Simon Beard: You have to say no to some customers. For me, I always built cold chickens as the first shop you go to as a boy without your parents. We didn't want the parents in their shopping. This is where my mum or their friends would complain, the music's too loud. And something I'm like, good, get the out.
Hannah Yudena: I think this might be bushy and you heard it here first. I think this is hot off the press.
Simon Beard: I remember when I did the deal, I was looking as we were going to list and then what we were originally going to list for. I'm like, I'm the biggest idiot. I've sold this so cheap.
Hannah Yudena: Welcome to a very special bonus episode of Add to Cart. This episode is brought to you by one of our partners who make Add to Cart possible. We're going to dive deep into an e commerce topic and unveil the secret tools that leading Australian retailers are using to grow their business. Here's your host, Bushy.
Nathan Bush: Hello and welcome. Welcome to a very special bonus exclusive episode of Add to Cart. Did I get you there? Special bonus, exclusive. All the big words, but I'm so excited about today's episode. It is brought to you by Shopify and features two absolute superstars of the e commerce industry. They need no introduction at all, but I'm going to do it anyway. First up, we have Hannah Yudena, head of partnerships for Shopify in Australia and New Zealand. Hannah works with agencies to develop and grow their footprint within the Shopify ecosystem. Joining Henna, we have Simon Beard, co founder of one of the most exciting retail brands Australia has ever seen. Culture Kings started from a market stall at the Carrara Markets to a value of $600 million in 2021 and a successful partial exit which was one of the biggest private retail acquisitions in Australia's history. Our chat today is going to focus on the findings that have come out of Shopify's most recent market research, the Australian Retail Report. Shopify surveyed over 200 medium to large Australian retailers across 11 verticals, along with over 1000 consumers to deliver over 30 pages of current findings into new customer behaviors and practical tips for growth pathways for Australian retailers. There are so many stats, retailer stories and practical tips in there, some of them which we'll cover off today. Now, if you want the report, you can visit shopify.com au/guide Australian RetailReport or much easier follow the link in our show notes or on add to cart.com 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 talk about creating profitable experiential stores, not just treating them as marketing exercises. We get into when the right time is to sell your business. With Simon sharing some personal insights on why and when he chose to sell. And in an Add to Cart exclusive, Hannah gives us the details of a new Shopify AI feature which will give retailers intelligent insights on demand. All right, there is so much to cover. Let's get into it. Thanks to Shopify for bringing us this conversation. Here's Simon Beard from Culture Kings and Hannah Yudena from Shopify.
Nathan Bush: Simon, Hannah, welcome to Add to Cart.
Hannah Yudena: Hello, Bushy, Great to be here.
Simon Beard: Thanks for having me.
Nathan Bush: Oh, great to have you on here. It's been a long time coming for both of you. How have we not had you on yet? I don't think we need any introduction. If people don't know who you are that are listening to Add to Cart, then there's something wrong. So we're just going to get straight into the content today. What is right in front of me is the Australian Retail Report, which has just been released by Shopify. And there has been some really interesting statistics and findings come out of that that I want to get your opinions on and your experience to kind of bring that to life and to help some of our listeners implement those findings in their businesses. The thing that where I want to jump off on is one of the statements in there, and this is quoted, is that most shoppers no longer have favorite brands. Simon, as someone who's built one of the greatest brands in Australia, how does that sit with you?
Simon Beard: Yeah, I could definitely argue it because if we don't have brands, we'd all just shop at Kmart. Right. The thing is all these little niches, all these exist is because we make our decisions with emotion and then we justify with logic. And I know that was at first principles in building Culture Kings and from a brand perspective. And you know, I didn't come up with this. I studied the greatest brand person of all time, which I believe is Bernard arnault, you know, LVMH Group, you know, he's extracted, he's turned a $15 million investment to 200 billion, you know, which is like basically one of the greatest returns pretty much ever. But it's how he understood is understood the power of brand and that key people are buying off emotion. And this is where this comment in there, I definitely, you know, would argue with it. And it's an important point to take in a lot of surveys too, especially I think they're so powerful. B2B. But you've got how you interpret them. And I always have this saying is people vote with their wallet, not what they say. And you know, a typical example is everyone talks about, oh, shoppers are so about sustainability and this. Well then why is Sheen the fastest growing retailer of all time? Of all time. No one's come even close. Which is probably the most unethical, unsustainable retailer of all time. So, you know, there is these. How you interpret and how you make these decisions is so important. But for my thing is, I still think brand is so important and it can be so easy in these tough times to forget about brand. Right. To be like short term, we've got to hit this. But brand is earned in drips and it's lost in buckets. And keeping that value for the long term is that to make sure you get realigned of that brand is the most important thing.
Nathan Bush: Yeah, and I love that you touched on value there because I think it's really important to unpack that statement because I've literally pulled out a sentence over a. What is it, a 40 page report. So there's a lot more context behind that.
Simon Beard: Exactly.
Hannah Yudena: Yeah. But do you know what, though? Bushy, I was talking to one of my colleagues yesterday. I love the question because it couldn't make a really great debate. You can see a lot of people having completely different perspectives, which to be honest, if you're looking at why the report was written and the context and the history of. Okay, consumer behavior and consumer purchasing patterns have changed. Who are these new consumer profiles that have now formed that retailers need to understand to be able to make decisions for their business moving forward? And a few of the different personalities or consumer types actually align with. Yes, I now no longer have favorite brands because I need to watch my money and I don't have the discretionary income. So that is now no longer a thing for me. But there are still a lot of people, as Simon was saying, many of the consumer types are still very loyal, are very loyal to their favorite brands. What they're cutting back on is potentially, you know, I'm guilty for it. You serve me an Instagram ad that I like with a great product. I will probably buy it then and there. But if we're talking about discretionary spending and who may not necessarily continue on that purchasing streak, that's that consumer group. So love the question. And I definitely think it could be a very hotly debated one.
Nathan Bush: We'll have to have that debate. We'll have to have it out. But for today, we've got so much to get to. I want to touch on those groups because Shopify have come up with six different shopping groups. And to your point, Simon, I think you can't put everyone under one category that everyone's after a bargain or a sale because we've got different types of shoppers and it's important to know what type of shopper is your shopper. I want to focus on the most popular group there, which was called the value Valuer. Just rolls off the tongue that 1 and 32% of that group prioritized value for money. Does that mean that they are after the cheapest products? Hannah, I'll start with you on this one.
Hannah Yudena: I mean, again, this goes back to depends on the consumer, right? So there are, there is a consumer group there that was outlined called the Saving Seeker. Now, they definitely prioritize the cheapest because they're constantly looking for the cheapest deal, the cheapest bargain very much, you know, from groceries to pretty much every category. However, for other other consumer types, value does not necessarily mean cheapest. Value means product quality. Value means brand equity. Value means do you offer the best service. Like there's so many different areas that value can be seen and that depends on who your customer group is. I love the fact that we, we outlined July in the report because I think that they are a brand that epitomizes value. And if you look at their story, right, they, they had huge organic growth and when they looked at where the organic growth is coming from, why it was happening, they recognized that their consumers love the fact that they gave a lifetime warranty on their suitcases for them and for their customers. That was value. And so I think we need to really move away from looking at value being price because there's so many layers to what value can mean depending on who you are.
Nathan Bush: Yeah. Simon, how does value translate for you as someone who comes from a brand perspective?
Simon Beard: So I always have this saying, perceived value is value. Right. That's, you know, from Bernard and Alt. Right. The reason you wouldn't value a Louis Vuitton bag If it was 99.95. It's because it's $4,000 creates the value. But yes, and they have the, the quality and all those parts that components that go into it that create that. So I think it's important to go, what is that consumer buying that product for? And this is where the more you push into the fashion side, the more you're selling on brand, the more you're creating the perception of value, the hype that is actually so much of the value creation. When you can compare and this is where a sort of commoditized product, where you're winning at product, that's where you would argue does that brand actually get confused where it's not really they're buying the brand, they're buying a great product in that category in the connection necessarily. And as that builds over time that will stack more and more brand equity. But this is where I sort of see depending which side you sort of come from. But in my experience and definitely creating that perceived value of how do you create the hype, how do you create that emotion in getting the product, how do you get them to fight a little bit for it? Because people don't value what they don't fight for. And this is some of the steps and gates which can go against all of us E Com traditional ways of like make it as frictionless, easy as possible. Like I've got the most crazy stories of putting pin code stuff and you sell 10 times as much and they had to put in the pin code to get it. But it's because you're creating gamifying, you're creating a journey, you're creating an unlock, you're creating that dopamine hit of the chase which this is where when it gets to brand and the more you sort of get into that lane, the more that becomes super important. But if you're selling a commoditized product where you're just creating the, you know, the value creation is in the product is in that as clearly as possible, then that's different.
Nathan Bush: Yeah, you're playing a different game.
Simon Beard: Yeah, totally.
Nathan Bush: So if you are in a non commoditized product and picking up on your perceived value, when we're in an economy like we are at the moment where wallets are a bit tighter, do you feel that a lot of E commerce retailers, rather than dropping prices straight away, just need to retell, find new ways of telling their story around value rather than relook at how they price and what products they stock.
Simon Beard: Yeah, definitely. One of the biggest things is that you've got to be careful of is inventory. Right. In this sort of thing is you have to be cautious. And this is where a lot of us have got into trouble. Right. Because we've come off this once in a lifetime will never happen again. Uplift in Ecom where it was literally like money raining from the sky to our consumers is they didn't earn it, they got given it. So they spend it so freely. And success can plant the seeds of failure. We all thought we just got all this better when we really didn't. It was this once in a lifetime thing. And the problem is when we made inventory decisions off that, you know, this has been the most common. Probably every retailer has gone through this of having too much inventory. And this can be such that you have to be so careful of the doom loop of the discounting, doing a bigger and bigger sale. The only way you can match those same figures is to discount harder. And especially as you've got this double whammy of getting hit with inflation and rising costs and everything as well, it can just all fall completely away at the bottom line, which is something to always have as this North Star. We all got swept up in this too, in the whole Covid period of valuing businesses on revenue. Right. What the ecom like it was, you know, it will never happen again. We were all drinking the Kool Aid back then.
Nathan Bush: I can imagine you rode that. Very much so, given what you've been through over the last three years.
Simon Beard: Exactly. And I fell to it 100%. I thought, you know, this was the. The sort of thing. And I remember when I did the deal, you know, I did it 600 million valuation, got 300 million cash and resting shares. And then I was looking as we were going to list and then what we were originally going to list for, I'm like, I'm the biggest idiot. I've sold this so cheap. Like, they're going to make so much money off my hub in like a couple of months, like, yeah. And this is the thing is, you know, unbelievable. 25 times EBITDA, all this sort of stuff that was just. And only when you sort of step back, you're like, oh, it didn't. This is the hype cycle.
Nathan Bush: If you had your time again, would you sell at the same point?
Simon Beard: Yeah, because I do believe it's the entrepreneur's journey. And this was the biggest part. I didn't have to sell, I didn't want to sell. And I got this best advice as this Peter Hedge, he goes, but when you want to sell your business, it's going to be worth nothing. Right. The best time to sell it is when you don't want to sell it. Like, oh, my God, this is insane. Like, you know, we're making this much. We would never. But. And that's when I realized it's that. It's that psychological thing of so much of that natural instinct when you step back and reflect and this is experience, can be wrong. And that's when I listened to him and said, yeah, okay, let's, let's do the part. But. And I hedged it. You know, how do we just get some money off the table and then it's all house money and then let it ride. But then I suppose I got a bit carried away with the let it ride.
Nathan Bush: Hey, that's your right. You've earned that right to do that. No. Incredible story. Congratulations. Going back to what you were talking about around that doom loop. And I love the idea of the doom loop because from a mental but also an actions, we can get caught up from that as business owners or operators in retail business. One of the findings in the research was that over half the customers researched said that the way to win their loyalty was through discounts and promotions. That just didn't sit right with me. Hannah, can you give us a little bit of context around this? And do you really consider this loyalty?
Hannah Yudena: Look, first of all, no, I don't consider that loyalty. I think that there are so many aspects to what loyalty means. So first of all, if you're wanting to continuously discount and attract that type of consumer, then you would argue that you'd be in this perpetual discount cycle, which isn't good for your business. It's not good for your profitability. It's not probably good for, well, I mean, I guess it's good for your customers if that is who you want to attract. But again, it comes back to customers. And I think going back, you know, riffing off of what Simon was saying, this whole concept of perceived value is probably intrinsically linked to loyalty. You know, you're going to buy a Louis Vuitton bag because, you know, your perceived value is that it is, you know, the best and the best quality on whatever it might be. And you're going to be loyal to them because you, that's, you know, that's what you want. So I think it really comes back to who your customer is. And just, I guess going again to add to what Simon said before, you know, I think it really, you can look at this from two parts. First of all is is great product. People are loyal to product that they love and that they want to buy and that they want to keep buying. And if you ask a lot of founders, Simon, I'm sure that you can agree with this when it comes down to, okay, what's your secret sauce? There's probably many things, but one of them is almost always, I have a great product that the customers who buy from me love and will Continue to buy. So if you have a great product, it means that people align with your, what your brand is doing, which means perceived value. The second part to it is around mission. And there are a very large group of consumers who will align with your mission. Right. And I think that who Gives a crap is an awesome example of this. Their name literally is giving. Right. In terms of what they're trying to show that what their business is for. So I think that there's multiple ways that you can look at loyalty. Discounting is one of them. Right. But that is not the only thing and it really depends on your customer. But we could probably have a whole session just on loyalty.
Nathan Bush: How do you measure loyalty, Simon?
Simon Beard: My sort of thing is on the discounting and the loyalty part is that. So we know like fashion's like a pyramid, right? Like 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. More you go up, there's less competition. But there's a lot less people to sell to. And it's sort of you sit somewhere among there. My thing is when you discount, you sort of get this customer that was lower that sort of 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've paid full price and then they see it get hit with the add on sale, they feel like an idiot. And that is such a cause you sort of, 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. And this is the thing you sort of can get blurred by the immediate impact of seeing this rise in sales. But you don't understand like that's the earned in drips lost in buckets. You just let a big hole in it that comes later. And this is from Louis Vuitton, right? Which never discount. They will burn 30 million euro worth of product a year because they know that they just it cannot be donated, it cannot be thing, it has to be destroyed. Because that's the only way you can maintain brand value. And I believe so in this part of the discounting and creating loyalty, my one's always being more. How do I just create more value for the person without discounting? Which could be gift with purchase. But we do it in a more value creation way that feels, you know, and this is, there's definitely art in how this is delivered. So it doesn't devalue the product. It actually creates more emotion, creates it a more memorable experience. That's the way that I sort of see a lot of people should doing it. And that as much as you can maintain your price because that is the value, the second you, you discount it, you're discounting the perceived value.
Nathan Bush: Yeah.
Simon Beard: Which is, that's the, the problem especially on a long term, you know, it's that the doom loop that I'm sure a lot of retailers find themselves in now. And it's like, well how do you just get back to selling on full price? Cause you've just trained your customer to buy on sale. And you know, this is the thing like I would always talk about the dinosaur retailers, right. Meyer and David Jones and stuff and throw shade and stuff. It's part of our thing of creating the battle. But I was like no one would ever buy full price from there. Like have they ever sold anything. This just gives the perception, right? And for Culture Kings that was started in a market store with no loans, investors get 600 million valuation. And David Jones been around a hundred years. Iconic, legendary, sells for 100 million last year. You know it's, I just like to give that is a perspective of like this is what happens, you deteriorate brand value.
Nathan Bush: What I'm hearing there is know your customer, serve your core customer that is on your level within the pyramid. Reward them, offer them value to keep them loyal. Don't go straight to price, ignore, ignore the pyramid climbers or the aspirational climbers below because they're not going to be long term customers. Can you bring customers that are potentially above you in the pyramid, down to
Simon Beard: you 100%, that's, that has to be the constant. And that's for me where I studied Louis Vuitton, lvmh because I was always like I'm going to bring their principles and be that for that youth, that young market of how I attach it, attach that emotion in the same way, lvmh so it has that status. So when they walk around with the Culture King's bag, they buy stuff from other shops, they put the bag inside the Culture Kings bag and they walk around because of the status of it. This was always drilled from day dot into how that brand is perceived. And to do this too, you have to say no to some customers. For me, I always build Culture Kings as the first shop you go to as a boy without your parents. We didn't want the parents in their shopping. This is where my mum or their friends would complain, the music's too loud in something. I'm like, it's good. Get the out. Like. Because I didn't want them shopping in there with their parents. I wanted it to be that first shop when they got dropped off the mall, 13 years old, 50 bucks. They would just be. Line the Culture Kings and be like, oh my God, heaven that was. And to do that, like, yeah, you have to alienate some customers, which is you try and sell to everyone. You sell to no one.
Nathan Bush: First rule in retail as an uncool dad. I take offense to all of that,
Simon Beard: Simon, but no, no, see, this is, this is part of the evolution of Culture Kings because we've been around so long now, our customers now have kids and we want to keep them there. So, you know, so this is the whole thing because it's like for myself, but that's where we, we balance that.
Nathan Bush: Yeah, I love it.
Simon Beard: That was very clearly from the start was. That was the gap we were shooting.
Nathan Bush: Yeah. Cool. I want to go back to what you said there around, right at the start, around what customers say and what they do is very different. You gave Shane as the example in the survey. A quarter of the respondents were considered unconscious shoppers. And my question was going to be around, does that put an end to the myth that shoppers are only considered shoppers when the going is good? Because we're obviously in harder times here and a quarter of people are saying that they still want to shop sustainably. Hannah, I might put it to you. Do you think this is actually being reflected in shopping behaviors or do people just want to say that they're a conscious shopper?
Hannah Yudena: This is a really hard question because I think the data will show one thing, but the reality shows another. Like I said before, there is still consumers who really align to mission and to a brand's purpose. And a lot of that is around sustainability. And if that is your. Your core messaging, then people will buy from you. And I'm. This is purely coming from my own perspective. In my own opinion. If I've got two brands, right, and there's one that's telling me that they've got a sustainable product. I can see their brand value, that they're doing good for the world and they're 50 cents more than another brand that isn't. I will always buy from the brand that is more sustainable, but that's Me, Right. That is, that is my personal. And I'm probably in that demographic where I have discretionary funds that aligns to, to my core of how I've been brought up, how I've been raised. And so I'm prepared to spend that little bit extra knowing that I feel like I'm passing through and doing good through that brand.
Nathan Bush: Yeah.
Hannah Yudena: But there is always other customers who are not like that. Right. Who will decide to choose to purchase goods that they either know are definitely not sustainable or they don't know and they don't really care. And so change takes a long time. And I am massively for sustainability. I talk about it all the time. It's a really important part of, of what I like to advocate for. But I think that we're going to see that shift over a 5, 10 year period. It's not going to be immediate.
Nathan Bush: Yeah. What do you reckon, Simon? Where does sustainability sit?
Simon Beard: Yeah, I 100% agree. It's just coming sort of slowly. And it's because, see, you value that extra 50 cents because it's part of your identity of like, see, I support sustainable, which is one of the problems. Right. That sheen has to balance is that people don't have that pride around it.
Nathan Bush: Right.
Simon Beard: When someone goes, oh, that dress is cool. Where'd you get it? They're like, Shane, right. They, they say down. They're not like, you know, Mishki saying like they're excited. Yeah. You know, to show it off. That's the element that they have to balance. But I do believe over time it will shift that because the identity and the status will be so much more linked to the brand and what that's doing and that people will not want to wear that or associate with the brand. That's. That's not.
Hannah Yudena: Yeah, yeah. I think this is also linked back to that whole. If you've got a favorite brand, you're going to buy from them no matter what. Right. You're going to be loyal to that brand. It's, it's the everyday. I'm going to make a decision when I've got two products that probably do the same thing side by side. One's a little more expensive than the other. That decision, I think will start to be what creates a snowball effect. Fast fashion is a whole nother. It's probably a whole nother concept. But I would say that, you know, people purchasing from Shein are probably not loyal to that brand. They're buying it because it's cheap or they get the TikTok ad or a TikTok influencer that's saying, oh look, look what I found. That that's a bargain and is that sustainable? Is that profitable? Like all debatable. Right.
Nathan Bush: They're in a whole other pyramid. We're talking different pyramids here.
Hannah Yudena: Exactly.
Nathan Bush: But I think it also comes back to what you're talking about value, Right. Is that sustainability can't be the only message when you're storytelling about value. Right. It has to be part of the message because it by itself, for, you know, unless you're ultra niche isn't going to be enough. So you still need to tell the story around quality, price exclusivity, everything else that your brand can bring. And sustainability is part of that story, Right?
Hannah Yudena: Correct.
Nathan Bush: All right. We've talked a lot about value there, but this report was really interesting because it talked about what's happening for customers out there and how they are seeking value and what value means to them and the different types of customers. But it also looked internally to what retailers are facing. They interviewed a lot of retailers, including yourself, Simon, some other great founders in E commerce in Australia. One of the key things, and I don't know if this will help people, is that, you know, what we're struggling with right now is we need to find operational efficiency right now, but we also need to deliver customer experience. It's not one or the other, you need to do both. You need efficiency plus up your customer experience. So obviously over Covid we had a huge change in how we designed retail experiences. Do you feel, Simon, that we're entering a new phase now? Now that we're going through this kind of reset again in what the shopping experience will look like?
Simon Beard: Yeah, I definitely feel we got a bit like we got carried away in Covid. We just thought it's, it's forever ecom, right? This is the to the moon. But we did realize how much people love that store experience and that is just so integral. And I just think it's, it's both like the omnichannel and bringing it together. And you know, one of the stats that really when we did doing the deal, they did this big customer survey, spent all this money on it, sort of unpack more stuff. And one of these crazy stats of it is that 80%, you know, we got multiple nine figure E comm business. Right. But 80% of our customers, E com customers first experienced culture kings in store.
Nathan Bush: Oh, wow.
Simon Beard: And so it was the whole thing of the store landed the emotional impact and made it memorable that they were like, it wasn't just boring Another store in a shopping center, like, next, next, next. It was like, wow, that when we hit them again with an ad, it resonated. It was like, oh, yeah, that store. Yeah, I need a new hoodie. Yeah, I need a new jacket. Yeah, I need new shoes. And that was the. So the stores, and this is from Tani and I being brick and mortar retailers. You know, Carney's, at our core, we learned of selling and creating value face to face. That was so important that the ecom part, and this is what I always say is thanks to, you know, Shopify was the game changer for us because it allowed us to then focus on the art part and not get caught up in the. The science so much that we lost our creative art and ability to create value. And this was the. The part. But so going forward, I truly believe stores that you can create a truly memorable brand experience where you can actually connect that emotion to the customer, tell the story, get that. And it's just the thing is, once you do that, then that ad that hits, they don't just skim past it. It's not just another thing on the feed. It lands.
Hannah Yudena: Yeah, yeah. Completely agree with what you say. And really signing. You are the master at this. I personally hate the word Omni Channel because I just think it's been done so long. People say, oh, I've got an omnichannel experience. Then you go in store, you go online, and you're like, this is crap. This is a terrible experience. I think ultimately, rightfully, as Simon said, brands need to focus on creating the best possible experience online and the best possible experience in store. And that is going to be different depending on who your customer it is, what. What your. What your brand values are. As Simon said, you know, getting a PIN code and gamifying, making a purchase is still an experience that culture kings customers love. The problem that brands are finding at the moment is that they have legacy tech stacks that don't allow them to focus on the experience part because they're beholden to the technology that they've implemented, that they've all of a sudden got this spaghetti mess of infrastructure that doesn't really talk to each other, that doesn't really work together. So really, I think we're going into a phase where a lot of brands need to go back to basics. They need to understand what is your tech stack. Is that tech stack well integrated? Is your technology working for you and not against you? Because if you're spending a good chunk of your time on operational tasks such as updating patches, security patches, this and that. You don't have a clear view of what your customer is doing in store. You don't have a seamless loyalty experience where you have a shopper that's come from online that then goes in store and you know who they are, what they like, what's currently sitting in their cart, why they're there. Then you're doing yourself a disservice. So people need to go back to the basics, do the foundational. Hey, let's rebuild. Let's think about what we need. Let's simplify, so that way we can focus on growth. And I think Tiger Lily, actually, they were called out in the report, but I think Travis Issel is awesome and has interviewed myself before, but she's done an awesome job at saying, hey, our tech stack wasn't working for us, so we made the big, bold decision to rip it all out and start again. But now we understand who our customer is. We know the average order value, we've seen an increase in conversion, we know our top customers and we reward them for that. And our business has grown and is more profitable and more efficient ever since. And look, shameless. Plug for Shopify. I mean, I work there, but I really do believe that Shopify Point of Sale is the only omnichannel product on the market right now that helps brands create those views, that simplifies that in store tech stack particular and means that you can actually have data accessible to you to be able to make decisions. So I get really passionate about this topic because I've been way before Shopify in the payments and point of sale game, and I see how antiquated it is and I see how scared brands get to. To make some. Some, you know, hard changes. But I think ultimately it's what needs to happen to be able to achieve what Simon's just laid out.
Simon Beard: And the longer you leave it, the harder it gets. That's the hardest thing is those people could have made those calls years ago, but then kept making this spaghetti more tangled and more tangled years later. And then it's just like at one point, you gotta bite the bullet. Otherwise, you know, you're just gonna be literally hamstrung in just unwinding that spaghetti, and you'll run out of time. I do. I do, really. And I'm so, like. My thing is, like, you know, I've sort of been a Shopify fan. I own a lot because I definitely would not have the freedom I have now without them. But I cannot believe how much the increase in features that are just coming out right now. It's mind blowing. Like I just. How fast it's moving. I think that idea to knock out the meetings per week or something and Chaos monkey. Yeah, it's just phenomenal. The features rolling out. And now, you know, I saw Harley did the thing of like, you know, it's a, it's a liability not being on Shopify. And I've been saying that for years when I would talk to her. I'm like, it is like you cannot compete. We're just gonna keep jumping ahead, you know, without it. And I definitely feel the combo of the Shopify pause in store and Shopify, all your customers are just coming in from one part. Like to try and integrate that.
Hannah Yudena: Like yeah, yeah.
Nathan Bush: I love the story.
Simon Beard: It tries so hard. It doesn't. It's so hard.
Nathan Bush: I still remember the story of. I can't remember if you told it or Mike told it around Mike convincing you to go on Shopify in those early days. And you're like. And then you got on, you're like, this is the best thing ever. One of the arguments we often see is that something out of the box or kind of that you don't have to put in a whole bunch of technical prowess yourself or a lot of custom development. There's a general feeling out there that it can't scale to large businesses as going on as a medium sized business to the Goliath that it is today. And you're doing some really cool things, pushing that platform to all sorts of levels and boundaries. How did you get around that or is it just a myth?
Simon Beard: It is purely a myth. Like look at JB hi Fi. Look from when they did Shopify. Look at their online growth. Look how they just leapfrogged and they won't put it in their earnings report because they don't want the competition to know. But it is a hundred percent Shopify. And this is the thing. Like what are they doing? How many billion? I don't know. Lots?
Nathan Bush: Yeah, I don't know.
Simon Beard: 3 billion. Something massive on it. Shopify in Australia, like Plus for us we were doing well over nine figures on Shopify with like basically no actual dev support. And that was the part. It scales in just phenomenally. And there's so many of these success stories that are just huge, but especially the Shopify components too that they've brought out, which is awesome for even the big 500 million plus, you know. So they've just been way too good in solving all those level of problems.
Nathan Bush: And I always say I Always say to retailers that I speak to is, you gotta just look at the roadmap and the level of success. Like, obviously you can't see what's coming over the next 12 months. Especially a public company like Shopify can't always see exactly what's coming. But you can have a look at the last 12 months and see how much has been released. And if that's. If that's good enough, if that's following your trajectory, then you can, you know, it's a good sign.
Hannah Yudena: Yeah. I just want to add as well, like, one thing that. And again, this is. I'm not a Kool Aid person. I'm just talking from a person who works at the company that I just think what we're doing is really cool. Right. But you look at the investment in product and our leadership team, especially Toby, is fanatical about product and making sure that he's giving the right tools to retailers. But, like, the figures in terms of investment are pretty astounding. Right. 1.4 billion was spent in R and D last year. Sometimes I have to just think about that number because it's massive. And you look at some of our competitors and I don't like talking about competitors, but it's maybe 80 million, 100 million that they're spending. Like we're literally investing 10x more more than that and that's going to continue. So I think there's a lot of good stuff to watch out for. We're doing a lot in this space and we're just passionate about commerce and we'll continue to make great product and great tooling.
Nathan Bush: Yeah, definitely. And you've got the community around you, which I love too, is like, there's power in numbers there.
Nathan Bush: I want to go back to what
Nathan Bush: you were saying, Simon, around allowing you to scale. In the research, it said that one in seven of the brands that Shopify spoke to were looking at developing international stores. So going back to physical retail, you obviously launched that amazing Vegas store. How many years ago was that now?
Simon Beard: So it was only last year? Yeah, we did it in November last year. It opened, but it was a big. It's a long time in the making.
Nathan Bush: Yeah. And was the thinking behind that that you needed something physical for the US market to experience first?
Simon Beard: Yeah, definitely. It was always sort of part of the. The model is that. So we had a US online store for a bit and this is how we sort of got the valuation. We did. We had this crushing in Australia, you know, eight stores and online. Look at this. Compared to, say, like, A Foot Locker, you know, three times the revenue, ten times less stores. Multiply out this in America and we've already got traction and runs on the board in America. So the first one though is the flagship iconic location we chose Vegas retail is the entertainment capital of the world. We've always considered ourselves this retail attainment of like I always wanted that because I believe us guys, we don't go shopping every weekend, but when we're on holidays, we're in the right state. That's where you can resonate a true brand experience and that make that wow, that magic moment that when they go back to Missouri or whatever, they get hit with the ad, bang, it will work. So that's why we chose Vegas. We went big though, you know, this was, we didn't, we didn't sort of test it. We went straight to the highest grossing mall per square meter in the whole of North America, which is Forum Shop, Caesar's palace and we have the biggest square meterage store there. So Molly, you know, you got us. We swung it big. But it's definitely, it's often it's racing and it's number one store and crushing and yeah, I can see. And it's built so much of the brand every day. You're just seeing it multiply and build that brand factor. And yeah, we just got to support it with a few more. But this is the thing. It wasn't like throwing it like we already tested, we already got grade to a million bucks a week shipping from Australia to America before we actually. It's not like we were, you know, guessing or. Yeah, that was. I think that's important is you gotta, you gotta sort of prove that product market fit. Definitely take a hit on shipping or whatever and make sure it's there and then, then go.
Nathan Bush: Yeah. And in terms of how you measure your physical stores and you've been doing this for a long time now. I could imagine that because of your philosophy around brand and experience and that that leading to online sales down the track, that you wouldn't be measuring stores based on a traditional square foot model, would you?
Simon Beard: Well, so this is funny, right? You would think that like, oh, it's all this sort of experience our stores. One of the biggest things is one of the highest dollars per meter and most important profit per meter. Like we set the standard in those metrics. So my more thing is people would think all these coaching, these are all for show stores. Actually the most profitable part. Right. So it is the part because in store you can sweep up on emotion. It's the whole. Some of this stuff, you know, from lvmh, disassociate customer from the price. It's the whole. You're getting them in that state where they just shop and add in more. This is the best part. It finishes way higher margin. Right.
Nathan Bush: Because
Simon Beard: online they can shop by price. So easy to filter and do those alternatives. This half a problem of AI is always showing them the discount one that converts more, but it's less GP dollars. Where one of the best things about stores is that we finish full margin, which makes it massive impact. So, yes, there's definite halo effect and it's massive. But I actually consider all that as upside. I want that store to be banking more profit than E Commerce every day of the week.
Nathan Bush: So a store can't just be a marketing activity. It's got to stand on its own two feet.
Simon Beard: No. And definitely, if you implement the right stuff, they, they do because it's way easier to shop. Like, you can get 25% conversion in store. I've never seen an E commerce store with fucking 25.
Nathan Bush: You know, absolutely. I want to go back to efficiencies. So the Shopify report talked about four key foes facing retailers right now. It's not the nicest reading if you're a retailer, but we're talking inflation, rising costs, obviously of product and wages being the key ones there, tightened consumer spending and shifting consumer behaviors. We've kind of covered a lot of them as we go there. If we're talking about creating efficiencies in our business, Hannah, where are you seeing most retailers focus their efforts in creating a more efficient operation?
Hannah Yudena: Yeah, so first and foremost, it is tough and there are a lot of different factors that you've just outlined that in combination make a perfect storm for a bad time. Right. But I'm a firm believer that in tough times, if you can lean out your business, if you can create efficiencies, you are doing yourself a service for years to come. Right. Because you're actually just doing what you probably should have done in, in the good times. Right.
Nathan Bush: Gold rush.
Hannah Yudena: In the gold rush. And efficient businesses are good businesses. So if you look at the data in terms of where the investment is going, a lot of it is going into AI specifically, specifically for employee experience. And we can probably go deeper into that because I think that there's so many applications of AI that really will transform and make your business better and more efficient, more profitable. But in terms of like, the practical element that I think is really important to understand is look at your Processes. Where can you optimize? Where are you spending a lot of man hours? Look at your programs at work. What's giving you the highest return? Double down on that. What's your marketing mix? Are you spending in the right places? Where are you overspending? Where are you underspending? What are your profit margins? Are they at a healthy level? Because if they're not, you need to be making the decisions to get them there. Do you have a retention strategy in place? Because we talk, we've spoken a lot about value, we've spoken a lot about loyalty. So if you're not having a really good retention strategy, you're probably missing out. So the data does show one thing. And yes, it is definitely around AI and even introducing technologies that help you better understand your data. But I think the practical elements are the most important part here to really help retailers set themselves up for success.
Nathan Bush: Is that what you found? Simon too. This is the time to kind of instead of chase those unprofitable sales, it's to bunker down and look in house.
Simon Beard: Definitely. And I think a lot of us, we got excited during the sort of gold rush and it was that thing just get bums in seats, just hire them like everything. And that was a problem is, you know, this is why we saw it so much through tech and everything is these layoffs is because people aren't going to raise their hand and go, hey, I could do my job in two hours. I actually don't have that much to do. They're not going to say that they're going to look busy, they're going to fumble around and do all this sort of stuff and you have to make that tough call as the leader, you have to dig deep and really look for this operational efficiency. And I would especially, I suppose this is where I'm looking at it from a different lens now is like we traditionally have these teams of like merchandise marketing, media buy, where a lot of it, like a media buy is basically extinct now. Right? It's AI performance max, it's Advantage plus. In Facebook ads the key thing is just being able to interpret the data and feed that back in the content machine to be able to make the right content and fuel that back. And this is where really defining some of these roles what they are because some of it takes 10 minutes now it's not a full time job but the art in being able to understand it and then influencing the right content, looking at the hold rate or the hook rate on ads, re cutting best performing ads and see how much better you can get them if you just increase the hook rate, if you just increase the hold rate. Looking back, this is where, where I believe some of these traditional teams, creative merchandise, marketing, need a much more integrated model and can run it so lean, so much leaner than I think we've had traditionally. And I've always had this principle from stores. If really running great retail stores, you're always better having one less staff member than one too many. Because the second you have one too many staff, what happens? Your B and C players take a foot back. Oh, don't worry, Simon will get that. Customer, Simon will get that. They all sort of where if there's one, two less, they, they can't hide. There's nowhere to hide that. Oh, I've got to get that. I've got to get like. You've got to keep that intensity level there in that energy. And I think I was always like, that was the principle at stores. But actually I'm like, you need that in every team.
Nathan Bush: Yeah, it's like, don't overcharge the battery. Keep the battery at like 90% to keep it pushing. If I'm listening to this and I'm in an E commerce business as an employee, whether I'm an E commerce manager, a merch store person, whatever my role is, I'm probably got my ears up right now and I'm thinking wages are putting a lot of pressure on retail owners right now. So headcount is going to be looked at if it hasn't been looked at already. Plus, we've talked about AI and we're going to dive into AI more because I think it's fascinating to talk to, but we've got AI which might be able to do my job. If I'm sitting in a retail organization right now, what would be your tips in how I add more value from my role? Hannah, I'll start with you and we'll go. Simon, love, both of your thoughts.
Hannah Yudena: Yeah, look, it's a good question and I think it's ever evolving. First of all, people I don't believe need to panic. Like the AI is taking our jobs has been around for the last 10 years. Right. That's kind of been the fear. The truth is, if you look at roles or what we did 50 years ago, they're completely different to what we do now. Right. It will shift, it will change. It doesn't mean that there won't be jobs. It means the roles that you'll be doing will be different and it's actually for the better. Right. It will be more focused on growth, it will be more focused on utilizing data to make decisions around best business practices as well as innovative projects. You know, Simon is the best kind of advocate for this in terms of thinking differently around how you're creating the best possible experience. So if you're in a role right now, first is don't panic, it's going to be okay. The second is think about how you are contributing to your business's growth, how you are coming up with the ideas based on what you're seeing, based on the data that you're analyzing to put projects or make changes that are focused on growth. If that's where your mindset is, you're going to be able to adapt and be agile no matter what comes along. And another add on to that is constantly thinking about upskilling. And this is where I mentioned Stephen Barlett's really good episode with Mogodat around AI and the future of AI. The premise of it was is that you need to understand it to be able to act on it, right. Go deep, understand the technology, understand what's happening in the space and then make decisions accordingly. So I know that's probably a long winded Simon will have a much eloquent way of, of putting it, but yeah, that's my take.
Nathan Bush: No, it's great context. Simon, what are you looking for out of your team?
Simon Beard: I definitely feel you need to embrace AI as you've got to leverage it as your thinking partner. I'm all about having it open all the time, really using it to test my thinking and my knowledge. Like 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 argument of why this could be wrong? Right. It's so good in triangulating your thinking like that because it's just. 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 to just these roles are going to change and if you are doing a job right now where you're literally like copying and pasting, it's like the rubber stamp Next, next like 100 you should panic because that's your days and 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 of like when something goes wrong or breaks, such a natural reaction to do that Homer into The bush, man. Like, not my fucking job. Where you've got to, you've got to train that emotional reaction of like, no, get out of the way, I'm going to solve this and charge at it.
Nathan Bush: And I love what you're saying there about AI tools. They're not the reason that you can actually take your foot off the pedal and let it do the thinking for you. It actually makes you step up your game and think more.
Simon Beard: And this is the thing, right? Every business within a year or two, two years will have its own chat GPT, internal chatbot, right? Which will be, which will wipe out so much of those miniscule work. Like, when does the Chadstone lease expire? Like, if I ask that now, it's like 10 emails. Where's the lease? Where it's like 26th. You got this option, you got to do it by this. It's like, bang, there's the answer. Or whose role is it to do organic TikTok, right? Goes through the role descriptions. Bang. This person's job, these little questions that don't get answered or no one knows the answer. I believe every internal document, every meeting record, everything will go into one centralized database where you can just ask a question. But what. I'm so excited. And I know Shopify and Facebook ads, but imagine this when you've got Shopify and Facebook ads pulling into your data in your own chatgpt and, and like, we don't need dashboards. Dashboards are just to ask or answer a question. You just ask the question, give me the correlation between the best performing ads this week and the best performing products. Bang, right? It's taking that and interpreting it in its way, like across this, ACROSS Google, across TikTok. You know, we talk all about multi, touch, attribution and everything. It's like we're all trying to figure out if we just pull it all in, it's going to have a. I can't wait for the ads. And then it's just about the prompt. Like, I'm chief marketing officer of this business. What is the one metric that changed this week I should be alerted to? Like, it's going to do the answer. You can even write, as you're the CEO, you're going to ask that too. You know, it's like, this is where it's just going to be. But this critical level of thinking, of going to that next level of thought, which I always talk about this, you have these mind blanks, right? When you open up chat gbt and it's like, but wait, what's the question.
Nathan Bush: Yeah.
Simon Beard: And that's that next level of thinking that we've got to go to. And that's going to be the same way. Before we thought the value creation was doing Excel or being a wizard at pivot tables where it's like, no, that's just like a ledger now doing it handwritten paper.
Nathan Bush: It's not.
Simon Beard: It's actually, you've got to go to the next level of like. Yeah. So that's, that's where I really see it going. And this is where as this comes in, if you've practiced and you're using it every day of training, that metacognition of what is the best question, how to come up with that, you will be so much better prepared for this than people that, you know, homer into the bush. Like I don't even know what ChatGPT is.
Nathan Bush: And I think those who have been flexing their muscle because we've gone through that big data phase over the last 10 years, let's call it, the ones that have actually been able to use big data have known the questions that they're asking of the big data. It's one thing to have a big problem pool of data and if you don't have the right questions, you're never going to be able to use it. So those who are doing that probably in a really good spot now.
Simon Beard: Yeah.
Hannah Yudena: Yep. But you know what I love about the likes of a chat GBT is it's democratized it. Right. It is so accessible for anyone to jump on and just practice, play around. Like Simon said, ask it questions, make yourself a to do list. Every day a reminder to say jump on chat GPT and ask a few questions that are potentially related to my job that you can, you know, get an answer and potentially make some changes. So there's a lot that you can be doing right now to, to prepare for, for that I'm sure will be influx of new tooling that will, that will arise.
Nathan Bush: So there was a question that I just want to pick up on here. I put out on threads that I was having this conversation with you both last night and I said anyone got questions? Josh Trenery from Purely Gourmet got back to me and I think this is the right time to ask it. Simon, you said that you've got AI tools open all the time, should just be part of your day to day process. His question was what are the game changing AI tools that I should be using? You mentioned Chat GPT there, is there any others that come to mind that you go to on a daily basis.
Simon Beard: So. And it's utilizing the, the AI that's coming out in all the sort of software like I was saying, the Google performance max. Right. That's just a. The advantage plus in Facebook ads. That's just all where it's like when you compare it against doing it the way before, it's like you don't need any targeting. You don't need. You just hit it wins every time. I've never seen it be even close to being undefeated. This is the sort of the tools in. Yeah, we of course of like definitely like the Photoshop one, Canva one. The experimenting with some of the video ones but you know, definitely mid journey and stuff for ideas and, and everything is awesome.
Nathan Bush: And we're seeing it just being released as product features now, aren't we? Like rather than having a separate AI tool that you go to, like you said, if you're using Canva go oh, pop up. There's a new feature where I can generate AI images. Like it's just being integrated into to everything.
Simon Beard: Yeah. And, and that's just really staying on the polls and being curious of when the new stuff and being first in there to test it. Because I always see it like this, this is resetting the first principles a lot. Like when Facebook ads came out it like reset the first principles of advertising. Because I'm like wait, why am I going to pay a TV ad? We have no idea where it goes into the vortex. We like they get the data off of TV ads, off a survey.
Nathan Bush: Right.
Simon Beard: We'll just say like where ads you could see what clicks on it. What's it like? I remember when it came out I just went straight away hard on it and I didn't. This is the thing. I didn't hire an agency. I didn't hire someone. You do this. I did it myself. I learned and played with, understood every column, understood it at its fundamental. Then I knew I could back myself to be that big charger, charge forward and you know, this is. It was a game changer but that was just advertising. Right. For Facebook really reset. But this is the problem, right. AI is like it's resetting the first principles across so many areas of creativity, across data, across every sort of admin
Nathan Bush: and, and the truth is like if you're in retail, especially E commerce right now, how fun is it to go in and play around with AI tools? Because we're on the precipice of what's coming. Like you shouldn't just have to have a curious bone in your Body. You should be actually excited about this and getting in and having a play and seeing what you can can do with it. It's not a chore. I, I don't think. And from from a Shopify perspective, what's on the radar for incorporating AI into some of the Shopify Shopify features?
Hannah Yudena: Good question, good question. Shopify has been making a lot of investment in AI and they did that very quickly. And anyone who has listened to Toby Ludke, who is the Shopify founder, you realize that he's very passionate about AI efficiency and tooling. And so we've done a lot of research around the why and what merchants need. And what has been realized is that brands recognize the fact that they need AI in some capacity. They just don't know how, they don't know how to use it, they don't know where to start, they don't know how to apply it to different processes. And so this is where, as Simon said, understanding the tooling you have and what that tooling is doing to provide AI features and functionality is really important. So from a Shopify standpoint, I think this might be bushy. You heard it here first. I think this is hot off the press. I know Shopify and maybe I might even get told off for saying this. But you know, whatever, let's, 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 are in that will impact and could impact the decisions you make next? So Sidekick is coming. In fact, I think it's just about to be released and it is a part of the Shopify Magic toolset. So Shopify Magic is a suite of AI enabled features that are integrated across all of Shopify's products and workflows. So you are going to see probably a sleuth of product features getting dropped that are going to help you in your everyday tasking to just create again, create better businesses, focus on growth, don't focus on all of those menial tasks you're currently spending time on. I'm really excited about it. I'm really excited to see the impact and value it will provide to merchants. As I'm sure Simon is, oh my
Simon Beard: God, I can't wait. When that comes out, I'm going to play with it for 48 hours straight. But you know what I hope is in there, which is one of these metrics that a lot of E Commerce honest ones missed. But toxic products, right? We all have toxic products in our E Comm store where if someone buys that product, they have a low, a way less likelihood of purchasing again than someone if bought another product. Because especially us in men. I really found this because guys, right, we don't return stuff. We just don't shop there again, which is way worse. Like at least women will let you know and bomb it all back. But this is a thing to watch out for. And I just hope that Sidekick is like, could you do an analysis on any toxic products? Because it's just, it has all the data there. Like you can do it in Shopify. It's just a pain in the ass to paste it and do it where I'm like that Sidekick and then could have those alerts. So something soon as it starts to trend toxic, you could catch it early.
Hannah Yudena: Have you seen the recent report just released, which is the ABC report where it scores your products based on the popularity in different metrics? Oh, I'm thinking it could be something, you know, yeah, there's definitely something that could be pulled there. 100.
Simon Beard: Yeah, I like that because a lot of businesses have these products, they sell well. That's the worst is when they're a bestseller because they literally like burning a hole in your store is like, they're like a cancer product.
Nathan Bush: Oh, so good.
Hannah Yudena: I love it. The possibilities are endless. This is, this is the exciting thing of, of the, the age that we're going into in terms of the investment that's being made now. I also just want to flag that they're not going to be the savior for a bad business. You know, you need to make sure that you've got your fundamentals right, Going back to those first principles, that core of what makes a good business. Because it's not going to be like the be all and end all. And you know, that magic switch that you can just flick to then solve all problems or maybe it will be. Who knows?
Nathan Bush: No, but I think there's, there's what you were saying before, Simon, what you know, mirrors what you're saying, Hannah, is like before you could have a Facebook specialist, you could know that inside out and you could treat it like poker machines. And basically if you knew the algorithm, you knew how it worked, you could smash your competitors but now everyone's going to have access to the same intelligence. So you've got to up your game because everyone's going to have the same tool set. So what are you going to do to be the tool?
Simon Beard: It's table stakes. Yeah.
Hannah Yudena: And that's another point to mention is that this tooling is going to be available for every merchant, not just merchants on Shopify. Plus it will be anyone from, you know, I've just started my business right through to Culture Kings and the JB hi Fi will have access to this tooling for that exact reason.
Simon Beard: Well, the dinosaurs on their old custom ERP stuff, they, they're not going to have it so.
Hannah Yudena: Well they're not exactly. You can only have it if you're on Shopify.
Simon Beard: And this is where I truly believe like Shopify just again it's investment is just gonna leap ahead so much and, and I'm about when these tools come out. That's why I'm not Joking about spending 48 hours is like some of the when new things have come out jumping on em early. Like we were first on Snapchat ads, like first on TikTok ads. They are ridiculously first on Advantage plus for Facebook. Like when you, when these new ones come out and you test and learn, you can get a huge competitive advantage. But exactly like what you said Nathan, they become table stakes soon enough and you've got to keep that hunger and finding the next thing.
Nathan Bush: Wow. Well that's hugely exciting and what a place to end on all the opportunities that's going to come out of AI. I'm going to ask for one final thought from both of you for retailers right now who might be experiencing those headwinds of changing consumers operational costs. This report has some great tactics and some great insights into how to overcome that and come out the other side really strong. What would be your one piece of advice to retailers for the next six months? Simon?
Simon Beard: I feel one of the biggest things is you have to make sure you maintain your psychology and your certainty in your team. Cause if they sniff one bit of uncertainty, your team it like amplifies like 5x. And as much as times are tough or anything, you have to be like a duck like calm on the surface, but you're pedaling like there's no tomorrow underneath. And you have to make sure for your team like you're bringing that certainty because look, just like those great times they pass this to shall pass will be at the other side. And there's, you know, we're definitely not through the worst of it. But my more is maintaining that solid psychology and doing a lot of discipline around training this. You know, I'm a huge one on, you know, I've done ice plunges at 4am for five years straight, you know, but it's part of the all this sort of discipline and meditation stuff because I know it just trains my mindset to be certain when there's uncertainty, which is for those that are entrepreneur, founder, the one that's actually taken the risk. That's the game is expanding your threshold of control and managing that risk. And so love it.
Nathan Bush: Mindset game more than anything.
Hannah Yudena: Yeah, it is.
Nathan Bush: Hannah, your advice.
Hannah Yudena: So on a mindset level, echoing Simon. Control the controllables and one step at a time. You know, focus on the next day on a practical level or just E commerce level, whatever we want to call it. I think the most important thing that people can be focusing on right now is knowing their customer, know your customer, know what they're doing. And if you don't act fast, start to implement the right processes to be able to know what your customer is doing. So yeah, keep it simple.
Nathan Bush: Awesome. And to echo Simon there, don't chase shitty customers as well.
Hannah Yudena: Yeah. Or if that, if that's your customer group, then chase them. You know, like that's the thing. Know who they are.
Simon Beard: Exactly.
Nathan Bush: Hannah, Simon, thank you so much. This has been a great conversation. Really enjoyed it. There's so much more in that report we could have gotten into, but we'd be here for hours and we've got some AI to look into. Thank you for joining us on Add to Cart.
Hannah Yudena: Thanks so much for having me.
Simon Beard: Thanks. Pushy.
Nathan Bush: Oh, wow.
Nathan Bush: I know we were here to dive into the Shopify retail report, but we got Vegas stories, Simpsons memes, and Shopify product release exclusives as well. Really putting the bonus into bonus episodes. Now if you want to get your hands on the report, it's a free download available for everyone. Head on over to shopify.com au/guides, Australian RetailReport, or maybe just follow the links that we have in our show notes or on add to cart.com along with all the findings, the stats, the customer groupings, there are stories from retailers such as July Boody, Kalani, Keenis, lskd, lots of friends of the show and a whole bunch of other retailers. Plus there's an omnichannel success scale from the team at Convert Digital and a brand demand and conversion framework from the team at Tracksuit, who we heard from a couple of weeks ago. You would be silly if you didn't get your hands on it. All right, so much in here, but here are more My three biggest Takeaways Number one Don't fall down the pyramid. Customer behavior is changing, but avoid the urge to chase unprofitable customers. Instead, focus on creating value or even, as Simon says, perceived value. Don't get into the doom loop of chasing customers who are further down the pyramid and are only there for the discount season. Create and promote value to your core customers and even to customers you aspire to attract. Number two it's time to focus on efficiencies. Instead of chasing unprofitable sales, create efficiencies that will make you more profitable in the long term. Hannah gave some great examples of activities you can be doing right now to improve efficiencies. Cull low ROI projects, optimize your media mix, remove unprofitable products, put a retention strategy in place. This is just the start and no one, no one has all of their house in order. There is always room for efficiencies. The last takeout for me was get interested in AI or Fall behind. Whether you're into it or not, you are going to find AI features and tools becoming embedded into the software that you are currently using. Get in there and experiment. Learn how they work. Know how you can use them for your business. You can get ahead of the curve now, but they will soon be table stakes. If you don't understand the fundamentals of AI and how to use it in your business, you'll quickly fall behind the Retail Pack to get the highlights of today's episode, head on over to add to cart.com and sign up for our free newsletter Each Tuesday we will send Monday's episode summary links and discount code codes for you to go next level on. And if you're looking to explore your next e commerce opportunity, come and visit us at E Suite. We're a dedicated e commerce talent agency connecting the best e commerce talent with the fastest growing brands in Australia. Head on over to esweettalent.com where you can download the free E Commerce Salary Guide and sign up to our weekly e Commerce job emails. Thanks for listening and until next time, keep those customers adding to cart.
