w/ Daniel Patricio, Bull & Cleaver
Imagine spending eight years shaping products inside Shopify's hallowed halls, only to step out and run your own store. That's Daniel Patricio's story. He left Shopify start his own store, Bull and Cleaver. But here’s the twist— Daniel's journey took an unexpected detour when Apple's iOS 14 update shook the landscape. Together, we'll explore this new conversion rate normal, take a sneak peek into the future of online storefronts, and share some insider tips.
The Unofficial Shopify Podcast
Kurt Elster: On today’s show, we’re diving deep into one man’s odyssey from Shopify insider to eCommerce innovator. Our guest today is Daniel Patricio. He spent eight golden years at Shopify as a product lead before launching his own eCommerce store, Bull and Cleaver, only to then get hit by the iOS update. On this episode, we are talking conversion rates post-iOS 14, the future of storefronts, and Daniel’s insider tips for you. Get your notepads ready, my friends. I’m your host, Kurt Elster.
Ezra Firestone Sound Board Clip: Tech Nasty!
Kurt Elster: And this is The Unofficial Shopify Podcast. I got a new cha-ching sound effect. That one’s like a little sharper, a little higher, a little… Nice musical quality to it.
Daniel Patricio: I like it.
Kurt Elster: All right. I need just like the straight cha-ching sound that the Shopify app uses. I gotta pull that out of the iOS app. Use that.
Daniel Patricio: Funny enough, my brother designed it.
Kurt Elster: No way.
Daniel Patricio: I have it somewhere in my email inbox, I think.
Kurt Elster: What are the chances that I would bring that up while talking to someone who knows where it came from?
Daniel Patricio: Yeah. Yeah.
Kurt Elster: So, you got started with eCommerce by working at Shopify, and that sounds like that was quite some time ago.
Daniel Patricio: Even prior to joining Shopify, my first company, I think I pitched Shopify on an app when they had the first app contest. That was the way back, way back. But yeah, I think diving deep in was about 10 years ago. I came to Shopify in 2013 when I was part of a product design agency called Jet Cooper, and we were acquired by Shopify.
Kurt Elster: Jet Cooper. I remember that. And I didn’t know what Jet Cooper did. I just knew it sounded really cool.
Daniel Patricio: It’s a good place to start. I think back then, there weren’t a lot of people exclusively doing design, exclusively thinking about mobile, and we were kind of an acqui-hire. We didn’t do too much eCommerce work, but I think we doubled the number of designers in Shopify when we joined. So, it was a fun and interesting time to kind of bring the teams together and that kind of thing.
Kurt Elster: Okay, so that’s about 10 years ago. That’s not long after I became a Shopify partner and probably just before we said, “You know what? We’re going all-in on this and just doing this exclusively full-time now.” It was an exciting time because it was so… You still had that very… that startup culture. Move fast and break things. That kind of stuff.
So, tell me about your first job at Shopify. What were you doing there?
Daniel Patricio: So, the place I started was on onboarding, so kind of setting the experience as soon as you signed up. And nobody had really ever looked at it before. Nobody had ever thought about it before. And Shopify was getting a bunch more complicated at that time. I think Stripe, the auto setup of payments just came up, and we’re like, “Okay, foot on the gas. Now you don’t need to set up a payment gateway.” Just a nightmare for my first business. You know, you gotta put up 10 grand at the bank to get a merchant account, and they were automating that.
Kurt Elster: I forgot about how revolutionary Stripe was. Like today, we take it for granted that like, “Oh, of course there is an internet payment processor that just works with everything and is easy.” Versus before then it was, “All right, fight your way through getting probably an authorize.net account, and now in this really stodgy web interface try and figure out your API keys and hope you set that thing up right so that you actually capture the payments and get notified about it.” Ugh. It was such a pain. Stripe made life easier.
Daniel Patricio: Yeah. You had to be really motivated to start a store versus now. You don’t ever think about it, right?
Kurt Elster: And you were there a while, and it was during just incredible growth phase. How did things change? Because they really would have added a huge number of people in that time, which just like… By necessity, by organization, by culture, things are going to change.
Daniel Patricio: Yeah. I think there were somewhere around 60,000 customers when I joined and 2 million plus when I left, so orders of magnitude, and even the company I think… We were 300 in total when I joined. I was one of the first product managers. And then we were like 7,000 plus when I left. And so, I think the weird part is it never… It always felt crazy, like doubling I think is always a shock to your system. Growth top line wise and people wise, and just everything was always doubling, so I think there was always new problems, and I think… I don’t know that the later problems were any less complex than the early ones. They were different ones for sure.
I think one of the best things about Shopify is they really know who they are, and you know, that doesn’t always work for everyone, but they really know who they are and why they do things, like a platform focus, their deep engineering focus, the focus on quality, and building things.
Kurt Elster: So, you’re there on the inside on this rocket ship of a software business, and you see how the sausage is made, and yet you still during that time said, “I should start my own eCommerce store.” What possessed you?
Daniel Patricio: I think it was there was actually someone, his name’s Tucker, and he was on the marketing team, and I think he was in support, and then he kind of joined the marketing team, and basically he took a coffee… He was drop shipping coffee. And I think he was selling maple bacon coffee, which no one had done before, and he went very hard into the bacon branding, and it took off. His sales blew off and I think he sold the company in like three months or something.
And I was like, “Oh, man. I want to be like him. I want to learn from him.” There was also another guy, Mark, that sold silk flowers online, and I just looked up to these two folks in the office and I’m like, “I love what you’ve done to actually try and start something,” and you know, they just had a deeper knowledge of the product and a deeper empathy. Because it’s easy to look at software as a bunch of buttons, and screens, and like, “Oh, how do we design this better?” But when you felt the pain, when you’re going in and you’ve gotta do five clicks to do something, you’re like, “Why did you do this?”
So, I think that was kind of the motivation on that side, and then when it came to starting my own brand, I grew up in South Africa, and there’s this snack we have in South Africa called biltong. It’s like beef jerky but like way better. And I couldn’t really… Nobody was really selling biltong online and I’m like, “Oh, this is an interesting product. It’s different. Photograph beautifully.” And so, I was like, “Okay, let’s try this.” And I mean it was very humble beginnings to start, like I think I literally threw up the store with stock photography, and I was doing testing some weird marketing strategies on Instagram, and I didn’t even set up the payment gateway properly, I think.
Kurt Elster: Oh, geez.
Daniel Patricio: And then I was busy, right? I had a full-time job, and just got married, and my life was complicated, and then somebody messaged me like, “Hey, I tried to buy from your store, but it wasn’t working.” I’m like, “Okay. Sick. This is the signal. This is the signal I need that I’m actually gonna finish this store and launch it.” So, that was kind of the push, and then… Yeah, it was a whole roller coaster from there. But yeah.
Kurt Elster: Yeah. Having a stranger reach out to say, “I’m trying to give you money and I can’t.” That’s excellent validation. The friends and family, you’re always suspicious. You don’t know. Are they just being nice? Are they being supportive? Versus like for a total stranger to go through the effort, okay, there’s something here. There’s at least one person willing to pay for this. So, if there’s one, certainly there’s 10 that tried and we didn’t hear from them.
I’m looking at the store now. Bull and Cleaver. Here it is. Phenomenal content but incredibly simple, straightforward theme. No goofball widgets and apps and things like popping out, flying everywhere. I like this store. How much branding? How much effort? How do we feel about this now?
Daniel Patricio: I mean, it’s got about a year. It’s been a year since I’ve done some polishing on it. But I think I am overall quite proud of it. I don’t think I’ve ever paid for a theme. I’ve always used… I think Dawn is what this one’s based on and that thing, I think… I think something I learned when I was on the onboarding team and was running a lot of experiences with themes, it’s like people don’t even know what they’re looking for in a theme, you know what I mean?
Are you trying to figure out the top? Do you like the banner? Do you like the collection page? Do you like the colors? The fonts? The photography in the default theme? I’ve learned that people don’t even know what a theme’s meant to be. And you know, my kind of mindset is always like the theme doesn’t matter. You could pick a better foundation, but you know, realistically you can make anything beautiful. You can make anything fast and functional. I think people sometimes get excited if they need to find the perfect theme, they need to add all the apps, and then you end up with a store that’s super slow, it’s bogged down, it becomes quite messy.
So, yeah, I’m definitely proud of what we got there. I think I always… While I was at Shopify, I was always a little bit of an abandoned child, like I grew the store very quickly in the first year. I wish I’d just given someone a pile of money and said, “Go about all the ads.” I didn’t realize how good it was when I started, how good ads were, but yeah, I grew quickly and then they’re like, “Oh, you should work on marketing stuff at Shopify.” And then my life got complicated. I became a lead, and had huge teams, and those kind of things. So, the store was on autopilot, I think, and then when I left Shopify, I went all-in on it.
And now that I’m building the next company, it’s unfortunately not investing as much time as I’d like into growing it. But yeah, I’m very proud of the building blocks we have there and very intentional about how we built it. I think it’s really just about sticking to the simplicity of things and do good photography. Do it really well. Keep the theme very fast. Know who you are. Know what the branding is. There’s a lot of subtleties there that really make the difference.
Kurt Elster: I hope people take that to heart. Someone who worked at Shopify, knew that platform inside and out, built a great looking and successful store, and did it using the free default Dawn theme combined with great content. Less worry about all the tech stack, and the features, and I have to have this and that. The table stakes are the content, the product, and the product-market fit.
So, what made you want to leave and go full-time on this?
Daniel Patricio: I mean, I think especially if you’re early in at Shopify, there was… We were always very proud. Like in Canada, there’s not that many Shopifies historically and that sort of thing, and there weren’t a lot of companies to look up to, and when we started to see success and when we joined, I think there was a big emphasis from everyone internally that like, “Hey, I hope you don’t all retire on an island and drink coconuts all day.” You know, you learned something hopefully at this company. You’ve got a bit of fuel in the engine career wise. Please go and do something, right?
Tobi, especially if you’ve spent time at Shopify, I think he’s excited to see you leave, especially if you’re building something, right? If it’s not the right time for you, you don’t want to just sit there for the sake of being there as like, “Oh, we need to keep someone there because they’ve always been there.” And even if you’re very valuable, I think it’s a compliment to the history you’ve had there to go and build something.
So, I think for me, the things I love, I love working with merchants. I just think pretty much every person in my family is an entrepreneur. I’m almost the only person in my family that has had a job, so Shopify was a natural place for me in that way. But I always wanted to kind of start something, and I love working with merchants, I love making that work. I love the complexity of the platform and the building blocks. And that was what I loved doing at Shopify is teaching people how the system worked, why this was built in this way, what are merchants thinking about, what are they doing?
And I think, yeah, it was just kind of time where as a lead, you do a lot of coaching, right? And teaching, and telling the stories, and pointing all the ducks in the right row. But I kind of just wanted to build again, and build something from scratch, and challenge myself, do something very hard that I didn’t know all the answers on. I think making the leap to running a store was definitely a leap. So, okay, cool. I’m gonna pay bills with this and it’s my sole point of failure and success. That was definitely a leap.
Kurt Elster: When you made that change and you go from Shopify employee to full-time Shopify store owner, what do you think… What’s the big lesson in that transition? You went similar job, different sides of the table.
Daniel Patricio: You know, a lot of the conversations I have are about the fun technical stuff, you know what I mean? We would spend all day thinking about the sections you can use in a theme, and what is the perfect… Literally spent 100% of my time thinking about very nerdy, very technical problems that everyone asks as soon as they want to start. What’s the perfect theme? What apps should I use? And then I think I quickly learned that doesn’t matter at all. Again, if anything it was a distraction for me as an early stage store owner, you know what I mean?
The things you have to get very good at are what do your funnels look like, right? How are the emails looking? How is the ad creative rocking? Do you have an angle? Do you know where you’re going for that? Are you writing a blog post this week? And it just… It was a very different operational model and I think I’ve got a lot of respect for D2C operators, and a lot of the people I’d been following on Twitter for quite a while. I’m just like, “Oh, man. This is what it really looks like to do that.” Because the tech is frankly a distraction.
I mean, you know, kudos to Shopify for their history. They made it so that you don’t have to be technical, and you shouldn’t be. You know, you don’t need to learn about the things that people inside Shopify know a lot about, you know what I mean? And I think that was the biggest shock. I think I was always quite balanced in that way. I’m not a tech for tech’s sake person. I care about the bottom line, the impact a lot, but I had to walk the talk myself.
Because you know, yeah, that stuff didn’t really matter.
Kurt Elster: You had that techy, geeky, that engineering mindset, right? And then you go into running a store where all the same tools, except now knowing how they work becomes much less important, and instead it’s about… I don’t need to know how my paint is formulated. I need to be able to pick up the paint brush and paint. So, you have to do the work, and have that creative output, and it has to serve a business. It has to serve this profit motive. Really, very different kind of thinking. Sounds like it was a challenge to adapt to it, but certainly you did. What were some of those road bumps when you went full-time, started scaling Bull and Cleaver, here?
Daniel Patricio: The biggest ones were like, “Oh, I haven’t been watching my margins.”
Kurt Elster: Uh oh.
Daniel Patricio: You know, and it’s meat. It’s a meat product, so there’s meat processing, and I’m like, “Oh, I haven’t…” I had a couple people helping me in the business and we’re like, “Oh, let’s add an extra SKU. Oh, let’s keep the products where they are.” And then you go and it’s fine if you got a day job and you’re like, “Oh, this is my little experiment.” But then you’re like, “But yeah, I gotta pay my bills with this.” It’s like you start really digging into the financials and really understanding it. Gotta be careful with how many SKUs you’re adding because adding SKUs seems like a good idea at the time, and then there’s more space in the warehouse, there’s more products you gotta restock across more things, so I think I got slapped in the face with a lot of that kind of very early on. And then I think the blessing and curse was we started growing very quickly, and then it was like, “How on earth do you forecast?”
Because you know, product-
Kurt Elster: I still don’t know.
Daniel Patricio: Yeah, so I still don’t think I’ve figured that out. I think it was like four to six weeks lead time for us, and then you’re like, “And we’re gonna double next month?” So, we gotta double or order now, and how are we gonna do it? So, I think that whole side was… I think when I was looking to do a full-time, completely change the game, and I felt like a child again. I’m like, “Okay, I need to learn this whole thing.” And then we had to change our warehouses, and just a lot of operational work, because I think again the best D2C operators I think are excellent operational people, and excellent marketers, right? And I think those are two things I realized I was inexperienced in.
And then, I think on the growth side, I think I started in like September-October kind of going full gas on the store, and then the iOS stuff happened, and that was a complete shock because I’m like, “I’m barely figuring out ads,” and then we kind of got… Everything was thrown out. We’re like, “Oh, nobody knows how ads works anymore, right?” Everything just looks crazy and you’re like… You’re not sure how and why it's working. So, I had… My partner was kind of doing a lot of the hands-on marketing stuff, and I was like, “Okay, let me start digging into the store. Let me start digging into conversion rates. Let me start digging into offers. I need to find a way of us creating leverage so we can keep scaling the ads,” and that kind of thing.
So, that was the big one, I think for us.
Kurt Elster: And so, it sounds like your traffic, your qualified visitors, the people who are gonna buy, your top of funnel strategy was Instagram, was Meta ads?
Daniel Patricio: Yep.
Kurt Elster: Back before it became Meta?
Daniel Patricio: Yeah. Before it was Meta. Yeah, so we were… That was the playbook I used to start. I think actually for many years, Google Shopping killed it for us. It was really great. It’s where we got a lot of our first sales. I did the Shopify course on Google Shopping, so I thought I knew it. And then we ended up getting a couple competitors that were selling in Walmart and Amazon, and it just decimated Google Shopping as an opportunity, like costs went through the roof. So, we’ve always had a lot of success with the Meta ads. I think for two reasons. Initially, it was it’s very easy to target people that have lived in or visited South Africa, so that was always a layer to the cake for us of customers to get. That also went out the window with the iOS changes.
So, we actually had a bit of heat on us. We were like, “Okay, we can’t just keep selling to them.” There’s not that many in America, either. So, we were like, “Okay, how on earth do we sell this to someone in America that’s never been to South Africa?” And the biltong sounds like eating some strange part of animal that you’ve never heard of. So, that was the big, I think, challenge for us.
Kurt Elster: Seeing it written out, it’s spelled biltong. B-I-L-T-O-N-G. Hearing you pronounce it, it sounds like bull tongue to me.
Daniel Patricio: Doesn’t help. Yeah.
Kurt Elster: When you say it quickly. And so, I wonder if… I mean, do Americans think it’s like… that that’s what they’re getting? Bull tongue jerky? Which you could totally do. You can eat tongue.
Daniel Patricio: Yeah. There’s nothing wrong. I grew up in a Portuguese household that loved tongue. My mom gave it to me as a kid. It wouldn’t be a bad thing. But yeah, I think it was a big part of the confusion, so it was a big angle we needed to kind of think around. I mean, I A/B tested a lot between biltong and just calling it beef jerky, or something like that, and I think it was never completely conclusive, and I think it actually… It weakened, calling it beef, because there’s a pretty strong dichotomy. South Africans get very offended if you call biltong beef jerky, so that was one problem.
But I thought the bigger challenge we wanted to take on is like how can I… Hopefully, people will learn about biltong, because we had a big competitor that raised a whack load of money, and they were spending a lot of money on educating the average Joe American about biltong, so I was like, “Okay, let’s try and ride that wave,” and in all of our marketing we’re like, “How can we get people to think about this as a healthier jerky but learn about biltong as a category?” So, it was one of those hard choices. I still have debates with people these days who are like, “Oh, should you just call it beef jerky?” And that kind of thing.
Kurt Elster: In your experience, what do you think are some of the key tips here for a store that really sells? I’m hearing hey, less tech stack, more content, more story specifically, and then within that you’re really experimenting with how you position and explain the product, and then how you’re targeting it, which kind of came out necessity with that iOS update that really hampered a lot of sales.
Daniel Patricio: Yeah. Yeah. I think my methodology is kind of like… It’s one I’ve been using kind of forever. I think I kind of learned this in my onboarding days at Shopify, like all my biggest… Onboarding was very simple at Shopify in a way. I think in any… Consistency through the funnel is how you make more money, right? Consistency of the experience, right? So, one of the biggest things I worked on at Shopify was when we were acquiring a lot of customers on Facebook. We were like, “Hey, let’s tell them you can sell on Facebook when you’re on Facebook.” And then we were like, “Oh, let’s actually create a landing page that talks about Facebook. Oh, great. Okay, that’ll increase conversion rate.”
And then in Shopify we’re like, “Okay, this has increased conversion rate.” So, my playbook when it came to my own brand was kind of the same in a way, so what I used to do early on, because I didn’t know how I could convince people to try biltong. So, what I would do is I’d run like 10 different ads with same image, and trying different copy, and different angles, and you know, it’s not just random word generation. 10, probably like, “Let’s try something a bit different. Let’s call it you’ll never eat beef jerky again. Let’s be aggressive against beef jerky.” Or, you know, “This is South Africa’s gift to the world.” Something like let’s go at a South African angle and build some curiosity. So, tried different things that you can learn from different experiences, and then I would… I don’t even think I got purchases in the beginning, because I was like… I was barely spending any money and whatever. But I would see which ones had the highest clickthrough rates and then I’m like, “Oh, okay. This one’s working.”
I don’t have enough data. But let me change the whole website. So, would rewrite my whole funnel to like, “Let’s try this copy and let’s see what happens.” And then it would click. And then you’d be like, “Oh, interesting. Okay, cool. How can we go deeper on that?” So, that’s kind of what I did at all phases, and I think the big breakthrough for us to selling to the American audience is like… I think I had a friend; she’d never tried the product over 10 years, and she was a foodie, and she was like, “Oh, Dan, I have to finally try your stuff.” And then I sent her a whole bunch of bags and she was like, “Very interesting. I actually didn’t expect it to be so different between all your different flavors. I didn’t know which one I wanted. I didn’t know if I wanted grassfed, or chili,” or we have this thing called droewors, which is like a… It looks like a peppery kind of thing. She’s like, “I had no clue what any of these things were. Thank you for sending me a bag of everything.”
I’m like, “Oh, interesting.” Maybe we should play around with a taster pack. Removing that friction of which thing do I try and that kind of thing. So, we were like, “Okay, cool. Let’s create this product and kind of tackle it.” And then that started to work, and then we just like… From our ads, to our landing pages, to our product pages, to even our popup on the site, we’re just like, “This is the thing. We want people to try a taster pack.” And then they’re gonna pick something they like, and they’ll order again. And maybe we upsell a subscription. That is a journey. And so, we just went through every step. How can we make that obvious on the landing page? How can we make that obvious in the ads? How can we make that obvious everywhere?
And I think just even again, little hack that I took from my Shopify experience, is like we took a screencap of the ad, and we put it on the landing page, in the banner of the landing page, and we saw a huge lift in that. Because just people are like… I think we have to recognize people are lost and bewildered when they’re on your website, right? They’re like, “I clicked on this ad. What is this? Am I in the right place?” And I think just giving people that comfort of like, “Hey, this is that thing that’s better than beef jerky that you saw. Yes, it’s called biltong, but you’re in the right place. That same ad that caught your attention, you’re in the right place. It’s okay.” And you just gotta keep… Bringing the consistency of messaging is a very… I think it’s like a safety thing for people, too.
Kurt Elster: I like the phrase safety. I often refer to the safety net, like there’s some things that you want that seem either pointless or obvious to you as the brand owner because you spend more time on that site than literally anyone else on the planet, and this will always be true. So, you have to get out of your own head and just accept that it is not obvious to the person who has spent maybe three seconds looking at the site after being interrupted scrolling through whatever by an ad. And so, it really has to have that consistency. I’m glad you brought that up.
Based on the timeline here and what you’re saying, I am guessing you left Shopify, go all-in on Bull and Cleaver, and then just get slammed by that iOS update. How did that go for you?
Daniel Patricio: Yeah. I think it was a big challenge, right? I had to… I mean, I think there was an interesting curve in the story. I think when I first came in, I’m like, “Oh my gosh. I need to focus on ops. I need to focus on warehousing. I need to focus on the model. I need to focus on figuring out marketing again.” And you know, we double, tripled, and whatever. But I think the funny thing was a couple months in, when it kind of had the breakthrough of actually acquiring Americans cheaper than South Africans through all this stuff, was I did that. That breakthrough was me leaning back into my strength a little bit. Because we orchestrated… We did a whole bunch of experiments on the landing pages, and we built the landing pages in Shopify sections, so we could test something, and then bring it from the landing page back there, and I started building a bunch of… We were doing a lot of promotions, and I started reading, detecting a lot of friction in how we were doing that, so I built a prototype for what became Abra, and that was what was making the business successful.
So, I think I kind of came to a realization. It was a bit of a journey of like you’ve done something for eight to 10 years and you’re like, “Do I do the same thing for the rest of my career? Let me try something different.” You learn your magic a little bit. It’s like, “Oh.” It turns out it’s rare to know how to pull these levers in Shopify in this way. And it made a thing that started making our business really click, but I think I also started getting the itch. I was showing off the stuff I was quite proud of that was kind of a new solution. People were like, “How on earth did you do that? Why are you doing that in that way? Why aren’t you using just the hipster landing page tool of the moment right now? How are you making this thing happen?”
So, I had a lot of friends that I was getting to know on the merchant side saying like, “Dan, just so you know, nobody has that. Nobody can do that.” And I’m like, “Oh. Okay, maybe I’m coming back to my roots a little bit.” So, I think that’s where it kind of came. Yeah.
Kurt Elster: And so, you then… I have a SaaS business that you’ve started after leaving Shopify, after Bull and Cleaver. Now you have a new thing. You’re back to software. Tell me about Abra. What the heck is this?
Daniel Patricio: Yeah, so I think Abra kind of came from this place of we had the site, and I worked so hard to build one version of it, and took a lot of time, and a lot of energy, and expertise, and then we were trying a new promotion. We were like, “Okay, cool. We’ve got spicy products we want to push right now. We want to upsell those and those are working on our retention side.” And we’d give the person the discount and they just wouldn’t use it. And we’re like, “Oh, well, that’s annoying.” And it’s because you give someone a code and they’re like, “Oh, you gotta memorize it, and put it in checkout.” So, we were having a problem kind of changing our site.
And you know, I’d kind of said to one of my developer buddies, I was just like, “This is so silly that I can’t change my store to make a promotion.” And so, we kind of built a prototype in my store where we were promoting grassfed biltong. We just suddenly changed the site. We updated the process to actually have that. We did a popup, and we followed the customer through the experience. And it doubled our conversion rate on our email campaign from like 10% absolute click to conversion ratio to like 20 to 25. And I’m like, “Oh, cool.” And then I showed it to a bunch of friends at Shopify what we’d hacked in our store. I showed a bunch of friends. [inaudible 0:31:38.8]. I don’t know why no one’s ever done this. This is very strange.
And so, I think that is kind of the genesis of Abra, and the real, the simple part of it is like we think simple, like personalization is way too complicated, but if more people could change their site and personalize it, they’d be able to increase conversion. So, kind of tested it with 30 people, they all saw great results. We saw people increasing the conversion rates by 25%, reducing their ad spend by 25 to 40% if they were using discounts in those ads, which is like a huge, material impact on your contribution margin and those kind of things. And then on the technical side, I was like, “Ooh.” I think I had… At some point in Shopify, I had a pitch of like, “I know a theme is just a lump of HTML, but wouldn’t it be cool if when I launch a promotion my site could just adjust to it? That would be amazing for my customers. I would get so many more sales.”
Everyone was like, “Oh, cool idea, but we need this, then we need this, then we need this, and this, this, this. It’ll be 10 years till we get there.” And so, I guess one of the fun parts of kind of being outside of the ecosystem is I can break the rules. I can just build it. So, yeah.
Kurt Elster: No, it’s a great idea. It’s a great use case. Because this is a thing that I’ve been dealing with recently that drives me a little crazy, is you run a promotion, and no matter how you promote that promotion… Promote that promotion. No matter how you hype it, when they land on the site, what pricing do they see and when do they see the discount? So, I get an email, it says, “Hey, 40% off storewide all weekend.” Cool. I click through because it’s using a discount code, it’s using a script, it’s using Shopify functions. However, I’m applying that discount, no one is seeing it until at least the cart or the checkout. They’re not seeing it on the homepage, collection, or product page. And so, they’re looking at that full price until they get to checkout, and then maybe even they have to apply the coupon code themselves.
What your app is doing is I see the discount immediately and throughout. And what kind of conversion lift are we thinking this is worth?
Daniel Patricio: I mean, again, we see… Matters on the offer. The important dynamics we actually find is like how big is someone’s cart, right. So, I think the one thing is you can build a landing page. You can auto apply a discount on a landing page. But you know, if someone wants to add more things, if they’re adding five things, if they’re adding 10 things to the cart, if you want to increase your average order size, it’s actually very, very, very important that the discount is actually applied there. So, I think that’s where we’ve been absolutely killing it. I think anyone in beauty, food and bev, even apparel where you kind of got this bundling in the carts that you want, we see… Depends on the brand, but anywhere between 25 and 200%.
It's kind of just simple user experience, right? There’s no secret, like, “Wow, how is this working?” It’s just simple, right? If your mom was shopping on your site and you are saying to her, “Hey, mom. I love you. Here you go. You get this special deal only for you as a VIP.” And you give her that code, and she’s gotta remember it in checkout, she’s not gonna buy, right? Whereas, if she goes on the site and be like, “Hey, welcome. You’re getting the VIP discount just by clicking on the link and the prices are there,” that person’s gonna buy.
Kurt Elster: Yeah, it’s just… It is a streamlined and sensible experience that way. And it eliminates the breakage. That always drives customer support people nuts in bigger Shopify businesses, where you’ve got this order volume coming through, they do a sale, and then guaranteed you’re gonna get a whole bunch of emails that are like, “Oh, I bought all my items, but I didn’t actually get the discount, so can you fix that?” Ugh. And it’s not tough. You do a partial refund. But it’s also not ideal.
Daniel Patricio: Yeah. Well, I think it’s… We saw the same thing. We actually had a customer, one of our earliest customers, he was… Whenever he did a promotion, in his email he had a whole section at the bottom that was like, “Here is how you use this discount. You go into this part of Shopify. You click apply checkout.” So, you have to literally… It increases conversion by teaching. That’s why he had to add it there, right?
Kurt Elster: Because on mobile in the Shopify checkout, the order summary is collapsed by default, and the discount code input is inside the order summary, and so you get people who are like, “Hey, I tried to buy, but I straight up could not find where the discount code goes.” And that’s why. And so, just eliminating that speed bump entirely, well, of course that’s gonna be worth a conversion rate bump. No, this tracks. It makes total sense.
Daniel Patricio: Yeah. And you know, I think the part that excites me the most is you know, I’m not like a, “Hey, everyone, isn’t it exciting you can give away more of your margin?” That’s not the part that… I’m not a discounting zealot. I think the problem is there’s this lack… It’s hard to do things the smart way with discounts here today, right? The easy way is you give everyone 20% off and then your margin’s gone. I was chatting with someone the other day, her name’s Jess Chan, she’s from an email agency called Longplay, and she has a data science background, and she’s super smart about this stuff. She’s like, “There’s six different offers you should be running for your six different cohorts of customers.” And that’s what I’ve seen that’s worked.
And she’s like, “Great.” She’s like, “The problem is merchants have no way to execute that,” you know what I mean? Out of the box in Shopify, you can’t run six different pricing offers to six different customers, right? So, that’s I find… The evolution of Abra has been like, “Okay, cool. People have this problem with discounts. They want to auto apply.” Great. But then the interesting thing was like, “Oh, wait. I can gate who gets that. That’s interesting.” But now I can run six offers. I can run 10 offers concurrently. I can run five different ones on Meta. I can use my retention campaigns. I can do things for my logged in users.
So, I think the part that’s exciting me about what we’re building right now is we have a new way of customizing the whole store at scale, right? Those are the merchants that excite us. They’re using us for all of their offers across their whole business. They’re using us in their retargeting ads and they’re new stuff. So, you know, that’s the very exciting stuff to me, so it’s about you can get far smarter. It’s hard to be smart today unless you’re using a tool like Abra I think to do discounts. You have to do the generic stuff. You have to give away all your contribution margin. Whereas I’m very lucky that the customers we get to work with are telling me strategies that I don’t see the average Joe trying, right?
They’re just like, “Oh, I’ve got one offer. I give everyone 10% off in their welcome email and that’s it.” I’m like, “Why?” Like, “I don’t know how to do that. It’s not technically possible to do anything more sophisticated, more nuanced.” You know, in your marketing textbook you’ve got this lovely strategy that you could do in theory, but in the tech today it’s super hard. So, I think that’s the part that really energizes us.
Kurt Elster: And you mentioned the tech today, and you have this wealth of experience. I want you to look at the crystal ball here. Make some… We’re not gonna judge you. We’re not gonna hold you to these like in five years we’re gonna be like, “I can’t believe how wrong that guy was.” Either where do you think Shopify is heading in the next few years, or what do you think the next thing is for online stores?
Daniel Patricio: Yeah, so I think with online stores, I think back to when I joined Shopify and it’s kind of horrifying. It’s like I’m almost shocked Shopify was successful when I look how bad the online store was when I first joined. You know, when you join, Shopify themes, now you’ve got the online store editor, and could be better in this way, and this way, and this way, but in 2013 you just had a sidebar with a bunch of settings, and you had your theme, and if you wanted to actually change things, you actually had to code it. And it was just, again, I always think about this like the old model of online store was just this lump of HTML, right? And now, I think there’s… I’m very excited. I’ve seen some of your stuff too around meta fields, online store sections, and those things sound so nerdy, so it’s almost hard for people to realize how powerful they are, and meta objects, and that kind of stuff.
But oh my gosh, this big lump has become these little modular pieces, right? And this dynamic kind of flowing thing. It’s actually a real thing now. It’s kind of mind blowing. So, if I look at the spectrum, there was this lump. Now there’s all these pieces. And I think some of the stuff that excites me that I hear from the recent additions is like personalization, like the price lists, and having these dynamic experiences. So, it’s like I think where store front’s gonna be, they’re gonna be far more programmable.
And they’re gonna be able to be dynamic. They’re gonna be able to be able to change. And they’re gonna be able to tweak things at scale. So, you know, I’m not… I mean, it might hurt me, and maybe I can get some free clicks about the perfect AI future of like, “Oh, components in the AI is gonna pick what someone sees.” Maybe. Eventually. But there’s also a lot of very smart people I know that have great visions for what they could do for a customer and that’s now possible, so I think I’m very excited by the future where it becomes more dynamic, and more modular, and you can just think about your… I mean, this may not be as sexy a vision as it is to me, but you can think about your store as this bunch of components that’s gonna be dynamically put together for each person on the fly, and that kind of thing. Just keep getting faster and doing that.
I think it’s been possible in the past but not fast, and I think when Shopify does it, it will get faster, and it will be great. So, that’s the kind of stuff that really excites me, so you can be nimble, and you can be fast, and you can kind of do this dynamic experience. That’s the stuff that… Because it’s gonna make everyone more… It’s a better shopping experience. Gonna make people more money. That’s why we’re gonna get there, right?
Kurt Elster: I agree with you. It seems technical. It is technical. But it’s really not hard once you’ve done it once. Once you’ve fumbled your way through a screencast tutorial once and now, okay, you can get through it. You can do it. You can mess with metafields. And it’s just having that much fancier modular true content management system where style and substance have been separated not only makes life easier to manage the store, but you’re right, it opens up a lot more possibilities down the road for generating dynamic content on the fly, for making personalized experiences based on say where someone come from. You know, how did they get to that store? What was the referrer? That is where we get interesting.
I want to know. Tell me. Where can we find out more? Where do I get biltong? Where do I sign up for Abra? What am I doing here? Tell me where to spend my money with you.
Daniel Patricio: Yeah. If you want to try biltong and see if it’s better than beef jerky, you can go to Bull and Cleaver dot com. And yeah, if any of the stuff on the promotions, or if there’s new and interesting problems I don’t know about, I’m still a product person at heart, so I love when people have interesting problems that we can solve. Yeah. You can find Abra as Abra Promotions dot com, or Abra on the app store. Or you can find me on Twitter. Daniel Patricio. Just reach out to me and… Yeah, I’m down to help.
Kurt Elster: Daniel, thank you so much. This has been fantastic and illuminating. I appreciate it.
Daniel Patricio: Yeah. Been a pleasure. I’ve really enjoyed it. Thank you.
Sound Board Clip:
Kurt Elster: Oh, I need a better one.