In this episode of Add To Cart, we are talking to Hannah Udina, Head of Partnerships for Shopify in ANZ. Hannah works with agencies to develop and grow their footprint within the Shopify ecosystem. Joining Hannah is Simon Beard, co-founder of one of the most exciting retail brands Australia has ever seen, Culture Kings. From a market stall at the Carrara markets to a $600m valuation in 2021 and a successful partial exit, which was one of the biggest private retail acquisitions in Australia’s history.
Our chat today will focus on the findings that have come out of Shopify’s most recent market research, The Australian Retail Report. They surveyed over 200 medium to large Australian retailers across 11 verticals and over 1,000 consumers to deliver over 30 pages of current findings into new customer behaviours and practical tips for growth pathways for Australian retailers. There are lots of stats and retailer stories in there, some of which we will cover off today. But our conversation goes in all sorts of directions today. We cover how to create perceived value for customers and avoid the doom loop of discounting. We cover how to create profitable experiential stores – not just marketing exercises. We discuss the right time to sell your business, with Simon sharing some personal insights on when he chose to sell.
Our chat today will focus on the findings that have come out of Shopify’s most recent market research, The Australian Retail Report. The surveyed over 200 medium to large Australian retailers across 11 verticals and over 1,000 consumers to deliver over 30 pages of current findings into new customer behaviours and practical tips for growth pathways for Australian retailers. There are lots of stats and retailer stories in there, some of which we will cover off today. But our conversation goes in all sorts of directions today. We cover how to create perceived value for customers and avoid the doom loop of discounting. We cover how to create profitable experiential stores – not just marketing exercises. We discuss the right time to sell your business, with Simon sharing some personal insights on when he chose to sell.
“Brand is earned in drips and it’s lost in buckets”
Simon Beard
Co-founder, Culture Kings
Leverage AI as your thinking partner
(Simon) I definitely feel you need to embrace AI. I’m all about having it open all the time, really using it to test my thinking and my knowledge. If I’ve got a problem, I will talk it out in the notes, dump it in there, talk out my solution and say, can you write an argument of why this could be wrong? It’s so good in triangulating your thinking like that.
But as well, you need to incorporate this into your everyday life, it is not going anywhere. I do believe there is so much opportunity, these roles are going to change, and if you’re doing a job right now where you’re literally copying and pasting, it’s like the rubber stamp, next, a hundred percent, you should panic because that’s your days. And now it’s a matter of time. If you’re not creating value, actively, critically thinking to add value to the company, to solve problems, you’re going to be in trouble and you need to build that muscle.
I always try and train this in the team, when something goes wrong or breaks such a natural reaction to do that Homer into the bush meme, not my fucking job! You’ve got to train that emotional reaction. No, get out of the way, I’m going to solve this and charge at it.”
Shopify Sidekick
(Hannah) “So from a Shopify standpoint, I think this might be, Bushy, a ‘you heard it here first’. I think this is hot off the press! Maybe I might even get told off for saying this, but you know, whatever, let’s just go for it. I’ll ask for forgiveness later.
We’re releasing a product called Sidekick. Now Sidekick is a, first of its kind, AI enabled assistant that is purpose built for commerce. So all it is programmed to do is understand your business and provide recommendations to help you make smarter decisions, improve your workflows, spend less time on operational tasking. Provide recommendations, as Simon was saying, of what you should be doing, what should you be looking at? What are the trends at the moment that will impact and could impact the decisions you make next?
So Sidekick is coming. In fact, it’s just about to be released and it is a part of the Shopify Magic tool set.”
The double edged sword of discounting
(Simon) “My thing on the discounting and the loyalty part is that… so we know fashion’s like a pyramid, right? You got Louis Vuitton at the top, Kmart at the bottom. The more you go down, the more competition because there’s so much volume of people down there. The more you go up, there’s less competition, but there’s a lot less people to sell to. And you sit somewhere among there.
My thing is when you discount, you get this customer that was lower, that aspirationally comes up to buy your brand just cause it’s on sale, but they’re actually the most disloyal customer. And the problem that can happen too, especially in the fashion space, is that when you get that, your most loyal customer, suddenly, once it’s on sale, especially if they have paid full price, and then they see it, get hit with the ad on sale, they feel like an idiot.
You’re trading down, you’re getting a more disloyal customer and you’re burning a loyal customer. It’s a really double edged sword.”
Questions answered in this episode include…
- Over half of the customers researched said that the way to win their loyalty is through discounts and promotions. Do you consider this loyalty?
- The four key foes: inflation, rising costs, tightened consumer spending, and shifting consumer behaviours. Which do you think is the toughest for retailers to combat?
- What part of a retail business would you start with when introducing AI capabilities?
