The Unofficial Shopify Podcast: Tales of eCommerce Entrepreneurship

What matters for the future of ecommerce

Episode Summary

An industry expert panel disagrees in this one

Episode Notes

Kurt Elster, Emmett Shine, and Lisel Welden work with DTC brands on the daily, respectively, so you’d think they’ve heard and seen it all. From Domino's self-driving cars to Walmart’s plan to be fully self-checkout by the end of 2021, to virtual fitting rooms debuting at a time when a lot of Americans really just want to get back into the mall (you get the picture)-- we want to know their takes on what's upcoming in ecommerce.

On the panel:

This panel was originally recorded for Route Connect, an Ecommerce Conference

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Episode Transcription

The Unofficial Shopify Podcast

Andrew Jones: Well, hello everybody. Thank you so much for joining today. I’m Andrew Jones. I’m the head of marketing at Route and I’m super stoked to be part of this portion of Route Connect. Our panel today is absolutely stacked. We have some of the industry’s very best. They all have decades of experience building some of the world’s most influential, interesting, engaging brands. And I’m just super, super excited to be able to speak with them today. And like the title of this panel suggests, we’re gonna be talking all about the future. What’s hot? What’s not? What works? What doesn’t? Where the crazy world of eCommerce is going over the next few years.

But before we get into that, let’s just introduce this absolute all-star panel. So, based on who’s on my screen first, Emmett, can you tell us who you are, what you’re doing, and we’ll go around?

Emmett Shine: Yeah. Hey, I’m Emmett. I’m happy to be here. Thanks for having everyone. I am cofounder of a business called Pattern, Pattern Brands. We’re a family of brands focused on the home. We have three right now. Open Spaces, Equal Parts, and GIR, and selling eCom and online, and coming from a background before that, I founded a digital creative agency called Gin Lane, where we helped build and launch a lot of popular consumer goods DTC businesses and brands for over a decade. So, that’s kind of my sweet spot, is consumer-centric internet first brands and businesses.

Andrew Jones: Amazing. Amazing. Thank you. Kurt?

Kurt Elster: I’m Kurt Elster. As a Shopify partner, I’ve worked for the last decade, I’ve worked with a lot of fun Shopify brands at our agency, like Hoonigan, Jay Leno’s Garage, lot of automotive stuff, but I’m probably best known for hosting The Unofficial Shopify Podcast.

Andrew Jones: That’s amazing. That’s amazing. Keep those sound effects coming throughout this whole thing. Didn’t even know that was a possibility.

Kurt Elster: You don’t know. You have… You don’t know what you just unleashed. You made a deal with the devil.

Andrew Jones: Yeah. We’ll see. We’ll see in a bit how I feel about that. But for now, I love it. For now, I love it.

Kurt’s Arnold Schwarzenegger Sound Board: You idiot!

Andrew Jones: All right. Thanks, Kurt. Lisel?

Lisel Welden: Hi, guys. Lisel Welden here. Jumping in, I worked in and around commerce in some way, shape, or form for a long time. Spent a long stint at Nike, about 10 and a half, almost did 11 years working in a variety of roles in marketing. From there, I was the first VP of brand over at Lyft, the ridesharing company, so helped them build their brand. Then I came back to the sports world and working in content at the sports media company, Bleacher Report. And most recently was at the company Stitch Fix, the personal styling platform which I think is a really relevant conversation to today, and I think I’ve been consulting a little bit for the last couple years, working with video game companies, working with a lot of apparel companies, and been one of the board advisers for Faherty Brand. So, spending a lot of time in and around the eCommerce space and learning and seeing what’s happening out there.

Andrew Jones: Amazing. Amazing. I think my favorite part of your intro right there is Lyft, the ridesharing company. It’s like you guys all have-

Kurt Elster: Not Lyft, the elevator company?

Lisel Welden: Exactly.

Andrew Jones: You guys all have incredible experience and are much too modest for what you’re doing. You guys are unbelievable and like I said, I am so excited to be talking with you. Like I said at the beginning, today we’re gonna be talking all about the future. But before we even get into the future, I would love to just kind of get some thoughts on the current eCommerce landscape. Let’s talk about today for a second, kind of level set where we’re at. When you guys look at the current eCommerce landscape right now, D2C, brand building, what are you seeing that you absolutely love today? Whether that’s technology, brands, experiences, opportunities, whatever, what really excites you about the DTC eCommerce world today?

Kurt Elster: The democratization of tools. For sure, tools are more accessible than ever and that’s exciting.

Lisel Welden: I think-

Andrew Jones: And what do you mean by that? So, tools in what way and what tools excite you the most?

Kurt Elster: Well, so eCommerce is almost purely software. All of these things 10 years ago, like 15 years ago it was build it yourself and good luck, and you will have a team of engineers to manage a database, or a series of databases. It just… I was not an accessible thing for a lot of people. Today, anyone can spin up a store in… I’m biased towards Shopify, but a number of tools. Or marketplaces.

Andrew Jones: Yeah. And I completely agree, I think the fact that anybody can jump right in, they can have a passion, they can have an idea, and they can jump right in, they can be doing and selling, that’s unbelievable and that’s something that hasn’t been possible for so long. So, I completely agree.

Yeah. Any other thoughts on that? Emmett, I’m seeing you kind of perk up a little bit. What excites you today?

Emmett Shine: Yeah. I agree with Kurt a lot. I’ve been building eCom kind of sites since the early 2000s and you know, it was like a blacksmith, or a welder back then compared to now. I think technology at its best, it’s a rising tide for all boats, and it is a democratizer, and gives access to a lot of people who maybe wouldn’t be able to spin up a complex service for transmitting cash for goods across the interwebs and the world.

I think other things that are kind of like exciting is the notion of internet 3.0, and about putting value in the pocket directly of content creators. I think it goes hand in hand with somewhat of what Kurt said, which is the ease and accessibility for presenting an idea, whether it is oneself, or something you’re making, or something you’re doing, and allowing others to transact with that directly. So, I think the entrepreneurship of that for people who are younger or more youthful oriented, I think also goes… Me, as kind of a design guy, I like the anti-aesthetic aesthetic a lot of these sites, because they’re not trying to be prim, and proper, and fancy. They’re just raw, throwing stuff up, and focusing on functionality, which is kind of like an allure of yesteryear, of internet 1.0 aesthetic, where it’s like blue text, and hyperlinks, and it’s on white, or when you make it fancy it’s like GeoCities and Angelfire. It’s like purposely bad bedazzled.

So, a lot of these mobile-first websites have like minimal or clunky UI because it’s really about the functionality, which I think is where the internet is at its best. When you’re just building hyper-efficient stuff and you’re testing in market.

I also am really excited about for Pattern, we just bought a brand and stuff, so I’ve been speaking to a lot of entrepreneurs around America, these mom and pop businesses that are doing a few hundred thousand, a few million, and I think their stories are not as celebrated in the eCommerce news, or Twitter, or whatever, Slack, Discord servers, but it’s cool how many in Shopify, and other ecosystems, and Amazon, thousands and thousands and thousands of people that are supporting family, and friends, and just had an idea and built something.

Lisel Welden: Yeah. I think building off of what Emmett is saying a little bit, I think you touched on a piece there around content. I actually think it’s really interesting, not just from the influencer marketing side, but also just from the way brands are figuring out how to build experiences that are built around telling stories. We do a little bit of that at Faherty. If you look at their catalog and how they have infused shopping into people’s… into more of a lifestyle view, you know? I kind of think that nobody ever wants to go shopping. They want shopping to be… Right? Who does? I don’t really want to go shopping. I want shopping to be a really natural and easy part of my life.

And so, I think all the different ways that people are doing that, kind of blending lifestyle, and content, and storytelling with shopping, has been really interesting. I mean, NET-A-PORTER has been doing it for a while. We know Casper was doing all that work around sleep to kind of build a deeper experience for consumers that isn’t just transactional, you know? Amazon is now launching… I think it’s in the beta. I’m not even sure exactly how far along it is. But they were gonna give you the opportunity to buy the goods that were in the shows you were watching on Amazon Prime, right?

So, innovating in ways that take consumers from having to go shopping and actually just seeing the things that they want in their regular life and giving access to them to get it. And so, I think that that is going to be… and there’s a few sites playing around in that space, as well. If we talk a little bit about technology. But I think that’s really interesting. Because we all know if we’ve done eCommerce that the fight to get people to your site, right, is real, and then conversion from there, but what if that’s not the game anymore? And you actually just allow people to shop wherever they are, whenever they are, at the easy click of a button.

I see that. I want it. I can get it right now. So, I think that that is actually really interesting and I’m excited to see where that goes.

Andrew Jones: Man, I love that. I love that so much. I think kind of like rounding out everything you guys said, I think felt a lot around shopping. I love what you just said right there, like nobody really wants to go shopping, but it’s good shopping, good online shopping is immersive, it’s authentic, it’s connected, it’s easy, it’s efficient, and when I look at eCommerce today and the landscape and why Route exists, it's exactly these types of things that fire me up and get us excited to build product to do that.

So, I love that. All right, so eCommerce today, we’re all decided. It’s fantastic. Let’s talk about the future. Before we get into technology, and experience, and things that we see coming down the road, I thought it’d kind of be interesting. Whenever we talk about tech, or trends, or… There’s a thousand blog posts online for trends in eCommerce 2021. What technology do you guys, or what trends, trend or technology, do you guys… that was supposed to pop that never really did. You know, when we look back at blog posts or content from 2017, there’s been things that we’re supposed to be big for a long time. When you look at where we’re at today, what is something that was supposed to be big and that just never really happened? Never really panned out.

Kurt Elster: Well, my favorite were the folks who used to email me and say, “Hey, what are you doing to optimize for voice search?” Well, it’s 2021. That’s still not really a thing anyone cares about, right? We were joking about it, but yesterday in my car I said like, “Play X podcast,” and it was I said, “Play Terry Carnation.” And this morning, I sat down, noticed on my phone there was an odd iMessage. It had messaged a gentleman named Q. Harrison Terry the word “carnation.” It’s 2021 and voice is still that bad. Stunning. So, I don’t know that voice search or voice commerce really is ever gonna be a serious thing, at least the way it was predicted when we were all running out to be Alexas in 2017.

Lisel Welden: I think right now, and this one is probably gonna be a little controversial, but I think AR is actually one of those things, right? The idea of AR and AR shopping was supposed to be that you’re able to sort of do things like imagine the goods on your body, or imagine the goods in your space, went through a whole renovation a couple years ago where they allowed you to take a painting and use AR in your house to see what it might look like on the wall. And maybe the technology gets better. And maybe it’s a technology challenge why it hasn’t totally blown up in more ways. But it’s helpful in some things, like GOAT, for example. That app. They do a really nice job in the sneaker space of allowing people to kind of see what it might look like on their foot, right?

But I think at the end of the day, we looked at AR as a way to replace the being live experience, but there’s still a tactile piece of it that it cannot really address. It can’t give you depth. It can’t give you weight. It can’t tell you if it’s soft or hard. So, I think that there’s still a way to go in AR. Maybe they get there technology wise, but I think that hasn’t popped the way that people thought it was going to.

Andrew Jones: I totally agree. I tried on some sunglasses the other day and I was like, “This didn’t give me anything to convince me to buy this or not.”

Kurt Elster: And a lot of that stuff feels like a parlor trick. And we’ve seen just absolutely phenomenal examples of it, especially like on iOS, where that stuff works pretty well natively. And has for probably two, three years now. And you never really see it in the wild. You never really see people doing it beyond like, “It’s a tech demo.” And then like if you want to take that to its extreme is we’ve also heard about how VR commerce is gonna be a thing.

You know, I love my Oculus Quest headset, but I’ve yet to actually place a purchase or even go shopping with it.

** Emmett Shine:** Well, I kind of agree with everyone. I think in isolation if I have to think, I would say AR and VR, but I would also say the nerdy quotes of like I think we overestimate what can happen in two years and underestimate what can happen in 10 years. I’m super bullish in AR for everything. I would bet every dollar I have that it is a transcendent form of technology that will be woven into the fabric of our lives. I just don’t know when. And I don’t think it’s gonna happen tomorrow. I think it’s gonna take some time.

But I don’t know. I have a lot of friends that work at Apple and other places and they’re like investing a psychotic amount of money infrastructurally into laying the rails down for that being a very big part of their business. VR, I just don’t like having stuff over my eyes, period. Maybe that’s just a paranoia of human, being a person, animal, mammal, and I like sci-fi, Snow Crash, and the Metaverse, and all that stuff, so that’s another inevitable. I just think that’s one that’s like generations away to some extent.

So, I think if you’re a business and you’re focused on not trying to die in a quarter or a year, these are things that are kind of shiny objects versus just core fundamentals that probably you need to focus on.

Andrew Jones: Love that. That’s a great point there. And I think we probably can all agree that’s like… I love what you said. Yeah. What’d you say? We underestimate what can happen in 10 and overestimate what can happen in two?

Emmett Shine: The other way.

Andrew Jones: The other way.

Emmett Shine: Yeah.

Andrew Jones: Perfect. Either way. Time. Timing is a thing that we’re talking about, right?

Emmett Shine: Yeah. We think that stuff’s gonna happen faster and then we also don’t realize how much happens in a long, quote unquote, amount of time, like 10 years, like a lot has happened and will continue. It’s exponential in terms of the rate of technology and change, but you see something, and you think it’s gonna… AI, there’s gonna be a Stephen Spielberg cyborg robots all around you, like every business is gonna have Hal from Space Odyssey embedded into their Shopify ecosystem, and that’s just not the case.

Lisel Welden: Yeah. You need the technology. And sometimes, I think you need the appropriate use, right? So, are we applying it in a way that is actually gonna be helpful and useful for people going forward? You know, I think AI has done really well in some ways in shopping. If you think about it, I worked at Stitch Fix, and you think about what algorithms can do. We used algorithms at Stitch Fix to help us pick out clothes for people, which is an intensely personal, difficult thing to do. And so, I think with innovations like that, where you start to see the real value it can deliver to consumers, it can take off. AI is essentially table stakes in eCommerce now.

If you’re not doing AI, you’re completely missing the boat. I’ve read somewhere that I think Salesforce put out a report that said that cart rates, cart checkout rates go up by 25% when there are recommended purchases available. And that can all be powered by AI. You know, even companies like Nordstrom are doing it.

So, once it proves its value to people, I think that these things can take off, but I totally agree with what Emmett and Kurt are saying, that things like AR and VR just… Yeah, they seem like gadgets. They seem like gimmicks. We’re not quite sure if they help us enough to influence the purchase. So, it’s harder to really grab onto them.

Andrew Jones: Yeah. I love that. So, rounding that one out, use case, timing, buy-in, all that. Yeah, I think it’s fantastic. So, I think that’s a great lead into my next question, is when we think about three to five years down the road for eCommerce, what technology do you guys think brands will be using to win online?

Lisel Welden: I was gonna say something that was a little bit related but connected. I don’t know if it’s a technology, but more of a space. Video games are continuing to transform and revolutionize what we do. I don’t know what that’s gonna be for eCommerce. There’s people who are dancing around it. For a long time, we’ve used video games as primarily billboards, marketing tactics, right? Like put your logo in there somewhere. If it’s NBA 2K5 or whatever it is, put your products on the players. But I think what we’re seeing is that video games are now becoming social platforms and communities, right? Travis Scott had 21 million… What is it, 16 million people, I think the number was? Show up for a concert inside of a video game. You have Gucci, and Burberry, and Mark Jacobs debuting product inside of games like The Sims.

So, there’s something happening there that I don’t know that anybody’s gotten their arms around, but I think it’s gonna be a change agent for a lot of industries as more and more people continue to interact. I think the number is something like 60% of adults play video games. Pretty compelling market for you to start to figure out how eCommerce becomes, or brands become more than billboards in there, but actually become purchases that people can make.

Andrew Jones: Yeah. Yeah, I love that. Yeah, so it’s that answer, too, that’s a combination of space, channel, technology, audience, I love that. That’s fascinating. That’s a fascinating thing.

Kurt, you were saying something, as well?

Kurt Elster: Well, we were talking about AI and machine learning, and there’s these AI-driven copywriting platforms now that… There’s several. I don’t know if you’ve played with them. They’re insanely good. Like frighteningly good. And so, if you combine that with… If you extend that idea out with like split testing, automating on-site optimization and personalization, and pairing it with an engine like this where copywriting, truthfully, I do a lot of conversion rate optimization, and copywriting really is often the number one thing that moves the needle on conversions.

Well, if you have enough traffic and enough, like a high enough order velocity, and you pair these tools, right around the corner you could completely automate that testing. And then the same idea, you could extend to PPC ads and just… If you have a big enough budget, iterate your way to the highest testing ad. And certainly, like you can’t replace humans entirely, but man, you could start to get close and… I don’t know. The idea simultaneously excites and terrifies me.

Andrew Jones: Excites and terrifies. I completely agree with that. That’s fascinating. Okay. Emmett, I want your thoughts on this as well, because we already know you’re bullish on AR over the next decade or so, which completely makes sense, but in the next three, four, five years, what other technology, or channel, or experience do you think brands should use to win?

Emmett Shine: Yeah. I think Lisel’s spot on about the emergence of… I mean, it’s kind of funny, like AR, VR, whatever, it’s video games is kind of that virtual experience and it’s a massive amount of people that spend time and money within those spaces. I think that world is really cool. I think for the world I know, of normal, kind of Shopify eCommerce type stuff, I would say it’s less the technical underpinnings and more what I’d say is like conversationality, and I think where I hope commerce continues to go, which gets into some of the stuff on AI that Lisel was saying, and AI for copywriting that Kurt was saying, is the ability to just offer more personalized, fluid conversations. And I think the medium and the interface becomes less important than the messaging.

And so, and again, this is where I think like I try to focus on intent versus pieces, and I think the intent is like speaking to any brand. It could be Delta Airlines. It could be Nike. It could be a startup CBG drink sold in… or whatever. And texting them, emailing them, going to the website, chatting, whatever the form of communication is, that it’s fast, fluid, personal, and frictionless gets you what you want. That, I think, is interfaceless and just, again, if you look at the speed and where things are going, I think the wind tunnel breaks apart a lot of the infrastructural ways in which you have to navigate digital experiences to get what you want.

So, I think fluidity, personalization, and conversationality are where I would like to see things going. Because I think it’s frictionless, and easy, and personal.

Andrew Jones: I love that. I love that. I think… Yeah, wow. I just looked at the clock here. We’re coming up on time. But I feel like we could talk about this forever. The one question I did kind of want to end on, which I think is a nice transition from what you all had said, is around creating immersive experiences today and over the next handful of years. We were talking about the tech. We’re talking about the channels. We’re talking about the Travis Scotts and the video games and what not. Any last thoughts you guys have on how can brands… Maybe let me shift this question a little bit.

We talked about the future a lot and I think a lot of what we’ve been talking about is around immersive experiences. Connection, authenticity. Do you guys have any parting thoughts on what can brands do today, or what should they invest in today, to start building these immersive, connected, authentic experiences?

Kurt Elster: Earlier, Emmett said you gotta nail the… Something to the effect of you have to nail the fundamentals or get the basics right. I think he’s absolutely right. We talked about really cool tech stuff and shiny toys. None of it matters if you don’t have that fundamental… all that fundamental stuff nailed. And I think the important part there, the stuff where we see the brands that exceed, that really excel, are the ones that act like their own little content production companies, their own little TV studios.

So, the ones that focus on conscious consumerism, social responsibility, where they know what their goals are and who they are, and they can communicate that with storytelling, with content, by partnering with influencers and ambassadors, that’s the really exciting stuff. That’s what moves the needle. And all the technology and the toys really are just things to facilitate that.

Andrew Jones: Great point.

Lisel Welden: I completely agree, Kurt. I think that when you think about great experience, you think about the whole person. And the importance of having brand purpose has never been more important than it is today. The number is something… 64% of consumers will switch brands that they buy from based on what the company’s values are. So, the experience is very much emotional, as much as it is physical, and tangible, and I think that your point about mastering the fundamentals that Emmett brought up is 100% right. It’s still about providing great service. It’s still about having the right inventory and the right products. All of those things still matter, no matter where you are.

But what is layered on top of this is this desire and need for people to also, and companies, to stand for the right things. Now, obviously a brand like Patagonia is both eCommerce and brick and mortar, but they are basically writing the playbook on how to do this. And a lot of that is based on can you create demand and not just capture demand through performance marketing? And they understand that game really, really well through the expression of their values.

And so, that is gonna become a bigger and bigger part of the experience and customers and consumers are gonna look much more for brands that can deliver on that than they’ve ever done before. So, I think that’s a big one for companies as they go forward.

Andrew Jones: I love that. I love that. Completely agree. Emmett, let’s end with you, man. Any parting thoughts on this?

Emmett Shine: Yeah. I think it seems like we’re all kind of aligned on stuff which is cool and good, because coming from different angles and seeing it the same way I think is hopefully for people listening valuable. I think two things I’d maybe add a little bit are like curation and community as just other things that are piggybacking on what we’re kind of talking about. I think part of the, again, artificial intelligence, it’s like assistive intelligence, really. It’s like there’s so much information out there that I think curation as a service is kind of like a term you’ll hear more. It’s like CAS. It’s like if you can curate information… I mean, that’s what algorithms and stuff do in social feeds, but it’s… I think people are kind of like, “Why are you curating this for me?”

So, I think we need help sifting through massive… The problem is now there’s too much information, right? So, you have to focus, and I think entities… It could be a media property. It could be eCommerce. It’s just the world around us, we need curation, and we need to choose what we want. It could be Substack, whatever. I think that’s more and more gonna be important for businesses across the board.

I think on the community side, it kind of plays a little bit to what Lisel was saying of creating kind of demand based on standing for values and signaling to audiences and community. Hey, if this is what you’re about, we’re the people that you want to be associating with, transacting with, learning from, Master Class style, whatever it is. I think community is really important and it’s really hard to do. Having people that follow you on Instagram or subscribe to your email list is not necessarily a community, right? So, I think having that connective tissue, the je ne sais quoi of feeling an affinity for a brand is a non-algorithmic thing. You can’t totally hack that. It’s like a human feeling of tribally wanting to be a part of something. As we’re less involved in religions than traditionally ever before, as we’re in this weird COVID, post-COVID work remote world, as social creatures we need to belong to things. And I’m not saying that we should all just belong to eCommerce brands, but it is… There’s state and there’s market, and you know, part of the market’s role for better or worse is filling that void, and I think people really gravitate towards brands that they feel a deep affinity to.

So, I think if you can do that, and by standing for values and stuff you care for, you’re not a transactioning kind of business. It’s a different value prop that is a little bit more sustainable because it’s harder to do.

Andrew Jones: If I were to kind of sum up what you guys just said, I think an interesting through line, get back to the basics, focus on brand, focus on value, focus on community, cut through the noise, ignore kind of the fancy 10, 15, 20 years in the future things, and really be deliberate and intentional about what you introduce to your brand, or to your store. Whether that’s technology, experience, or whatever, get back to the basics, focus on values, drive home your customer needs, and then be really intentional with anything else you do after that.

I think that’s fantastic. And seriously, I could talk about this all day long. You guys have been so insightful, so amazing. We can’t thank you enough for being here. And you know, with that, we’ll sign off with this one. We’ll see you guys next month. There it is.

Kurt’s Sound Board:

Andrew Jones: Kurt, I love it.