Shopify's 2023 Wins, US Market Trends, and TikTok's Shopping Revolution | Elizabete Fleišmane and Dans Rozentāls

Speaker A: Foreign. Welcome, everybody, uh, to another episode of Ideas Fulfilled by Printful X Snow Commerce. My name's Elizabetha. I work in content marketing, and Dan has just arrived from his US business trip. I wonder what it was like.

Speaker B: It was awesome actually, because I managed to go from sub zero temperatures here to 25 degrees Celsius for all the European people. I don't know how much it is in US metrics. Yeah. Go to 25 degrees Celsius near the beaches and just chilling there with palms and everything. Yeah. Coming back was awful to say the least.

Speaker A: I'm not in pain at all. I'm fine. This is fine. Uh, it's been so busy lately. Like Christmas is in like four days. Uh, right. And I have not got almost any gifts how this even started.

Speaker B: So great.

Speaker A: Good job, us. Sorry, all family members ever. But, uh, so I've mentioned what I do. I do content marketing. Uh, what do you do?

Speaker B: I'm essentially managing the customer success team at Printful and we're the team that manages and helps business owners scale their businesses with Printful.

Speaker A: Very impressive. But what we've gathered here for is a little bit of a discussion of e commerce trends. Right. We had an episode before where we went through the very current trends for that moment. But since the year is drawing to a close, we wanted to look back at this previous season and review some trends for the upcoming season.

Speaker B: Yep, exactly.

Speaker A: The first thing that obviously we should look at is the holiday season and Black Friday. Uh, right, the Cyber 5, the new Trendy term. What I personally is etched into my brain right from all of the articles that I read and the frenzy of, okay, right after Black Friday, we were all just kind of like, oh my God, watching the order spike and stuff. But what I saw like a couple of days after was how many orders Shopify sellers generated. If I remember correctly, it was like 9.3 billion with a B billion in sales for Shopify merchants. And what's crazy to me is that within just a year, that is 24% growth. And I always look to Shopify as like this industry benchmark, that that's what we should be striving for. So do you feel like you've seen our customers experience that in your team and who you work with? Or is that like an unrealistic benchmark or what's up with that?

Speaker B: Well, for Shopify, they generated 9 billion, but I think overall U.S. customers alone spent. It was, I think like 39 billion purely e commerce sales. And they saw around 7.8% growth. So the industry is Actually growing a bit slower than Shopify. And I'd honestly believe that Shopify is adding that growth as a result of new users joining Shopify. It is a popular platform, obviously. I saw one of the top stores was, um, what was the name? Skims.

Speaker A: Mm, yeah, 10K.

Speaker B: Yeah. That brand is growing like crazy. I think Mr. Beast is also using Shopify, if I'm not mistaken. So there's a lot of big sellers, but in general, I believe that the platform is just adding a lot of sellers. And overall, I honestly bet on an average seller growing closer to that 8% rather than that 24%.

Speaker A: So we shouldn't feel bad if we're not reaching 20%.

Speaker B: Yeah, of course, of course.

Speaker A: Okay, good, good, good. When you mention Skims, I immediately think of all of the other celebrity brands and stuff because something that I've seen happen over the past few years is just how much beauty brands, clothing brands, a lot of that is being dominated by celebrity owned and run brands. I immediately think of Savage X, Fenty and Fenty Beauty and stuff like that. That to me is the iconic epitome of a successful celebrity brand because there's so many, not to go on a tangent, but there's so many celebrity endorsed and celebrity created lines of stuff where really their input was like picking a few colors and then that very clearly doesn't translate. Like that effort doesn't shine through the product and so people don't really buy it versus what Brianna did. That is a great example of what, like actual investment from a, uh, creator looks like. A similar thing, honestly, is happening with Skims. Like, I was very skeptical at first when that appeared, right. Because there were so many controversy around the, uh, original name at the time. And Cam has a much more polarizing reputation, let's put it that way. But I've honestly been so impressed, right, like, uh, with the new menswear line as well coming out this year.

Speaker B: That's insane.

Speaker A: Yeah, I looked at it and I was like, I might get something for myself.

Speaker B: You know, What I love about them is the fact that they're actually doing collaborations with other brands. And I, I feel like that's also a trend in the segment that we work with. I do see a lot of, like, even you would sometimes think that they're competing brands, but not really collaborating, making collections, making drops. And both brands obviously benefit from it. You get synergies from, um, in terms of, like, consumers that you target, more visibility, something has a chance to go live. And I honestly feel like the brands that are actually growing above that 7.8%. Right. They actually are doing collaborations, they're doing influencer marketing, they're on all the social media channels, everything. And that is, it's tough, as you said, for those brands. I feel like the effort really does shine through when it actually comes to the end result.

Speaker A: Yeah. And that's super important now especially you mentioned that Shopify's growth was very much primarily probably driven by new markets.

Speaker B: I would assume so, yeah.

Speaker A: So the market is getting more and more saturated as the years go by. So if you're a new seller, if you've just created your store, what you then have to do is stand out. Right. Looking for like that is a good reason to collaborate with other brands. It's also a good reason to look at what you're offering, look at your audience and be like, okay, there are 17 different other brands that look exactly like mine that is offering the exact same thing. What is special about me? Why should my audience care? And then that could be very specific, like product things, like maybe your brand is eco friendly or your brand uses embroidery, or you specifically go for this premium brand of base products if you're using on demand stuff. All of those things are product based innovations. But there's also another avenue. Okay, what is it about your brand that attracts people? What is it about the way that you communicate with your audience, how you position yourself, et cetera? I think collaborations, honestly kind of taps into both a little bit.

Speaker B: Yeah, I would say so, because both product innovations and just the brand building. But in general about like what you mentioned, there is a lot of competition in the industry, so you have to stand out. And what we're actually seeing or the biggest success comes from brands that actually have loyal audience already built. Those brands don't have to do as heavy discounts. We were actually reading a, uh, report from Klaviyo where they essentially said that an average like apparel seller only has discounts ranging up to like 9%. Which honestly, like blew my mind.

Speaker A: Yeah, because you keep seeing like 50% discounts everywhere in every store.

Speaker B: Exactly. But I guess with apparel sellers they kind of manage to build that brand loyalty. And um, whenever like, even I'm buying T shirts, I usually go to the same brands that I've kind of been going through for years. So I guess that's part of where it might be coming from. But in general, other reports suggest that discounts, uh, usually don't go higher than like 30% even during like Black Friday and Cyber Monday. So you don't necessarily have to have like 90% off to be successful this year or next year or like, in general, uh, with your store.

Speaker A: So differentiate, not discount.

Speaker B: Yeah, exactly.

Speaker A: Okay.

Speaker B: Exactly.

Speaker A: Good sound bite.

Speaker B: If you manage to build something with those loyal customers, like, you're all set. You don't have to spend as much on marketing. You don't have to, you know, fight for every single sale. It's fighting, like, perfect for everybody.

Speaker A: And returning customers are always, uh, um, a lot more cost effective, you know? Right. Like, you don't have to acquire a new customer over and over again. If you have a loyal audience who cares about your brand and who would keep rebuying once, you know, they run out of something or they are like, okay, have these two T shirts. I've been wearing them every single day. If it's somebody who cares about your brand, not just the quality of your product, that is going to make it so much more likely that they're going to come back and. And buy again.

Speaker B: Exactly. I think, like, last year the average customer acquisition cost was like $29. And like, given the customers that we work with, obviously on your first purchase, you probably sell a T shirt, perhaps two, perhaps a sweatshirt. But, like, that doesn't add up. That probably doesn't cover that acquisition cost. Right. So you have to be in it for the long game of actually having an email subscriber list that's always up to date. You have to drive that. You have to be active on social media. So it's everything, honestly. But spending $29. And if that's like, your main strategy of driving business, I've seen those businesses fall year over year, uh, in a lot of instances.

Speaker A: And I also imagine that this is like, more what's going on in my head. I don't have raw data to back it up. But if you're buying a gift for somebody, especially around the holiday shopping season, you would also care about the fact that you've bought from this brand before, of course. Or you know that they're reputable and stuff. That is something that is not only useful in terms of, like, generally during sales, but especially during, like, busier shopping times. If you have a list of people you need to get a gift for, you're not going to be like, okay, so for this person, I probably want to get a funny T shirt. Let me scour the Internet and look for one. No, you're going to be like, okay, I know this brand, and I think this would really suit this person. And that connection is what is going to drive so many sales for people for holidays.

Speaker B: Exactly.

Speaker A: And the holiday season. Okay, this is maybe, uh, a tangent, but I have felt like we have been in a holiday season for months now. I'm not sure if that's super accurate to what it actually is, but I started seeing holiday specific marketing and people actually browsing for gifts and for their holiday shopping in, in like October. This might just be me. Maybe I didn't notice it before, but it doesn't feel like this was the way before. And I also saw, um, some stats that basically said, like, oh, the holiday shopping season is going to last longer. Like, it's going to extend into like mid January. And I'm just wondering why, like, I understand why people would want to buy earlier because, like, cost caution maybe, or they don't want to pay for express shipping, all of that. But why longer? Like, where's that coming from?

Speaker B: Well, if you're a subscriber to a lot of brands that, like, sales season started even in September with all the VIP early bird sales. But in general, I primarily think that starting earlier is something that the customers are driving, so they want to cross all the items off the list. Because this year the consumer sentiment in general is a bit tricky right now.

Speaker A: Everyone's very cautious.

Speaker B: Exactly. Uh, the report from, uh, was it Deloitte or. I don't remember exactly, but essentially said that 59% of customers in the US were planning to take on depth to actually purchase holiday gifts.

Speaker A: Whoa.

Speaker B: And they attribute that to rising inflation costs, cost of living, job security and other things. But in general, yeah, they have a limited budget that they try to at least plan ahead. And that's why they start earlier where it goes into the other end. So lasting longer, even in January or sometimes for the whole year. Right. You have to do promotions all year long, but that's where the store owners, the brands themselves kind of push it because they're fighting for every single customer. Obviously. They also have, um, you know, for brands that do everything in bulk, they have inventory that they want to sell. For brands that do on demand, they want to compete for the same customers that the bulk brands are going after. So you can probably get good deals for like three, four months and still have, you know, great sales.

Speaker A: So soon, like, half of the year is going to be holiday shopping.

Speaker B: Pretty much, yeah. Uh, what surprised me the most was that Black Friday is actually smaller in terms of sales than Cyber Monday. Cause on Black Friday, right? Yeah, they did like 10 billion. Right. And on Cyber Monday they did 12.5, which is like 25% higher. Insane. Always blows my mind. But that kind of happens every single year.

Speaker A: So I wonder a, I wonder why, because I know, like, I also am, um, a part of that statistic. Like I know of Black Friday, but then I remember about the Black Friday discounts, like towards the end of the weekend and then I go like, ah, I can still buy tomorrow. I don't think that's the mechanism for everybody necessarily. But do you know what the mechanism is?

Speaker B: I feel like you're kind of scouting out for deals and you kind of know that all the retailers are trying to push everything, like higher discounts later on because they want to capture first the customers that don't care about discounts, then they want to catch customers that have a bit more money to spend. And then in the end you're kind of trying to push or squeeze money out of everybody.

Speaker A: There is, I mean, fair enough. And you can't blame them. Of course there is one point at which you have to go like, okay, I'm going to start selling, let's say Valentine's Day products, for example. You can start selling them on the 1st of February. Sure, there is a specific type of customer who's only going to start looking for that stuff a week in advance, but realistically, A, you got to give time for campaigns to start working. B, there are different types of customers. There are some over the top people who are going to like prepare a Valentine's Day gift like two months in advance. And on top of that, like the only way to actually stick in a customer's mind, especially if it's a new customer, someone who hasn't bought from you before. Continuous interaction.

Speaker B: Yeah. Be in front of their eyes, essentially. I usually see Salesforce specific holiday usually start around like 45 days ahead. That's when, if you follow like Pinterest trends. Huh. People start searching for Valentine's gifts ideas in January, probably after going to the gym. Because everybody goes to the gym in

Speaker A: January and then never again.

Speaker B: Exactly. But in general, yeah, it usually starts around like 45 days. And irrespective of the holiday, be it like St Patrick's Day, Christmas, hopefully not us. We still have to go shopping afterwards. But in general.

Speaker A: But yeah, like these early promotions and these early sales, A, they give you the opportunity to capture all of the customers, but also it gives you an opportunity to make sure that everything is ready, ready before you launch it. Because there's this idea of, oh, you're just going to move fast, just launch things, whatever, whatever. But that can land you some kind of hot water sometimes. What if your system breaks down and then your customers are disappointed because you didn't test anything beforehand. What if your designs are received in a way that you didn't intend for them to, but you just didn't like? Ask anybody but yourself. What do you think about this? If that happens, at that point you're in a completely different ball game. You have to then manage a crisis. And step one of crisis management is avoid the crisis, don't do it. But if you're a brand that has been selling for a little while, in my personal opinion, you can never one and safeguard yourself from either controversy or system breakdowns or stuff. At some point, some parts of it, it's going to be out of your control. Let's say your store engine breaks down or something. There was this one email, uh, I saw where essentially a store engine that an online store was running their website on broke down and there were technical issues and customers couldn't get orders. The way that some brands would handle that would basically be like fix the problem first and then pretend nothing happened. And that doesn't increase trust. In fact, that kind of approach erodes trust significantly. And if you are a brand, especially one that is like only a few people, if you are somebody who positions yourself as, you know, me and my friend, we run this little store. These are our designs and you build a community that way, you gotta handle all of your communication that way, including crisis communication. Have you seen any of your customers you manage go through a crisis before? Even like a small one?

Speaker B: I think it was two, three years ago, there suddenly was snow in Texas.

Speaker A: Oh right, the power grid thing. Yeah, yeah.

Speaker B: Everything just fell apart. Everybody got crazy.

Speaker A: Which makes sense if you're not prepared for snow. Snow.

Speaker B: Snow, of course. But uh, at that point for that specific brand, sales stopped for like three days, four days. They couldn't get employees to the office, they couldn't communicate, they couldn't keep up with the actual store. I honestly don't think they were ready at that point to actually. They didn't have a clear plan on how to communicate. They didn't have enough channels to actually communicate through. It was a store that was heavily relied on paid advertising. So for them it was just, I would assume, just losing a lot of new customers that they could have gotten but didn't. And then there's this, uh, other one that happened this year. There was a huge storm in the state of Georgia.

Speaker A: Mhm.

Speaker B: And for two weeks they didn't have electricity. During those two weeks, probably lost like 50% of that month's sales. But the important thing there is that you communicate about that. You let your customers know that, hey, everything's fine, our team is fine, we'll, you know, be up, back up and running, just like give us time. And that kind of gives confidence to the customer because again, as we spoke before, there's a lot of competition. Like the market is saturated and consumers won't give you a lot of, like, second chances. So it is important to like, let them know what's happening and probably, you know, steer towards over communication rather than like keeping things to yourself and not

Speaker A: being afraid to keep it human. That's the other part. Yeah, of course, of course. This honestly happens with brands and creators. They will run merch and stuff like that. And then there is either something wrong with quality. I've seen that happen for people where their statement, even though all of their communication is super candid and they can be sometimes crass in their humor and they're very, very much themselves in either their brand presence or their content or whatever. Suddenly when it comes to managing a crisis, they turn to lawyer mode and they're like, uh, we regret to inform our customer. And it's. I understand the desire to do that because it feels like a more defensible position. It feels like nobody can poke holes in what you're saying and stuff. But in reality, if you want your audience to continue to trust you, you got to be super candid with them either. If it's a controversy, I messed up. No excuses. I am sorry. This is how it works. If it's a system failure or something, so sorry, this is out of our control. Here's what you can expect. Here's what we're doing actively to improve this and be proactive in communicating the details rather than there will be further communication in the next week. There is merit to that in some situations. But if your brand, especially not a huge one, not the way to go.

Speaker B: I guess it's okay to. I don't know if I can say this, but piss some people off. Don't be afraid to make stunts. If everything's perfect, you're probably not risking enough, especially in this day and age.

Speaker A: I mean, caveat depends on what your brand is all about. Of course, if you sell baby clothes, maybe don't be super escaped, but if you think of the biggest brands out there, the reason why they gathered a, uh, cult following is because they felt different to people regardless of if they were or not. But they felt different. It felt like, you know, like when the reason why Apple was so immediately and quickly popular For a specific audience is because they felt like rebels. They felt like, okay, like, I'm going to be different. There's this very, very different company that just sells the exact same phone. But it was all about how they chose to position themselves and how they weren't afraid to be like, hey, we have different priorities than other brands. If your priorities align with ours, welcome. And it worked. So I wonder sometimes, especially when it comes to a crisis, communication, but also just communication around holidays, around any sales event. I wonder what is going to be different in the next year or so. Are we going to see brands become more human? Honestly, I saw recently some more headlines popping up about live shopping and how that unedited way of communicating and being like, hey, buy my products and stuff is becoming more popular. I think TikTok rolled out the feature, right? And I wonder, is that going to be what launches this unedited nature of content into the mainstream?

Speaker B: Essentially, I guess we have probably different opinions on this, right? That kind of goes back to the old commercials on TV where you can just sit all day and pick up your phone, order or something. But honestly, I do think that there's a lot of opportunity there. Even my grandma buys a lot of things.

Speaker A: What's on TikTok shop?

Speaker B: Facebook.

Speaker A: Oh, okay.

Speaker B: But still, there's a few local companies that sometimes do, like, lives. You can ask questions, they can show you around. Uh, like it is that like, human aspect of it. There's no pressure to buy, you can get all the questions answered. It feels more genuine. Right. And I feel like that's the direction that all the social media is kind of going towards. Not that like staged photography or staged videos or only talking about your product. It is that like lifestyle, user generated content, uh, making mistakes, you know, m being bold.

Speaker A: I can see the value in it. And by the way, your grandma's very advanced. Kudos. I'm so conflicted about this all the time because I see all of the ways in which livestream shopping could be valuable. But then I also remember seeing the same headlines about it two years ago, three years ago, and it's not like it really took off. So I always wonder, oh, is this it now? Is this when it's going to happen? I will choose to be skeptical for now, you know, but I feel like it's something that could potentially work because livestreaming in general has gained steam over time, you know, And I feel like five, six years ago, anywhere outside of the gaming space, it would have been kind of inconceivable to be like, what Twitch streamers are going to be hugely popular. Uh, but then the pandemic came and then I found myself watching streamers. Like, I watched, like, I don't know, political streamers and stuff like that. And it felt like a completely new niche. Uh, and I wonder if this is just me going on a very personal theory, but we want immediacy in content more and more to a point where getting our news immediately doesn't even suffice. Getting them live is the expectation. Like, when I watch music awards or something like that, or if, uh, I'm at work and I know that something's going on, I will find the website that was going to give me live news like this and keep refreshing. And I realized that at no other point in history was this at all a thing that people would have expected. But maybe that is going to be the engine that drives live shopping. Being able to not just see the human side, but also. It's so touchable. Almost. Um, it's right there.

Speaker B: I don't really know about that instantaneous aspect, but that feeling of. It's almost like you can touch it or if you're buying fragrances, almost like you can smell them across the shelf. Of course, but it is that feeling. You need to play with a lot more senses rather than just relying on touchscreen where people just scroll through. You need to sound, uh, sight and all those.

Speaker A: So, yeah, I guess the question is going to be whether almost is going to be enough, you know, almost touchable. Is it going to really get us there? We'll see. Okay, I think we've blabbed enough probably because, uh, I am worried about stores closing down before I can get my Christmas gifts. But, you know, the year is drawing to a close, uh, for everybody celebrating, whatever holidays coming up. Make sure to stay safe, stay happy, and share any of your insights with us. Like, you know, we, we've talked a bunch, but we can find everything. We can cover everything. If you have anything to, to share with us or with the audience, leave things in the comments below or find us on LinkedIn.

Speaker B: Yep.

Speaker A: And thank you again for listening to ideas fulfilled by Printful X Snow Commerce. And we will see you next year. Right?

Speaker B: Yeah.

Speaker A: Yeah.

Speaker B: Uh, let's go shopping. Let's go. See you guys.

Speaker A: It.