Simon Beard: The ones that are too high level and too far out. Get a report from an agency once a month and flick through it and don't really is like and then they're just shredding fucking money.
[Voiceover]: The best innovation comes out of burning platforms.
Simon Beard: Throw out all your SLR cameras. Destroy them all.
[Voiceover]: Welcome to ADD to Cart, Australia's leading e commerce podcast that Express delivers all you need to know in the fast moving world of online retail. Here's your host, Bushy.
Nathan Bush: Hello everyone, my name is Bushy and I'm joining you on the land of the terrible people here in Brisbane. Welcome to a very special bonus episode of Add to Cart where we're going to break a few cardinal rules today. And it's for good reason. Normally we don't re interview guests on ADD to Cart. It keeps us on our toes and ensures we're connecting with a diverse range
Nathan Bush: of e commerce leaders.
Nathan Bush: But this time Shopify made me break the rule and I'm glad they did. Today's episode revisits two of our most popular guests from last year. Please join me in welcoming back Simon Beard, former CEO and co founder of Culture Kings, and Hannah Yudena from Shopify. Together they bring an amazing combination of insights. Simon's experience leading one of the world's top streetwear retailers and Hannah's inside knowledge of the latest trends and developments from Shopify. In this episode we dive deep into the big shifts in retail and e commerce which were highlighted in Shopify's 2024 retail report. You might remember that we explored this last year for the 2023 retail report. We do the same this year and
Nathan Bush: we go off script just a little bit.
Nathan Bush: We explore why successful e commerce founders still need to be hands on with with their ad accounts. We talk about how social commerce and platforms like YouTube are changing the game in e commerce. And probably my most enjoyable part of this conversation, why you never want your hook to be cooked. It's a concept that tickled me a little and I don't know why. It just did and I hope you'll enjoy it too.
Nathan Bush: I think you'll get a lot out of that.
Nathan Bush: This conversation comes almost exactly a year after our last chat and we're excited to discuss what's changed, including key takeaways from Shopify's 2024 Australian Retail Report. If you haven't grabbed your copy yet, feel free to pause and head on over to shopify.com auenterprise retailreport2024 or follow the links in our show notes or our blog. It's a brilliant report that is full of insights that could well shape the future of your e commerce strategy. Best of all, it's free. But that's enough for me. Let's get right into the conversation. We kick straight into it. A big thank you to Shopify for making this episode possible. We really appreciate their support. Here's Simon Beard and Hannah Yudena.
Nathan Bush: Simon and Hannah, welcome back to Add to Cart.
Nathan Bush: Here we go. We have a rule on Add to
Nathan Bush: Cart so that we actually don't re interview people. We interview people once and then that's it. You guys have broken the rules. So welcome back. Thanks for joining.
[Voiceover]: This is the day to be rule breakers.
Nathan Bush: I love it.
Simon Beard: Lots changing in this in our world.
Nathan Bush: So all right, I'm not going to waste any air time. We're going to get straight into it. So if you haven't listened to last year's episode with Simon and Hannah, probably pause, go back and hear that because we're going to leap straight from that into this year. So we're exactly one year on guys, we know that the environment's tough. It's been a bit of a roller coaster year. But let's start on a good note. What's surprised you or stood out so far in 2024? Simon, I'm going to start with you.
Simon Beard: For me, I'm definitely seeing the opportunities of how E commerce is shifting and the ease of doing the ads like we know the meta tax is there in E commerce. You just have to understand Facebook has built this brilliant model where they basically are the landlord of the Internet and tax the whole lot. And you have to understand how you have to work with that tax and how good you can create content, works out, how much you're paying the tax. And it's just such an important metric now is that I know for myself. I thought most e commerce founders were in the ad account every day, were understanding it, were building those daily standups around it, looking always knew what was the number one creative in the business at all time. And then it blew my mind as I met others and they'd never even logged in before. And I think where I and especially as I've got to meets, you know, I was part of my exit journey. Tons of different E commerce founders, tons of different ones. There is a crazy scary correlation between founders that are in the ad account and understand the fundamentals are the ones that are profitable and the ones that are too high level and too far out. Get a report from an agency once a month and flick through it and don't really is like and then they're just shredding fucking money. So that has been a sort of iron for me and I think we're seeing a lot of consolidation in that. There's just, there's not enough margin in there for you to have all this heavy in house team be paying an agency as well, paying the meta tax, not spending a lot on creative and content. That though you could sort of survive doing that in the. You know, especially on the COVID once in a lifetime perfect storm tailwind that is all getting sort of consolidated now. But the ones that are doing that and running that value chain super tight it is mind blowing the results and how big they can get in this market. Like I was just speaking the other day with a 25 year old, I don't want to mention his one because he did teach me a lot but 100 mil for staff and it's just like oh my God, like do you know how fucking long it took me to get to 100 mil? And I think I had about 500 staff, you know and it was like this. But it is the sort of what's required into that two to 300 creators working with a week, posting two to three times per week self serving of the ad scale. Not oh, I'm doing it once a day, they're doing it every hour and it's like oh okay. There's levels to it. And it is something that I've learned I think, you know, in walking away from culture kings. I was never always, I was never worried about, you know, the general pants or the David Jones or whatever. I was always worried about the 18 year old Simon Beard because I'm like man, that's the one I was. And as I've met a few of them I'm like oh Jesus, this is the new way and it's great to learn and sharpen the saw. And that one was a big huge tailwind off TikTok Shop which you know, in America it's not out yet in Australia but in America there's some, some pretty insane results with the ones that can figure that out. That's what I'm sort of seeing really change in the market. It's not all doom and gloom, trust me.
Nathan Bush: Fuck me.
Nathan Bush: You've like literally opening monologue and I've got about 20 questions, new questions beyond the ones that I've already given you to ask you. But I'm going to park that there. We're going to come back to some of that because there's some good stuff in there. Hannah, what's exciting you?
[Voiceover]: Yeah, look, I just building off of what Simon just said, I think my personal philosophy is that the best innovation comes out of burning platforms. And I really do think there have been a lot of different types of burning platforms that we can go into over the last year in particular that have popped up. So reinforcing what Simon said, it has never been more important to know your numbers and know exactly what you're doing from a business level. But I think broader than that there's also a lot of opportunity and there's a lot of exciting things that you can accomplish by being more lean. I know, Simon, you're probably going to talk about this, but content, content, content. There has never been more of an opportunity to reach more people in this day and age and to sell on more platforms. And I think as we, you know, yes, we can talk about the doom and gloom, yes we can talk about all of the tough things, but let's look at them as burning platforms and how we can utilize that pressure to change for better. And so, you know, we were Talking about before YouTube as a great platform in long and short form content, how you sell more through that. Like Shopify is just launched an integration to YouTube to be able to do that more easily now than ever and actually thinking more broadly around social commerce and being able to sell on multiple platforms, that is what Shopify is going to continue to enable. I think that is hugely exciting for brands that are well established but also those 18 year old Simons who want to start a business and grow really quickly. So there's a lot to be excited about, honestly, I love that.
Nathan Bush: Are you going to jump on the YouTube integration straight away, Simon?
Simon Beard: Oh, when I saw that video from Harley I was like this is huge because I got so excited because obviously seeing the results on TikTok Shop, but TikTok Shop anyone? That's it is so hard and so complicated, so clunky and you know, it just turns off for no reason. It's very in its infancy and how to get it but straight away the YouTube looks very simple to integrate. But the other thing that I really like is that long form content is so much better for the actual sale to be built because TikTok so you know, it's the fire hose of content. You've just got no attention span and already what you're seeing on TikTok shop, things that work are very in the gray area of marketing, right? Supplements, promising, you know, stupid stuff. And that's where sort of always starts in that but YouTube, I really love this because you know I've been you know a big part of AKA brands and seeing where's with Princess Polly build that flywheel. They did the, the YouTube hauls. You know, that was a huge part of building a 300 million YouTube US business was YouTube halls, girls doing them and, and these are like 15 minutes, you know, and it's like girls were watching. But that was an engaged shopper and that's where I was like with the YouTube integrate with this click shop shop pay button, two clicks while you're doing it. My eyes lit up. I was like, I believe this is as much as TikTok shop is a sort of revolution but, but I do think it's in a bit of a weird place in America maybe because it's going to get banned. Like in America you're hearing people hit 50% of their feed as TikTok shop like every second post and maybe they're just trying to make as much money as possible in case it gets banned and leveraging it. But YouTube, I really like this idea of long form storytelling, engaging content where you're weaving in overcoming those objections like why would someone not buy and you bringing that through all the content and you're just stacking and say I'm a salesman at heart. Like I know that sales is just transferring that certainty to someone but you know, building that up over time with the right way. I think creators will come up with it and just to have that bang bang shop pay 2 clicks. I can just see this being an absolute home run. So that's what I'm really, really excited about.
Nathan Bush: I love it. And I'll just mention TikTok, great sponsor of the show, we love them to bits, is going to explode here in Australia.
Simon Beard: I'm sure it will. I can't wait for the day of. I've been sort of bracing for Australia.
Nathan Bush: It feels like everyone's just got their strategies ready to go.
Nathan Bush: But what I love about what you're
Nathan Bush: saying there with YouTube is that it's shifting the way we're thinking about content again because we've been taught to kind of come back to that short form, real format, instant attention, lock it in. You've got one key selling message, straight up, hook out, sell.
Nathan Bush: Tell us about.
Nathan Bush: And I'd love your thoughts on this, Hannah as well. As we're expanding out now into long form content as a selling mechanism. Surely let's spitball some ideas here. What are you thinking beyond unboxing videos?
[Voiceover]: Oh, look, I'm. I use my Mother as a litmus test for everything. Right. My mother absolutely loves buying from a woman by the name of Natalie Angel. It's let me try before you buy now, every Friday she has a live where she goes and stands in front of an Instagram feed or whatever it is and literally just tries on clothes and gives those lifetime reviews of the fit on. This one isn't quite right. If you're, you know, a certain size or a certain height, this isn't going to be a good one for you. She's built such an amazing community off of quite literally just doing that and having really honest, real raw reviews of garments. I think that is the future of what long form content is going to eventually. It's already morphed into right now. Natalie angel could tell my mom to buy anything and she would. And the thing is, is that my mom doesn't just buy it. She will then go back onto a community and say I loved this recommendation because of every xyz, like everyone else get on board. And that's the power of it. You know, that's where I'd kind of see that. And like there could be so many different variations and versions of that. But at this, the very simplest of of forms is building a community where people get to speak to other people around common problems and pain points.
Nathan Bush: There's a bit of authenticity in that too, right? Because it's like actually I don't need to clip this into 20 seconds, 60 seconds. I've actually got to be more time and space to be the true me.
Simon Beard: And as you're creating that authentic connection, like it's the most important thing in sales is like you have to have rapport first. If there's no rapport, there's no sale. But once you have that connection, the feeling of commonality which is built through trust built is that whoever has more certainty influences the other person and then bang. And this is where those, those right way to close. And it's so easy to buy. And I just think the long form too, like it's the short form is just this very impulsive, hacky buy throwaway Temu stuff sort of. Yeah, that's going to bomb through that TikTok channel completely. But I do believe for the hundred dollar plus items all that this is where this YouTube and how it can be put together. The curation I think is so important, right. The outfitting, you know, but how you're curating and curating looks together, explaining those, those little details that you can't, you can't always get it through on a pdp. You can't get it through on a. No one reads a description or thing anyway. But it's like that's where that authentic. It really feels to me is like a big opportunity. But my idea would be, okay, how are you creating content from your stores? Like my biggest sort of secret as culture kings is that the stores I put is they were studios, right? They were the content generating machines that we'd been doing since 2017 of the Snapchat days. Each one with the individual Snapchat right through to is that they. They are just such a great place for authentic content. You've got the backdrop, you've got it all. You've got the people that are knowing like they're selling this stuff every day. They know where someone buys this pant, right? It's because the way it sits, the fit, the fit around the ankles, that baggy but not too baggy look how you can sit it over the Jordan fours or tuck it under. All those little details that I've always sort of found when you translate through to online, it's just. It gets lost and it gets. But those little things, when you're in the store and you're dealing one to one with customers, you see their eyes light up. They're the moment, that's when they make that purchase decision. That's when they're like, I'm sold. And so that's where I sort of see. I think physical retailers that aren't creating content out of their stores are just absolutely mad. Throw out all your SLR cameras, destroy them all. Just buy one iPhone for every store and one road mic and run a tally and a comp and say if anyone gets a view video with a million views, you'll pay them a thousand dollars cash. And you watch them create content and you'll have to sort of. Because chasing views, they might do stuff a little bit edgy, which can be off brand. But my thing is in this fire hose world of TikTok, it doesn't matter. No matter how bad you think it is, trust me, everyone will forget it in two friggin minutes.
Nathan Bush: You know what we should do?
Nathan Bush: Should do a Shopify promotion which is like an SLR buyback campaign.
Nathan Bush: So I was like, you know, you buy back and just replace them with shit your team can use.
Simon Beard: Yeah, Rode mic and the iPhone and it's like, yeah, it is always the.
[Voiceover]: There you go, Harley, if you're watching. Yeah, the buy back end, he heard it here first.
Nathan Bush: I've got a question on that.
Nathan Bush: And I think it links into what you've been doing at Shopify this year. Hannah around. Does it actually change the retail model as a whole? Because as we build authenticity, as we build audiences, essentially, not just customer bases, does it change the way that products are distributed? Because, Simon, you did a Great post around Mr. Beast's distribution strategy for his last deodorant. And we've obviously seen.
Simon Beard: Oh, Jake Paul. Yeah, yeah.
Nathan Bush: Oh, Jake Paul.
Nathan Bush: Sorry. Yeah, yeah, yeah, Jake Paul. And we've seen it with Mr. Beast as well. He's kind of taken a different approach to a D2C approach.
Nathan Bush: Does it also change once you own
Nathan Bush: an audience, does it change your retail options as well? Rather than just be a D2C player, does it change how customers get their hands on it?
[Voiceover]: So it does in the sense that there's never been more channels to be able to sell through at this point in time. Right. And the aim of the game should be to be able to sell everywhere. And if you think about the fundamentals of that is that you need to know your audience, you need to know where they're going to be and you need to meet them there. Right. And conversely, it might be that you are a traditional DTC retailer, but actually, you know that most of your customers are shopping in store. And so you've seen this blend of traditional D2C players moving into retail storefronts. And then obviously traditional retailers now really wanting to take that. That online game for store. I think High Smile is a perfect example of this. They have come out number two in their category in Woolworths, which is unbelievable.
Simon Beard: And you know, when that launched in store, I was the hater on it. I was like, no one's gonna buy $18 toothpaste at Kohl's. Like, you know, it's never. But you know, what was the breakthrough that was the aha moment for me was like, but if you worked it out, they would've spent more on advertising then 10x any other toothpaste brand. So they had so much top of mind awareness that, see, it's just like the Red Bull theory, right? They spend it all top of mind because you only have that split decision to make it stand in front of the fridge at 7:11. And that's when it's like Red Bull wings, all the frigging. But that's the. That is that brand implant that makes you make that decision. And that's what High Smile had. And they didn't even realize they'd spent all this D2C building it up. That once it Went there. Unbelievable. They're like, their results are just. And that should be, you know, so much where I'm like for some of these is just gassing the D to C and yes, grabbing that market share because you can then just jump over and then bang. And even at a premium price point, like so premium, like I thought, I'm sure a lot of us thought like oh that's it's such a pressured consumer or thing. But it's, it's nowhere near as I think people way overestimate that sort of stuff in their own sort of bubble and these examples just prove it to us.
[Voiceover]: If you think about the basic four Ps of marketing as well, like they recognize that they had to have variety in their product and if we think about their audience, obviously the D2C is probably attracted more of that 30 to 40 year old buyer. But if you've got a bright pink strawberry flavored toothpaste that's sitting in store, all of a sudden you're appealing to children and you're appealing to potentially a new demographic. So I just think that they did that transition really well. And honestly my opinion and perspective on the market right now is that the players that have done DTC really, really well are going to be the retail disruptors. And I think that that's because they know their audience really well. As Simon's just said, they've done a great job at that top of funnel awareness and when they come in store they're going to know how to do it right. And we're seeing more and more examples of that. So has the retail model changed? Absolutely, but for the better because it makes it easier and easier to be able to distribute, market, sell your product from wherever. It's also giving new opportunities to those solo entrepreneurs to launch amazingly successful businesses incredibly profitably.
Nathan Bush: Yeah, and that was one of the key stats that I thought came out of the research report that 43% of Australian customers prefer shopping in store. Last year that was 38%. So that's a big jump.
[Voiceover]: It is, but you know, it was 31% that also prefer shopping online and 28% where they say I don't care. So yes, that stat in isolation is impressive, but the reality is there are lots of people that like shopping in every single channel. You have to not just focus on one type of demographic. So your experience and what you offer has to show up consistently across channels as opposed to us just going I do in store really well, it doesn't matter about my online, it just doesn't cut it these days like as a customer who is, I'm a very picky customer. My expectations are sky high and I know I'm not alone on that front. And so every brand has to be thinking about setting the right expectation and experience across all channels.
Nathan Bush: Simon, if you were starting a new brand today from scratch, would you start at D2C or would you go straight
Simon Beard: store, straight up the money like I got now just do the stores as well because you know it's so much about building that experience and content out of it as well. If I didn't, I had to do it. I'd just start and build that really tight little flywheel and test the product market fit till you know, you know you've got it humming and then, and then go into stores. But I do think when you get the store and online working so well, creating the experience, the feeling but I would do the stores of such extreme thinking. How do you resonate a memory in it? This is just such an important thing that people forget is their chance of a store. Unless there is a shift in a state like your emotional state changes, unless there is some change, there's you'll never remember it. And that's what I always position Culture Kings I wanted like okay, if someone's going to pack fair is going to walk through all the stores if you just ran up and interviewed end of the day and say what is the one shop you remember from today? I wanted to say that Culture King stores there was a DJ and this guy shooting basketball and then we got the chance to win these shoes in the claw machine and the staff was so cool and it was like that's what I wanted was to resonate that memory from the experience from shifting their state. And this is like I think there's so many ways to do it but you have to think of that first because then you create a brand experience that when you smash them again especially use Shopify POS in store you get the phone number, you get the friggin email right in the kiss. When they get that SMS again or they get hit with an ad on Facebook again that memory comes back ideally the positive experience and that they'll actually see your ad. Because see that's the thing we forget so many of this content. You can be doing it but they're so blind to it. You know. Next time you're at a like next I always do this next time you see like a Gen Z kid or something at the airport on their phone just watch how fast they scroll. It's mind Blowing right how quick they're going through it. And so when you think you're getting an impression, it doesn't mean anything. It's it's on the biggest one on hook rates the first three second you only look at past that because otherwise it's just nothing.
Nathan Bush: What's a hook rate? How do you define that?
Simon Beard: So in the ads you create, your hook rate is basically how many people watch the first three seconds as a percent. And it's one of the biggest sort of like I can help so many people straight away. It's like anyone, it's like with my retail team and give me your best ad, I guarantee I'll fucking beat it. Like, like because all I'll do is I'll just tweak the fucking hook and then bang. You know, because it's so many are still at 30% hook rate. And then if you can change that to 80%, you've paid for the same impression but you've got three times as many people to see it. It's just a bit of a. But to switch it back to though this the store experience creates the brand that they'll remember. So yeah, if I was doing it again, I'd do these crazy wild over the top store experiences. That is these holy shit, aha, wow. Pull my phone out moments, capture that, capture the customer, capture email and then hit them up. And as long as you, you'll bring that feeling back when they see the ad and then when they're in that I've got an event, I've got this thing to go to. I need something new to where that ad will hit them at the right time. Cause the Facebook AI knows everything. And then it will click through and convert and hit that Shopify button in two seconds it's done.
[Voiceover]: I've got a great experience. But the digital, great example. But the digital version of that. I don't know whether you've interviewed him yet. Bushy. But Jared from Some sometimes, always.
Nathan Bush: Oh no, we're talking, we're going to do it later in the year.
[Voiceover]: I'm going to ruin the story a little bit. So this can be the pre tease but he does something in that business that I just thought was so genius, particularly in a market such as selling wine online. Right. And they have really beautiful site. Go check it out. It's awesome. But every single time somebody is a first time purchaser, what they do is they send a personalized video of them walking around the warehouse giving that kind of here's where this wine has come from. Here's a little bit about this wine. Here's how you can enjoy it, here's what food it goes well with. We love this choice because of xyz and it's so personalized that they quite literally have people sending them videos back of them drinking and enjoying the wine. And oh look, here's how I decided to drink it. And I'm like, that is genius. Because it's the last thing that they remember. It's the last thing that they go. This brand had such a personalized touch point with me through a digital medium as well, which is actually very similar to the experience I'd get in store. But I love that as an example and I thought it was a good build from what you were talking about,
Simon Beard: Simon, that my biggest advice for those young brands at the thing is do that unscalable stuff you can't do when you're big. Like if I had a brand, you know, it's like get your first thousand customers. I would DM everyone. I would follow up every individually video message, every single one, you know, thanking them. Show me your outfit engaging that back. Because you just can't do that at scale. But you can create those, those raving fans that can just be your biggest advocate. And that is one of the biggest opportunities for the smaller brands right now is doing the unscalable. And yes, there's going to be ways to bring this in with AI and everything but. But it's crazy too like anyone in ad accounts now is like how this. Because the lo fi, you know, winning right now. But these founders ads and how much they're still like cutting through so well because it's that authentic nature. I think we've got such a bullshit meter now for ads. That's why the high production doesn't work. The second you see that pro footage, like they're just scrolling, it's gone. And you'll see that in the hook rates. That's why I'm a big one on smashing all the SLRs.
Nathan Bush: But what's your favorite hooks at the moment? What's working?
Simon Beard: Street interviews are absolutely fire. But I mean this is what I would say is that I think they're going to be fire for a while because they're hard to do. Like it's actually take skill to stop someone on the street, right and get rejected 100 times and thing. And then actually you got to put in the work to get some gold out of them. Yes, you can set them up and stuff but they're. I sort of feel you can see through those as well. But those are still absolute fire. Mainly I think because golden rule of advertising is the ad, Scott, to not look like an ad. And because that's so much the organic that's driving through and it's just this authentic nature. As much as you can get that test and that feeling and get across from the. Get that wow moment, get the aha,
Nathan Bush: you know, boring practical question. Do you actually have to get releases from people you stop on the street to use them in ads?
[Voiceover]: I don't know.
Simon Beard: That's for somebody like how long is it going to last? And just take it down again.
Nathan Bush: Yeah, I love it, I love it.
Simon Beard: But you could create a docusign and stuff and yeah, I'm definitely a bit scrappy. That's where it's like with that once it got big in public company it's like, oh, it feels so hamstrung. You know I want to just, I want to. You know, I think I'm still a carney at heart.
Nathan Bush: I love it. What we're talking about though, there's a lot here that we're talking that's scrappy, that's authentic, that's behind the scenes scenes which kind of flies in the face of where Run's running with AI. Do you reckon it's a bigger opportunity than ever to almost be not anti AI, but being very specific around where you use AI and where you just buck the trend and go no computers touch this. We are going to be as just scrappy and authentic as possible. And you know, this is an AI.
Simon Beard: I think though this is what's going to happen that AI content. I'm not saying this. There's. I think that's part of your building your content flywheel. You need someone organizing UGC creators and putting that all together. Someone running your own team of creators where store content. This street interviews. But then as well will be AI content generators on your team that are just creating stuff to go with it. But I do get worried, I do get this feeling. I feel we've already. This would be interesting if you think this as well. I feel we've already developed such a bullshit meter for Chat GPT. Like how much does it piss you off when you see a LinkedIn post written by Chat GPT or someone sends you an email or a cover letter to a resume like please don't ever do that. That is like. But this is the thing. We can see it a mile away when it's written by it and I sort of feel the same way. We've developed that so fast. We're going to see it for content as as much as it's going to be good. I don't know, I just think we have this amazing pattern recognition. We can't quite put the finger on it the same way we can pick it up but because it's going to get flooded with it, it's so easy to create and it's no barrier to entry and every most crazy idea is going to do it. I do think we're going to see crazy like that whole, you know, fiction category from movies. Content across the world is just going to be completely AI because you're going to be able to think of the most crazy stuff you couldn't imagine and create it with AI.
Nathan Bush: But can you imagine the 18 year old Simon Beard? He'd be going nuts with creating content left, right and center with AI, wouldn't he?
Simon Beard: You know what? I'd be my 18 year old self right now would be all over these YouTube faceless channels and then getting these YouTube affiliates, you know, with the Shopify and then just building this friggin like one man band, just crank. That's what I'd be on right now.
Nathan Bush: That's awesome.
Nathan Bush: Hannah.
Nathan Bush: Shopify released a whole bunch of AI features in your drops this year and it's been a real central theme. How are you seeing retailers adopt those features but being able to build brands that are authentic and mean things to people while taking away some of the stuff that doesn't add value?
[Voiceover]: I think just adding on to Simon, like creativity is not dead. If anything it's more and more important to be creative because that's what drives and relates to that authenticity that we were just talking about. And you're right, people can smell Chachi beat from a mile away. And so it's important that we don't get carried away with that. The unsung application hero application of AI and automation that will never go away, will keep on getting better is through business efficiencies. All of those mundane tasks that you don't want to do automated. And why not? Like we should be leaning into it from that perspective. I use ChatGPT as my Google search. You know Simon, as we were talking just before, I literally typed into chat GPT, what is a hook? Well, what are the top 10 hooks that are currently being used? These are things we can use it as prompts to get us better at thinking and thinking broader and more creatively around the way in which we're doing things. So the tools that Shopify has released are all about making Life easier for you to run your business which is directly related to those activities and tasks and all of the mundane things in the background that may have taken you five hours but you can now do in 15 minutes. And that's where we're going to see it just evolve and get better and better and better. And I'm personally really excited for that day.
Nathan Bush: Simon, you said before that you spend a lot of time in ad managers and that's where founders should be spending time. Obviously a lot of, even from a marketing perspective a lot of that is automated. Now where do you think that it's a no brainer just to go let the machine take control from an operational perspective and then where do you need to keep your eyes on the ball?
Simon Beard: It's more and more the, the targeting is completely gone. It's the creative does the targeting but and it's so easy. Like you can run a real simple creative testing advantage plus two stage setup, manual bids. But it's like crazy how much like the DPA and stuff it's a, it's a very simple setup and it does not take long to learn. It used to be all this skill. I remember years ago we used to chop all this data, the lookalike audience, all the hacks that we can like. None of that is there anymore. It is so simple. But the key is being able to look at the data and understand it and then take action from it. But this is the key. If the founders looking at the data they can make such better decisions. It's like take Coach Kings for example. Say when I was running it, if we had an agency we would have had this Nike shoe. Oh this is getting seven row ass. Put all the budget behind that. But I'm like but wait a minute. This same water jacket is getting six ROAS but I get 80 margin on that. The same the Nike shoe. I'm going to sell them anyway. Like so I turn the Nike off and triple the budget in the same order. And the other thing I look at repeat customer by product. That's a kilometric because one you find these amazing products that when someone buys it they're way likely to become a repeat shopper. But as well you find toxic products especially for men. This is really important because we don't return stuff, we just never shop again. So you might find something you're selling at once and they're never coming back. But that was the thing is that same order jacket had an 80% repeat compared to Nike. They're flaky ads, they'll just go whoever's cheaper on Google. So it was just. And see that's where the difference is. An agency would have just mashed that Nike. Everyone's like, yeah, we sold out the Nike. Where I would have been scrimp, you idiots. This is what. And this is the alignment right of understanding the ad account is because when you understand it and this the founder, the CEO just has so much more context and knowledge than anyone else. It's not fair. They know, oh I can get that St. Lauder jacket in 60 days and still smoke it for the rest of winter. Or I could, if I made a thousand of them, I could land that 20% cheaper and then put even more into ads. And then they're learning off the creative, they're learning off all these parts of the business and it's, I'm not ripping on agencies. The thing is if you have an outside agency and they don't, they can't see contribution margin, they can't see profit. Like they're flying blind and then they have no creative to work with. It's just like it's not fair. And that's where that model needs to change. But it's especially as I do it, I'm like, like these founder CEOs, it's like don't palm this off. Like you need to learn this because if you are an E commerce company, I hate to say it, you're a frickin marketing company because you have to have that as part of you. And just understanding it is so important because whatever platform comes next, they've all copied campaign ad set ad level. They're all copying meta, they're all doing it. It's, it's going to sort of all relate in a way. And it's, the thing is if you look at it every day, you have this touch and feel on the customer because you're seeing what they're responding to. Why are they clicking on that? Why do, why did that work? Why did that one not work? Which I thought was a banger and it just 10% hook rate and it's like, oh, the hooks cooked. Just change a hook and bang, you're away. I love that the hook's cooked.
Nathan Bush: It's the best thing ever.
Simon Beard: That's, that's my. Yeah. On the being in the ads manager. It's just don't get to think you're too big or thing like I was doing this when we were turning over 300 freaking million every day. So don't. Yeah, don't think you little $10 million business. You're too good for it.
Nathan Bush: I love it.
Nathan Bush: Hannah, I know that you work closely
Nathan Bush: with a lot of agencies here in Australia, both from marketing and development perspective. What are you seeing from the best agencies in how they're evolving and changing their services to E Comm clients?
[Voiceover]: Oh, it's such a great question. And I work with a broad spread. I like to look at it from, from this perspective. The. The most value that an agency can provide is the fact that it works across multiple different brands, which means they get really good at identifying problems and common problems. And so I say this to everyone I work with, learn how to solve problems in a scalable way. And the agencies that are doing really well at the moment are not just doers, but they're consultants. They take a very highly consultative approach to solving problems and provide solutions that are easy to implement, easy to scale. It's funny. And Simon, you probably hear me out on this one. It's so easy to say you do that really well and much harder to execute. So. Yeah, but we're really lucky in this, I think in this region in that there is so much to choose from and so many great agencies that have scaled multiple brands. So, yeah, if you ever want any help, you know, you know where to come because I can give you the honest reviews.
Nathan Bush: I love it. That's a pretty good offer. I know a lot of, a lot of people want to take you up on that. I think there's a theme coming through this as well and we kind of touched on it last time. It's a around speed to decision making too. Like, I don't think you can just be a service provider. You can't just be a manager, you can't be an analyst. The value you bring to an organization is in making decisions quickly and executing them. Is that fair?
[Voiceover]: From my perspective, Absolutely. And if we look at again, just taking it back to the Australian retail report, which is second edition, so everyone jump on and read it and I'm sure Bushy, you will attach the link
Nathan Bush: for everyone to share that on the blog.
[Voiceover]: Fantastic. Love it. If you look at where a CTO is spending their money at the moment, it's business intelligence. And why is business intelligence more important now than ever? It's because the data is needed to be able to make good decisions and make them quickly. And so I think it's fairly widespread that this tech is just getting faster and faster, faster. You need to be ahead of it. To be ahead of it, you need to understand what you're currently doing, what's coming and then analyze it to make the decisions on what to do next.
Nathan Bush: Simon, do you reckon you make the best decisions inside of business or outside of a business looking in?
Simon Beard: Well, I still feel inside you've got more context but I'm a huge one of especially as a CEO entrepreneur. You just have to have outside people that you can pressure test your big decisions with. I think it's one of the things as CEOs, entrepreneurs, right. You, you've got to have an ego to start a business because everyone else is like against you and it's a bit of like this and if you look at, you've got an over optimism bias because even the odds of starting a business, you know, 90% fail in the first three years or whatever, you've got to buck that trend. But what I've seen though is when they grow the ego can, can really, that's, that's the thing that can bring them undone. Especially like I saw this heaps in fashion. Right. You've got everyone around gassing you up. Yeah. So that's a great idea. Yeah. Let's put stripper poles in the store, you know, and it's like. But if you don't have anyone that will push back and really pressure test and you know, at your level I think that's just so important and that's like I was thinking with the agency, the consultant part where you can do it but you know, because that's where they've got to be that right relationship which is so important. But at the end of the day as a, as what I always had is I had an advisory board but I still own 100% of the shares. It's still my decision at the end of the day but I liked to have to justify it. I like to see because I've got blind spots and I push my ego barrier and this was, is so important I think as a, as an entrepreneur too because you've, you've got a, it's a double edged sword that ego. It's the thing that can do it and drive it but it's the thing that can just run you blindly off the cliff as well.
Nathan Bush: There's something nice around making sure you've got that person next to you whether you are a founder or whether you're a manager or whether you're just starting your career that you can bounce things off that doesn't have a vested interest. So they're not an agency trying to upsell you or they're not, you know, they're not someone else in Your team trying to get a promotion to tell you what they want so they get the promotion. It's like actually they can give or take it, but here's my advice.
Simon Beard: Yeah. And you know I did because Shopify had these amazing meetups that I would go to and I always was learned so much and those became part of my advisory board. That's what I actually did at starting this One Life club for that was I wanted to recreate that the magic that happened at those Shopify meetups. But as well adding in a bit of the gray hair experience as well. So you got offense and defense battling it out and yeah, that's what I sort of. But it was like I really owe Shopify putting together those like I remember those were the nuggets. I think you know Danny from Milk Run when he had koala and I was like oh my God. That I was like oh my God. Manychat and Snapchat, this hack. And it's just, it was. Those were just worth, you know, thinking back, just millions and millions of dollars. And Shopify always been so good at that. Creating that entrepreneur ecosystem. That's what I wanted to sort of create and share for these other ones that don't have the glory of Shopify as well.
Nathan Bush: So in the last 12 months you mentioned before you were, you know, working with these up and comers, these 18 year olds, 20 year olds with these big ideas. Got any inside word on good ones coming through that we should be keeping an eye on?
Simon Beard: Well, just go through the TikTok shop top brands and this is something I always did as an entrepreneur is like you've got to stay learning and look like the numbers don't lie. Check the scoreboard. It's not these awards or crap, they're just all made up anyway. You actually go for the list and see who's ranking. What are the. I would rank. I remember this in like 2017 I found like the top spending ads in America and there's this one iPhone case. I hunted down the kid, he was 18 years old. Do you ever remember seeing that ad with the stick on the back and it was like the chick at the Mirror squad. Anyway, spent $6 million on this one ad, you know, made a fortune. 18 year old kid, I hunted him down and emailed that paid him $1,000 for him for an hour. And he taught me it, how he did it, this manual bidding and every night he'd reset them at 12 o'.
Nathan Bush: Clock.
Simon Beard: They get the learning. He basically it's what Advantage plus does now automatically but this was before it. But it was like this kid had just unlocked it. And that's what I always try and hunt down and see is who are the actual ones that are actually making the breakthrough, actually got the wins because as well too, they're not necessarily. They don't have the money off the table and it's all fun. Like me. They're. They're all up and they're hitting the gas pedal as hard as they can. They're not going to tell it on no podcast or something. They're just going to gas it. But that's how I like to learn and stay. Stay on the edge and stay relevant. Because this is the thing, is that you can get around and everyone can sort of say doom and gloom and stuff.
Nathan Bush: You wouldn't have to pay $1,000 to have that chat now, would you just go home, Simon Beard. I want to have a chat.
Simon Beard: Well, now, now, now. It's good. Like, it's good. I can just hit them up straight away and I'm on the call. But that's part of, like, why I wanted to, you know, create my own personal brand and stuff out there too. You know, it's. I really sort of see there is a huge benefit there of just cutting through and saving a lot of time. And. And I just love learning because it's. This is the, the funnest part about E commerce, right? It's all changing. It's all like the, you know, where we think from the days of bloody Magento and couldn't sleep at night, the thing crashing before Shopify and then Shopify unlocking all this and the glory days of, you know, afterpay and, you know, all these magical innovations and how much we took advantage and by staying on that edge, staying on the new, testing, learning, seeing what works and what doesn't. And then when it does, this is the key. You got to throw down, you got to hit the pedal, you got to back the truck up. And I see that a lot with entrepreneurs where, you know, I'm helping now, my retail team at 1, and I can do the numbers. And I'm like, you, this is to the moon friggin back. The 3,000 order this jacket. They're like, oh, I'll get 300. It's like, no, it's like, it's. But it's just that risk tolerance, they're not used to. You've got to. And I suppose that's something as you, as you grow as an entrepreneur, you grow that threshold of control and the numbers change.
Nathan Bush: You've got to get that merch sorted for one club.
Nathan Bush: Like, back the truck up, the hooks cooked.
Nathan Bush: Like, you've got so many phrases that would be just flying in the ecom merch space.
Simon Beard: Ah, nah.
Nathan Bush: Yeah. Yeah. I suppose you got some bigger fish to fry, I reckon.
Simon Beard: Nah. But it's. It's great. It's. I'm having a lot of fun and, and learning and growing and I love. I love helping that entrepreneur community in Australia because it is this thing of, like, you know, what is Australia's like, the highest Shopify stores per capita?
[Voiceover]: Isn't it something Hannah, I cannot confirm or deny.
Nathan Bush: She's searching chatgpt as we speak.
[Voiceover]: Yeah, just give me a second. But we absolutely punch above our weight from a global standpoint in that we are one of the top markets for. For Shopify, which is telling because there's a lot of stores globally on Shopify.
Simon Beard: Yeah. And I just want to encourage those entrepreneurs, but give them as much the real facts and stuff. And it's not like. I'm not saying it's easy or it's like this lifestyle business. It's the freaking opposite. It's 100 hours a week. But it's. It's. You got to be able to do and know the foundations of every part of the business. But when you do it and you connect it and you pull it off and you see those, you log in and you. You're excited to check the ads manager to see did that ad work? The dashboard, when you see it up and green to the right, it. It lights you up. And. Yeah, I want to see more brands in Australia, be these global brands and. And I'm sure they can. You know, it's like all this stuff that I learned, I didn't invent it, I just learned it and did it and, oh, my God, it worked.
Nathan Bush: And get your hands dirty doing it.
Simon Beard: They can do it faster and bigger than me. I'm sure it'll just keep happening.
Nathan Bush: That's brilliant advice. I love it. You've got me pumped.
Nathan Bush: But, Hannah, that's what I've loved about this conversation.
Nathan Bush: We kind of started going. It's not all doom and gloom. There's plenty of opportunity and the retail report showed that too. Like, there's something like three in five Australian businesses are looking to expand internationally in the next 12 months. 60% are looking to increase their marketing spend. So it's definitely not doom and gloom to close us out. Hannah, tell us around your advice for the next, say, six months. We're recording this. The end of August, going into a little bit of peak planning, peak trade soon, what's everyone going to get right?
[Voiceover]: Oh, goodness. Look, I think just following on what Simon said, it's an ever evolving journey. So you're constantly learning. I think actually it's a great time to try new things, try new strategies. Obviously, we are coming into peak periods, so get your fundamentals right, know your numbers, know your audience, make sure that you're, you're spending money in the right channels in the right way. Think about how you're really providing value that goes over and above discounting or pricing to your customer base. I think that's a massive one. Like loyalty takes many different forms. Value takes many different forms. Don't assume that everyone is expecting a discount. Think creatively about what you're doing there. And look, it's typically not the best time actually to think about international expansion during peak period. But there are so many brands right now, Australian brands in particular, that are absolutely killing it overseas. So if it's not in your roadmap over the next six to 12 months about capitalizing on the fact that you can capture an audience via your content and online channels in other markets, particularly the U.S. you'd be crazy not to look into it. So, yeah, I know that that's many different forms of what you should be looking at doing, but there is so much going on. Just stay focused on the fundamentals and
Nathan Bush: don't cook the hook.
[Voiceover]: Don't cook the hook. Goodness. I need to get more into my hooks now, I think.
Nathan Bush: Love it. Guys, this has been a lot of fun.
Nathan Bush: We've got to none of my questions
Nathan Bush: that I planned but it was a great conversation and really appreciate it. Hopefully we can do it again next
Nathan Bush: year when the new report comes out.
Nathan Bush: Thanks so much for giving us your time and your great insights.
Nathan Bush: Always great fun. Thanks Simon. Thanks Hannah.
[Voiceover]: Thanks Bushy.
Simon Beard: Thank you.
Nathan Bush: All I can say is can we please make this a yearly tradition? One hour is never enough with Simon and Hannah. Not only do they delay deliver a wealth of practical tips, but it's just such fun, especially when we go off script. Here are my three key takeaways from this episode. Number one, master your ads. Simon highlighted that successful E Commerce founders are deeply involved in their ad accounts on a daily basis. Understanding and managing ad metrics is crucial for profitability. His advice was that those who leave it all to agencies often end up shredding money without knowing what works. We heard this not long ago too from Anita from Hero Packaging. And even with all his investment in AI and him stepping away from the day to day of business, Simon remains hands on with his ads. AI can help, but it's not a substitute for staying closely involved with one of your biggest investments. Number two, Omnichannel is essential Hannah pointed out the growing importance of omnichannel retailing, especially for D2C brands who want to grow. With 43% of Australian customers preferring to shop in store and many more spreading their shopping across various channels, it is becoming crucial to have a physical presence. But as Simon noted, it's not just about being present everywhere, it's about about creating memorable standout experiences like Culture Kings did. Make sure your omnichannel approach not only exists, but leaves a lasting impression. And number three, don't cook the hook. Simon stressed the importance of the hook, those crucial first three seconds of an ad that either grab attention or lose the viewer. He advised brands to focus on improving their hook. Hook rate the percentage of viewers who stick around after the first three seconds as this can make or break your ad success. Thanks again to Shopify for bringing us this bonus conversation. If you haven't already, make sure you download Shopify's 2024 Australian Retail Report. You can find it at shopify.com auenterprise retailreport2024 or find it in our show notes or our blog post. Go give it a download and see what insights you can come up with for your business. See you next time. Before you go, we'd love to invite you to join our free e commerce learning platform, Add to Cart Campus. Meet other professionals and learn from e commerce experts to take your business and your e commerce career to the next level. Register to join Campus and add to cart.com
Simon Beard: now.
Nathan Bush: If you enjoyed today's episode, make sure you share it with a friend or a colleague. Or even better, leave us a review on Spotify or Apple. It really makes a difference.
