My thoughts on eCommerce

I’ve spent the last 4 years trying to figure out what I’m good at and how I can monetize that skill doing something I enjoy…

Some quick background:

-In 2020 I started freelance copywriting.

-In 2021 I tried building an email marketing agency. I did that with a handful of clients for about 2 years.

-In 2023 I started to gain a deeper understanding about email marketing which is often based on the success metrics of ESPs (email service providers) & agencies more than brands themselves. This led me to studying the relationship between qualitative & quantitative data. This made me realize that to be a competent marketer I needed to gain an understanding of all the areas responsible for long-term business growth, rather than trying to be some hyper-specialized marketer responsible for one sole area of a business.

Ok, so a lot of “best practices” in eCommerce marketing are based on success of the vendors & agencies more than the actual eCommerce stores. Meaning, the way that marketers measure success is based on their success more than the success of the brands they claim to work with.

Email marketing revenue & ROAS are great examples of this…

The true ROAS happens outside of time intervals that ad platforms can measure for. They happen throughout specific confidence intervals in which traffic is statistically more likely to purchase and repurchase. For example, if you have 2 people come through the same ad at the same AOV and the same ROAS, who is more likely to repurchase? ROAS doesn’t tell you who is more or less likely to be a higher/lower value customer over the long-term. But if you knew that someone with a lower ROAS was ascribed data points that render them more likely to generate a higher LTV (lifetime value) then it would totally change the scope of one’s advertising strategy. This is a solution that requires qualitative data in combination to their respective quantitative outcomes, but few marketers are privy to this because they’re so gung-ho on the “best practices” that make them more money than the brands they aim to target for their cookie-cutter marketing.

Email & SMS marketing are not generating 30% of a brands revenue; they’re taking credit for 30% of a brands revenue based on last click attribution. Do most subscribers who purchase do so within about a day? Yes. Are customers often required to leave the website and open an email to access their code promised during signup? Yes. Is placing a touchpoint in front of latent sales “generating” the same revenue that's being attributed? NOPE! The reality is retention happens if perceived value is present when a need for the product arises. This is out of your hands as a marketer. You can’t control for when someone needs a product or the value they ascribe to it according to their use case.

AND EVEN IF YOU COULD, it wouldn’t even matter because let’s face it customers buy similar products from competing brands. With the exception of maybe like 50-100 legacy companies, consumers are generally not loyal to brands; they are loyal to the lowest price that meets their quality standards. How is one going to map a customer journey around this sort of thing? ¯\_(ツ)_/¯

This is the customer journey vs. company journey argument in a nutshell.

Make no mistake, quality email marketing and advertising strategies are important… But long-term, the incremental gains it can yield just aren’t worth paying $2-5k per month to manage for the majority of small/medium DTC companies because it literally only takes about 2 hours of work per month with the help of AI to get 80% of the way there (barring the time spent on graphic design but that probably isn't going to make or break the success of your emails if the content is clear & relevant because an email that gets opened is already captured interest and its just agreeing on the terms of the offer at that point but I digress).

My point is that email marketing has become easier than ever to set up and automate with less resource allocation using the help of AI. In fact, I built a content ideation & automation system in a free Asana workspace that cuts the workload in half, and creates drafts for all core flows:

Anyone could easily do the same. Many are.

This brings me to a broader consideration… DTC brands have been going under like crazy; even established brands run by agencies known for getting good results are having a harder time making the numbers work due to rising ad costs and increased commoditization thanks to globalization rendering most consumer goods a sea of the same.

Growth is declining fast. Money is drying up and people with a lot more marketing experience than me are struggling to find jobs. A quick look at Reddit will give you an idea of just how difficult it is for marketing folk right now.

Companies that went public like allbirds, the honest company, casper, etc haven’t sustained their valuations because they lacked the household name recognition. Economic contraction and skyrocketing media prices are making it harder for smaller brands to turn a profit.

Facebook isn’t the money machine it once was; where ad costs & competition were low enough to profitably acquire new customers given the costs of doing business. Competitors with bigger budgets are outbidding smaller brands until they fold so they don’t have to acquire them. It’s a race to the bottom.

The unit economics given the costs of ads and the cost of doing business in relation to massive competition creates a huge challenge for everyone in the space.

So what does it come down to? Who will be the winners? Will it be those with leverage over their manufacturing & distribution advantages via pre-existing audiences? Sure seems like it.

So where does that leave me? I don’t really know. All I know is that I need to be creating content or building assets around my interests. This is that.

In tomorrow’s newsletter I’ll post my thoughts about content creation/curation & asset building.