How E-Commerce Companies Can Compete in an Amazon-Dominated World

When it comes to e-commerce marketplace dominance, Amazon is at the top of the food chain.

Over 44% of all product searches begin in Amazon’s search bar, and Amazon owns almost half of all U.S. online retail sales.

And if CEO Jeff Bezos has anything to say about it, that’s just the beginning.

Even some of the other biggest retail giants in the world have a tough time competing against Amazon.

Companies like Walmart, Apple, Macy’s, and Costo still can’t stack up against the behemoth that is Amazon.

So how can anyone else even compete? How do you stand a chance?

Well, you don’t.

The simple truth of the matter is that you don’t really stand a chance of competing.

But the key is that you don’t actually have to compete.

You just have to learn how to co-exist.

DON’T compete with Amazon

The bottom line is that you won’t be able to invest the time and capital it takes to build anything close to what Amazon is offering.

In terms of infrastructure, scale, and sheer sales numbers, they’re killing it.

amazon statistics

They have a massive physical footprint as well, which is only growing with their recent launch of brick-and-mortar stores around the U.S.

But you probably already know that you can’t compete with their size.

Some may tell you that even if you can’t compete with their scale, you can compete in other ways, like offering competitive discounts and free shipping for your own customers.

But in terms of product pricing, you still probably can’t offer a better deal to your customers than the price they could find on Amazon.

And yes, free shipping is cool. But Amazon has and will probably always have better shipping deals simply because they can afford to have better shipping deals.

amazon shipping speed leads competitors

In these instances, you can’t beat them.

But there is one realm where you can live in the same relative sphere as Amazon: customer experience.

Amazon has a lot of the same problems that most retailers have when dealing with customer service. They still deal with customer complaints with varying degrees of success, just like everyone else.

And customer experience can play a big role in customer retention and loyalty.

why customers stop using your service

So while you might not have the means and motives of the largest retailer on the Internet, you can still offer something that customers want:


Here are a few ways to offer a comparable customer experience to Amazon’s without breaking the bank.

1. Create a solid product offering for your niche

As Neil Irwin once pointed out, Amazon has a “winner-takes-all” approach to sales.

They want to sell every product in every category. If you think about it, their “niche” is really a lack of a niche. They sell to everyone.

But you can’t do that. You simply can’t appeal to the wide audience that Amazon does with their vast selection of products.

So what can you do instead? Do just the opposite: sell within a niche.

Just like you can’t appeal to the wide audience that Amazon markets to, Amazon can’t satisfy every need in every niche. That’s where you have an opportunity to fill in the gaps.

If you already have a decent product offering and audience, start with what you have. Look at your existing products and find a way to fit them into a narrower niche.

This might mean that you focus on curating products that meet customer demands rather than trying to be ultra-competitive on product pricing.

Studies show that after customer experience, the second biggest reason a customer will ditch your brand is dissatisfaction with the product itself.

customers leave because of bad customer service survey

You can save yourself a few headaches by putting some extra effort into marketing and promoting your products and making sure they work for your audience.

But don’t be afraid to look for other smaller product categories and niches that might serve your audience, too.

The other way that you can go about niching is by using Amazon’s categories to find smaller, profitable niches that fit well with a current customer base and product line.

If you go to Amazon, you can find hundreds of niche ideas on their site directory.

amazon store directory

Clicking on any product category will also give you a list of dozens more niche and category ideas.

amazon niche product categories

This will give you a better idea of the types of products your customers may want from your brand.

When you can tailor the shopping experience to their specific tastes, you can “compete” with Amazon because you’re giving them what they want in a one-stop shop: your site.

2. Use customer data to inform your business

Amazon collects data on every single customer of their 300 million customers.

They collect information on all kinds of things: browsing details (IP addresses, operating system, etc.), search queries, wishlists, reviews and previous order history, and other datasets.

amazon you last purchased this item reminder

They do this to inform a lot of their marketing strategies and determine how to best serve their customers in other ways.

Some of the things they use customer data for include:

  • Product recommendations based on previous searches, wishlists, and order history
  • Kindle book recommendations based on data from Goodreads
  • One-click ordering based on user profiles
  • Anticipatory shipping (their patented model) based on user profiles
  • Supply chain optimization based on customer locations (user profiles)
  • Product pricing optimization based on search inquiries and competitive data
  • Cloud storage optimization (Amazon Web Services) based on user data

A former Amazon employee once said that Amazon “has the ability to track both what people are buying as well as what they search for and can’t find.”

This is part of what gives them the edge over competitors in a lot of ways.

But you can also use customer and competitive data to help improve your offerings in the same way that Amazon does.

One retailer, Spearmint LOVE, saw a year-over-year growth of 991% when they started using their customer data to create more targeted Facebook Ads, for example.

ecommerce advertising on Facebook

They were also able to use dynamic product ads to retarget shoppers who had visited their site, improving their reach by simply using basic data you can easily gather from Google Analytics.

According to research cited by McKinsey, companies that use customer data to inform their practices see 85% more sales and 25% more gross margins than those that ignore their data.

You can use the behavioral data you already have in your database (customer profiles and shopping history, etc.) to improve key areas of customer acquisition and retention.

customer acquisition vs customer retention

Just because you can’t shell out hundreds of thousands of dollars to acquire data like Amazon does, it doesn’t mean you can’t use the same strategies they use to propel your business forward.

It’s a matter of using the resources you do have to improve your offerings.

3. Consider adding subscription services

Convenience is something Amazon offers in abundance.

They do this by offering subscription services like Subscribe and Save, which offers customers the chance to receive specific products automatically every month.

subscribe and save product selection

An Amazon Prime membership also comes with some convenience perks like free two-day shipping and unlimited streaming and use of Amazon’s other services.

They now also offer Amazon Payments, which gives customers the additional convenience of being able to purchase items from other retailers using an Amazon account. (Amazon also tracks these purchases to fuel their data even further, of course.)

amazon payments

Adding something like a subscription service not only provides convenience for customers, but it also can help your own revenue.

Research shows that businesses with subscriptions increase revenue twice as fast as their competitors and see 2x the overall growth.

To take advantage of a subscription model like Amazon’s and consider offering renewable subscriptions for certain products that are likely to be repeat purchases.

Or, if few of your products lend themselves to repeat purchases, consider offering a curated box of specific items every month (the subscription box model) like Birchbox and Dollar Shave Club.

how birchbox works

Other ideas might include:

  • Subscription-based shipping plans
  • Offers from specific manufacturers
  • Product discounts for membership

This not only sets you up for more sales in the long run, but it also gives customers a chance to get products from you without sacrificing their convenience.

4. Improve your shipping

Now, you can’t directly compete with Amazon when it comes to shipping.

Technically, not even Amazon fulfillment can compete with Amazon.

amazon logistics cost growth

According to GeekWire, Amazon lost $7.2 billion from shipping in 2017 between what it cost them and what they charged. But they have more than enough revenue from other sources to make up for it.

You probably don’t.

The goal isn’t to compete, anyway. Your goal is to stay in the game.

To do that, there are plenty of ways you can improve your shipping to provide additional convenience and customer service.

First up, consider offering free or discounted shipping for a minimum threshold or for specific products.

most important options when checking out online

For example, REI offers free shipping on purchases over $50, but they include other caveats to the rule that allow them to maintain this offer without losing money. For example, the offer isn’t valid for special orders or prior purchases.

rei free shipping

Studies show that 48% of shoppers on average <a href="; target="_bl


Telegram chalks up 200M MAUs for its messaging app

Another usage milestone for messaging platform Telegram: It’s announced passing 200M monthly active users “within the last 30 days”.

The platform passed 100M MAUs back in February 2016, when it held a lavish party at the Mobile World Congress tradeshow in Barcelona to celebrate the metric. At the time it said it was adding 350k new users daily and that there were 15 billion messages generated daily.

Since then Telegram has kept its powder fairly dry on the usage metrics front — presumably waiting to be able to announce 200M.

Its blog post is not revealing of any other details about usage. Rather founder Pavel Durov uses the space to give thanks to Telegram users for getting the company to the milestone, and takes a sideswipe at other “popular apps” which he says — unlike Telegram — monetize via advertising and/or pass data on to third parties.

Safe to say, it doesn’t take much imagination to figure out who he might be thinking of

“Since the day we launched in August 2013 we haven’t disclosed a single byte of our users’ private data to third parties,” he writes (emphasis his). “We operate this way because we don’t regard Telegram as an organization or an app. For us, Telegram is an idea; it is the idea that everyone on this planet has a right to be free.”

We’ve reached out to Durov to see if he’ll give up any more Telegram usage tidbits and will update this post if so.

While he writes confidently now that “Telegram doesn’t… do deals with marketers, data miners or government agencies”, it’s not clear how much longer he’ll be able to stand up that claim — given the legal pressure being applied, for example, in Russia to hand over encryption keys or face being blocked. Telegram has also faced restrictions in Iran.

It told Bloomberg it plans to appeal the Russian ruling in a process that may last into the summer, according to company lawyer, Ramil Akhmetgaliev.

Durov also tweeted that: “Threats to block Telegram unless it gives up private data of its users won’t bear fruit. Telegram will stand for freedom and privacy.”


Facebook hit with shareholder lawsuits over data misuse crisis

The lawsuits are piling up against Facebook in the wake of the Cambridge Analytica data misuse and political ad targeting scandal.

According to SF Gate the company has been hit with four suits in federal courts so far this week following fresh revelations about how Facebook’s app permissions were abused to surreptitiously suck out vast amounts of user data.

One lawsuit filed yesterday in Northern California on behalf of a Facebook shareholder, Jeremiah Hallisey, alleges the company’s senior management “breached their fiduciary duties by failing to prevent the initial misappropriation [of user data by CA] and, after learning of it in 2015, failing to inform affected Facebook users or the public markets”.

The complaint names Facebook founder and CEO Mark Zuckerberg; COO Sheryl Sandberg; and board members Marc Andreessen, Peter Thiel, Reed Hastings, Erskine Bowles, Susan Desmond-Hellman and Jan Koum as defendants.

It notes Facebook has lost $50 billion in market capitalization since the data leak was disclosed, and flags reports that the FTC has launched an inquiry into Facebook’s conduct and whether it violated the terms of a 2011 consent decree that requires the company to notify users before sharing their data with third parties.

We’ve reached out to Facebook for comment but at the time of writing the company had not responded.

Last week the New York Times and the Observer of London reported revelations from former CA employee Chris Wylie, who detailed how working with a University of Cambridge psychology professor that had developed a survey app to run on Facebook, the political consultancy had been able to obtain vast amounts of user information — as many as 50 million US Facebook users’ profiles — without the vast majority of the users being aware their data had been harvested nor what it would be used for. The firm had been working for the Trump presidential campaign.

After the newspaper reports Facebook acknowledged that 270,000 people had downloaded the survey app.

CEO Mark Zuckerberg has also since gone on CNN to apologize. But the scope and scale of the data mishandling, coupled with Facebook’s failure to inform users when it found about the policy breach in 2015 have played very badly with markets and users alike…

“The recent revelations regarding Facebook’s actual practices with respect to user privacy and data security have severely damaged the Company’s reputation and imposed significant costs on it, including regulatory investigations, lost business, exposure to litigation, and other damages,” the complaint runs, before going on to allege that Facebook sought to “downplay concerns about access to user information” and “continued to assure investors that Facebook maintained effective” internal controls and systems that automatically detected ‘suspicious activity’”.

In a statement, Mark Molumphy, a partner with Cotchett, Pitre & McCarthy — the firm representing Hallisey — said: “Facebook’s apology doesn’t do much for the millions of Americans impacted by this conduct. It also doesn’t explain why Facebook executives waited three years to inform their loyal users and shareholders of the massive breach, especially on the heels of the FTC consent decree in 2011.  This action seeks accountability from those entrusted to safeguard our personal information and who seem to pay only lip service to the privacy concerns of their users.”

Also adding to the awkward questions for Facebook: Board member, Thiel, who supported Trump’s presidential bid, made a $1M financial donation to a Trump-supporting Super PAC, called Make America Number 1, in 2016 — which Mashable reports subsequently paid Cambridge Analytica $231,352 toward the end of the same year, per an FEC filing

Earlier this week, a proposed class action was also filed in California by a group of Facebook users seeking damages from the company for failing to protect their data.

On Tuesday, another shareholder lawsuit was filed. Gizmodo reports that complaint shareholder Fan Yuan has accused the company of making “materially false and/or misleading” claims about its handling of user data, and failing to disclose the ongoing situation has reduced the value of Facebook shares.

A fourth suit has been filed by another shareholder, Robert Casey. And Facebook will surely face more before the outrage over this epic fail privacy scandal burns out.

It also seems very likely that additional app permissions problems will come to light as Facebook has committed to a historical audit of any apps that were accessing large amounts of user data around the same time as CA was. Safe to say, it would be very unusual if the app used by CA to suck out Facebook profiles en mass was the only third party app to be acting out before Facebook acted on regulatory recommendations to tighten its app permissions, starting in 2014.


The Campaign Comeback: What to Do When Content Fails – Whiteboard Friday

Posted by Shannon-McGuirk

We’ve all been there: you plan, launch, and eagerly await the many returns on a content campaign, only to be disappointed when it falls flat. But all is not lost: there are clever ways to give your failed campaigns a second chance at life and an opportunity to earn the links you missed out on the first time. In today’s Whiteboard Friday, we’re delighted to welcome guest host Shannon McGuirk as she graciously gives us a five-step plan for breathing new life into a dead content campaign.

What to do when content fails.

Click on the whiteboard image above to open a high-resolution version in a new tab!

Video Transcription

Hi, Moz fans. Welcome to this edition of Whiteboard Friday. My name is Shannon McGuirk. I’m the Head of PR and Content at a UK-based digital marketing agency called Aira.

Now, throughout my time, I’ve launched a number of creative content and digital PR campaigns, too many to mention. But the ones that really stick into my head are the campaign fails, the ones that got away from the link numbers that I wanted to achieve and the ones that were quite painful from the client-side and stakeholder-side.

Now, over the last couple of years, I’ve built up a couple of steps and tactics that essentially will help me get campaigns back on track, and I wanted to take you through them today. So, today, I’m going to be talking to you about content campaign comebacks and what to do if your content campaign fails.

Step one: Reevaluate your outreach efforts

Now, take it right back to when you first launched the campaign.

  • Have you contacted the right journalists?
  • Have you gone to the right publications?
  • Be realistic. Now, at this point, remember to be realistic. It might not be a good idea to start going for the likes of ABC News and The Daily Telegraph. Bring it down a level, go to industry blogs, more niche publications, the ones that you’re more likely to get traction with.
  • Do your research. Essentially, is what I’m saying.
  • Less is always more in my eyes. I’ve seen prospecting and media lists that have up to 500 contacts on there that have fired out blank, cold outreach emails. For me, that’s a boo-boo. I would rather have 50 people on that media list that I know their first name, I know the last three articles that they’ve written, and on top of that, I can tell you which publications they’ve been at, so I know what they’re interested in. It’s going to really increase your chances of success when you relaunch.

Step two: Stories vs. statements

So this is when you need to start thinking about stories versus statements. Strip it right back and start to think about that hook or that angle that your whole campaign is all about. Can you say this in one sentence? If you can get it in one sentence, amazing because that’s the core thing that you are going to be communicating to journalists.

Now, to make this really tangible so that you can understand what I’m saying, I’ve got an example of a statement versus a story for a recent campaign that we did for an automotive client of ours. So here’s my example of a statement. “Client X found that the most dangerous roads in the UK are X, Y, Z.” That’s the statement. Now, for the story, let’s spice it up a little bit. “New data reveals that 8 out of 10 of the most dangerous roads in the UK are in London as cyclist deaths reach an all-time high.”

Can you see the difference between a story and a statement? I’m latching it into something in society that’s really important at the moment, because cyclist deaths are reaching an all-time high. On top of that, I’m giving it a punchy stat straightaway and then tying it into the city of London.

Step three: Create a package

So this seems like a bit of a no-brainer and a really obvious one, but it’s so incredibly important when you’re trying to bring your content campaign back from the dead. Think about creating a package. We all know that journalists are up against tight deadlines. They have KPIs in terms of the articles that they need to churn out on a daily basis. So give them absolutely everything that they need to cover your campaign.

I’ve put together a checklist for you, and you can tick them off as you go down.

  • Third-party expert or opinion. If you’re doing something around health and nutrition, why don’t you go out and find a doctor or a nutritionist that can give you comment for free — because remember, you’ll be doing the hard work for their PR team — to include within any press releases that you’re going to be writing.
  • Make sure that your data and your methodology is watertight. Prepare a methodology statement and also get all of your data and research into a Google sheet that you can share with journalists in a really open and transparent way.
  • Press release. It seems really simple, but get a well-written press release or piece of supporting copy written out well ahead of the relaunch timing so that you’ve got assets to be able to give a journalist. They can take snippets of that copy, mold it, adapt it, and then create their own article off the back of it.
  • New designs & images. If you’ve been working on any new designs and images, pop them on a Google shared drive and share that with the press. They can dip into this guide as and when they need it and ensure that they’ve got a visual element for their potential article.
  • Exclusive options. One final thing here that can occasionally get overlooked is you want to be holding something back. Whether that’s some really important stats, a comment from the MD or the CEO, or just some extra designs or images for graphics, I would keep them in your back pocket, because you may get the odd journalist at a really high DA/authority publication, such as the Mail Online or The Telegraph, ask for something exclusive on behalf of their editor.

Step four: Ask an expert

Start to think about working with journalists and influencers in a different way than just asking them to cover your creative content campaigns and generate links. Establish a solid network of freelance journalists that you can ask directly for feedback on any ideas. Now, it can be any aspect of the idea that you’re asking for their feedback on. You can go for data, pitch angles, launch timings, design and images. It doesn’t really matter. But they know what that killer angle and hook needs to be to write an article and essentially get you a link. So tap into it and ask them what they think about your content campaign before you relaunch.

Step five: Re-launch timings

This is the one thing that you need to consider just before the relaunch, but it’s the relaunch timings. Did you actually pay enough attention to this when you did your first initial launch? Chances are you may not have, and something has slipped through the net here.

  • Awareness days. So be sure to check awareness days. Now, this can be anything from National Proposal Day for a wedding client, or it can be the Internet of Things Day for a bigger electrical firm or something like that. It doesn’t really matter. But if you can hook it onto an awareness day, it means that there’s already going to be that interest in the media, journalists will be writing about the topic, and there’s a way in for your content.
  • World events. Again, keep in mind anything to do with elections or perhaps world disasters, such as tornadoes and bad weather, because it means that the press is going to be heavily oversaturated with anything to do with them, and therefore you might want to hold back on your relaunch until the dust is settled and giving your content campaign the best chance of success in round two.
  • Seasonality. Now, this isn’t just Christmas. It’s also Easter, Mother’s Day, Valentine’s Day. Think about the time of year you’re launching and whether your content campaign is actually relevant at that time of year. For example, back home in the UK, we don’t tend to launch content campaigns in the run-up to Christmas if it’s not Christmas content, because it’s not relevant and the press are already interested in that one seasonal thing.
  • Holidays. Holidays in the sense of half-term and summer holidays, because it means that journalists won’t be in the office, and therefore you’re reducing your chances of success when you’re calling them or when you’re writing out your emails to pitch them.

So there are my five steps for your content campaign comebacks. I know you’ve all been there too, guys, and I would love to hear how you got over some of these hurdles in bringing your content campaigns back to life. Feel free to comment below. I hope you guys join me soon for another Whiteboard Friday. Thanks.

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Snapchat’s new feature is aiming to turn Snap Map into a next-gen newsfeed

Snapchat may still be getting a lot of heat for their redesign, but the company is continuing to devote resources to build out Snap Map, the map-based feature it introduced last year.

A new feature called Map Explore will let you thumb through Snap Map updates in a more methodical way, so that you can see where your friends are and where they’re traveling. These statuses are generated by your friends’ movements rather than them physically typing out something on their own. Snap Map is importantly an opt-in feature, so if you’re understandably creeped out by the privacy implications, carry on.

The feature, first noted by The Verge, is furthering Snapchat’s idea of a map-based feed in Snap Map, but Map Explore integrates some more conventional UI elements and notifications to call users’ attention to items of interest that might otherwise get lost in the expanse. It’s just a start, but it’s definitely a necessary move. Expecting users to pan around a map is daunting enough for the immediate surrounding area, but when you’re trying to get users to see where your friends are vacationing or doing other cool stuff, it’s a lot more difficult.

The feed can give updates on the jet-setting habits of friends who are going on trips; it also can give location updates when they’re off to the beach or at another noteworthy spot. What’s perhaps most interesting is that Snapchat says they’ll be using the feature to push updates or breaking news updates to users based on areas of the Snap Map that are seeing a lot of traffic tied to news events.

The feature is going to be rolling out globally in the next few weeks.


Sheryl Sandberg says Facebook leadership should have spoken sooner, is open to regulation

The days of silence from Facebook’s top executives after the company banned the political advisory service Cambridge Analytica from its platform were a mistake, according to Sheryl Sandberg.

In a brief interview on CNBC, Sandberg said that the decision for her and company chief executive and founder Mark Zuckerberg to wait before speaking publicly about the evolving crisis was a mistake.

“Sometimes we speak too slowly,” says Sandberg. “If I look back I would have had Mark and myself speak sooner.”

It was the only significant new word from the top level of leadership at Facebook following the full-court press made by Mark Zuckerberg yesterday.

The firestorm that erupted over Facebook’s decision to ban Cambridge Analytica — and the ensuing revelations that the user data of 50 million Facebook users were accessed by the political consulting and marketing firm without those users’ permission — has slashed Facebook stock and brought calls for regulation for social media companies.

Even as $60 billion of shareholder value disappeared, Zuckerberg and Sandberg remained quiet.

The other piece of information from Sandberg’s CNBC interview was her admission that the company is “open” to government regulation. But even that formulation suggests what is a basic misunderstanding at best and cynical contempt at worst for the role of government in the process of protecting Facebook’s users.

Ultimately, it doesn’t matter whether Facebook is open to regulation or not. If the government and U.S. citizens want more controls, the regulations will come.

And it looks like Facebook’s proposed solution will end up costing the company a pretty penny as well, as it brings in forensic auditors to track who else might have abused the data harvesting permissions that the company had put in place in 2007 and only sunset in 2015. 

Before the policy change, companies that aggressively acquired data from Facebook would come in for meetings with the social media company and discuss how the data was being used. One company founder — who was a power user of Facebook data — said that the company’s representatives had told him “If you weren’t pushing the envelope, we wouldn’t respect you.”

Collecting user data before 2015 was actually something the company encouraged, under the banner of increased utility for Facebook users — so that calendars could bring in information about the birthdays of friends, for instance.

Indeed, the Obama campaign used Facebook data from friends in much the same way as Cambridge Analytica, albeit with a far greater degree of transparency.

The issue is that users don’t know where their data went in the years before Facebook shut the door on collection of data from a users’ network of friends in 2015.

That’s what Facebook — and the government is trying to find out.



How the Customer Experience is Powering the Fastest Growing Brands

A form of this article originally appeared on Stitch Labs. Stitch Labs is a purpose-built inventory management software to help brands improve customer experience and scale efficiency. Download the original guide here.

When we talk about the future of retail, industry news is abuzz with the idea of brands creating experiences for their customers. Consumers want more than an email newsletter—they want easy tracking and personalization. They want more than a product—they want community. The experiences we read about in headlines are often grandiose and costly, like virtual fitting rooms and same-day shipping. So, how can small- to mid-sized brands keep up with this trend in a cost-effective, creative way? With the help of scrappy teams and technology to automate processes, these brands are not only keeping up with the trend, but also are redefining it and leveraging it to grow. In this guide, we’ll discuss different approaches for building a memorable customer experience and how successful brands are executing on these creative ideas.

Automated Personalization Isn’t a Contradiction

Most businesses under-invest in customer loyalty, even though establishing some type of loyalty program is one of the most obvious ways retailers enhance their customer experience. Instead, they often put all of their eggs in the new customer acquisition basket. While this approach may work well in the early days of a business, it can be detrimental for scaling later. In order to set your business up for future success, you’ll want to think early on about a backend system that will scale with you. You’ll also want to think about today’s first-time customers who you hope will become tomorrow’s loyal brand advocates. As you grow in resources, you can consider many types of loyalty programs that will help you track and analyze customer behaviors and reward repeat purchases. If you’re starting out, there are simpler—yet still scalable— ways to personalize the customer experience. Customizing gifts based on the product someone buys is a thoughtful—yet realistic—way to make a customer feel warm and fuzzy about your brand. Chubbies, a clothing brand with an emphasis on the weekend lifestyle known for their colorful shorts and hilariously quirky marketing campaigns, figured out a way to send gifts without breaking the bank.

Image Source

With their target customer in mind, they created add-on gifts like branded koozies, coasters, and baseball cards that fit within their lifestyle theme but are significantly less expensive than sending an additional item of clothing. The gifts can match the purchases, too. For example, sending sunscreen when someone buys a swimsuit, or golf tees when a customer purchases golf shorts. This program is able to delight the customer in a personalized way, without having to know personalized information about the customer. In automating this process, they can quickly swap out a gift that isn’t garnering excitement and track orders so customers don’t receive the same gift twice. Their customers are surprised and delighted to receive add-ons and their loyal social media followers will often post their latest gift, thus increasing brand awareness in addition to fostering loyalty.

Using Data To Improve Customer Experience

The previous section is all about personalising the offline experience with your brand, but what about improving the online one?

The better you know your customer, the better the experience you can deliver – on and off-line. Data from customer behavior on your eCommerce site allows you to better understand your customer and therefore engage with them in a way that is deeply personalized to their experiences with your brand. With customers being bombarded with emails and offers that have little relevance to how they’ve interacted with a brand, you can stand out with more targeted, personalized engagements.

To do this, a tool like Kissmetrics collects person-based behavioral data, defines and tracks key customer segments and then enables you to engage more effectively across email, facebook and more. You can segment by location, products purchased, time between events, etc. The more detailed you make your segmentation, the more easily you can personalize your messaging. Why does this matter? Because when you create refined segments of your many different customer types and tailor messaging uniquely toward just that segment you’re creating yet another delightful moment between your brand and your customer. Not to mention better suited engagements increase purchases and brand loyalty.

Collaborations: Combine Forces To Get New Customers

While brands obviously want customers to love their products enough to buy from them time and time again, we know no customer is 100 percent brand loyal. Even your most loyal customers have other brands they love and those are the very brands with whom you should consider working. Topo Designs, a Denver-based outdoor apparel and bag company, has partnered with brands like Woolrich and Chacos (not direct competitors, but other brands Topo’s target customer loves!) to create unique, limited-edition items that they then promote across both of their customer bases.

Image Source

Even if your brand doesn’t have the desire or resources to make physical products with another brand, there are many ways to collaborate with lower barriers to entry. Find brands with similar audiences and aesthetic and stock each other’s items in your brick and-mortar stores. Create a themed “swag bag” with several other brands and host an Instagram giveaway by having followers tag three friends for a chance to win. Similarly, host a giveaway where those who enter to win agree to sign up for your and your partners’ email lists.

Austin-based metallic tattoo and accessories company, Flash Tattoos is always finding ways to collaborate with brands who share target audiences. Entries can be as simple as tagging friends in an Instagram post or you could go so far as to have people fill out a form to ensure you’re capturing email addresses (and even additional information you can use to collect data). Keep in mind, the more involved the entry procedure, the more desirable you’ll want to make your prize.

Events: The Low Cost Way To Get Foot Traffic In Your Store

Want an even easier way to collaborate with other brands—without having to give away free product? Consider hosting an event at your store (or theirs). Modern Citizen, a San Francisco-based women’s apparel brand, hosts a series of events both with and without partners to foster a sense of community while getting people into their physical store. For one event, they teamed up with Fashion Incubator SF, a nonprofit that supports up and coming fashion designers. They hosted an open discussion with the two founders and answered questions from the audience—which was made up mainly of their exact target demographic. The total cost of the event was buying donuts and coffee for 30 people (who each purchased $10 tickets to attend, the proceeds of which were donated to Fashion Incubator SF) but they were able to establish themselves as thought leaders and make sales from the shopping attendees did after the talk. Additionally, they sent an email after the event thanking everyone who attended and included a 15 percent off coupon code that expires at the end of the month, encouraging further shopping as well as a sense of urgency and immediacy.

But what if you don’t have a physical store? Brands everywhere are using popups to boost awareness and collect data in a cost-effective way. Whether it’s renting a booth at a local fair or event or even creating a mobile trailer to determine the best location for your next (or first!) brick-and-mortar, temporary shops are great ways to gauge interest and build hype without breaking the bank.

Build a Community

Many brands are still at loss when it comes to Amazon. Is it better to adopt a, ‘if you can’t beat ‘em, join ‘em’ approach, or try to compete as best you can with the behemoth? Building a community is small to mid-sized brands leg up on Amazon. They may provide same day shipping and low costs, but they don’t provide the customer experience that’s only increasing in importance for today’s consumer. One team hyper-focused on building a community and showing their customers they’re much more than a shoe brand is Freda Salvador. Through their mobile shoe trailer, in-store events, and collaborations with other brands, Freda Salvador is everywhere their customer is.

Image Source

Similar to Modern Citizen, the Freda team hosts in-store events that both increase foot traffic and brand awareness while simultaneously creating a sense of community between customers and the brand. They often choose tangentially related concepts that their target customer is interested in—like a flower arrangement workshop, a skin care workshop, etc. Since they aren’t actually selling anything Freda-related at the event or even talking about their brand, this is a great way to foster a sense of community in an authentic way.

Have a Backend That Supports Your Initiatives

There are so many creative ways to enhance your consumer experience but even the most well-intentioned plan can have the opposite effect on customer retention if your backend can’t support it. These creative ideas are great ways to connect with your customer, but you first and foremost must master the most basic customer experience: getting the right product, to the right person, at the right time. If someone can’t count on your brand for clear and descriptive product pages, easy checkout, and speedy delivery, you’ve already fallen behind. So, before you begin creating the experience of your customers’ dreams, get organized and make sure you have the right systems and people in place. Stitch Labs provides brands with visibility into their inventory at all times and across all channels, allowing them to be more efficient with their inventory. Stitch connects to your eCommerce site, 3PL, and marketplaces to make sure inventory numbers are accurate and you know where a product is at all times. This level of control lets you not worry about inventory, so you can focus on what matters most—your customers.


Cambridge Analytica’s Nix recalled by fake news probe

Stock up on the popcorn — the currently suspended CEO of the firm at the center of a data handling and political ad-targeting storm currently embroiling Facebook, Cambridge Analytica, has been recalled by a UK parliamentary committee that’s running a probe into the impact of fake news because it’s unhappy with the quality of his prior answers.

The committee also says it has fresh questions for Alexander Nix in light of revelations that hit the headlines at the weekend about how a researcher’s app was used to gather personal information on about 270,000 Facebookers and 50 million of their friends, back in 2015 — data that was passed to CA in violation of Facebook’s policies.

Nix gave evidence to the DCMS committee on February 27, when he claimed: “We do not work with Facebook data, and we do not have Facebook data. We do use Facebook as a platform to advertise, as do all brands and most agencies, or all agencies, I should say. We use Facebook as a means to gather data. We roll out surveys on Facebook that the public can engage with if they elect to.”

That line is one of the claims the committee says it’s keen to press him on now. In a letter to Nix, it writes: “[T]here are a number of inconsistencies in your evidence to us of 27 February, notably your denial that your company received data from the Global Science Research company [aka the firm behind the survey app used by CA to harvest data on 50M Facebook users, according to The Observer].”

“We are also interested in asking you again about your claim that you “do not work with Facebook data, and […] do not have Facebook data,” it continues, warning: “Giving false statements to a Select Committee is a very serious matter.”

The self-styled ‘not a political consultancy’ but “technology-driven marketing firm” (and sometime “campaign consultancy and communication services” company) — which Nix also described in his last evidence session as “not a data miner… a data analytics company” — had its Facebook account suspended late last week for violating Facebook’s platform policies.

The UK’s data protection watchdog, the ICO, has also applied for a warrant to gain access to CA’s offices and servers — accusing the company of failing to hand over information the regulator had requested as part of a wider investigation it’s carrying out into the use of data analytics for political purposes.

CA is also now facing several legal challenges from Facebook users angry about how their data appears to have been misused.

We reached out to the company for comment on the DCMS recall. At the time of writing it had not responded.

Below are a few choice segments from Nix’s last evidence session in from of the committee — which we expect he will be asked to revisit should he agree to make a repeat appearance…

Q698       Rebecca Pow:… Could you expand a bit more on what those surveys are, what you are asking people and how you are gathering the data? Do you keep that data on surveys carried out on Facebook or does Facebook keep it?

Alexander Nix: I cannot speak to Facebook, but as far as I am aware the process works a bit like an opinion survey. If I want to find out how many people prefer red cars or yellow cars, I can post that question on Facebook and people can agree. They can opt in to answer a survey and they give their consent and they say, “I prefer a yellow car” and then we can collect that data. That is no different to running a telephone poll or a digital poll or a mail poll or any other form of poll. It is just a platform that allows you to engage with communities.

Q699       Rebecca Pow: Are they a big part of your data-gathering service?

Alexander Nix: When we work for brands, whether it is in the UK or in the US or elsewhere, we often feel the need to probe their customers and find out what they think about particular products or services. We might use Facebook as a means to engage with the general public to gather this data.

Q700       Simon Hart: Let me ask a very quick question on the Facebook survey opt-in option that you were describing. If you are asking somebody what kind of car they prefer and they opt in, does that facilitate access to other data that may be held by Facebook, which is irrelevant to car colour, or is it only the data you collect on car colour that is relevant?Nothing else that is part of the data held by Facebook would be available to you.

Alexander Nix: You are absolutely right—no other data. As far as I am aware, Facebook does not share any of its data. It is what is known as a walled garden, which keep its data—

Q701       Simon Hart: People are not in any way accidently giving you consent to access data other than that that you specifically asked for.

Alexander Nix: That is correct. People are not giving us consent and Facebook does not have a mechanism that allows third parties such as us to access its data on its customers.

Q702       Simon Hart: Even with its customers’ consent.

Alexander Nix: Even with its customers’ consent.

Chair: You said in your letter to me that, “Cambridge Analytica does not gather” data from Facebook.

Alexander Nix: From Facebook?

Chair: Yes.

Alexander Nix: That is correct.


Q718       Chair: The actual quote from the letter is: “On 8 February 2018 Mr Matheson implied that Cambridge Analytica ‘gathers data from users on Facebook.’ Cambridge Analytica does not gather such data.” But from what you said you do, do you not, through the surveys?

Alexander Nix: Yes, I think I can see what has happened here. What we were trying to say in our letter is that we do not gather Facebook data from Facebook users. We can use Facebook as an instrument to go out and run large-scale surveys of the users, but we do not gather Facebook data.

Q719       Chair: By that do you mean that you do not have access to data that is owned by Facebook?

Alexander Nix: Exactly.

Q720       Chair: You acquire data from Facebook users through them engaging with surveys and other things.

Alexander Nix: Exactly right.

Q721       Chair: Is your engagement, either directly or through any associate companies you may have, just through the placing of surveys or are there other tools or games or thingsthat are on Facebook that you use to gather data from Facebook users?

Alexander Nix: No, simply through surveys.


Q729       Chair: In that presentation I think there is a slide on data analytics where you describe that data is sourced from multiple sources and any marketing company will know that there are companies that specialise in data analytics to analyse consumer behaviour. I think on your chart you had logos of different companies. I think Experian was one and Nielsen was one. You had Facebook on there as well. Again, just to confirm on this, is that because you are highlighting the fact that you can gather data from Facebook?

Alexander Nix: Collect data through Facebook—that is exactly right, yes.

Q730       Chair: Does any of your data comes from Global Science Research company?

Alexander Nix: GSR?

Chair: Yes.

Alexander Nix: We had a relationship with GSR. They did some research for us back in 2014. That research proved to be fruitless and so the answer is no.

Q731       Chair: They have not supplied you with data or information?

Alexander Nix: No.

Q732       Chair: Your datasets are not based with information you have received from them?

Alexander Nix: No.

Chair: At all?

Alexander Nix: At all.


Instagram will show more recent posts due to algorithm backlash

Instagram isn’t quite bringing back the chronological feed but it will show more new posts and stop suddenly bumping you to the top of the feed while you’re scrolling. “With these changes, your feed will feel more fresh, and you won’t miss the moments you care about” Instagram writes. It should be more coherent to browse the app now that you won’t get bumped to to the top of your feed and lose your place because your feed randomly refreshes, and there shouldn’t be as many disparate time stamps to juggle. Instead, you’ll be able to manually push a “New Posts” button when you want to purposefully refresh the feed.

Instagram switched from a reverse chronological feed to a relevancy-sorted feed in June 2016, leading to lots of grumbling from hardcore users. While it made sure you wouldn’t miss the most popular posts from your close friends, showing days-old posts made Instagram feel stale.

And for certain types of professional content creators and merchants, cutting their less likeable posts out of the feed — like their calls to buy their products or follow their other social accounts — was detrimental to their business. Instagram and Facebook moved to hide these posts over time because they can feel spammy. But at least since it’s just images and videos, Instagram they’re easier to scroll by if you now see more of them.

“Based on your feedback, we’re also making changes to ensure that newer posts are more likely to appear first in feed” the company writes. Instagram’s VP of product Kevin Weil’s tweet indicates Instagram really is listening to all the complaints about the algorithmic feed:

Interestingly, despite all the anger about Facebook’s Cambridge Analytica scandal and the #DeleteFacebook movement, we haven’t seen nearly as many calls to #DeleteInstagram. In fact, the #DeleteFacebook trend seems to overlook the corporate parent company that owns Instagram, WhatsApp, and Oculus. Instead it focuses on just Facebook’s app, indicating that the scandal blowback might not be as much of an existential crisis.

If anything, the shift to the algorithmic feed caused much more of an uproar that any political issue or privacy scandal. While Facebook has become a core utility by bringing your real world identity to the Internet, Instagram is the pleasureful escape from that real world. And people get a lot more angry when you mess with their behavior patterns than when you highlight some abstract threat like misused personal data.


10 Accounting Basics You Need to Know to Run a Successful E-commerce Business

Accounting is a painful necessity.

It’s the boring side of the business. I don’t like dealing with it either.

But, if you want your business to grow, you can’t avoid it.

You could try tossing all your receipts into a shoebox and handing them to a stranger.

But you’ll be handing them financial control. That means risking the success of your business.

You’d be handing them a nice chunk of change to do it all for you too.

I promise it’s not as complex as you might fear, though.

And you shouldn’t need an accountant for day-to-day management.

Even if you do pay for help, you should still know the basics yourself.

This way you can understand and question what someone is telling you.

After all, it’s your business at stake.

The following ten accounting basics will cover everything you need to know to understand your money and ask the smart questions.

1. Get yourself accounting software

Don’t try to piece it all together using excel or a calculator.

Do yourself a favor and get accounting software. Freshbooks is marketed to customers who run e-commerce businesses.

Or if you use Shopify, there are a bunch of accounting software apps you can get right in their app store.

Not sure what you want? Test out a free one. Or pick one with a 30-day free trial.

The best option will depend on your business and preferences.

If you’re shopping through the app store, make sure you’re picking a bookkeeping system.

Look for an app that will track sales, costs, and inventory.

Avoid apps that only create invoices or just provide reports. You want a tool that can do it all for you.

Whether you pick software through Shopify or go with something else, pick one that will sync directly to your e-commerce store.

It will make life a whole lot easier.

2. Track your cash flows

Step two: watch your cash.

If you don’t have a separate bank account for your business yet, get one.

You need to know that your business is making money. And the easiest way to see this is to watch your cash flow.

If you have more coming in then going out, you’re probably doing well, right?

You also should be watching the timing of money going out and coming in.

After all, what if all your bills are due tomorrow?

It won’t matter a whole lot if you have $1 million coming in next month if you can’t pay your employees until then.

Keep in mind any holds you have on your accounts.

What payment methods do you offer your customers? Do any of them place a hold on the money?

Is there a five-day delay from the time a customer pays to the time the money is in your bank? You need to know this when you’re figuring out when you’ll have money to spend.

Shopify offers a free template for tracking cash. You can easily create your own in excel.

Track what you expect to spend each week. Track what money you expect to come in each week.

If what you need to spend is more than your current bank balance plus what’s coming in, you know you’re about to have a problem.

Follow these tips to help improve your cash flow:

  • Don’t pay anything earlier than you have to. If it’s due in 30 days, pay it in 30 days.
  • Consider offering monthly payment plans or subscriptions to customers to guarantee money coming in.
  • Keep a reserve in your business bank account ‘just in case.’
  • Don’t overcomplicate it. You don’t need huge technical cash flow statements.

3. Determine how to count inventory

If you’re selling a service, then ignore this step.

Inventory is the product you sell or all the materials you use to build that product.

Don’t forget to include any costs for wrapping or packaging your product.

Decide what minimum volume of inventory you want to have on hand, and make sure you are tracking inventory so you can reorder before you pass this point.

The last thing you want is to run out of inventory and lose sales.

Why is inventory part of accounting basics?

Inventory equals money.

It’s money you spent to buy the stuff. Money you won’t make back until you sell your product.

And the money tied to your inventory can change while it’s sitting in your warehouse (or store, or apartment).

If I buy 50 products at $100 each, and tomorrow the price shoots up to $150, my inventory is suddenly worth more.

But if the price drops tomorrow to $50, my inventory is worth less.

And watch out for ‘shrinkage’!

That’s when you suddenly have less inventory than what you’re supposed to.

You know you bought 50 products. You know you’ve sold and shipped 40.

You should have 10 left, right?

What if you only have 8 left?

That is ‘shrinkage.’

Maybe an item got lost, or stolen, or was ruined and had to be thrown out. There are lots of reasons it happens.

The good news is shrinkage is lower when you don’t have a physical retail store.

Warehouse shrinkage is actually pretty low. Typical shrinkage is less than 1% of your total inventory.

If you’re operating a business out of your home, it’s even less likely you will have shrinkage.

After all, you’re less likely to have someone steal inventory if you’re the only one around it.

It’s also a lot harder to lose inventory in an apartment compared to a huge warehouse.

That said, shrinkage can happen to anyone.

This is why it’s important to physically count inventory regularly. You need to know if you just ‘lost’ $100 worth of product and factor that into your accounting.

4. Understand your cost of goods sold

Cost of goods sold is the expense directly tied to the products you sold.

This is the inventory sold plus how much it cost to make that inventory.

Let’s say you sell one widget. Whatever it cost you for the parts plus whatever it cost to build it should be the cost of goods sold for that widget.

If the parts of the widget cost $50, packaging cost $10, and you paid someone $25 to put it together, your cost for that widget is $85.

This can get a lot more confusing to figure out if you bought a lot of widgets at different prices, and you’re paying different people different salaries to put them together.

Don’t overcomplicate things.

The easiest way to figure it out is to use a weighted average. Here’s an example of calculating a weighted average:

($440 divided by 5 is $88.)

Anything that is tied directly to your products and has a cost increase when you make more stuff should be in cost of goods sold.

If you pay employees per every widget they make, include their labor.

If you pay them a flat hourly rate even if they don’t make a single thing that day, don’t include their labor in the cost of goods sold.

The retail price of an item minus the cost of that item is your ‘gross margin.’

This is not your profit. It just tells you how much you’re making on each item before you add in all your other expenses.

Things can get pretty complicated here if you have different costs for different sales conditions.

For example, do you offer free shipping on all orders over $100?

This means your cost of goods sold is going to increase every time a customer buys more than $100 worth of stuff.

It will also change for each different location you ship to.

Some websites will tell you not to include shipping in costs of goods sold.

I disagree. ‘Freight out’ goes up or down with the volume you sell.

To simplify it, let your accounting system track your actual cost of goods sold. If it’s linked to your e-commerce site, it should be able to do this automatically.

For predicting your future cost of goods sold, save yourself a headache and just use an average.

If last month you sold $1,000 and paid $150 for shipping, that’s 15%.

So you can assume that if next month you sell $2,000 you will probably pay $300 (or 15%) for shipping.

It won’t be perfect, but it’s better than just leaving the cost out of planning.

Here’s a simple way to calculate your rough average cost of goods sold, including shipping, packaging and any other e-commerce fees:

5. Calculate all other expenses

Now you know your costs directly tied to sales volume.

Next, you need to understand how much everything else is costing you.

Any expenses that don’t increase when you sell more or decrease when you sell less are called ‘fixed expenses.’

For example, if you pay a monthly rent, the amount is fixed. It won’t change whether you sell one widget or one million.

These costs aren’t part of the cost of goods sold and aren’t factored into your gross margin.

They do affect your profit and your cash flow, though.

Common fixed expenses are:

  • Rent
  • Utilities
  • Insurance
  • Property Tax
  • Interest on loan payments
  • Salaries

These expenses are considered ‘fixed’ since you have to pay them even if you sell nothing next month.

Don’t get this confused with an expense being the exact same amount every month.

An expense like utilities might be more one month than the next. Or it might be more in the winter than in the summer.

It’s still a fixed expense in accounting terms.

If any expense changes month-to-month, you should use an average for budgeting.

6. Figure out your break-even sales requirement

Budgeting and planning are important parts of running a business.

After all, you’re not going to just want to know if you made a profit last month, you’re going to want to know if you expect to make one this month and next.

Your break-even sales amount is the amount of sales dollars you need to earn to cover all of your costs.

For example, let’s say all your ‘fixed costs’ add up to $5,000 per month.

This means you have to sell enough of your product to cover the cost of making them (including the labor) plus an additional $5,000 just to break-even (no profit and no loss).

Figure out your gross margin per unit (from the fourth basic).

Then divide your fixed costs by that amount to figure out the number of units you need to sell.

If your break-even number of units is 5,000 and you think you can only make or sell 3,000, you know you’re in trouble.

If break-even is 5,000 and you think you can make and sell at least 10,000 then you know you should be making money.

Remember that your fixed costs don’t easily change.

For example, if you’re in a five-year lease, you’re going to struggle to find a way to lower your rent.

This means if your break-even seems too high, you should first look at either raising your prices of trying to lower your costs of goods sold.

You could do this by charging more for shipping, using cheaper materials or finding cheaper labor.

Here’s a visual of break-even:

7. Track your sales and profits before tax

Now you know how many items you need to sell to break even.

Next, you need a way to track your sales.

This lets you know early on if you’re going to have an issue. It will also help you manage your money.

Let’s say you figured out you need to sell 5,000 units to break even.

It’s now the 15th of the month, and you’ve only sold 1500.

If you’re tracking your sales, you’re able to notice this. Now you have time to do something about it.

You still have two weeks left to try and drum up more business with some extra digital marketing efforts.

Just make sure that if it’s paid marketing, you figure the cost of that into your budget.

After all, if you spend $2000 to increase sales by $1000 then it wasn’t worth it, right?

One way to track your sales is by linking Google Analytics to your e-commerce site.

Google Analytics even has a plug-in for your e-commerce site to make it easier.

Log in to your Google Analytics and go to your Admin Settings.

Next, go to your e-commerce settings.

Then turn on the ‘Enable e-commerce’ switch and ‘submit.’

You can learn more about Google Analytics in some of my other posts, or check out my video.

But let’s get back to accounting.

Now that you know sales, cost of goods sold and all your other ‘fixed’ expenses, you know your earnings before tax as well.

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