February Seventeen
This midweek Fix goes deeper on everything retail - DTC / DNVB/ O2O/ ecommerce etc. We aim to give everyone involved in this vibrant new economy insight and tips that help make your business grow. How are we doing? - hit reply.

Iconic Merchants - London Lockdown (pic credit Mark Maddox.

Shopify & ecommerce
Shopify report on Q4 today — at the start of the day rather than after the market closes which is usual with US firms. Great performance — as expected - with Q4 revenue up 94%, just shy of $1bn. For the whole year revenue was just short of $3billion — up 86%. Their Investors Deck (PDF) is a great summary of their business and this timely piece by Benedict Evans is a good take on how the Shopify success illustrates the key trends in ecommerce. 
The local newspaper is very proud of the Toronto success story and this in depth piece celebrates the leadership team. The founder is still bullish about prospects;
“I had venture capitalists pass on Shopify 10 years ago because they didn’t think there was a market for more than tens of thousands of online stores,” he says. “E-commerce is now somewhere below 30 per cent of sales. What’s the equilibrium? I imagine it will end up around 50.”
The WSJ note that Shopify’s Secret Weapon Is Thousands of New Business Owners as Covid drives people to start new ventures.
As part of their arming the rebels strategy, Shopify are now active in payments - and Shopify Pay is now compatible with Facebook and Instagram. The checkout is becoming a key battleground and offering the right choice of payment options is critical. But with the addition of Buy Now Pay Later options like Klarna as well as all the Payment options, it can get congested.
A core element of our workshops is the fact that halving basket abandonment is probably easier than doubling ad performance — so attention here can be really beneficial.

Action? How does your checkout page compare with your competitors?

TikTok and ecommerce
Next up is TikTok, who have been hinting at their ecommerce plans;
The Chinese-owned viral-video app has briefed advertisers on a number of new features for 2021, according to several people who have seen its plans, such as a tool that lets its most popular users share links to products and automatically earn commission on any sales.
This was mooted 18 months ago and we noted then that our friends at Soreto are ahead in this game. A launch is imminent as the TikTok Shop Seller University is now live. 

Action? How can you enable your customers to earn by referring their friends?

With a new CEO at Amazon there has been some speculation on whether we will see any changes in strategy. I think that’s highly unlikely — Bezos still has effective control as Exec Chairman and he has spent almost 30 years designing an amazing company that works incredibly well. This WSJ article agrees — arguing Amazon’s Retail Side Won’t Be a Side Hustle
Evidence of this in the latest acquisition —  an Australian business called Selz which enable people to launch their own online shop — a direct competitor to Shopify. They closed their own version of this business — Webstore — back in 2015, so this deal seems a bit of change in strategy. 
Their Live Streaming service is gaining traction - with the launch of a new car from Mitsubishi the latest big brand promotion. The live element lets the brand create an event and using the Amazon adtech stack (and that super rich targeting) is a smart move. The fact you don't buy the car online isn't that relevant. Could Mitsubishi retarget those who engage with the launch through Amazon newTV inventory?

Golden Geese
As regulators around the world contemplate the effects of Covid on their finances, GAFA look more and more like Golden Geese. We have covered the moves from the US, the EU, the UK and most recently Australia. 
Now US states are getting in on the act, with Maryland setting a 10% tax on Digital Ad revenues shown in that state. It is targeted at firms making more than $100m in digital advertising and it is estimated the state could make $250m a year. Clearly the lawyers are going to get involved but I am sure every other state now has their calculator out, working out what their windfall could be.

Whilst acquiring customers is arguably the key skill for a Merchant you also need to be good at product and at logistics. The first two drive the topline success but get logistics wrong and it can be disastrous.
Speed and efficiency are essential — both to avoid disappointing customers and to protect margin. 
One of the advantages of Amazon is their superpowers in this area. In their recent earnings call Coty mentioned the benefits they get from a close partnership with Amazon — halving delivery times
As one of only 15 companies globally to be admitted to Amazon's global Vendor Management Program, we have been working very closely with Amazon to share data, improve service levels, and trial new programs. One of these initiatives was Vendor Flex warehousing, where Amazon set up a fulfillment operation inside a Coty warehouse in the U.K.
This drove down the delivery lead time from seven days to three days, which is a critical driver for consumer purchases
Also in the call their CEO called out the success of ad campaigns with Amazon, Snap and Tiktok as well as some good insight into how they manage their business in China. If you are running a Merchant business you need to be on top of these issues. As we kept hearing, the Arcadia board were just not up to speed on their digital metrics.
In a recent podcast Benedict Evans describes a visit to an Amazon logistics and the counter intuitive way they store products. The robots know exactly where everything is and bring the picker the trolley with the items needed. But size 9 shoes are not stored next to other shoes, but on the trolley alongside a book, items of clothing, tools etc — all reducing the chance of the human picker making the wrong choice.  
Getting Creative right is now the key element of customer acquisition but too many people are missing this - largely because the control often sits with media folk who are less experienced with creative.
This is a good post supporting our belief in bespoke creative for each platform - work that fits the grammar of each medium — here arguing that If You Want Successful TikTok Ads You Can't Treat Them Like Facebook Ads.
And this video shows you don't always need an agency - because understanding all the elements of a good ad should not be outsourced How I Shoot Ads for My Ecommerce Startup.
But the right agency can and does make a difference. California based agency Common Thread set out the case for their agency here. Much to learn from their approach, but I am happy to point you to more local agencies that we rate.

Action? How many new creatives are you testing right now?

High Street
The FT have a slightly gloomy look at how landlords are coping with the closures on the High Street.
In the US some of the better locations are being picked up by luxury brands. As rents dropped 15% in New Yorks Soho district Chanel and others have signed leases for new stores. In other parts of New York it is local stores that are weathering the storm better as this piece on Brooklyn shows.
People will still want to visit stores but they will gravitate to good stores. I have talked in Brand Cathedrals for a long time and this will become even more important. Some interesting thinking on stores as experiences here.

Action? Why should I come to your store?
Triller, Twitch, OnlyFans and Discord are the latest fashion playgrounds.
WPP on the importance of digital fan engagement
Friendly neighbors are the key to China’s community group-buying craze
Uber’s food-delivery growth fails to offset rideshare decline

Action? There is so much opportunity for smart Merchants right now - I have expertise, experience and an extensive network. Let's talk about how I might help you - hit reply
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