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Are You Running Ads to Products People Can't Buy? · eCommerce Podcast

0:04
So welcome to the eCommerce Podcast. My name is Matt Edmundson, and it is great to
0:08
be with you as always, wherever you are in the world listening to or watching
0:12
the show. Great to be with you. We are going to be talking about ecommerce. If
0:17
you're new, let me just introduce myself a little bit. If you don't know me,
0:21
I've been around ecommerce since nineteen. No, 2002 was when I launched my first
0:26
e-com website. 1998 was when I did my first website. Uh, so I've been around a
0:30
while. I still run my own e-com businesses. In fact, right now the studio that
0:35
I'm in, our brand new studio, is actually on the edge of one of our warehouses.
0:39
So if you hear people, you know, throwing boxes around, it's because I'm
0:44
actually in a warehouse. We still ship products all over the world. And so I
0:48
love doing this show where I get to talk to e-com experts and founders just like
0:53
yourself. from around the world, ask him some really interesting questions about
0:57
how I can run my business better, uh, and you get to listen in to that
1:02
conversation. So you're very welcome here. If you want to know more about the
1:06
show, check out the website ecommercepodcast.net. You've got our complete
1:11
archive there of all our episodes, all 300+ of them. And, uh, you'll get today's
1:15
show notes. Everything like that is on the website. You can sign up to the
1:20
newsletter. You can find out about our cohort groups. There's all kinds of stuff
1:24
going on, uh, over there that you're going to want to check out. So that's
1:29
ecommercepodcast.net. Anyway, that's enough from me. Let's find out who we got
1:33
on the show today. So, uh, Leon, welcome to the show, man. How are we doing?
1:38
Doing well, Matt. Thanks for having me.
1:40
No problem at all. I've been looking forward to the conversation. Uh, we spoke a
1:44
couple months ago before the summer, uh, and, um, and so yeah, just great to
1:47
have you on. Finally we get to make it happen. But for those that don't know
1:51
you, just give us a sort of a brief insight into your world, what you do and why
1:55
you're here.
1:59
Yeah, my name is Leon Bart-Williams. I'm the CEO of Akikumo. We are a Shopify
2:04
tool that helps with your merchandising. It gives small, lean teams the power of
2:09
an entire merchandising team. We do everything from collection sorting to
2:14
collections intelligence. Merchandising is one of the most important And often
2:19
overlooked functions within an ecommerce business. And so we're helping teams
2:24
get some more visibility into that part of their, into that part of their
2:29
business, because we feel like that is the upstream and the driver of all sales
2:34
and engagement with the customer, and ultimately drives a better customer
2:39
experience and higher conversion. So my background has been pretty varied.
2:45
Mm-hmm. As an entrepreneur and an intrapreneur, I started my career in business
2:50
development in media. So working for Comcast, NBCUniversal, those big, big media
2:55
companies. And then, but pretty much quickly knew that I wanted to help with
3:00
startups and help businesses from the ground up, specifically with brands. Was
3:05
tried and failed at a lot of different other ideas, as one does, trying to,
3:10
trying to build products from the ground up. Mm-hmm. And through that failure
3:15
was actually recruited by Amazon back in 2014 to their marketplace and had an
3:20
amazing experience helping young brands scale in that marketplace, helping them
3:25
grow. And so I got a front row seat watching brands go from $0 to millions of
3:30
dollars overnight and watching people literally have their lives change in the
3:36
blink of an eye. And I got to help them along that journey. On that journey, I
3:41
learned a lot about the problems that a lot of brands face as they start
3:46
scaling, as their product catalogs get bigger and larger and their teams get
3:51
sometimes leaner and all of the problems that come along with it. So I was
3:56
recruited back to— I was recruited to NBCUniversal to help launch their commerce
4:01
business, which we call sort of live livestream shopping or shoppable TV. I
4:06
think people are probably a little familiar with Whatnot, which is a new sort of
4:11
livestream shopping platform. Yeah. So this was kind of at the infancy of live
4:16
shopping and shoppable television. So I was part of the founding team that built
4:21
that product for NBCUniversal. So if you're watching a TV show and you love a
4:26
product, you could take out your phone, you can scan it, you could buy it with
4:32
quick pay method. So it was really frontier work that I was doing at a major
4:37
broadcaster in ecommerce. And again, just working with great brands and really
4:42
understanding their challenges. And while I was there, sat next to a world-class
4:47
advertiser by the name of Lexus, and she was really struggling as our
4:52
merchandiser, helping us build our business because her entire world was just
4:57
built on product feeds, ingesting product feed, analyzing inventory reports from
5:02
our different brands that were integrating into our platform. And so I saw
5:07
firsthand a lot of the challenges that she was having and struggling with as a
5:12
member of my own team scaling our business. And that's where the idea for
5:17
Akikumo first sort of started germinating about just making that process a lot
5:22
easier, just because when you're a brand and you sit on top of Shopify or you
5:28
shop, sit on top of an ecommerce platform, there's so much data that just sits
5:33
there untapped into, unused.
5:38
Yep.
5:38
That takes a lot of time of downloading Excel spreadsheets and doing pivot
5:42
tables. And so, you know, Akikumo is a solution for that. And so, yeah, we've
5:46
been We've been around for a short amount of time, but we're scaling pretty
5:49
quickly and we have a lot of world-class brands working with us. So we're pretty
5:53
thrilled.
5:57
Yeah, no doubt. And it sounds— I mean, the whole Amazon thing would have been
6:02
fascinating. But before we get too far into it, Leon, let me ask a really, maybe
6:06
an odd question. Let's define at the start what merchandising is.
6:11
I've been asked this question quite a bit. And I think there are a lot of very
6:15
grandiose terms about what merchandising is. I
6:20
think we've used all of them, to be fair.
6:22
We use a lot of different terms to describe it, but I tried to actually,
6:27
thinking about our conversation, I really tried to distill it down to just a
6:32
soundbite that people can really understand. And what merchandising comes down
6:36
to effectively is putting the right product in the right place at the right time
6:41
in front of the right audience. and having the right inventory levels to satisfy
6:46
that demand. That's it, right? So merchandising is really the process of taking
6:50
your inventory and converting it to sales. That's fundamentally what it is. Now,
6:55
some people think of— when most people think of merchandising, they think of the
7:00
retail experience, going into a store and seeing the mannequins, and the
7:04
mannequins are dressed a certain way. Maybe the store is decked out in
7:09
Christmas, right? But merchandising applies to your e-com storefront. And I
7:14
don't think a lot of retailers, a lot of brands really pay attention to that and
7:18
really commit to really focusing on merchandising as a strategy to drive
7:23
conversion rate. And so hopefully, you know, these type of conversations at
7:28
least bring that topic to people's minds. Yeah,
7:32
well, this is why I've been intrigued by or been looking forward to this
7:35
conversation, because I think I said to you last time, we don't talk about
7:37
merchandising much on the show.
7:40
No.
7:40
Um, no. And if I— when I think about merchandising, I, um, I, I instantly in my
7:45
head, and maybe it's an age thing, Leon, I don't know, I instantly go to the
7:50
movie Mannequin, right? Which is this sort of 1980s movie. Yeah. Uh, that, that
7:55
I just thought—
8:00
That's a reference. That's a, that's a good reference. That's a good '80s genre
8:03
movie reference, Mannequin. Yeah,
8:06
I think I've just lost about 3 quarters of our audience. Um, but that's okay.
8:10
Look it up, kids. Yeah, look it up. Go watch Mannequin. Uh, I think it was Kim
8:13
Cattrall that did that movie. Um,
8:17
anyway, that was, that was also, that was vintage Kim Cattrall. Yeah, it was
8:20
before Sex and the City.
8:22
Yeah, yeah, yeah. And so, um, Nothing's Gonna Stop Us Now was the theme tune. I
8:26
remember that. And listen, this is not an '80s movie show, so that's That's what
8:30
springs to my head when we think about merchandising. So I'm looking forward to
8:34
talking about it. And I'm super curious, right? You've been around a while doing
8:39
this. You've got a lot of experience, a lot of great clients. What is the
8:43
biggest mistake we're all making when it comes to merchandising? Let's start
8:47
there. It's my favorite question. Where are we all screwing up? And how do we
8:51
fix it?
8:56
Well, can I first say, you say this is not an '80s show, but you're also wearing
9:00
a Back to the Future t-shirt. So I just want to point that out. Just want to
9:04
point that out for the audience that may not be watching this.
9:08
Yeah, yeah, yeah. I am wearing a Bikes for the Future. And we have neon lights.
9:11
So yeah, neon lights back there. So I'll just say that. So I think there are a
9:16
lot of things and a lot of things that brands can do when it comes to
9:21
merchandising and a lot of misconceptions. I think there's a lot of just
9:26
fundamental sort of what we say here in America, to use a football analogy,
9:31
blocking and tackling that a lot of brands don't do. It's as simple as just one
9:36
thing that comes to mind is just making sure that out-of-stock products aren't
9:41
in the first 10 positions of every single one of your collections, whether
9:46
that's bestsellers, whether that's your new arrivals, whether that's a men's or
9:51
women's collections, or if you create, you know, subcollections. I couldn't tell
9:56
you the stories of how many times brands don't even realize that they have
10:01
out-of-stock products in the prime parts of their website. And think of the
10:06
first 10 slots of your website as, you know, the moment people walk through the
10:11
door of a physical store, and they see a mannequin with nothing on, right? So
10:16
that, that in and of itself is the first thing that brands can do to, to
10:21
merchandise better.
10:26
Yeah.
10:26
Is just take an active role in making sure that their, their products are And
10:31
then to take it, to take it a step further, you know, because I know your
10:36
audience runs a lot of ads, making sure your ads aren't pointed to products that
10:41
are out of stock as well. You would be shocked, even people with budgets not in
10:46
the millions of dollars, but are pointed to products that don't have any
10:51
inventory. And in a funny story, they're not even one of our customers, but
10:56
we're working with an amazing brand here in the US, or we're You know, friends
11:01
with an amazing brand here in the US called Johnny O. Good friends with their
11:06
team. We were about to chat with them. I went on to, and I'm sure your audience
11:10
knows about this, Meta's Ad Library.
11:15
Yep.
11:16
Which is an amazing website, right?
11:18
Yeah, yeah.
11:19
I did just a quick search on their brand and noticed that one of their
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top-selling products had 3/4 of the variants sold out and it was in the top
11:27
slot. And so I emailed Allison and said, hey, This ad is right here. She goes,
11:31
"Oh, let me just email my ads team and tell them to point it somewhere else." So
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you know, it's just basic, basic things like that.
11:38
That's really—it's fascinating, isn't it? And I suppose, is it a case of the
11:42
more products you have in your product range, the more likely this is to happen,
11:45
right?
11:49
Yeah, it—it is because I listen. Every every brand has their own strategy for
11:54
growth. Some some brands want to add more SKUs, want to add more what I call
11:59
variants, which is. Size, color, style variants to their catalog. It's just
12:04
natural as you grow your business, especially in the apparel space, right, where
12:09
you have those type of variants. It happens quite a bit as your catalog gets
12:13
bigger. You tend just to not have control or full visibility. And this happens
12:18
when I say grow, I don't even mean tens of thousands of SKUs. Sometimes things
12:23
get out of hand by like 400 SKUs, 500 SKUs, right? When you start adding those
12:28
variants in. So it happens quite a bit. I think that's where you need, you know,
12:33
your head of e-com or your director of e-com really needs to be on top of things
12:37
as they change every day. Because these things kind of slip through the cracks.
12:42
And when you're working with teams and everyone's working on their different
12:47
silo of the business, communication tends to break down. People aren't
12:52
communicating, or sometimes people just have knowledge in their head and they
12:57
just forget to share. Yeah. Right? Like, oh, this product ran out. Let's, let me
13:01
tell my, my coworker, hey, let's stop pointing the ad there. It's, it's just
13:06
human error sometimes.
13:11
Well, I, I'd imagine it's human error most of the time.
13:14
Yeah. Yeah. Actually, it is.
13:16
To be fair.
13:17
You know, my, it's funny, my, my cofounder Jared, you know, he says this, he, he
13:21
came from Figs and Chewy. So he was one of the principal engineers working with
13:26
the CTO of those 2 amazing e-com companies. He always says that most of
13:30
ecommerce is just fixing human errors and fixing, you know, and fire drills and
13:35
fixing. And it's mostly, it's mostly self-inflicted wounds that we're trying to
13:39
fix. And so, yeah, so this tool, you know, our product is really aimed to just
13:44
solving all of those challenges within ecommerce, which is pretty ambitious, but
13:48
all of those sort of manual tasks, because it all comes down to manual tasks.
13:52
Yeah.
13:57
Yeah,
13:57
you know, sometimes you can't fix those errors.
14:01
No, I guess I'm kind of curious, you know, in the sense that obviously if people
14:06
don't have your software, how do we, how do we go about creating a system
14:11
whereby we are monitoring these types of things? Well, you know, like making
14:16
sure, like you say, with the ads, making sure that out-of-stock products aren't
14:21
listed? Is it a case of someone's just got to go look at that every day? Is it a
14:26
case of a spreadsheet can help you do a chunk of the things? How do we create
14:31
those systems?
14:35
Well, I think it starts in 2 places. One, and this is sort of a best practice
14:40
that we've learned along the way as far as curation goes, I think curation plays
14:45
a big part of it to begin with. So when you're, when you're, when you have a
14:50
brand and you have products, when you're creating collections, Managing the
14:55
number of SKUs within those collections will help you first and foremost, right?
15:00
Yep. So curating a collection of, let's say, 50 products or less is a lot easier
15:05
to manage, a lot easier to check whether you have all of the variants available
15:10
for stock. So we always recommend to our customers, the more curated, the more
15:15
tighter, the more focused the collection, whether it be, you know, Mother's Day
15:19
holiday, whether it's, you know, any kind of special capsule collection,
15:24
curation beats everything. More does not mean— more products does not mean more
15:29
sales. So that's first and foremost. Then I think if you're doing this manually,
15:34
which a lot of people are, I think having a system in place, whether that's
15:39
just, you know, daily checks that you're making on inventory, making sure that
15:44
all of the inventory of your best sellers— well, first identifying what your
15:49
best sellers are, but also how quickly you're selling those sellers, right, in
15:54
terms of sales velocity.
15:58
Yeah.
15:59
Whether you're selling on a daily— whether you're selling on some brands hourly
16:04
basis, daily basis, weekly basis, how much inventory you're going through,
16:09
identifying what those top sellers are, and at least just making sure your top
16:13
sellers at the variant level, which is key, are fully stocked. And what I mean
16:18
by that, if I could take it one step further, is I think one thing that a lot of
16:22
brands don't fully appreciate is the 80/20 rule, which is, you know, 20% of your
16:27
variants are going to drive 80% of the sales of that specific product. And every
16:31
brand should know what specific style, size, or color of this product, if they
16:36
have a multi, you know, multivariate product, is driving a majority of my sales.
16:41
If you can't answer that for all of your products, like knowing that the, let's
16:45
say it's a dress, The dress in blue size 2 is driving, you know, 80% of the
16:50
sales of this specific product. You need to, you need to know that and you need
16:54
to at least be fully stocked in that product. Yeah, which then goes back to the
16:59
whole ads, right? Because you could be running an ad maybe not to an
17:04
out-of-stock product, but what if you're running it to a partially out-of-stock
17:08
product?
17:13
Yeah.
17:13
With that, with that specific core variant, that specific dress size 2 sold out.
17:17
So you're effectively running an ad to a product that is effectively, for all
17:21
intents and purposes, sold out because it's driving 80% of your sales, right? So
17:25
it's, it's things like that. So I think at a basic level, just understanding
17:29
your sales velocity, understanding your top sellers, and curating your
17:33
collections and then just doing it every day, right? Every day you just do a
17:37
morning check, see where you are inventory-wise, and then make decisions from
17:41
there.
17:45
That's really good. I guess, are we tempted, listening to you talk, are we
17:50
tempted, going back to your dress example with the size 2, are we tempted to go,
17:55
well, that's our best-selling dress in this range, but I've got a few of these
17:59
other products still in stock. I've got the size 4 and I've got the red one. So
18:04
if I keep the ad running, maybe I'll sell those. Or is it a case of,
18:09
yeah,
18:10
Actually, let's take our ads and point them either intentionally to that
18:14
variance and make sure that, you know, the red dress is in the image. Or do we
18:18
look at our next best-selling product with a high sales velocity where we know
18:22
we've got stock and spend our ad budget there, perhaps?
18:26
I think both, both are legitimate strategies, right? But have a strategy when it
18:30
comes to that. I think, I think, I think you can make, I think you can make
18:34
strong arguments for both.
18:38
Yeah.
18:38
I think if you're fully stocked out of a product and it's gone, but you have
18:43
other products that you can point to, depending on what the ad creative is, if
18:47
the ad creative just has that product in blue, that blue dress in the creative,
18:51
it probably doesn't make sense to point it to that product. But what you could
18:56
probably do is point it to the category, right? Or to the collection so people
19:00
can see the full assortment of those products if the creative is just of that
19:04
blue dress. If you have multi-variants of that specific product in the product
19:08
image, Or in the— sorry, in the ad image, you can then probably point it and get
19:13
away with pointing it to the red dress or the green dress or the other products.
19:17
So if when in doubt, point it to the collection. If that doesn't work, point it
19:21
to the website in general, if it's one of your hero SKUs. Yeah. But just keep
19:25
that discovery going and try not to piss off your customer too much by not
19:30
having that product out of stock.
19:34
That's the essence of ecommerce there, right? Yeah. It's just don't piss off the
19:36
customer.
19:39
That's what it comes down to. So maybe that's another rule of merchandising is
19:44
right product, right place, right time, right inventory. Don't piss people off.
19:49
Yeah, rule number one, right? Yeah, brilliant. So yeah, I, I guess what I, I'm
19:54
intrigued actually, I've not looked at, um, and I— a conversation I need to get
19:59
into actually now with our team I think is going to be measuring the performance
20:04
of ads when they point directly to products alongside the sales velocity of that
20:10
product, right? Which would be a really interesting little experiment in terms
20:15
of measuring that in terms of profitability and sales. But yeah, it'd be an
20:20
interesting one. You said curation plays a big part. I love the word curate, by
20:25
the way. I think of a museum when people say curation. Yeah. Um, although maybe
20:30
it's a little bit, um, I was listening to, uh, who was it, The Freakonomics. I
20:36
don't know if you listen to The Freakonomics podcast.
20:41
I've heard a few episodes. Yeah, they're really popular.
20:44
Yeah, really great podcast. And they were talking about museums and how museums
20:48
need to hand back half the pieces that they've got because the collection
20:52
methods was slightly dubious 200 years ago. Um, but that said, curation is a
20:56
really interesting idea, isn't it? Rather than just going and grabbing anything,
21:01
but curating Talk to me about that. How do we curate well?
21:05
Well, I think it comes down to what your brand strategy is, and who you are as a
21:09
brand and the story you want to tell to your audience, right? For one brand, you
21:14
know, and I'll think of a specific customer, but for one brand, it can be, you
21:18
know, we have a hero SKU that we really want to highlight, we really want to
21:23
talk about. And so everything we build around that specific product is curated.
21:27
So anything that complements that product is a curation of that hero product,
21:32
right? So it's the hero product plus maybe an accessory. I'm talking apparel
21:37
now.
21:41
Yeah.
21:41
Let's say the hero product is that dress and then, you know, curation around
21:45
that is the handbag, is the shoes, is, you know, the other things that tell that
21:49
brand story.
21:52
Yeah.
21:53
A lot of brands really do this well. I think of a brand in New York City. We
21:58
don't work with them, but they're a fantastically curated brand, Cara Cara NYC.
22:03
It's a women's brand here in New York City. They do a wonderful job storytelling
22:08
and curating. Okay. So I think they do a wonderful job doing that. One of our
22:14
customers, Brooke, at Simply Moab and Desert Soul, they're a luxury boutique in
22:19
Moab, Utah. So one store actually does souvenirs and one stuff is more homeware
22:24
and beauty. She does a wonderful job curating not only her store, but also her
22:29
e-com experience, and those 2 experiences tend to match. So, you know, feeling
22:34
of home, she tries to build that in terms of product imagery, in terms of the
22:40
products that she features and she rotates. So that's just on like the, I guess,
22:45
the brand storytelling side. When it comes to the physical curation, as I
22:50
mentioned before, less is more, I believe. Yeah. And I think curation is, you
22:55
know, at a tactical level, you know, 50 SKUs or less if you're working, if you
23:00
have a catalog that warrants it, 50 SKUs or less, mixing the curation. So maybe,
23:06
yes, you have, take men's, for example, men's polo, shorts, pants. But if you're
23:11
curating a collection of, you know, bestsellers or top looks, or you're curating
23:16
based on an event, having, you know, 10% polos, you know, 10% shorts, 10% hats,
23:21
some accessories, Like build, build what we say with, with collections, try to
23:26
build a story. Like what's, what story are you trying to sell or share, but also
23:32
sell to your customers about who your brand is? So it really comes down to
23:37
whatever your brand strategy is. That's where merchandising is. That's the— when
23:42
you think of merchandising, it's part art, part science. That's, that's the art
23:47
part that comes into it. And then the science is how many of those products do
23:52
you, do you curate?
23:58
Yeah. Yeah. No, I love that because I think brand story or telling a story well
24:01
is the trick, isn't it, in ecommerce these days?
24:05
Absolutely.
24:05
In a way that sort of resonates with your customer. And I love what you're
24:08
talking about here. It's like, don't just get the dress, go and get all the
24:11
things that go alongside the dress, make it easy for the customer to—
24:15
And write content, write content around it. I think, again, I use Care/of as an
24:19
example because they actually do this. They actually write, I think, a travel
24:23
edit, right? If you're going to, I'm picking Mykonos for the for the weekend.
24:28
Here are all the things you want to pack, right? And and they don't just talk
24:32
about their own products exclusively, or I think they might. I might be making
24:36
this up, but maybe you should steal this idea. You know, but they talk about all
24:41
of the things that you actually we did this at when we launched our commerce
24:45
business at NBC. We we would curate products from different brands and say,
24:49
"Here's the lip balm you want in your bag. Here here are the sunglasses you
24:54
want. Here's here's where you go," right? And actually write that. Yeah. Here.
24:58
are the places you should stay. Here's what you should eat, because you're
25:03
essentially telling the story of your customer, right? If that is the customer
25:07
you're targeting, tell that story. Where are they going on the weekend? What are
25:11
they doing? Are they playing golf? Are they playing tennis? You know, are they
25:16
more of the, you know, relaxing clientele? They love the tropical islands. Tell
25:20
that story. So I think that's the art part. That's the part I'm not good at. I'm
25:24
part of— I'm good at the science part. But that's part of the— Art part.
25:29
Yeah, that's, um, oh, that's back to mannequin, isn't it? Now we're— yeah, it's
25:34
back to mannequins. Yeah, it's the storytelling, it's the, it's the art form of
25:38
it. And I think people have for the longest time just threw stuff up on the
25:43
website and expected people to make the connections. And I even see this a
25:47
little bit now, um, on platforms like, uh, Pinterest Shop the Look, and you can
25:51
take one photo and it will pull in you know, products from different websites to
25:56
create that look. And you see, I think you see it on furniture sites now more
26:00
and more appearing, isn't it? It's like, actually, here's a photo and here's
26:05
everything in that photo and here's how that thing's compiled.
26:09
Yeah. And it's interesting because now you're starting to see a lot of AI
26:14
startups that are, that are, I won't say attacking the space, but are trying to
26:18
build discovery apps, discovery platforms for people to just type in a word and
26:23
say, you know, I'm going, I'm going to dinner, you know, what should I wear? I'm
26:28
going on vacation.
26:33
Yeah.
26:33
To Mykonos. What should I wear? And it's pulling in all of these products and
26:37
kind of giving you narration about what you should do and what you should wear.
26:41
And, you know, it's quite interesting because I think people want— and sorry not
26:45
to get off on a tangent— I think people want less options. I don't think people
26:49
want more options. I don't think people want more products. I think people want
26:53
to be told what to do. I think that's, that's both for consumers and for
26:56
businesses. Just tell me, tell me what I should wear. Tell me what, tell me what
27:00
the best thing is. And this is one of our major gripes around, you know, endless
27:04
scroll, right, on a website, right, where, where you are on a website and this
27:08
is more big box, but this applies to, I think, most brands that have a lot of
27:12
products and you're just scrolling and you're scrolling and you're scrolling
27:16
products with no curation at all.
27:20
Yeah.
27:21
It just keeps going and going and people think more is more, right? They think
27:26
if I show people more options, they're likely to purchase more. But I think it's
27:31
actually the opposite. I think curation and being limited and being specific and
27:37
intentional about the collections that you build and your curation is actually
27:42
what's going to drive higher conversion. than just more products.
27:47
Yeah, I, I'm reminded of the, uh, the famous— I'm trying to remember the book
27:51
that I read, and I think it might have been Persuasion. I can't remember. But
27:56
the, the idea of the jam experiment, right? The very famous sort of psychology
28:00
experiment where they, they went to a supermarket and they just put out, um, I
28:04
think it was 6 jars of jam and the standard flavors, you know, like strawberry
28:08
and blackcurrant and all that stuff. And, um, they monitored sales of those
28:13
products. And then the following week, same location, everything was the same.
28:17
The one thing that they changed was instead of having 6 flavors of jam, there
28:21
were 36 flavors or something like that. And they were quite exotic, like
28:25
pineapple and mango and all those sorts of things. Um, I might not be getting
28:29
the facts entirely right, but in essence, this is the, the story. And they
28:34
monitored sales and sales fell. Um, the theory being that if you had more
28:38
choice, you would buy more. Actually, the more choice you have, the more
28:42
paralysis there has or that becomes in that choice, right? And so I totally
28:46
agree. And the science backs it up. The less you have, but curate what you have,
28:51
the more you sell.
28:55
That's correct. I think that story is— I think they've replicated that in many
28:59
different studies. So I think you're spot on for that. I think, you know,
29:03
people, I think, tend to want to just say, and I also have this and I also have
29:07
this and I also have this. Please buy something from me, right? I think that's
29:11
what what brands really want is just to give people as many options as, as they
29:15
can. But I think the best brands in the world, I mean, you think luxury brands,
29:19
it's, it's, it's tight, it's specific, it's intentional. They storytell and they
29:23
say, you know, if you want this other type of product and I don't have it, you
29:28
can go down the street, you can get it from somebody else. This, this is the
29:32
products that we sell and we're, we're happy to do it.
29:36
Yeah, no, I like that. And again, I'm, again, I'm thinking of specifically
29:40
clothing brands that do this well. It's like, here's the outfit, here are the
29:45
accessories. But it— when they show you the accessories, it's just one. One
29:50
handbag, one pair of sunglasses, one whatever which goes with that dress. It's
29:54
not like choose from this range of bags to go with this dress. When you shop the
29:59
look, yeah, this is what you want. We're giving you a single option. Um, and
30:04
you're, you're right, sales increase as a result. The other thing where this
30:08
begins, where this starts to get a bit interesting I'm off on a tangent now,
30:13
Leon. Sorry. Yeah, I love it. This is where it starts to get interesting is when
30:18
you go to checkout and you do the standard upsell, right? So it's kind of like
30:22
you have bought this, customers who bought this also bought dot dot dot, right?
30:27
And so we want to do the upsell to increase the average order value of that
30:32
customer. What is the optimal number of times you do Right? Because if you, in
30:36
theory, if you just kept offering more and more and more and more products until
30:41
they said no, that you— they could have bought 100 products, um, you know. And,
30:46
and it's kind of like, would they though? Yeah, when they go see the checkout
30:50
total. But what's interesting actually, if you restrict that, that upsell to
30:55
just 1, 2, or 3, you'd have to test it on your own sites, but you have a much
31:00
higher uptake on On the upsells, if you limit the amount of upsells you give a
31:04
customer before actually taking them to the checkout.
31:09
That's interesting.
31:11
Yeah.
31:11
Yeah. I don't know. I don't know too much about upsells and right before the
31:15
point of checkout, but I think you bring up a very interesting point around
31:19
testing. I think more brands should be testing, A/B testing, not only just their
31:24
checkout experience, but also the way they merchandise their collections, how
31:28
their stores are laid out, right? Ecom stores are laid out. I think testing is
31:32
absolutely critical and every store should, if they're not already, incorporate
31:36
some kind of testing. I think one of the big challenges that brands have is that
31:40
they'll create, they'll launch a product, they'll create collections, they kind
31:44
of create collections sort of willy-nilly. They just kind of throw things
31:48
together.
31:53
Yeah.
31:53
You know, one of our brands that we work with, Vince, at a golf brand called
31:58
Bogey Brothers based out of Texas, this is what he would do for sale pages. Is
32:02
kind of go, go in. He would by hand kind of pull products from memory that he
32:07
thought might sell, kind of throw it all together. No curation whatsoever. Then
32:11
he would take him about a day to kind of get all the pricing right. He would
32:16
guess on the pricing, guess on the discount. He'd get all, you know, he'd get
32:20
his leadership to approve. He talked to his marketing team to make sure that
32:25
they could run ads there. He'd launch the page. And then he'd, you know, job
32:29
well done. Yeah, he'd leave afterwards. And then I would ask him, well, what
32:34
did— how did the collection perform? What did you do? How did you test whether
32:39
what you did was effective? And it's just,
32:44
yeah,
32:44
nothing. I didn't, I didn't test. And so I think you bring up a really good
32:48
point about testing. It should be done on everything you do. You launch a new
32:52
product, you should test how it does. You should A/B test how it does.
32:57
Yeah,
32:57
you put it into a collection, you should A/B test how that collection performs.
33:00
And I think I think that's what we're trying to do. I think the challenge though
33:03
is a lot of people don't have time for that, right? Yeah, it takes a lot of
33:06
intentionality to try and test everything you're doing, but, but it's absolutely
33:09
important.
33:12
It really does. I suppose the opposite problem to finding time to test is, um, I
33:17
guess it would depend on your personality. Some people would just spend their
33:21
whole life curating. Do you know what I mean? It's, um, I, I can see how that
33:26
would be quite tempting. We have people here that curate products, and I can, I
33:31
can see the allure of, you know, trying to create the combos and the, the
33:35
collections and the ideas. And,
33:41
um, do you think that's a bad thing? Do you think you, you, you sound— you make
33:44
it sound like it's very tedious. Do you think it's—
33:47
No, I don't think it's tedious. I think it's, um, I think it's a wonderful thing
33:51
to do. I, and I, I think it depends on the size of your company because it can
33:55
become a little bit distracting or a little bit shiny object syndrome, right? So
33:59
if you're a small company and your, your thing is merchandising, that's what
34:03
you're going to do, right? Um, if your thing is email marketing, you're going to
34:08
spend most of your time there. But different parts of your business struggle. I
34:12
liken it to going to the gym and just working out your arms, right? It just
34:16
looks weird. Um, and so if you're a, if you're a small company or solo, you
34:20
know, solopreneur or any of that kind of stuff, I think you've got to wear
34:24
multiple hats. But I think as your company gets bigger, you definitely want
34:28
people whose sole job it is to just do merchandising. And part of me, I think
34:32
when I was back at school, part of me thought this would be an ideal job. It's
34:36
like, I just want to go and buy stuff.
34:40
No, I think you make a very valid point that merchandisers tend to want to
34:45
merchandise and You know, email marketers just wanted to optimize all their
34:50
email marketing. I think when you have those people that want to do those
34:55
things, I think it's probably most important to set up, well, what are the
34:59
rules, right? What are we testing for? What are the goals? Almost like a
35:04
hypothesis. We're gonna move a product to a certain price point. We're gonna
35:09
move a product from one collection to the next. Let's test it. Let's measure it.
35:13
But let's get some Let's get some theories on how that product should perform,
35:18
right? Or how that collection should perform. So those tests should happen. I
35:23
think they should happen. I think those merchandisers should merchandise, but I
35:28
do think they should have goals, right?
35:32
Yeah.
35:33
What are we trying to do? Don't just merchandise for the sake of merchandising,
35:37
but let's have a goal around, are you moving this? Are you moving conversion,
35:42
you know, 0.2, 0.5, You know, 2 points, 2 basis points, right? Like, what is the
35:47
goal? And then yes, incrementally merchandise to get to that goal, but it should
35:51
be finite. It should be, and then you've got to move on to something else
35:56
because you can't, you can't just optimize your way to success all the time.
36:01
It would be nice. It would be nice.
36:03
I know.
36:03
The thing about all of this, of course, is On the other end of merchandising,
36:08
you are buying products obviously for a reason. You think they're going to sell.
36:13
So you have to be aware of seasons, you have to be aware of trends. But I think
36:18
also you have to be aware of suppliers, right? And who you're actually buying
36:23
from and can they deliver what it is that you need? Have you got any tips for us
36:28
there on how to manage supply as well?
36:33
Yeah, it's interesting that our product, we really Because merchandising really
36:38
focuses on operations, it focuses on marketing, or it's at the center of
36:42
operations, it's at the center of marketing, and it's also at the center of
36:47
inventory management and inventory planning. I think managing your inventory is
36:51
really important.
36:56
Yeah.
36:57
I think I said before, understanding sales velocity of a specific product down
37:02
to the variant level. Is really important. How well you're selling a specific
37:07
variant is important. And why I think that's important is because, you know, and
37:12
depending on your business, when you're looking to buy and restock specific
37:18
products, you need to know that information before you place that purchase
37:23
order, right? We see brands all the time working and just really guessing If a
37:28
product did really well, they restock all the same sizes, all the same colors,
37:33
all the same variants, right? And then by the end of the season, there's still
37:39
some product left on the shelves.
37:44
Yeah.
37:44
Because they didn't really truly understand, okay, again, 80/20 rule, what
37:49
actual variants were driving, you know, the sale here, right, of this specific
37:54
product. And now they've wasted their money purchasing products. or purchasing
37:58
variants of that product that are gonna sit on shelves and now they have to burn
38:03
through it with sales. So understanding velocity is absolutely critical, but
38:08
also understanding demand. How many reds am I selling? How many blues am I
38:12
selling? How many size 2s, size 3s am I selling? And again, all of that takes a
38:17
lot of work because you have to go through, let's say Shopify, pull your pull
38:22
all of the data that sits underneath it. Sometimes Shopify doesn't capture all
38:27
of this information. You've got to now manually say, okay, well, how many greens
38:31
did I sell? How many blues did I sell? How many yellows did I sell? And if your
38:36
Shopify isn't set up right at the beginning of your business where you actually
38:41
tagged and identified and categorized all of those things, that analysis is very
38:45
difficult to do, which is another reason why we started this product is because
38:50
you need to do that analysis beforehand before you cut POs. to those vendors to
38:55
resupply you, to restock you for the season. You need to know going in what is
39:00
the most, not only what is the most demanded product that I need to restock, but
39:04
at what specific variant level do I need to restock those specific products. So
39:09
sometimes you may not even need to restock the red, right? Or restock the green
39:14
as much as you think. And you don't, and that money can then now be allocated
39:18
somewhere else. So I think having intentionality going in, you know, To go back
39:23
to my example with Brooke, one of our customers, she not only runs an e-com site
39:28
for— 2 e-com sites, one for Desert Soul and Simply Moab. She also runs 2
39:32
brick-and-mortar stores that support those 2 brands online. And so she spends
39:37
about 20 to 30 hours a week with pencil and paper walking through her store.
39:42
Yeah. trying to identify the products that sold out to reorder. And that's a lot
39:47
of time that she's spending just walking, walking the aisles, right? And jotting
39:51
things down. And not only was she doing that, she was also talking to her, her
39:56
salespeople. Hey, what's selling? What should I resell? And she was asking them,
40:01
and sometimes they didn't really know because she didn't, she didn't have that
40:05
data available. And she would also go and ask the vendors, the people that she
40:10
was buying from. Hey, what products are really selling well at other stores?
40:15
Right. And she would have to rely on the people selling to her to tell her what
40:20
was popular. So, you know, a lot of this is pre-planning. And so, you know,
40:24
understanding what's selling, how much it's been selling, how quickly it's been
40:29
selling, and down to the detailed level is absolutely important before you cut
40:34
that PO. So I know that was kind of a long-winded way of saying better planning,
40:38
but it's absolutely about better planning. That way you're not wasting money on
40:43
inventory that's just going to sit on your shelves. Yeah.
40:49
Well, that's the opportunity cost, isn't it? You're talking about there that
40:52
actually once I've spent this money on stock, I can't spend it elsewhere. Yeah,
40:55
exactly. And stock on the shelves is cash and cash not doing anything.
40:59
Absolutely. So yeah, it's every business's dilemma. How much of this should I
41:02
order?
41:05
Every business.
41:06
Right.
41:06
How much should I reorder? Right. And understanding demand, which is interesting
41:11
because I think, yes, you can look at like sales of a specific product, But what
41:15
about products that have long sold out? How do you know what product that sold
41:20
out to restock, right? How do you prioritize what, you know, the shirt in blue?
41:24
Well, that was sold out. How many, you know, do we, do I stock that before the
41:29
one in green? How do I decide, right? And so there are a lot of these questions
41:33
that brands have and they're all questions, right, that they're trying to answer
41:37
and try to make the best guess. But a lot of it is guessing. You think, well,
41:42
okay, I stocked out of this first, maybe I'll restock it first, right? Or I just
41:46
ran out of this, but my supplier says I can get it faster, maybe I'll just
41:51
restock this and hope that sales are good. And again, a lot of it is just
41:55
guessing, and a lot of it is just intuition. A lot of it is not based on data.
42:00
And so, you know, I think there are tools that can help you do this, but you
42:04
need to stay on top of it.
42:09
Yeah, so true, so true. I, I'm thinking of when we had the beauty business, uh,
42:13
we carried 7 days worth of stock. That was a good thing for us, but we, we knew
42:18
we didn't have to carry much more stock because we could buy whatever products
42:22
we're selling from the manufacturer. And it— and actually managing all of that
42:26
was their problem. I just would order it and I'd get it. We now have other
42:30
businesses, a gift business, we've got a supplement business. With the
42:35
supplement business, some of our products you have to order 18 months Right. So
42:39
this is a phenomenally different experience. And so better planning, definitely.
42:43
And just thinking what makes sense for your business and where you're at right
42:47
now is so crucial.
42:52
Well, especially if your lead times are that long. I mean, Matt, you have to
42:55
make sure your data is accurate because you're stuck. You're stuck for 18 months
42:59
if you make a mistake. I mean, that's, that's money that you can't get back. So,
43:03
I mean, that's when your data really has to be dialed in. And you really have to
43:07
make sure that what you reorder is, is what's actually going to sell. And I
43:10
really like that model of keeping, you know, keeping it lean. But again, with
43:14
multivariate brands, sometimes it's not a possibility, right? And they have to
43:18
stock the shelves.
43:21
Yeah, no, I appreciate that. And I think it's— I'd rather have a product on the
43:25
shelf and get it to the customer quick than say to a customer, well, we'll get
43:28
it soon and ship it to you in 3 weeks. You know, I just— that customer's never
43:31
coming back.
43:34
And, and hope that they maybe leave their email with you, which, you know, I, I
43:38
have— sometimes I take issue with those type of—
43:42
those type of subscription business.
43:44
Leave, leave us your email, we'll tell you when we're back in stock.
43:46
Yeah, no, just have the bloody thing in stock. What's wrong with you people?
43:50
Anyway, I, I'm, I'm now venting my frustration As a consumer rather than someone
43:54
who runs a business, Leon. Listen, I'm aware of time, but before we get carried
43:58
away too much, let me ask you a question. I'd like a question from you for me.
44:02
The question for Matt: This is where I take a question from you, and I will go
44:06
away and answer on social media. Question could be about anything. So what is
44:10
your question for me, sir?
44:15
Well, I think, Matt, the question that comes to mind for me: You've you've
44:18
interviewed so many guests over the years, and congratulations. I think it was
44:21
three hundred episodes. Yeah,
44:24
yeah, yeah.
44:25
300 episodes in, you've, you've talked to a lot of folks, a lot of very
44:31
successful entrepreneurs, people on the brand side, people running businesses,
44:37
technologists like me. I guess what is the most common thing you've seen in
44:43
successful store owners? And what's the one common thing that you've seen owners
44:50
struggle at over the course of time?
44:56
Fantastic.
44:57
I would really, I'd really like to know if there's a common, a common thread or
45:00
a common thing that you see in success and failure.
45:02
Okay. Very good. If you want to know my answer to that question, come follow me
45:05
on social media and I will post the answer there. But Leon, listen, man, how do
45:08
people reach you? How do they connect with you if they want to do that? What's
45:11
the best way?
45:13
Yeah. If you're a store owner and you're running a brand and you want just more
45:18
insight into, you know, your store understanding and getting just more
45:23
intelligence out of your store, whether it's collections intelligence or data
45:27
intelligence or product intelligence, and have just better collections and a
45:32
better customer experience in terms of curation in general, I humbly ask you
45:37
check out Akikumo. We offer a 30-day free trial of our product. Come in, you'll
45:42
learn a lot about your business very quickly. So please check us out at
45:46
akikumo.com. That's A-K-I-K-U-M-O dot com. We're also available in Shopify App
45:51
Store. So you just, just download it, couple clicks. So no big integration
45:56
there. If people want to reach me directly, they can reach out to me on
46:00
LinkedIn, Leon Bart-Williams, you can find me there, happy to answer questions,
46:05
or send me an email, leon@akikumo.com. But I'm happy to help brands, other
46:10
entrepreneurs on the journey, happy to share information whenever I can.
46:15
Fantastic. That's great. And we will of course put all of those links in the
46:18
show notes. Uh, which if you're on a podcast app, just scroll down, they'll be
46:21
there in the description. If you're watching on YouTube, it'll also be in the
46:24
description. If you sign up to the newsletter, it'll be in the email. If you're
46:28
on the website, it'll be on the blog post. And of course, if you're connected to
46:31
our AI system, just go and ask Sam and Sam will put you in touch with them.
46:34
Anyway, there's so many ways to get in touch with people now. It's phenomenal.
46:37
Uh, it's a lot.
46:41
You can find me anywhere. Yeah, I'm everywhere.
46:43
Uh, back to— I wonder if this is the too much choice dilemma. It's like, here's
46:45
my number, call me. That's it.
46:48
Yeah. I think that's all you need to do at this point.
46:52
Yeah, yeah, yeah. Here's my number. Just call. Old school. Back to old school.
46:56
Uh, but Leon, listen, man, um, we love it, love it, love it, love it. We'd love
46:59
to do this thing called saving the best till last. If you've got a few moments,
47:03
um, what's, what's your top value advice for anybody just starting out their
47:07
ecommerce journey? They're starting, they're listening to you thinking this
47:11
might apply in 5 years' time, but they're But how do you do it right at the
47:15
start?
47:19
In terms of starting a brand or how they scale a brand?
47:24
I'm starting, I've got an idea, I've got some products, I want to do
47:29
merchandising well, but I'm limited by time, space, and money.
47:33
Yeah, time, space, and everything. I think just doing the basics. I come back to
47:38
the basic 101 of merchandising, putting the right product at the right place at
47:42
the right time with the right amount of inventory. I think go into your top
47:47
collections tonight, make sure you're fully stocked, make sure you have all of
47:51
your collections tight and they're curated. I think archive products that aren't
47:55
well, push products down if they're out of stock or out of inventory, push them
48:00
to the bottom of the page. They're basic things that can move the needle that
48:04
you can do today that doesn't take a tool to do. It just takes intentionality
48:09
and it just takes the diligence to do it every single day. You know, you don't
48:13
have to pay for my tool to do it. You can just do it automatically. But if you
48:17
want to do it automatically, we're happy to do that for you.
48:22
That my tool is—
48:23
And we're happy to do more.
48:24
Yeah. Yeah.
48:25
We're here to serve. So, yeah.
48:26
I can take that away. I think it's such a great name that I really like it.
48:30
Yeah. But Leon, thanks for coming onto the show, man. Genuinely appreciate you.
48:33
Appreciate you coming on, sharing the value. Love the conversation. Love what
48:36
you guys are doing. And yeah, this has been great.
48:40
Thanks, man. Really appreciate time.
48:42
Well, there you go. Another fantastic conversation. Love that. Love that. Love
48:45
talking about merchandise. I'm not doing that for a little while. So yeah, if
48:49
you enjoyed that, make sure you like and subscribe and do all of that good stuff
48:52
because we've got more great shows coming up. And of course, I don't want you to
48:55
miss any of them. But yeah, that's it from me. That's it from me. And thank you
48:59
so much for joining us wherever you are in the world. Have a phenomenal week.
49:02
I'll see you next time. Bye for now.
49:07
Bye.