Reviewing Shopify's 2022 Trends Report
We discuss our own key takeaways Shopify's extensive Future of Ecommerce Industry Report for 2022 to arm you with the ecommerce trends, insights, and advice you need to succeed in 2022.
Also available on YouTube: https://youtu.be/Z26-lJ6GKPsdash
The Unofficial Shopify Podcast
2/1/2022
Paul Reda: I shoved my hand into a pile of baby vomit yesterday.
Kurt Elster: Quite the opener.
Paul Reda: I didn’t know it. Baby was-
Kurt Elster: Yeah. I didn’t think you were just like, “Hey, this is what I should… This might make good hand lotion.”
Paul Reda: Yeah. The baby was asleep in the pack and play in the bedroom. I was not in the bedroom, but the baby was crying, so I was like, “I’m gonna go get that baby.” And it was dark in there. You know, you can make out the baby’s shape and I was like, “Oh, I’ll pick up my baby. What’s the matter?” And as I put my hand down underneath her head, it was just very cold and wet. And gooey. It was gooey.
Sound Board Clip: Eww!
Paul Reda: She had a big bottle before she laid down and she popped that right back up, apparently. It was easily five times as much barf as she’s ever made before.
Kurt Elster: Now, have you laughed at perhaps siblings who have barfy babies?
Paul Reda: No. I don’t mock. I don’t mock barfy babies.
Kurt Elster: Have you been amused by barfy babies?
Paul Reda: Yeah. I love it. I love a smiling baby that when they’re like, “Ah,” and just the waterfall of barf comes out. I find that consistently hilarious.
Kurt Elster: Yeah. See, I also did, and then we had a barfy baby. And so, I think that was karma.
Paul Reda: She’s not a barfy baby in general. She’s really calm, really good, but yeah, I just really plopped my hands straight down in her giant barf pile last night. Had to do a whole outfit change. It wasn’t good.
Kurt Elster: Welcome to parenthood. Just mystery substances always on your hands.
Paul Reda: It’s not that bad.
Kurt Elster: Everything you own is sticky now.
Paul Reda: Everything has a slight stain on it.
Kurt Elster: Yeah.
Paul Reda: There’s nothing that doesn’t have a slight stain on it.
Kurt Elster: Yeah. I remember a lot of… just eventually accepting that all my clothes had barf stains.
Paul Reda: Yeah.
Kurt Elster: You get through it.
Paul Reda: It’s fine. I mean, who sees me? You. That’s it. I go home.
Kurt Elster: Yeah. So, aside from barf, which I guess that’s on trend right now. Baby barf is on trend. We’re talking about Shopify’s trends report for 2022. The Future of Commerce, they called it. And these trends reports from various places pop up every year. Some pique my interest, some don’t. This one is exhaustive. It’s big.
Paul Reda: It’s real big. It’s a big boy.
Kurt Elster: It is impressive. It’s broken into logistics, retail, and eCommerce. And so, we’re just gonna scratch the surface on the highlights from just the eCommerce report, but what was your impression? What did you think?
Paul Reda: I feel like a lot of the stuff we’ve been hinting towards was vindicated, which I liked.
Kurt Elster: Yeah. I like anything that agrees with me.
Paul Reda: Yeah. It told me I was right, which is my favorite thing in the world. Now, a lot of it was like… It’s very wide ranging, so like if you really want to sit down and eat a little info meal, it’s really something you could sit down with because it’s going into social shopping, shoppable videos on TikTok, dealing with physical retail spaces, all that sort of stuff. You could hit everything. We’re only gonna kind of be hitting your on-site Shopify store type stuff on this podcast. There’s a whole-
Kurt Elster: That’s usually what we talk about.
Paul Reda: Because that’s what we talk about, that’s what we know, that’s what our focus is. But there is a… If you’re someone who has more than that going on, there is a wealth of information for you in this report, which I assume Kurt will share the secret link for in the show notes.
Kurt Elster: Yeah. If you search Shopify Future of Commerce, you’ll find this immediately, but I will also… I will link to the broader report and directly to the eCommerce section in the show notes so you can have that.
Paul Reda: Yeah. Basically, the one-sentence summary is due to the vast amount of competition in the direct-to-consumer space and the downfall of cookieing and tracking people via Facebook, modern-
Kurt Elster: I’d say the rise of privacy controls.
Paul Reda: The rise of privacy, the downfall of online tracking means that the most important way to survive is going to be building up your brand and brand loyalty to maximize customer lifetime value so you don’t have to fight over these crumbs of new customers you’ll be able to access.
Kurt Elster: So, I need to get less reliant on pay-per-click ads and move toward what, content and community?
Paul Reda: Content and community, yes. And loyalty. And I don’t know, this kind of comes later on when they’re talking about it, but something I thought was interesting was have a flagship product that you push everywhere. That flagship product is on marketplaces, put it on Amazon, put it in stores if you can. Get it in front of as many faces as possible and use the flagship product pretty much as your new customer marketing, and then people buy that out in the world and that gives you the entry point to pull them into your brand circle of reoccurring customers.
And then you have more products that you are personally selling yourself on your own personal website, via your own personal channels, and you then… Then you can truly maximize the value.
Kurt Elster: So, I have a hero product. I have a number one bestseller that I know that’s the entry point for most new customers. And this is where it really helps to understand segmenting and have a really clear idea of new versus returning customers and how they shop. So, if I’ve got one product that I know does really well with my first-time customers, I want to put that on as many marketplaces as possible intentionally so that I can acquire new customers, and then ideally funnel them directly into my website for repeat purchases.
Paul Reda: Yeah. Yeah.
Kurt Elster: I love this idea and I love that they just codify it as a recommendation officially by Shopify in this trends report.
Paul Reda: Yeah. I mean, so I took a bunch of notes that we can talk about. Just to start with, this is random, this is a random stat. The average cost of a shipping container is now four times higher than it was a year ago, so-
Kurt Elster: I mean, we knew-
Paul Reda: We knew all that, but-
Kurt Elster: But it hurts to see.
Paul Reda: There’s an actual codified thing I learned. You all know what’s going on with third-party cookies. Everyone complains about iOS 15. Is 15 the bad iOS that we don’t like now?
Kurt Elster: We’re on iOS 15. It was iOS 14.5 last summer where this started.
Paul Reda: Yeah. Wrecked everyone’s tracking and claimed that it caused… Did we ever prove it really caused plummeting value of Facebook ads and stuff? Or no?
Kurt Elster: For sure, our PPC ads became less effective, but in practice we suspected it’s they’re better than they can report is what’s going on, but they can’t be what they were because it’s missing a ton of data that it was using, that that algorithm was using to target the ads before. But it’s like someone purchases and now I can no longer attribute that to my ads, so even if the ad was successful as part of that sales funnel, I can’t attribute it. So, it looks worse than it was, but also it's bad.
Paul Reda: Okay, but it’s kind of like the magic days of targeted ads, we’re not in the glory days anymore, but marketers have been surviving this way for decades. I mean, you’re buying ads on I Love Lucy for Lucky Strike cigarettes. They don’t know how many people saw and then purchased Lucky Strike cigarettes because they saw the ad on I Love Lucy.
Kurt Elster: Unless they did post-purchase exit surveys.
Paul Reda: I don’t think they did post-purchase exit surveys in 1953, but-
Kurt Elster: Just a guy at the grocery store who’s like, “Hey, where’d you hear about those Lucky Strikes?”
Paul Reda: So, yeah, that’s pretty much what television advertising is. I mean, Procter & Gamble built multiple billions on not knowing exactly, being able to track the entire purchase process. So, it’s definitely survivable.
Kurt Elster: Here’s the pull quote that you grab from this, is that as third-party cookies phase out and advertising conversion rates continue to plummet… That’s strong language. 80% of marketers will likely abandon personalization efforts by 2025. And so, by personalization efforts in this context, I read that as remarketing, which remarketing, in the past, that felt like shooting fish in a barrel as far as ads go, at least relative to like top of funnel, and so my middle of funnel ads are really what took the hit here.
And this is flat out saying like, “Hey, four out of five people, they’re gonna give up on this.” Or marketers, anyway.
Paul Reda: Yeah. That seems a little dire and I don’t like anything that’s like prognosticating about how things are gonna look in three years, because you don’t know.
Kurt Elster: Yeah. That’s so far out. Especially in an industry that moves so quickly.
Paul Reda: Yeah. I mean, what do you think people were saying about 2020 in 2017?
Kurt Elster: I don’t think anyone had global pandemic.
Paul Reda: Yeah. Exactly. So, we’re getting into methods, the future methods that you should be using then. 52% of global shoppers are more likely to purchase from a company with shared values. Given this, brands should focus on customer retention and lifetime value, especially as advertising costs and uncertainty continue to climb. Prepare to invest more in your customer experience and build a community that keeps customers coming back.
Kurt Elster: I love this advice. Because think about this, if I have to sit down and figure out pay-per-click ads, I think that’s a much bigger ask, chore, thing, and like series of skills than it is to communicate my beliefs and my story to try and get a community going.
Paul Reda: Yeah.
Kurt Elster: I think their advice for, “Here’s the better option,” will be both beneficial and easier to execute.
Paul Reda: Yeah. I think it’s a thing where when you’re buying those ads, your thought process is how do I make someone who doesn’t know my business be interested in my business? You’re trying to put your mindset into someone else’s. You’re trying to think about what another person is thinking. For this, you just gotta tell people why you love your business. You already know why you love your business. Just tell people about it. Tell people why. You can’t get that wrong.
Kurt Elster: And in doing so, you’ll attract likeminded individuals. And they’re more likely to trust you because you essentially… For them, it’s like someone held up the mirror and they went, “Oh, I empathize with that.” And I think for a lot of brands right now, like sustainability would be a common one, like communicating that sustainability is important to you and making that part of your story. Or just having your own journey in there and if people can relate to it, it works well.
Paul Reda: We could debate this. I kind of found… I didn’t put all these stats down. I probably should have if we’re gonna talk about it. But you know, like the stat in here, 52% of global shoppers are more likely to purchase from a company with shared values. Well, that means that 48% aren’t, so it’s like-
Kurt Elster: Yeah. Flip a coin.
Paul Reda: It’s 50-50. Flip a coin. And there was a lot of that type of stuff, where they were like, “Well, 45% of people care about the sustainability of the company.” It’s like, “Oh, well 55% of people don’t.” So, it’s sort of like, “So, who cares?” 95% of people are not buying from you anyway, so this thing where we’re trying to like… We’re gonna get this slice of the salami, and then we’re gonna slice it this way, and it’s just like how about you just try to appeal as broad a base as possible and get the 5%?
Kurt Elster: Because the difficulty here now is without those ads, I need to be able to drive word of mouth and create community, and create content, and the answer to that is to try and go niche with it. So, taking that shared value approach helps you create community. All right, if I can get community, now I have a really powerful audience that’s gonna help market my brand.
So, I like those ideas. And certainly, it’s like if PPC ads aren’t working for you, what am I supposed to do? All right, well, they’re saying here’s some suggestions.
Paul Reda: Yeah.
Kurt Elster: Plus it’s trends. If they presented it as like, “Well, last year it was 30% of people cared, now it’s 52%,” oh. All right. It’s moving up. But you’re right, anytime in a statistic that it’s 50-50…
Paul Reda: It’s like yeah, whatever. Random number. The cost per click for paid search ads increased by 15% between the second and third quarters of 2021. But now that I read that, between the second and the third quarter, so third quarter is July, August, and September. Are we getting Black Friday ramp up by that point in ad purchasing?
Kurt Elster: Personal experience, I don’t think so.
Paul Reda: Okay. Because I was gonna say, “Wait a minute. Could that just mean… Doesn’t that just happen annually, maybe?”
Kurt Elster: Like back-to-school pushes it up?
Paul Reda: Yeah. Back-to-school pushes it up? Because it’s like no one’s buying any… May, June, July…
Kurt Elster: Summer is slower. Unless you’re selling bathing suits.
Paul Reda: Yeah. Mother’s Day and Father’s Day in there, but it’s not like there’s like a buying season in there.
Kurt Elster: You’re saying that could be systemic. But we know ad costs have gone up consistently.
Paul Reda: But ad costs have gone up. Yeah.
Kurt Elster: And they’re saying it went up 15% just through part of the year. But yeah, they elaborated on that in here. They said competition is the biggest obstacle to achieving growth. Privacy laws that limit marketers’ ability to target ads and consumers who are better at blocking ad interruptions, it’s becoming tougher to get a decent return on advertising spend. And then they’re saying hey, it’s up 15% just between these two quarters. And that’s what… Second and third quarters, you really would not expect that increase.
Paul Reda: Oh, I thought it… I was trying to figure out why maybe it would systemically increase. Anytime I hear a stat, this is just me in general. You might have… This is gonna come as a shock to a lot of people, but I try to call bullshit on anything I hear and figure out why it might not be true. So, anytime I hear a stat like that, I’m kind of like, “Okay. Is there a systemic reason why that might be occurring just in general and not the reason that the person citing me the stat is stating why?”
Kurt Elster: That’s why you’re such a valuable cohost, because I’m just like… I just take it at face value. Like sign me up. I’m all in.
Paul Reda: It’s like how come people dying of heart attacks shoveling snow was 10 times as high in January as it was in July? Think about that.
Kurt Elster: Did you know that drowning deaths and ice cream sales are correlated? Ice cream will drown you.
Paul Reda: It’s true.
Kurt Elster: 41% of brands plan to increase investment in paid and organic search.
Paul Reda: They have to. Well, because the prices are going up, so they have to increase the investment amount.
Kurt Elster: Yeah, saying we’re gonna spend more on paid and organic search, that’s okay, we’re gonna spend more on Google ads.
Paul Reda: A lot of people are spending more on cars right now. It’s not because they love cars more, it’s because they gotta spend more money to have a car.
Kurt Elster: Well, this is saying 41%, yeah, plan to increase investment. And organic search. Well, organic search, that’s content, that’s SEO. But I really read that as we’re gonna create more on-site content, more YouTube content, since that gets in, will show up at the top of results too.
Harvard Business Review said, this is interesting, they said the accuracy of digital profiles that data brokers sell is dismal. The age tier was correct less than one in four times and gender was identified correctly in well below half. So, if you’re like, “Hey, we’re gonna make an end run here and buy the data from data brokers,” which I remember seeing privacy people handwringing about data brokers. It turns out the data the data brokers sell is garbage.
Paul Reda: I mean, I really like they didn’t get the gender right. They got the gender right less than half the time.
Kurt Elster: This is another flip a coin scenario.
Paul Reda: It’s like that’s a coin flip! Like just pick one and it would have been better.
Kurt Elster: Sometimes those work just by looking at the first name and they’re like, “This is probably…”
Paul Reda: Yeah.
Kurt Elster: They’ll make a guess as to gender based on the name. But even then, like getting it right less than half the time? That’s rough.
Paul Reda: It’s brutal. And then there was a good quote from Morgan Brown, who’s the VP of Growth Marketing at Shopify. “The brands that speak to everyone speak to no one. Whether brand differentiation means what the brand stands for, the way the product is made, or the way they engage their audience, consumers are looking for differentiated experiences and brands they can connect to.” So, this is sort of… This is the overarching theme of pretty much the first quarter of the document, and our show, and this show, and everything.
Kurt Elster: And my belief system.
Paul Reda: Yeah. Of everything. Be different. Be aggressively you.
Kurt Elster: Oh, I love that advice.
Paul Reda: Yeah. Be aggressively yourself and not everyone’s gonna like that. Fine.
Kurt Elster: That’s the idea.
Paul Reda: 95% of people aren’t gonna buy from you anyway. The biggest TV shows on television are not watched by 80, 90% of people. So, just be aggressively you and then the people that get picked up in that-
Kurt Elster: Are your true fans.
Paul Reda: … are the true fans and the people you want to be with, and who want to be with you. Also, excellent dating advice.
Kurt Elster: Yeah. No, that… Morgan Brown’s advice, your advice, and the theme in this report, really good advice for life, it seems.
Paul Reda: Yeah. So, I mean yeah, it might not be, “Oh, everything’s eco, we’re donating money to Taiwanese dogs,” none of that stuff. That doesn’t-
Kurt Elster: The buy ugly dogs plastic surgery foundation is who we donate 10% of our profits to.
Paul Reda: That doesn’t necessarily have to be it. You just have to find a way that you’re different or a way that you speak to specific people, so it could be intense quality. It could be your manufacturing process. And all the people who are really into weird, intense, niggling little product details, that could be your niche audience. Your niche audience of Kurts that are way too interested in that.
Kurt Elster: Yeah, I was gonna say you’re speaking my language. I was like, “Tell me more about the tolerances on this. Ooh.”
Paul Reda: Yeah. Well, as you were scrolling through your photo album of different 3D prints you did yesterday and why the specific prints had specific problems and how you were gonna solve for them.
Kurt Elster: Yes. Yes. I love it.
Paul Reda: It’s like, “I built a tugboat. This is a special tugboat that all the 3D printers use to determine who’s the best.”
Kurt Elster: I like gadgets and the novelty in precision engineering. I like sustainability. And in part, sustainability to me is an engineering problem to solve. I like making my own challenges. I like problems to solve. I like these stories. And I want to know when someone has made a product, especially an entrepreneur, I want to know the thinking that went into it. I love those product videos where someone walks through their product and explains to you why they set it up the way they did.
And I think that’s… You can run with that idea, and you need to develop that connection, and that’s how you get that community that is so… It’s easy for us to go, “Oh, yeah. Community. You gotta build community. This brand’s missing community.” This is a thing I have said a lot the last six months. Easier said than done, buddy. It’s not just like, “Oh, yeah. I’ll just go buy community.”
Paul Reda: Oh, it’s super… No, it’s very easy for us to sit up in our concrete tower on the fifth floor in Skokie and say, “Well, just do this.” If I was the coach of an NFL team, I would just have one-minute scoring drives the entire game. I don’t understand why they only do it in the last three minutes of the playoff game. Kurt has no idea what I’m talking about, but-
Kurt Elster: I’m smiling politely.
Paul Reda: Chiefs-Bills.
Kurt Elster: I understand the sentiment.
Paul Reda: So, but you just gotta pick something. You gotta pick a lane and you gotta go hard in that lane. You gotta go hard in the paint on whatever the thing is that you are gonna use to forge your identity.
Kurt Elster: I think it’s gotta be authentic, though.
Paul Reda: Well, I know.
Kurt Elster: You gotta believe in it.
Paul Reda: You can’t just make it up out of nowhere, but you-
Kurt Elster: I’m sure a handful of sociopaths can. Good for them. But for most people, it’s gonna be a lot easier to pick the thing that you are genuinely excited about.
Paul Reda: There you go. Like what excites you? Don’t hide your light under a bushel and tell everyone else about what excites you and why.
Kurt Elster: I love entrepreneurship, and I love business, and I’ve always loved the web and eCommerce, hence this show. That’s what made it work. Because when I started it, I sure as hell didn’t know what I was doing.
Paul Reda: What a wiener.
Kurt Elster: Oh, I know.
Paul Reda: I love business!
Kurt Elster: I do. I’m such a dork. But that’s what made it work, is that genuine enthusiasm about it.
Paul Reda: Yeah.
Kurt Elster: Not because I was some extraordinary interview. I figured it out 400 episodes later, but when we started, it’s rough. That authenticity is key. All right. What else we got here?
Paul Reda: They recommend aiming for a 60-40 split between brand building actions and short-term performance marketing, so you can achieve the ROI you need in the long term. Because, I mean yeah, you can’t… You need money coming in, so you probably can’t completely abandon paid search ads or something to just get butts in the door. You gotta get the butt in the door in order for them to see why you’re so cool. You can’t just be cool on an island with no one looking at you.
Kurt Elster: I like that they were able to quantify this, because I’ve had this question before and I don’t really know what the answer is, right? Where they say, “Hey, how much time and money,” so they say resources. Could be your time or it could be you’re hiring people to do it. Plus, you’ve got budget in there. It’s like, “How much should I be putting toward that content creation, those community efforts, the audience building stuff, and how much should I be putting into PPC ads?” And they’re flat out spelling it out for us as 60-40. 60% the make money tomorrow strategy stuff, which is that audience and brand building, and then 40% that make money today strategy with PPC.
Okay. I wonder how they came about that. But I’ll accept it since I really did not have an answer myself.
So, get this. There’s an interesting nugget of internal Shopify data that leaks out in here. They said, “Since the start of the pandemic in March 2020 until September 2021, email marketing integrations were among the most popular apps globally according to internal Shopify data. Email and text continue to be two of the most powerful and cost-effective ways to nurture customer relationships.” It’s they’re owned channels. You’re not having to pay to play. At least not in the same way. Not in this bidding strategy that PPC ads have, where the price to show someone an ad changes on an hourly basis. Versus the cost of my Klaviyo subscription is not changing particularly often, right?
And so, I own that relationship, it is much more personal, it is one to one, it is in their inbox or on their phone, in their messages, and so we knew this, but seeing it spelled out here where they’re saying that this is the biggest category of installs is fabulous. And so, I think that was when iOS 14.5 happened, that was our initial advice was hey, keep focusing on what you can control.
Paul Reda: Yeah. Yeah.
Kurt Elster: And your email marketing, for most brands, email marketing really is a tremendously powerful and profitable channel to drive revenue.
Paul Reda: Yeah. I mean, you know, there’s a lot of talk today about creating experiences, and what can we do to get people more invested, and all this other stuff. That all starts with email. Email is the ground floor, it’s the base of the pyramid. You could just… Millions of dollars and millions of businesses have run on just email alone. You don’t need to do any of that crazy cool stuff as long as your email just kicks ass.
Kurt Elster: Yes.
Paul Reda: You could build a great, sustainable, huge business on just email.
Kurt Elster: And even if you’re not doing email and you start, mediocre email, still way better than nothing at all.
Paul Reda: Still way better than no email.
Kurt Elster: Because it keeps you top of mind. You’re in the right place at the right time, ideally. And on the flip side, there is this pressure to use all the tools available to you with marketing automation, and in email, you can get really crazy with it, and I’ve heard people say like, “Well, you know, maybe… Is that weird? Should I do that? Is it creepy?” And in here, there’s a note about that. It said, “Consumers are over three times more likely to abandon brands that over-personalize compared to brands that fail to personalize enough.” So, including too much personal data in customized communication can make consumers feel stalked by brands.
Now, I don’t know-
Paul Reda: I’ve had that happen. I hate that.
Kurt Elster: I don’t know where the line is. Off the top of your head, can you think of an example scenario?
Paul Reda: Well, let’s just go with the most basic one. I think they send you an email and it has like your name in the email field. It’s like it’s addressed to Kurt.
Kurt Elster: Yeah.
Paul Reda: I think that’s fine.
Kurt Elster: Yeah. Okay, good.
Paul Reda: Stuff where they’re like, “Hey, I saw you were looking at this product and let me tell you more about why you should buy this product that I know that you were looking at.” No. Don’t like that.
Kurt Elster: Yeah. Acknowledging. I have found if you acknowledge the trigger to the email that your unsubscribe rate will jump.
Paul Reda: Yeah. I think no one wants to see the man behind the curtain. If they happen to get more ads about washing machines or whatever, that’s just a happy accident. Who knows? That’s just the world we live in. But if they’re just like, “Hey, Kurt. I know you like washing machines. Here’s some washing machines I’d like you to buy. I know all about your home in Northern Illinois, in Lake County, and it needs a new washing machine, doesn’t it?” Like, no. Don’t do that.
It's the same outcome. You’re showing him washing machines. But don’t expose the man behind the curtain.
Kurt Elster: Yeah, because the next step is like, “Look, you’re gonna buy an appliance or we’ll kill your family.” That’s what they’re thinking. Yeah. You’re right. There is a fine line where it goes from this is relevant to this is creepy. And I think part of it is if it has this meta layer to it, where you acknowledge that you, person, did X action that triggered this marketing event. Oooh. Just let it be a bit of a mystery, right?
Paul Reda: Yeah. And like, you know, send that abandoned product email… Maybe wait a little bit. Don’t send it like five minutes later, like, “Where’d you go? I thought we had something nice going on between us.”
Kurt Elster: On Black Friday, crank it up to 30 minutes.
Paul Reda: “Why did you suddenly ghost me? That’s abusive. You were love bombing me.”
Kurt Elster: Whoa! This abandoned cart flow got weird fast. It’s gonna start gaslighting you?
Paul Reda: That’s right.
Kurt Elster: And the final call out that you had listed in here that I thought was great, this is the exact quote. “Video is now the default expression of the internet.” I love that phrase. Video is the default expression of the internet. From web searches to livestreams, video is becoming the primary way the next generation of shoppers make buying decisions. 46% of consumers want to watch product videos before they buy.
Paul Reda: See, now I like that stat because if you think about the flip side of it, I don’t think there’s anyone that’s going, “If I see a product video, I’m closing that tab right away.”
Kurt Elster: I’m out!
Paul Reda: I’m out. It’s 46% want a product video and 54% don’t care. So, the product video is not hurting you. No one’s going, “Product video? Get out of here.”
Kurt Elster: Yeah, this is like the CRO hack hidden in here, is hey, you should add product videos to at least your hero product.
Paul Reda: Yeah. Which you are selling on a marketplace to rope people in.
Kurt Elster: Yes. All right, yeah. There is a fair amount of strategy worked into this.
Paul Reda: Marketplaces, this is the thing that cited that. Marketplaces are an effective channel for many DTC businesses to get new eyes on their products, yet 44% of brands report the biggest challenges selling on marketplaces are competing on price and controlling the customer experience. Use a hero product to reach new customers, then incentivize shoppers to move to your site by creating store-only offers.
Kurt Elster: Smart.
Paul Reda: Yeah. So, maybe your big, main product is on a marketplace. You sell that on Amazon. But the accessories, the new version, the new version that’s better, sell that only on your own website. Maybe you dump off your old product on Amazon. I realize that’s not a hero product, but you get what I’m saying.
Kurt Elster: Yeah. Yeah. I want… and I’ve done this. Or I’ve seen this. I bought an item, and you buy and item, and it’ll come with a pack-in, and the pack-in will be like, “Hey, you could register.” It gives me some reason to go visit their website.
Paul Reda: And that would be… I’ve seen that multiple times, too. That would be the way I would handle it because when you’re selling on Amazon, you don’t get the email addresses, so you have no people to kind of guide their way to you. Doesn’t Amazon disallow that?
Kurt Elster: Yeah. Oh, yeah. There are terms of service restrictions on, as there should be, on the pack-ins. Because otherwise it’s stuff like, “Hey, write us a review and then we’ll send you a free gift.” And they’re like, “Hey, no.”
Paul Reda: That is a question I would like an answer to, because I hope you know it. If I’m selling my hero product on Amazon and I want to get people to my actual Shopify store, how do I do that?
Kurt Elster: I think the safe… So, I don’t know. I’m not an Amazon expert. Straight up. Don’t know. Double check anything. But I think the safe way to do it would be like, “Oh, register your product with us on our site for some level of support.” I don’t know what it would be. Or like some mild accessory, or reward, or like, “Hey, you could download the PDF manual.” I don’t know, but you give them a reason to go to your website and identify themselves as that buyer.
Paul Reda: Yeah. Well, yeah. Maybe your product comes in a box, then in that box you could just have a thing that’s like, “Here’s our website.”
Kurt Elster: Of course. Yeah. I think maybe we’re overthinking it.
Paul Reda: We’ve overthinking it.
Kurt Elster: I think one of the nice parts about this Shopify trends report is it is supported by a lot of examples and commentary from actual merchants, from real deal store owners as opposed to just like it’s, “Well, it’s survey data. Just trust us. It’s survey data.” Or you know, this industry analyst said so.
Paul Reda: Yeah. Or like, “Oh. Well, we talked to this weird boutique marketing agency that’s in Miami, and you’ve never heard of, and only works with high-end SoundCloud rappers-“
Kurt Elster: On Thursdays.
Paul Reda: On Thursdays. About what the future of commerce is. It’s like they’re not dealing with actual people, they don’t know what they’re talking about.
Kurt Elster: Yeah. They’re living in their own special niche reality.
Paul Reda: Yeah.
Kurt Elster: Was there any larger macro trends in this report? It seemed like there’s a lot of focus-
Paul Reda: I mean, I told you about them. That was the whole point of this show, dude. Have you not been paying attention?
Kurt Elster: I’ve been paying very careful attention. I hang on your every word, Paul Reda. It seems like they’re saying, “Hey, look. PPC ads are more expensive than ever and not sustainable as a model.” Just because supply and demand of advertisers versus consumer eyeballs. And so, it’s the suggestion that it keeps getting more expensive and that’s creating competition. And so, the solution is similar to what we’ve seen in TV, where like streaming services just created increasingly niche and weird shows, the same thing works for brands. And then you can find your tribe and create that loyal audience.
Now, in the past that was advice for like this is the steppingstone for eCommerce entrepreneurship. Now it’s becoming this is the mainstream way to do it.
Paul Reda: Yeah. I think the cable TV metaphor is a good one. It’s just like Turner Classic Movies, they know who they’re pitching towards, and we’re just gonna pitch to those people. A ton of stations are like that. Yeah. I think the one-sentence takeaway from all of this is in order to succeed in the future, you need to really personalize your brand around what it means and what it stands for and find a likeminded group of people that you forge like a brand friendship with, but don’t do it too hard because they’ll run away.
Kurt Elster: Well, yeah. Don’t do it… You want to be speaking one to many. As soon as it gets to too one-on-one-
Paul Reda: You can’t use the robots to make it one-on-one, because they know the robot’s there, and they don’t like it.
Kurt Elster: Yeah. I don’t blame them. I just don’t want Alexa listening in on me any more than she does. She’s listening to us right now.
If you want to check out the Shopify Future of Commerce trends report, and I highly recommend you do, grab the link in the show notes or Google Shopify Future of Commerce. You will find it immediately.
Paul Reda: We’re done.
Kurt Elster: Yeah. Let’s wrap it up there. I’ve got 3D prints I have to go fiddle with.
Paul Reda: That’s right.