State of E-Сommerce

Transcript

Jesse: What’s going on? How’s it going today, Richard?

Richard: It’s going well. How about yourself?

Jesse: It’s an excellent day here. It’s Friday.

Richard: Are you on special behavior today?

Jesse: Special behavior? How so? Oh yes, I’m on special behavior because my boss is in the studio today. So let’s bring him on. This is V.P. of marketing at Ecwid, David Novick.

David: Hey everybody. Thanks for having me onboard today, I appreciate it. Jesse, I expect you to be your normal random awesome self.

Jesse: I’ll try to keep it random, not best behavior.

Richard: Beautiful Sunday. I’m excited to have you in. Sounds like you have some interesting stats coming up for the holiday season, and just what’s been going on in the state of the Internet and e-commerce. What are the stats that you have, what is something that someone should be interested in as far as just something that is compelling, that most of the news hasn’t shared with yet?

David: Sure, sure. So you know I love getting the opportunity to work with you guys. I see it from the periphery and see that you do an awesome job. What you’re doing is really going into the detail to help our merchants and anybody else out there to learn more about how to do e-commerce, how to grow their own business, how to live their true authentic lives, and be that business person they always wanted to be. I think it’s a great service. What I wanted to do today and what I think would be most helpful is to kind of step up a level and maybe give like a 30000-foot viewpoint of what’s happening in e-commerce. I might have a little broader purview of what’s going on out there and how we’re helping to steer the development of Ecwid commerce to be that amazing tool to help people live their dreams. So it’s exciting.

Richard: Sounds good.

David: OK. I’ve got a long list of cool stuff that people really don’t know about, some really late breaking news. Hopefully, they’ll find that as exciting as I did just reading about it, researching and writing it down.

Richard: Awesome.

David: I’ll just start rattling some stuff off. Love to hear your thoughts about these, we haven’t even gone over them yet. It’s kind of interesting but we’re at them, it’s amazing. It’s an amazing thing — the growth of the Internet and e-commerce. I’ve been doing this over 20 years and it just continues to increase the excitement levels and growth, it is just amazing. We’re at the point right now where the world is growing and the world of Internet users is growing at even much faster pace. We are expected to eclipse 3.6 billion Internet users in 2018, and some of these notes (this one in particular) are from a gal named Mary Meeker. She puts out stats of the state every year, we can share. Jesse, we can share resources later on.

Jesse: We’ll put this on the blog page. Ecwid.com/blog/podcast out there.

David: You don’t need to take any frantic notes either. We’ll take care of this for you. It’s a good opportunity to help digest some of this stuff. So over 50 percent of the population is now Internet users in the entire globe.

Jesse: That’s pretty amazing. I mean I think you know we’ve been around a long time. There’s some gray hair here in this office. When you think about it, back a long time ago the Internet was OK for universities and then it was business people. Now everybody has the Internet in their pocket. Everybody, meaning half of the world, there are people that maybe have never sat down on the computer as we might think of a computer, but they have the Internet in their pocket.

Richard: That’s part of what’s going on with the smartphone. Was it really the Internet or is it the smartphone that’s doing this? I mean, you have to have the Internet obviously. But that computer — because it’s really a computer in your pocket that happens to make phone calls. We’re talking… So first off you guys provide the opportunity for people to create a business, and they can do it internationally, they can do it domestically. These numbers are international now, going global.

David: We all should be thinking globally at this point. Even small businesses.

Jesse: That’s the part that’s fascinating. There are 3.6 billion people that you have access to…

David: Exactly.

Richard: …For the cost of your cell phone plan or whatever plan you have.

David: Let’s think about this. Not only there are 3.6 billion Internet users in 2018, but the time on the internet in the past eight years has also actually doubled. So, each user is now averaging 5.9 hours a day, not a month, not a week, per day. And we’re all guilty of this. Let’s think about this. But the efficiency of using your mobile device to figure things out, to entertain yourself, to communicate with others is phenomenal. Right. We do need to be careful here a little bit. I mean 5.9 hours is a lot. Yesterday was…

Jesse: Cut the kids off a little bit.

David: There are some great apps out there to cut your kids off and I think that’s a super important thing.

Jesse: Sure.

David: Careful about that. Anyway, business is happening on the internet and you need to be there and if you’re listening to this, obviously you are there. Hopefully, we’ll give you a couple more pieces of ammo today to help you refine your game in a couple of pieces that might help you up your game as well. Let’s move on and talk about some other interesting stats. The National Retail Federation released some interesting news. We found out that last year’s holiday spending hit 814 billion dollars, not million. I said something with a B.

Jesse: Yeah, that’s a big number. Can I get just one of those?

David: I’ll take them! Yeah!

Richard: It’s crazy because you say one of those, and it’s so easy when you hear million, billion, trillion, no, it’s not just a different letter, different pronunciation. There’s a thousand M’s for every B. Yeah. Say that out loud. There are eight hundred and sixteen thousand million dollars being spent. That’s freaking ridiculous.

Jesse: If you saw my front door, you would start to understand why I participate. Yeah. There are packages there. Like for my wife. I’m going to say, it’s mostly for my wife. Yeah. There’re just packages every single day and multiple ones and I don’t know what’s in there.

David: It’s everyday business now and it’s fantastic. It makes things a lot more efficient. Who really wants to go out to the store? If you have a complex product that you really need to see like a large stereo — you want to hear a stereo. Well, you go to the store and you listen to it, and then maybe buy it online.

Jesse: On your phone when you walk off the store.

David: It’s come down to kiosks at some point and showrooming is happening. Yeah, let’s continue a little bit. So, it’s 814 billion according to Mary Meeker. E-commerce is now about 13% of total retail. Retail is a much bigger piece of the pie. But e-commerce continues to accelerate its portion of the entire puzzle. And you’re looking at the acceleration increasing, not decreasing. When I say “acceleration” that means the percentage of growth of e-commerce as a part of retail is an increasing pace. That’s pretty exciting, given the fact of the prevalence of e-commerce in general. but now it’s paces.

Richard: They’re all merging together too. Right. We use this term e-commerce sometimes as if it’s just one small thing, it’s a widget but it’s all kind of blended now. What is social, and e-commerce, and Yelp — it is internet but it could be driving still more retail sales through your brick and mortar location. It’s all morphing together. And even though e-commerce is growing, in this stats, we don’t really know, where there could be this hidden gem. Maybe she’ll have a new stat next year. It’s driving more restaurant sales, or just doing your social stuff, bringing people into your brick and mortar stores. Now it doesn’t seem to be working for Sears and J.C. Penney’s and, Toys R Us, so something’s changing. It’s growing but how are we seeing this behemoths disappearing too. What are they doing wrong? What’s going on?

David: You make an interesting point and it’s not necessarily a problem with the physical store. Physical stores are alive and well. If you look at the stats, and I don’t have them here with me today, but you will see that mall closures are definitely happening and some store footprints are disappearing. But some of the higher-end stores are actually increasing, and you’ll see a lot of the upscale products are doing quite well. People do what it really needs to be if you were going to be a physical store and do well as you need to have an experience. Brands that do recognize that and realize that and take advantage of that are doing great. So they’re having both, it’s really about the omnichannel piece. Selling both online and offline is really the key to larger retail success.

Jesse: I think part of the reason for this continued growth is more and more people are getting used to buying a lot of things online and not just the things they used to not just buy, like books on Amazon. They’re essentially buying everything online even when you’re like: “OK, it’s my kid’s birthday coming up in a couple days, so we could go to Target and whatnot and buy stuff but we just bought online because it’s so much easier”. And then you see the rise of the direct to consumer brands. Now if you have a good idea, if you either make the product yourself, you get it manufactured somewhere. Now you are the whole brand and basically, it opens up a lot of Ecwid merchants to be able to create a brand and sell online. People are not afraid to buy online at all. It happens all the time. These success stories.

Richard: Yeah, it’s a lot different when we first started. I think back to starting days, I actually started with physical or not physical, but the credit card processing piece of it. It was like “wow I could see behind the scenes they’d send me their statements”, you try to get them a better rate and not always it would be the best-looking store selling the most stuff. I remember this one guy that sold saddles in 2001. He sold saddles on the sort of million dollars plus and it was the ugliest site ever. But he had his market. He had his audience, it just made sense to his audience. They didn’t mind getting lost in his sight. They didn’t mind sticking around and looking for a while. You could barely even find the “how to buy” buttons. Wow. It was crazy. Yet a million plus and then sometimes you’d have these people that would say: “Oh I want to get that theme and make it look like Amazon”, the exact opposite extreme. Good luck. Yeah, it’s fascinating. Just what people are able to do these days. It doesn’t necessarily have to be some super fat complicated fancy site. You could just test something out to your point. You make something, you want to test something, and Ecwid can put it up in a day.

Jesse: And you’re online.

David: One of the things that I like that Richard said, it’s really interesting how it was back in the day. Suppose you’re a saddle guy and I think I heard about this story. It was really about having that content, having that product and being able to get it out there to your audience. Getting to your audience is the thing that we’re really focusing on now at Ecwid E-commerce in general. We’ve had these great capabilities to develop a store quickly and efficiently. With even a small shop you could use Ecwid, get your stuff rolling very quickly. But what it’s coming down to now is a lot more about the distribution of your content. That’s really one of the key pieces that we’re actually bringing to our merchants. We want our merchants to be successful, so we’re rolling out new tools to allow that to happen. And that’s really the key component there. This is a quote that I liked from my days back at the Chive and it was: “Content is king”, meaning having great content on your website that was really interesting was king. But distribution is the queen and she actually wears the pants in the family which was funny at the time but it didn’t really hit home until you think about it. It’s one thing to have great product content. The other piece is really getting your message out there which is the key piece. So if you’re the saddle guy it wasn’t just that his product was so great. His website could really be awful. He was able to somehow get everybody to his website in order to sell these saddles. And that’s really where we are today. Ecwid provided the tools for a small shop to be able to make their own website. And now we’re trying to, we’re not trying, we have built tool sets that are really functional and working for a lot of our customers that are allowing you to get that distribution piece, get the word out there about your products. That stuff have been diving into every week.

Jesse: The important part is having the infrastructure taken care of. Ecwid really takes care of that for you. You get your products future prices, tax, shipping, all that stuff is now taken care of that used to be a very expensive process back in the day. A many-month process, and now you can do it in an afternoon if you just stick to it. It’s really up to you as the merchant to work on that distribution. How do you get the message out? There’s a ton of different ways to do that. Richard, what’re the latest stories we’ve heard on people getting the word out.

Richard: Oh, man. First off it goes back to what we were talking about earlier with the 3.6 billion people online. Those people are sharing things online. Those people are mostly consuming which is good for e-commerce people. Right. They’re mostly consuming. And if you’re creating media… First, I’m going to to take a broad answer to that. Which path do you want to go down first? You want to talk about social. You want to talk about other marketplaces. There’s just so many distribution channels these days. What I love about what you guys are doing is you’re basically setting up a system to where — what is your strength — and you can focus on that. If you want to do marketplaces, Ecwid can hook you up to do Amazon too, if you want to. So help me narrow it down first because this one is huge.

Jesse: Yeah, it’s a pretty broad.

Richard: Three point six billion people.

David: You know what. Here’s the thing. As even some of the pro guys, I’m looking at here. Where do I start on this topic and it is tough but that’s what we want to do. We want to make it easy for you. The tools that we bring onboard are the ones that we believe in. If you’re not successful as an Ecwid merchant, we’re not successful. We’re only going to steer you toward things that we have proven and do work. When it comes down to it… Look there’s a couple of things that we’ve been focusing on lately. Social selling is a huge piece and social selling is kind of a new term. People didn’t believe in it at first but look. I’m going to hop into my stats a little bit more here. Did you know that there is 48% as of this year of the U.S. population is either Millennials or Generation Z. Crazy right. Crazy sell, baby boomers. I mean they’re adopting digital faster than almost anybody as a percentage. But anyway millennials and Gen Z are a huge piece and growing…

Jesse: What makes that interesting is if you’re not in Generation Z, what’s the picture you have of this person. Right. You have a picture of somebody probably looking down at their phone. Right. So looking at their phone, you assume they’re looking at social media. That’s the place where you need to target people.

David: That is true. We’ll share this online as well. There was an Audi ad survey in 2018. A very competent group put it together and it showed that for millennials and Gen Z the most relevant ad medium is not television, it is actually social media. For the first year this year in 2018 we’re expecting mobile advertising, meaning display ads on your mobile devices that few of us ever really try to hit purposely. We think that it’s surpassing television advertising in spend. Ad investments by all these major brands, believe me, we know what we’re doing, they know what they’re doing. It has shifted from television as the primary to mobile devices as the primary advertising, the single largest advertising investment that brands are making is now mobile. Crazy, right?

Richard: Let’s tile those together now. We originally started with like “Richard, what do you think of distribution stat?” I said that’s kind of wide. That’s OK. What kind of wide and we narrow down to some of the things that are going on. You guys are working on social selling and to your point and the stats right there. We have 48 %. They are these millennials that Jesse’s for the most part.

Jesse: Millenials and Z.

Richard: They are staring at phones and so we…

Jesse: Don’t quote me on that (laughing.)

Richard: I know there are other ones changing the world… one shoe at a time. But where I was going at, you have to keep that in mind as a seller. If that’s your market where do you need to be to get in front of them? Because in this world where they say no like and trust I can’t guarantee they’re going to like you, I can’t guarantee they’re going to trust you, but I can guarantee you they’re not going to like you or trust you if they don’t know about you. Sure. Right. And so where are they? If you’re not necessarily selling to them you might get a get out of jail free card on that because you’re not selling to millennials maybe, but there are grandmas on there. There are all kinds of people out there.

Jesse: It’s not just millennials who’re looking at their phones. We’re all looking our phones too and we might think we don’t click on those banners or we might not think we’re not affected by them. But there’s a reason that mobile ad spending is going to surpass TV like it obviously works, it’s super target.

Richard: Literally where I was going with it. Think of the old term — broadcast. It was about casting a broad kind of wide message that you hope would stick with someone. But now with all the A.I. and all this stuff going on, they’re getting better and better at putting in your feed what you’re interested in.

David: Well, let me give you some more stats because it’s kind of why I’m here for and it’s fun. Again the National Retail Federation says (and this just came out) that one-third of shoppers say that they are influenced by promotions for their holiday shopping by online vendors and display. And so you don’t think you are influenced. They’re talking about not just e-commerce but sales across all channels. This is an eleven point four percent increase year over year. A full one-third of holiday shoppers might have had another idea and they’re influenced by the advertisements that offer promotions. We do expect that to continue to grow.

Jesse: I mean, advertising works, period. Right? When you think about that mobile ad spending is now surpassing TV. I think that’s a huge opportunity for small merchants because for a small merchant the ability to make a TV commercial is probably not going to happen. It’s a tough deal: you’ve got to have creative commercial it’s is expensive, period. But creating a mobile ad is very easy. You have a phone in your pocket, you pick it up. You push the button. You record a video. I could record you two sitting across from me right now and we can make a video commercial. Maybe not the best one but then you can add all these different graphics and things. It’s amazing what you can do with your phone to create a really good ad.

David: Yes. And you’ve actually just added steps of complexity that aren’t even really needed. The tools that we offer right now allow you to just simply connect your product feed in the artificial intelligence that we’ve aligned as partners. Ecwid allows you to actually choose a category and a basic target and set your budget and artificial intelligence will actually do most of it for you. That’s a no-brainer. That’s what I love about this stuff. You know when I think about it, I love that we really serve smaller businesses and I love that we’re bringing these great technologies that used to be really reserved for only high-end brands that had huge development teams and analysts and now we bring these tools right in for these solopreneurs. It’s amazing but that’s kind of where I see it. So I think most of the tools that you see us offering, to be honest, are really strong and they’re definitely worth working with. We’re now deep, Jesse. This is huge news, huge news people.

Jesse: All right. Breaking news everyone. We did wait for this.

David: It’s the seventh year that Ecwid has been plugged into selling on Facebook. OK. Seven years.

Jesse: Wow.

David: It’s huge. So that was really one of our number one. That was the number one sales tool for many years. Now we’re seeing the fastest growth and adoption obviously coming from Instagram. That’s been fantastic for our partners unrelated to these. Obviously, we’ve already talked a lot about Facebook, we’ve talked a lot about Instagram, but you know I think it’s really a smart thing to look at right now going into the holidays to be looking at probably you know the Google Shopping opportunities with artificial intelligence. I think that’s probably a pretty key point.

Jesse: Yeah, I mean we talked about this a couple weeks ago on a podcast, you can literally get going with Google Shopping. Automated Google Shopping thing. In, I don’t know, five minutes. Right. You just plug into it, you connect your products. Put a credit card in — Google’s going to want to get paid. You know there is a promo by the way. I think it’s pay 25 bucks you get 100 free or 150/150 but literally, in five minutes your products are going to be on top of Google. When people google your products, you’re there. And of course, Google is pretty smart. They know the right people to put your products in front of. They want to make you successful, so you keep advertising obviously it’s not a secret there. It’s an amazing thing to be able to do. You could pull over if you’re listening on the podcast in your car right now and set this up from your phone. It’s that easy.

Richard: That’s actually something I was going to ask earlier Dave. You guys really are amazing at getting something up and going quickly. And if someone wanted to do a side hustle and they just want to try something out before they may be quit their job or stay at home mother/father wants to do something on the side. But I’ve also noticed the more I’ve worked with Ecwid that you get some pretty darn close to an enterprise if not enterprise features also. This isn’t really something that anyone does. You’ve got to grow to a pretty darn big company before you’re even remotely thinking of switching out of this, so you can kind of get up and go and ride away. How big! What are some of the kind of interesting different things you’ve seen someone doing with Ecwid at a close to enterprise level? Do you have any clients that you could think of? You don’t have to specifically name them but just something interesting that they’re doing with the software.

David: You’d be surprised at the number of seven-figure people that we have selling the records of seven figures as a number. Plus six zeros. Right. So into the millions. Yeah you know and quite a few of them. And so it’s pretty exciting stuff to see. It is exciting. And what I really want to hear is more of the success stories. I mean if you guys are out there and you have success stories…

Jesse: Yeah please, guys. This is a way for you to promote your store. We’ve had some people on recently, you probably just heard Joe Colker from Heroic Kid. We had CakeSafe on. CakeSafe actually did a recent, what he called a case study. That’s what’s available on the website too. I mean we have a ton of examples of stores that are doing well with Ecwid. I think the best one good thing about this podcast is if you want thousands of people to hear about your store please, message us in the in the notes. Actually, it’s a podcast@ecwid.com if you want to send an email and tell us your story so we definitely want to have more merchants on to help your story and it’s the holidays too.

David: We love the feedback too. Literally, inside the company, we love talking about the success stories and sharing them. And it makes us all feel good because that’s kind of why we’re here. We all love what we’re doing here. Let me jump on that CakeSafe thing. You need to check this out, it’s not that super long. It’s a pretty short case study. But we’ve been working with CakeSafe, we love these guys, really cool product. You know there are bakers out there, they make a cake and they’re trying to transport these things. It’s really actually pretty hard to do. So this is like a vault for your cake that makes it easy to transport without getting bumped so the wedding cake doesn’t get ruined. Anyway, they said, “we’ll try this Google Shopping thing with you guys”. And they had an 18X return on ad spend. So I don’t want those return on ads been numbered to scare you guys. But what that means is if they invested one dollar they got $18 back on their investments. And it’s not like they’re not sophisticated marketers, they’re sophisticated chefs and bakers and they had a really cool original idea but it really comes down to the content that was great, and now it’s the distribution engine. So for small companies, it can really help to use paid media to try to get the word out there. Well, that’s one of the things about a big brand right. And when you know a lot of our clients are smaller brands and you know they grow.