New Essentials Drive Our New Normal
"This is an astoundingly good read on the situation. Wow."
That's what I said to today's guest when he explained his view on what's driving purchasing behavior over the last four weeks.
In this episode, we're joined by Klaviyo's Director of Product Management, Jake Cohen.
Jake has been using Klaviyo's network of 30,000 businesses and their data science skills to analyze consumer behavior in response to the pandemic.
With weeks of data, we're ready to start theorizing on why we're buying the way we are and what's going to happen next.
What you'll hear:
Kurt Elster: Today on The Unofficial Shopify Podcast, we are gonna look at the data! Yes, we have got, we’re on week four. At least for me, anyway. Week four of lockdown, of self quarantine, of living in our new normal, and I don’t even like saying the name of the bad thing, but with COVID-19, with the pandemic. Feels dirty. We are all wondering what’s going on, what’s going to happen next, and well, three, four weeks ago it was very difficult to answer that question, because we really didn’t know. No one has ever lived through anything like this before, at least not exactly like this.
And now that we’re in week four, ah, now we have some data. Now we can look back. We’ve been coming together as a community, and I’ve been so impressed by this, being plugged into eCommerce, direct to consumer, digital marketing Twitter, whatever you want to call it, and people pooling data, and sharing resources, and talking, and discussing about this, and one of the people who have been really extraordinary at it, and it should be no surprise being their focus on data science, is the Klaviyo team. And so, joining me today is Jake Cohen, Klaviyo’s head of product marketing, and he’s gonna go through with us the data, what we’re seeing, why some of it is so disparate, like we’ve talked about before on this show, where it makes it tough to kind of parse that data, some theories that he’s got on why that is and what’s going on, and even some predictions.
He’s worked psychology into his theory. I was really impressed by it when I got the crash course on this, but we’re gonna go on a deep dive journey into it right now. Jake, thank you for joining us. How you doing? How you holding up?
Jake Cohen: I am awesome. Better now talking to you, and thanks as always for the opportunity to share.
Kurt Elster: Oh, my pleasure. Yeah, I’m an extrovert at heart. I know certainly I enjoy my alone time, my family time, but I am slowly… It’s taking its toll in that I noticed in week three, I’m like I think I’m getting overly sensitive and I think a little overly emotional as a result of just being so starved of human contact. And I get really excited now when the phone rings, because I’m like, “Oh! Somebody to talk to!”
Jake Cohen: I am also a bit of an extrovert. I think I’m an ENTJ or ENFJ. I forget. And yeah, it’s tough to be cooped up in your house all the time. I’m so thankful, like total aside from all of this, I am so impressed and thankful for the DevOps teams that work on Zoom, and Skype, and Slack, and FaceTime, and all of the networks, because man, the load has been like a persistent Saturday, and they’ve really kept up, so thanks to them for making stuff like this totally possible and saving us extroverts.
Kurt Elster: I know. It’s been… As flaky as the internet in general, like I’m not singling out any service, all services have been a little flaky the last month, and I’ve yet to be mad or frustrated about any of it, because I can’t be. I can only imagine how difficult it is to be in IT at the moment.
Jake Cohen: Scary.
Kurt Elster: You’re everybody’s lifeline.
Jake Cohen: Yeah, totally. Totally.
Kurt Elster: More than ever, it becomes clear that internet is a basic human right at this point.
Jake Cohen: Could not agree more.
Kurt Elster: So, Mr. Jake, you’ve got… What has Klaviyo been doing? How have you been responding as a team to the bad thing?
Jake Cohen: So, it’s actually been both really fun and frankly kind of inspiring. So, on… Gosh, I think the 13th of March, I think that was a Thursday, Klaviyo made the decision that going forward, Klaviyos would work from home, and on that Monday, which I think was the 16th, people on the marketing team, we kind of looked at each other and said… Frankly, this was people on my team came to me. I don’t take credit for this. They said, “Hey, business as usual doesn’t feel right. We need to be more sensitive to the times. We need to do something different.”
And so, we put our thinking caps on and said what… We say all the time in marketing our goal is to provide value every day, and so we said, “What can we do to provide value every day right now?” And we decided that the two things that were really difficult, at least at the time for merchants, is to figure out number one, what the heck is going on out there? And number two, what should I do about that?
And so, we decided to establish our mission, as long as the bad thing to be unnamed will persist, we decided our mission was to create value every day, by telling people what we see that’s going on and what they should do about it. And from that moment, we established a brand survey, where we’ve had nearly 2,000 brands tell us what they’re seeing, both in their sales, in their ad spend, in their web traffic, in their conversion rates, what they’re worried about, everything. We’ve established a consumer survey, because we wanted to start to predict where spend was going, to help merchants understand.
We now publish between 10 and 15 insights and pieces per week on a dedicated page that we spun up. We’ve repurposed 12 people internally to be on what we call internally Operation Lighthouse, so we can show people where land is. And we’ve engaged our support team to spin up a complimentary system, team, to write a whole bunch of guides and resources on what brands can do right now to survive today, and be successful, and thrive in the future, and I’m exceptionally proud of how the team has mobilized.
We’ve now additionally pulled in data science resources to go pore through all of our data and see if we get an insight from a handful of people, can we validate it very quickly with a substantial data set and share that? And it’s just been… You dream of these moments to be nimble, and even as your business starts to get bigger, you could totally do if you just stay focused. So, anyways, I’m ranting. I’m just very proud of what we’ve accomplished. It’s been very cool to see come together.
Kurt Elster: Well, you should be, because I think it’s very easy right now to go to a very dark place mentally, and then as a result, kind of freeze up and do nothing. And certainly, for the first week, I really struggled. Just a lot of anxiety, it came in waves, and I couldn’t do deep work. I could do superficial stuff, but nothing that really, like heavy design thinking kind of stuff.
Jake Cohen: Not to mention you and I both have kids. Holy smokes!
Kurt Elster: Oh, yes. Adds a whole new layer on there. Yeah, I know. Just one Friday they found as they’re leaving school, “Oh, by the way, you’re not going back.”
Jake Cohen: Yeah, right.
Kurt Elster: Whoa! I mean, that’s hard on them. It’s not like summer break. You said bye to your friends, and you know when you’ll be back. It’s very weird.
Jake Cohen: Totally.
Kurt Elster: All right, but what I found is as we’re able to gather data, and build a picture, and develop new routines in a new normal, ah, life continues, and work continues, and the anxiety monster starts going away. So, as you have buried yourself in this data, you have… For a lot of us, I feel like I’m trying to navigate a cave with a candle, and you… I like that you called it Operation Lighthouse, where you’ve got all this data and you’re showing us where land is.
Okay. Having buried yourself in it, tell me. Give me just the gut check. How do you feel right now?
Jake Cohen: Honestly, I feel more optimistic today about all things than I’ve felt since frankly February.
Kurt Elster: I’m glad, but sell me on it. Tell me why.
Jake Cohen: Okay, so first, a little context. So, one, for those who don’t know me, I am exceptionally dorky and I really like numbers, and I’ve been following this thing since early February. There’s a guy, Balaji Srinivasan, who if you don’t know him, he’s been wonderful, and sort of providing a thoughtful, analytical, but also biomedical perspective on this coronavirus, all the way back from Wuhan to its global spread, and so I’ve been fortunate enough to have discovered him and read a lot of stuff, so I was very curious early as to what might happen here.
I’m optimistic primarily on two big fronts. Number one, I built my own personal model projecting the public health side of this, what I think will happen by day, based on trailing performance and then just other qualitative inputs, and for the past week, the transmission rate of net new cases is lower than my predictions have been, and this is before the state imposed stay-at-home mandates are really kicking in, so I personally am very optimistic that our net new case rate is going to start to flatten out dramatically this week, and this is not a result of insufficient testing, but I can have that conversation. But we are unfortunately going to see a spike in deaths, because it’s a trailing 14-day lifecycle for the virus itself, so the next two weeks are gonna hurt on the death side and look great on the case side is my opinion.
So, that makes me very optimistic. On the sales side for merchants, on eCommerce, we, as I mentioned, our data science team has been digging in. I’m looking at a model right now that we had pulled up, and we looked at across all… I think we have 32,500 customers now. Across all of them, we looked at sales each week since the start of this year. We’re now comparing them to last year, and what I can tell you is we saw a big drop in week-over-week sales across all merchants the week of March 14th, which is when this all kind of started. And since… It was a drop of 3.6% across the board.
Since that week, week-over-week sales across Klaviyo customers have been increasing at an increasing rate. So, the week of 3/21, they were up 6%. The week of 3/28, they were up 9%. And this past week, they were up 15% week over week. So, people are buying. They are buying online. We think that the overall consumer spending volume is probably going to be a little bit lower than it would have been if nothing were going on, but we think a big shift is moving from offline to online, and we’re also seeing early indicators that it’s moving from Amazon to independent merchants as I believe that what people are buying is changing, and it’s becoming more discovery or brand oriented, as opposed to search and commodity oriented.
Kurt Elster: Well, and the other issue with Amazon specifically is when you search for items on Amazon… This is my theory, because I’ve had a few merchants reach out to me and go, “Kurt, I can’t believe it. My web sales, my Shopify store sales are up right now, but the thing I don’t understand is my Amazon sales are down 90%.” And these are all people in non-essential goods categories, so what, because of the way Amazon has prioritized stuff, and it’s got these very safe but pessimistic shipping estimates on there now to set expectations, which I think Amazon’s doing everything right there. I really do. It still I think has forced, not forced, but encouraged a lot of people to buy direct from those merchants.
And maybe it’s people also knowing like, “Hey, I could support people.” But I’ve seen this for years in certain cases, where people feel more comfortable going as close to the brand or manufacturer as they can get, in belief that, “Oh, all right, if I do that, I’m more likely to get the right good faster.” And I think we’re seeing that really play up right now.
Jake Cohen: It’s funny. I think it’s actually two things. So, on the qualitative side, I was speaking with my wife yesterday about something she wanted to get, and she said, “I guess I can look on Amazon, but I don’t even think I want to go there.” And I said, “That’s interesting, why not?” And she said, “Well, their sales are delayed now, so the whole get it as soon as I want is kind of out the window, so why bother?” And I was like, “Isn’t that interesting?”
Kurt Elster: Yeah, they blew up their sole selling proposition.
Jake Cohen: Big time, which fascinating. It also kind of speaks to if Shopify can nail the logistics thing, that would be tremendous. But anyways, so that’s on one side.
The other reason I think that this is happening is… You’re familiar with Maslow’s Hierarchy of Needs?
Kurt Elster: Yes. Yeah, but for people who aren’t, explain it to me as though I don’t. I mean, I don’t know what it is. Tell me.
Jake Cohen: Sure, so for people who aren’t, A. Maslow was a psychologist and sociologist in the mid-1900s, and he created this model for what drives people’s desires, or interests, or drives them to do what they do, how to act. And there’s a pyramid that basically says, “You must satisfy the bottom rungs before you get to the top rungs.” And the bottom is safety, security, food, and shelter. The next is belonging, so you want a sense of community. The next is esteem. You want to feel good about yourself. And the next is self-actualization. You want to be creative and explore.
And I believe pretty firmly that the path of purchasing will follow Maslow’s Hierarchy of Needs, or phrased differently, Maslow would be able to predict how sales will trend starting two weeks ago and probably for the next two months. And what we’re seeing the data is this is… It’s kind of looking true. People started in week one overbuying on things that they needed to feel safe. Food, paper products, we saw massive spikes in firearms and ammunition brands, and there was a big surge in overall spending, and those categories have either leveled or dropped since that time.
And what we saw come next is people buying things that made them feel connected or belonging, so we saw obviously an increase in usage of Zoom, and people FaceTiming. We saw people buy stuff for office supplies at home, so they could still work and connect with people. And as that started to take on, we started to see people then spend on themselves, so we saw big increase in health and fitness. We saw big increase in beauty and cosmetics, because people want to maintain a normal daily routine, so they feel normal, if you will.
And what I predict will happen, we’re seeing early signs of this, is once people start to feel connected and have esteem again, they’re gonna want to be creative. And so, we’re seeing more people buy toys and games, more hobby spending. We’re seeing them do more housewares and decorations for their home, to make it more comfortable. These sort of more creative endeavors. So, anyways, that’s what it is, and that’s what I think will be happening. We’re literally seeing the data pan out this way, and I think to tie it back, this is why independent merchants and retailers are gonna fare really well, because as we move away from the sort of security-driven purchases, which largely you know what you want. You just search it into a text box and then you see result and buy whatever’s the cheapest or the one you’re familiar with. As you get into more esteem-driven stuff and more creative-driven stuff, you don’t know exactly what you want. You want to be inspired. And so, you will search. You will seek things out more. Discovery comes back into play.
And so, I think we’re seeing a lot of brands be referred by friends. I think we’re seeing a lot of people return to brands they’ve bought from in the past, in particular if there’s a discount offered via email we’re hearing. They’re gonna go back to Facebook and Instagram, to discover brands and see cool stuff in the context of their new normal. And they’re gonna buy, and we’re seeing it. We’re seeing it now, and it’s gonna happen more.
Kurt Elster: Yeah, absolutely. I have seen, especially in B2C, a lot of things that I didn’t think would sell are doing as well or better than they would have without the bad thing occurring.
Jake Cohen: You know, Kurt, you know what we almost bought at my house?
Kurt Elster: What?
Jake Cohen: A bird feeder.
Kurt Elster: We just bought a bird feeder.
Jake Cohen: There’s what I’m saying. It’s this kind of stuff that like now that you’re home, and you look around, and you’re like, “Huh, you know what would be cool to have right now?” That stuff is selling.
Kurt Elster: Yes. Yeah. It was funny, as you’re rattling off the stuff, I knew from in our household, we had followed exactly what you described. Week one was, “All right, let’s get the essentials, and stuff that makes us feel safe,” like I bought a pulse oximeter. I bought a respirator. A half-respirator mask. We made a run to the grocery store, like that’s week one, and then that was… I ate like two pounds of Dot’s Pretzels, which that was my true panic buy. I bought six pounds of Dot’s Pretzels from their website, because they were selling online. I went direct to the manufacturer of pretzels and bought $40 worth of pretzels or whatever.
And then like week two was, “Oh, I better start upgrading.” Week two and three is like upgrade the home office, right? Like, “Oh, I gotta spend more time at home,” and suddenly start buying some home goods. And just yesterday we were like, “How do we get these cobwebs off this,” the family room has this high ceiling, and I’m like, “How the hell do we get up there?”
Jake Cohen: Well, and so-
Kurt Elster: And then I did exactly what you said. I typed telescoping duster into the search box, found the cheapest one and ordered it.
Jake Cohen: Yep, and I think now that it’s… I’m looking at a chart right now from our survey. The question is, “Are your sales being affected,” among survey takers. And for the weeks 3/17, sorry, days. 3/17 to 3/26, between 15 and 22% of people said yes, it’s going up. And since 3/26, it’s gone up almost every day, and now 48% of people said yes, my sales are going up.
Kurt Elster: eCommerce is a lifeline. Within the confusion here, the thing… There are a few things I know to be true. eCommerce is a lifeline, so for people who are still willing to spend, and need to stay at home, how else are you going to do it? Sitting in my home office, I could see, I’m like right at the entrance to the neighborhood. The only traffic I see, it feels like, is just delivery truck, after delivery truck, all day long. I got bored and chased a couple with my drone for something to do. I did. And I observed FAA regulations, thank you.
Jake Cohen: So, honestly, as you say that-
Kurt Elster: It’s amazing.
Jake Cohen: I bet, so we’re starting to see an uptick in spending on electronics, and I hadn’t considered until you just mentioned it, but drones would fit in that, and that also fits with the toys and hobbies thing, so I bet we’re gonna see an increase in spending there. Interestingly, it’s early, I don’t know if this is… how significant this is yet, but we’re seeing that… We started asking consumers if they’re unemployed, or employed, or whatever, and interestingly, more recently unemployed respondents said they planned to buy electronics than people who are currently employed.
Kurt Elster: Are they looking for side hustles, or creativity? What do you think’s going on there?
Jake Cohen: I don’t know. My guess is they’re like, “Well, no one’s hiring right now. I don’t want to be too bored, so I’m gonna get a PlayStation. Or I’m gonna get a toy. Or I’m gonna try something new.” One person said they’re gonna get a computer, because they don’t have one from work anymore.
It’s fascinating. We’re also seeing that people who are over 45, which tend to have a stronger correlation with people who own a home, are investing in home improvement and housewares more than younger folks. Which again, makes sense. Because you’re home.
Kurt Elster: I bought a toaster oven air fryer that I have been thinking about purchasing for at least six months. The Bed Bath and Beyond coupon showed up and I knew I had a gift card, so I went and I bought that. So yeah, I’m thinking anecdotally, but for every single thing you’ve said, an anecdote about my personal life, or a client, or family, or friend pops into my head where I’m like, “All right. I’m seeing this firsthand with my own eyes.”
Jake Cohen: So, one of the things that I can share with your audience of merchants, of a tempered suggestion of what they can and should do, there are three things that I’ve seen or heard that have been working really well that I’d like to share with them.
Kurt Elster: Please do.
Jake Cohen: The first one is a lot of consumers are responding to sales through email. If you-
Kurt Elster: It’s that owned channel.
Jake Cohen: It is an owned channel. Amen. If you have the ability, obviously we provide this at Klaviyo, but with whatever tool you use, if you have the ability to pull people who have purchased, both recently and a long time ago, I would consider sending them a message inviting them to check out a certain, a specific set of products, and connect it to a sort of new trigger as I call it, or a reason to buy this. The same old thing you’ve said in the past does not matter, because we now spend 16 waking hours at home instead of four.
So, there’s a new sort of driving behavior to purchase. If you characterize and position your products in the context of why it matters for them now, and a little discount sent to email, I guarantee you you will get sales. I guarantee. That’s one.
Kurt Elster: Let me comment on number one.
Jake Cohen: Okay.
Kurt Elster: To your point, I like the idea of hey, change the messaging. Rework the buying trigger here. The opportunity for you as a marketer is you have a better opportunity than ever to connect to your customers, because realistically, you know what’s top of mind for 99% of them, and it’s every… It’s the bad thing, it’s working from home, it’s being bored, it’s trying to survive 16 hours a day trapped in your house, and make that easier for yourself, and your family, and whoever you’re with. And staying safe and healthy and sane.
I think the longer it goes, the sanity portion of it is going to expand in importance.
Jake Cohen: Yeah, and I think something that’s been funny is the more brands I talk to, a sort of common theme, and we have this problem too, is everyone has hypotheses on what their customers are thinking, and are worried about, and whatever-
Kurt Elster: It’s a best guess.
Jake Cohen: Everyone has this sort of level of uncertainty. It’s like, “But I don’t really know. How can I really be sure that this is really what they care about?” And it turns out we’re all 80, 90% correct, which is more than enough to put together a campaign, and put it in front of people, and see results.
Kurt Elster: Yes. Okay. Well, actually on number one, on your first point, do you have any examples that come to mind?
Jake Cohen: I mean, open my inbox. Yes. You know, one thing in particular, I like a brand called Fairity, and they sell comfortable clothing, and they started… I don’t know if it was a new collection, or if it was just well positioned, but it’s called the comfort collection.
Kurt Elster: Yes.
Jake Cohen: And their email said, “While you’re stuck at home, make sure you’re wearing comfortable clothes.” And I’m like, “Amen to that.”
Kurt Elster: Yeah. I noticed week one and two, like when I say weeks, I’m going just by when I started working from home, so I’m on week four now for reference. But week one and two was a lot of like, “Hey, we have the ultimate sweatpants.” Right? It was a lot of loungewear ads. But at the time, that was very appealing. And I did end up from Hoonigan, which is one of our clients, but they ran this big flash sale that was so successful, just absolutely blew away everybody’s expectations for what it would do. Apparel as a category did really well, and my purchase was like I love their soft flannel fleece shirts, and I got an oversized sweatshirt, because I want that loungewear. I want to wrap myself in a cocoon of direct-to-consumer coziness, all right?
Jake Cohen: There you go. There you go. Oh, that’s funny. Yeah, so we’re seeing that work for sure.
The second thing we’re seeing work, it’s kind of related to the first, but it really has to do with messaging and transparency. So, brands who communicate why your product matters, or if you frankly feel it just simply doesn’t, which is okay, and they are transparent about how everything that’s going on is affecting their ability to deliver the experience they promise, they’re doing well. So, we’re seeing people say… A great example is one of our customers is Who Gives A Crap. They sell toilet paper.
Kurt Elster: I’m sure they’re doing well.
Jake Cohen: Well, as a matter of fact, if you go to their website, which is whogivesacrap.org, or us.whogivesacrap.org, because they’re global, they have a popup that covers the entire screen, and it says, “We’re completely wiped out. These past few weeks have been crazy for everyone, but we’re working our bums off to get toilet paper ready as soon as possible. In the meantime, wash your hands, check in on your neighbors, share a role if you have one. Let’s fight this panic with kindness. Hugs from a safe distance, Who Gives A Crap. Sign up for our wait list and we’ll let you know when we’re back in stock.”
Kurt Elster: So, what I take away from that is number one, speak directly to what’s going on.
Jake Cohen: Yes.
Kurt Elster: If you try and talk around it, that can come off strangely. Though you could do it. I mean, I saw a Little Caesar’s Pizza commercial that said, it was like, “Hey, our pizza’s cooked in a 600 degree oven, and then moved directly into a box with no one touching it.” No reason. They never actually mentioned it. So, you can speak to exactly what’s going on, and you could still do it in your brand voice, and you could still do it with some humor, and no one is going to be upset with you for it.
That’s what I get from this Who Gives A Crap example.
Jake Cohen: Absolutely. If anything, they’ll be appreciative that you’re honest. I mean, there’s just so much crap out there. People cannot… Not to get political, but I think that there have been mixed messages from different leaders, public, private levels, whatever, that I think it’s difficult for people to find something that they can just say like, “That makes sense to me.” And not to mention, this is like a difficult and confusing medical thing that not everyone’s a doctor, so if you can just shoot them straight, people appreciate that and they respond.
And so, for brands who are selling, and they are transparent, I think they’re getting more sales than expected. Another story, this is insane. A brand called Pistol Lake, which sells kind of like cool, minimalist, athletic material clothing. They, when this hit, their sales tanked immediately, and the CEO, Ryan, was kind of potentially in a tough spot. And he wrote a really candid note to his customers, and he said, “I’ve never really worried before. I’m a little worried now and I’m asking for help. If you ever were considering buying something, anything in the past, we’d really appreciate it if you bought it now, and here’s a friends and family discount to help.”
And I can’t give specific numbers, but let’s just say his sales were like 10X what he normally saw after that note, because people wanted to band together and support.
Kurt Elster: Wow. So, he just said, “Hey, this is what’s going on.” Wrote from the heart, wrote to people, and his audience came together as a community to support them.
Jake Cohen: And what’s even more incredible about that, because they got that support, because they were able to not furlough anybody, because they were able to keep their warehouse and their factory open, they pivoted, stopped production on their main product, and started building masks to support hospitals and people in the community.
Kurt Elster: I have seen so many people be able to pivot or be able to sell something that they can then use to raise money for charity. So, two great examples, Adam’s Polishes, which is a car detailing brand, and they’re vertically integrated, so they do their own manufacturing, was able to start selling hand sanitizer, surface disinfectant for your house, and hand soap, so they were able to just turn around and meet the direct supply dead on. So, if you’re in a position where you can pivot to meet a supply shortage, oh my gosh, do it. Absolutely do it if you can, and it makes sense. And I think in most cases, it’s going to.
Jake Cohen: And if not, the other side of this is if you’re a brand that’s not selling something essential, or you are out of inventory, if you shoot them straight and you ask to connect, gosh, people are like… Time on social media is up. Open rates and click rates across the board appear to be up. Time spent on email is up. People want to connect, because they’re bored at home. Ask for the opportunity to connect, because when we emerge from this, that connection will persist, but the problems will not. And so, you’ll have a new relationship that you can foster. You will have, to use the word that you brought up earlier, which we of course love, you’ll have an owned channel to communicate with that person on. And you’ll be able to really grow your business with the help of people that you establish relationships with now.
Kurt Elster: I think the trick here though is, and I say trick, but I think the trick is there can be no tricks. You need to be as genuine and authentic as possible, so now more than ever, be yourself. You can still use that brand voice, but don’t… I don’t know that you necessarily want to pretend that nothing is going on. You could probably argue there are instances where it creates a sense of normalcy, and that could benefit-
Jake Cohen: I would even say in particular if you sell accessories, like imagine you sold keychains. I’m making this up. I don’t have a specific example.
Kurt Elster: I probably have a good one for this but go ahead.
Jake Cohen: If you’re not… People are probably not buying keychains right now, but you could literally say, “Hey, we appreciate you stopping by. We know you’re probably not buying keychains right now. But we’d love to tell you when a new one comes out as you think about gifts in the future and use cases for yourself. Please fill out your email.” I guarantee you that will work.
Kurt Elster: So, if you’re in a position where you’re seeing like, “All right, sales are down, or for some reason I can’t sell.” Maybe I have a supply shortage. I should view this as an audience building exercise, and that’s where you really want to be authentic, and genuine, and up front.
Jake Cohen: Thousand percent.
Kurt Elster: All right, what else? You’re filled with loads of actionable tactics and strategy here, which is what this show’s about, which I love, so give me the third one.
Jake Cohen: I got one more. So, we’re starting to see this. This was my prediction. We’re starting to see this, because it’s a little hard to pull off. But we’re starting to see brands band together and sell a package of items across them.
Kurt Elster: So, like a cross-store brand bundle, sort of like a collab, but in bundle form.
Jake Cohen: Yes, and what I think, it’s early, so I don’t know if this will really work. What I think will work is if you can take complimentary products and you can stitch them together and do like a rev share kind of thing, I think what you’ll be able to do is you’ll start to give the opportunity for people to send gifts. And this has not really emerged yet. I think this is later in the hierarchy. I think we’re gonna come back to belonging, but I believe that people are gonna start sending gifts to loved ones.
The first wave of this has been buy something and then we’ll donate to doctors and first responders and things. I think we’re gonna start to see, especially as Easter’s coming, Passover’s coming, holidays are coming, I think we’re gonna see people send gifts to other folks, and they’re gonna want to know, “Hey, what’s a good thing to send?” And I have a hunch, I don’t know if this is right. I have a hunch that if either cross-brand packages are put together, or even within a specific brand, a care package is put together and positioned as such, I bet that will do pretty well.
Kurt Elster: I like this idea. Do you have… Can you think of an example of anyone who’s done this?
Jake Cohen: They haven’t yet. I just heard… Let me see if I can find this. I just heard this morning… We have all these channels set up across the whole company. People are just feeding back stuff that they’re seeing. I don’t know where this is. No, I don’t know yet. There’s one group that’s starting to put this together, but I haven’t really seen it. I just think that we’re starting to think about gifts for our friends as we’re in this. As people believe that they’ll be in this for another month, maybe two, maybe longer, birthdays don’t stop. Holidays don’t stop. We don’t stop having friends and caring about people and we don’t stop wanting to connect with them.
And as we run out of “things to buy,” because you don’t want to spend all your money, and at some point, you’re like, “This is now getting ridiculous,” other people come to mind. And I think we’re gonna see that more in the coming weeks and months.
Kurt Elster: Okay, so start thinking about gift opportunities and potentially cross-brand bundles and promotion.
Jake Cohen: Let me put it this way. If I own a store right now, I’m doing three things. Number one, I’m asking for someone’s email address so I can keep them in the loop around shipping, around new products, around what’s happening. Number two, I am positioning my best sellers in the context of the new reality. Stuck at home? Working from home? Want to go stay healthy? Any of that stuff that people are thinking about. Number three, I’m gonna start to introduce, “Thinking of a loved one? Send them this. Here’s why.” And number four, if I have friends that have stores, I want to get on a call with them after my kids go down, and I want to say, “Is there anything we could possibly do together? What do you think?” And see what comes out. And if I do those four things, I will have plenty of activity and plenty of selling opportunities to connect with me current customers and people who come to my site to sell.
Kurt Elster: I can see why at the top of this conversation you said, “I’ve been looking at the data. I’m a big spreadsheet jockey nerd, and I’m feeling optimistic.” And I said to you, “All right, sell me on that.” And 30 minutes later, you did. I feel pretty good. I feel like okay, there is hope here.
Jake Cohen: Not only is there hope, there’s opportunity. And I think of people are… Look, you kind of have to be cold and sober about the information around you to determine what will happen in the future, and if you do that, I’m telling you, people are buying. They’re buying for evolving reasons. They’re buying from independent brands who are online. They are looking for connection. This is… The next thing I’m starting to honestly think about is how much of the shift to buying online is permanent versus temporal. Because it is so pronounced, and it is so material. The brands who acknowledge that this matters for them, they’re gonna thrive.
There’s a coffee company we spoke to who does some sales in grocery stores, some sales in department stores, some sales online, and then some subscription. And she said their department store sales are gone, their grocery sales have doubled, their subscription sales have doubled, and their online sales have 10Xed. That’s what’s happening right now.
Kurt Elster: Yes. Absolutely. And I know for some people, they’re not seeing that. And I know for some B2B focus brands, your sales are down 90%. What you should be hearing right now is there is opportunity to pivot. You have an infrastructure in place, you have experience, you’re closer to the money by virtue of being in eCommerce, so you can make this work. You absolutely can. Don’t panic. Don’t hide. This can work for you.
Jake Cohen: Kurt, one thing I can throw out there as we start to wind down, so much, one of my core hypotheses early on here was the duration of this incident, of this pandemic, is gonna inform strategy. If you had a crystal ball on when things would happen, you’d have the perfect strategy, because you’d know when to execute all these things. And what makes it hard is, well, I don’t know if this is a two week thing, or if this is a two year thing, or shorter, or longer, and I don’t know the answer to that. I don’t pretend to. But I believe that come fall at the latest, we’re gonna be to a pretty normal operating cadence across the country, and probably a little sooner than that.
So, if you think about things on that basis, one quarter, two quarters or so, you can think about, “Hey, can I spend the next two or three months really building my audience, really building a connection, really establishing value to them, so that when they’re back in a mode of buying the thing that I sell, which they may not be in at the moment, I have their attention, I have their trust. And can I rebound more spectacularly than ever because I worked really, really hard to build those relationships and establish them firmly, so that they’re with me now and in the future?” And I promise you, if you do that, not every single person’s gonna make it, because there’s cashflow considerations, and it’s nuanced, but I promise you if you take the approach of building value and sharing value with your customers, however is appropriate today, they will be with you for the long haul. And they will come out, and they will stick with you, and you will thrive when this is all over.
Kurt Elster: Jake, I can promise you have my attention and trust. That was inspiring. If someone wants to participate in your data gathering, how do they do it?
Jake Cohen: You go to Klaviyo.com, and actually there’s two things you should know. Klaviyo.com, and at the top, there’s a green header bar. Just click on that link. That link will take you to a page where you can fill out the business poll or the consumer poll or both, and we’re also publishing every single day both the latest results and the insights that we’re collecting from brands and consumers around the world. So, you can read as far back as you want, you can read our op-eds, and we’re starting to add tips and tricks on what you can do about it, as well as deeper data analysis. It’s our central place where we hold all this stuff, so Klaviyo.com, click the link at the green header bar at the top, and you’ll find everything you need.
Kurt Elster: I will include all of that in the show notes, and lastly, if someone wanted to learn more about you, connect with you, how do they do it?
Jake Cohen: Two ways. You can find me on Twitter. I try to be very active and helpful. My handle is jfccohen. You’re also more than welcome to email me, email@example.com. I’ll do my best to respond very quickly. I love connecting with people around the community, so I hope you reach out.
Kurt Elster: Jake, this has been enlightening and inspiring. Thank you.
Jake Cohen: It’s my pleasure. Thanks for giving us the opportunity to share and help.