or, “Hey, you’re a VIP customer,” which we define as like you’ve spent more than $500 with the brand, whatever it is. And so, we want to thank you, reward you, and we’re gonna run our Black Friday sale early. We call it the VIP early bird sale. You get access to it.
And so, you run the sale two weeks early. You run it in early November, and then that way you can run a soft version of your… an early test soft version of your sale and if it works, great, then you rerun the same thing at Black Friday. So, now we’re capturing… We’re running the sale twice. We’re capturing that value twice. And we get to test it out and make sure that the offer lands and resonates with people, with the audience.
Paul Reda: And if people buy during that… I mean, I’m just thinking more about Ezra’s thing, he was all… and even the week before that we were talking a lot about pruning your list and getting people… Getting non-buyers off your list. So, it’s like can we use that early sale? Because if they bought during the early sale, I don’t think we’re… We’re not gonna be hitting them as hard during the actual Black Friday, are we?
Kurt Elster: Yeah. I would definitely use segmentation, so what you could do, segmentation and automation, so one of the things I would do is anyone who makes a purchase, and this is from Ezra, you then email them the next day, “Hey, if you want to make a second purchase, you got 48 hours, here’s an extra 15% off.” Whatever it is. So, we try and extend that customer lifetime value on autopilot, so when we say 50 to 60 emails, some of these are triggered. They get additional emails triggered by their actions.
Paul Reda: Yeah. One human being is not getting 50 emails from you.
Kurt Elster: No. And so, the other thing we could do is if let’s say they made… They made a purchase and then seven days later the sale happens, maybe you want to segment them out so they’re not like, “I just bought that thing that’s now 30% off.”
Paul Reda: Yeah.
Kurt Elster: Because that’s always annoying, so maybe you want to segment them out, or, “Hey, they made the purchase, so let’s not keep hitting them up with sale’s ending! Sale’s ending!” But depending on how aggressive you want to get, maybe you want to. Maybe people do tend to make repeat purchases. It’s gonna depend on the brand.
Paul Reda: Well, I think it would be a good thing… Again, and this goes back to something we’ve talked about before, is if you have some sort of accessory or side thing where it’s like, “If people buy X, they might also end up wanting Y, which goes with X,” so if they buy X and the sale’s ending, but they’ve already bought, send them the email that’s like, “Hey, the sale’s ending, it’s your last chance to buy Y to go with the X you already bought.”
Kurt Elster: Oh, okay, yeah. So, cross promo.
Paul Reda: Yeah.
Kurt Elster: I like that a lot. Yeah. Anything we can do to add, because the way you phrased that, that’s adding value to the customer, like, “Hey, do you want this accessory? Hey, we saw you bought a digital camera from us. Did you want the tripod, the memory card?” That kind of thing.
All right, let’s make it a better experience for them, and then we’re also extending our own customer lifetime value. And then I’m not paying to acquire this customer. I already have them. Yeah, I like that-
Paul Reda: Yeah. And that’s the other thing of doing the sort of early bird type sale thing, on the one hand people are gonna have bought, but on the other hand you know who’s hot.
Kurt Elster: Yes.
Paul Reda: By having the early bird sale.
Kurt Elster: Anything… Well, and I think the other thing to look at is like make sure you’ve got opportunities to increase average order value, so upsells from one product to a bundle, or cross sells, like, “Hey, you bought the camera, buy the memory card,” kind of thing. I like the bundles, though, because you can go in Shopify and there’s a report in there called Website In Cart Analysis, where it just goes, “Hey, for the last 30 days, here are the items that got added together.” So, Shopify will straight up tell you this is the stuff you should be bundling or cross selling.
And what’s great about doing it as a bundle is it’s like, “All right, let’s say people who bought glass cleaner also bought a microfiber glass cleaning cloth.” Okay, so now I’m gonna sell those as a combo, as their own separate product. If someone adds glass cleaner to cart, then I use Bold Product Upsell and what I love about it is it’ll go, “For just 5 bucks more, did you want to upgrade to the combo?” So, instead of like I’m not adding a product and I’m not saying, “Buy the combo for $15.” I’m saying, “For 5 bucks more, get more value.”
Paul Reda: Yeah.
Kurt Elster: I like that a lot.
Paul Reda: Yeah. Or something for increasing average order value, you just… You set a threshold that’s like, “Well, if you spend 60 bucks you get this free gift with purchase.” And then people gotta… I mean, if I’m already spending $49, I’ll spend the extra 11 to get the free gift.
Kurt Elster: Well, you know what? If you think your only option is site-wide sale, do a tiered promotion. So, let’s say we go, “All right, we’re gonna do a site-wide sale and it’s 25% off everything.” Don’t do that. Do 25% all purchases over $75, 20% all purchases over $50, 15% off all purchases over $35. So, break it down as tiered and then… Yeah, you’re doing this big discount, but you’re also really ramping up the average order value in doing that.
Paul Reda: I think you went in the wrong direction on that.
Kurt Elster: Did I?
Paul Reda: The more they spend, the percentage off should be higher.
Kurt Elster: Yeah, that’s what I thought I said.
Paul Reda: I don’t think that’s what… I don’t know, I wasn’t listening. I was looking at my phone.
Kurt Elster: Okay.
Paul Reda: We’ve already established you can’t do math, so-
Kurt Elster: I really can’t. I gave my graphing calculator to my 11-year-old. I was explaining it to him-
Paul Reda: And he told you you were a loser.
Kurt Elster: Yeah. He laughed at me. He goes, “I already know.” I’m like, “Well, I didn’t learn how to use this until I was 13.” Shame. I brought shame upon my household.
Paul Reda: Well, you crossed that Rubicon years ago.
Kurt Elster: Anyway, let me put my war makeup on. All right. I think that’s everything.
Paul Reda: Do we have thoughts on the… Everyone’s like, “Black Friday! Black Friday! Black Friday!” Do we got thoughts on the back end? Like end of December. It’s December 20th. It’s after December 20th. It’s the week after Christmas, between Christmas and New Year’s. What are we doing then?
Kurt Elster: Good question. A lot of people, they got time off during that period, and they’ve got money burning a hole in their pocket.
Paul Reda: They got that Christmas money from grandma.
Kurt Elster: That’s right. And so, doing a promo like literally on Christmas where you go, “Hey, didn’t get what you wanted? Here’s 15% off our best sellers.” Boom. That… Those sales often work really well. And a lot of brands don’t run them and email in general is pretty quiet at that time, so you stand out by offering it, and you’re… We know that people suddenly have disposable income and they’re thinking about gift giving, so they’ll buy themselves something.
Paul Reda: And they’re like trapped at their uncle’s house, where everyone’s like, “Blah, blah, blah.” They’re looking at their phone and feeling kind of crappy, and then suddenly your email appears and it’s just like, “Hey, want to make yourself feel better by buying something? How about you buy something?”
Kurt Elster: I like it. We need some Christmas music. How much of this can I play before it’s copyright infringement?
Paul Reda: I don’t know. I… Three seconds. I wouldn’t go more than that. Because YouTube’s got the automatic thing.
Kurt Elster: Oh no!
Paul Reda: We’re gonna get a copyright strike.
Kurt Elster: No, I’m glad you brought that up. That’s a good point. Okay, let’s… We’ve been going.
Paul Reda: And I think New Year’s Day, if you-
Kurt Elster: That’s always like, “New Year, New You!”
Paul Reda: Well, it’s like if you got anything left over too, that you’re like, “Well, this part of my Christmas didn’t work out. Get this out of here.” You really just like… 80% off. Get rid of it.
Kurt Elster: All right. That’s it for us today on The Unofficial Shopify Podcast. I’d love to hear your thoughts on this episode. Please join our Facebook group. Search The Unofficial Shopify Podcast Insiders on Facebook and I think that’s all of that song I can play.
Paul Reda: If we keep it quiet, Phil Spector won’t get us.
Kurt Elster: Oh! I’m so scared of Phil Spector. Actually, I should be. Oh my God.
Paul Reda: He’s in jail.
Kurt Elster: He made a great album then did horrible things.
Paul Reda: He made a lot of great albums.
Kurt Elster: Phil Spector. I’m jimmying the camera for Phil Spector. All right, see you guys.
Paul Reda: All right, bye.