Apr 17, 2020
Every two weeks host Will Francis explores with each guest all aspects of their own digital marketing expertise, as well as those soft skills like presentation and productivity techniques, that we could all learn from.
An in-depth look at what works, and what drives success in ecommerce today. Will chats with veteran marketer and DMI expert, Cathal Melinn.
[00:00:04] Will: Welcome to "The Big Q&A," a podcast brought to you by the Digital Marketing Institute. I'm your host Will Francis. And today we're talking to Cathal Melinn, an analyst and expert in e-commerce who's been in digital for almost two decades, helping clients like Aer Lingus, Coca Cola, Board Beer, and many more find better results in their online marketing. Like everything digital, e-commerce has gone from being a minor niche to disrupting and then turning the entire world of retail and commerce upside down. So, we're going to take a deeper look at what really matters and ultimately drive success in e-commerce today. Cathal, welcome to the podcast.
[00:00:44] Cathal: Thanks, Will. Two decades. I don't know. I don't know how to...
[00:00:47] Will: Where has it all gone?
[00:00:48] Cathal: It's moved very quickly. And I think that's the whole kind of takeaway is that it has moved so quickly from myself, from where I started to even now and what's happened in between. So, I think it's a big question where has it all gone?
[00:01:05] Will: Just to set the scene, what are the big talking points in the world of e-commerce right now?
[00:01:11] Cathal: Yeah. As you said, like, it's just taken over everything. Like, you can sell at scale in cost-efficient ways to markets that you couldn't have dreamt of doing years and years ago. It's really kind of changed the mindset. So, the major talking points I'm finding is how things like offline retailers, bricks and mortar retailers are adapting to the online piece, how payments are changing. That's a quite a boring one for a lot of people. They think e-commerce is just nice products in a website and all this stuff, but actually, we have to consider things like, "Well, how are we getting paid? You know, what's the methodology here?"
[00:01:52] And payments, since the European directive came in around moving payments away from traditional organizations like the credit companies and the banks to more organizations like Revolut and things like that, you're finding that these type of mini disruptions within a disruptive field are a talking point because you have to catch up. And you suddenly...all the kids are using Revolut, are you taking it or are you just going to miss a payment option and therefore a massive market?
[00:02:24] So, it's moving quick in terms of really, really, you know, functional stuff like moving bricks and mortar online to things like payments. And then like other disruptive markets, which would be...like our example, which is the Chinese market and what that means, and given how close it is to Cyber Monday, Cyber Monday obviously was the talking point of all last week and previous weeks and different things like that. What would it be? What would the turnover be? We knew that Black Friday was going to be a really big e-commerce day. So, what was Cyber Monday gonna be like? Is it gonna just blow everything out of the water? And it comes in at $9.4 billion dollars. That's the biggest Cyber Monday ever. But then we forget that a month earlier on Singles Day, which is the 11th of November, there was $30.8 billion worth of revenue sold on e-commerce sites in China on that day.
[00:03:26] Will: That's incredible, isn't it?
[00:03:28] Cathal: The numbers aren't real. Like they're just not real.
[00:03:32] Will: Does e-commerce work differently in China?
[00:03:34] Cathal: Yeah, I mean, it's massively different. We're illuminated with stats to start off and we'll just use our two most recent days, which is Cyber Monday in the West and Singles Day in the East. So, Cyber Monday was $9.4 billion worth of revenue with 33% of transactions completed on a mobile phone. So, on a mobile phone, you are thinking we traditionally buy on a desktop. And I thought, when I read that statistic, "33% we're really adopting, we are really, really adopting to mobile-commerce." So, that's obviously a talking point shifting consumer patterns. Then when we look at China on that particular day on Singles Day, we have $30.8 billion worth of e-commerce transactions done on that day with the first billion done in the first 68 seconds.
[00:04:34] Will: Wow.
[00:04:35] Cathal: Yeah. Ninety percent of transactions were done in the mobile, 90%. I thought 33 was a fantastic number given where we've...you know, what it's like.
[00:04:50] Will: That's progress.
[00:04:50] Cathal: Yeah, we're like...it was usually 7% or whatever like that, but in China it was 90%. And a talking point for the West really was that it was 33% done on a smartphone, which is, you know, a significant enough step change in what we've seen over the past number of years. But a glimpse into the future, which China can be, is 90% was done on smartphones. And there's a reason for that, you know?
[00:05:15] Will: What is the reason for that?
[00:05:16] Cathal: Well, that was the lineup. So the reason is, the internet came late to China. When we got e-commerce originally and different things like that back in the early 2000s and late '90s, desktop was the preferred device. So, we started transacting on a desktop device and mobile telephony, and mobile networks, and smartphones didn't really kind of make an impact till 2006, 2007. By that stage, the purchase pattern had been culturally ingrained in us. When China had opened its doors to the internet in the kind of 2000s in that era, mobile telephony had grown to a point that it was natural that they just adapt and adopt to this technology as their preferred medium for purchasing. So, everything is done in the phone. Everything. It's really amazing.
[00:06:11] Will: I believe it's called leapfrogging and a lot of cultures have leapfrogged in that way in the way that people talk about the way that people pay and have done for 10 years or more in Kenya with SMS messages and things like that.
[00:06:26] Cathal: I find that fascinating.
[00:06:27] Will: So, we see a lot of this outside the West and, of course, we're a little bit...most people are a bit blind to it. And has the Chinese use of WeChat kind of does that typify their very different approach to commerce and payment on mobile? And does that have a lot to do with driving that e-commerce stat?
[00:06:51] Cathal: Definitely, definitely it does. So, WeChat essentially is the everything app. It is the absolute everything app. So, initially, it was launched as a chatting app. You know, mobile, like, chatting with your friends, social media, that kind of thing. And then they integrated WeChat wallet which is payments similar to Revolut, similar to Apple Pay, and all of those kind of newer-age payment providers that we have. Those then integrated natively within the same app framework with their social media. So, for example, you can see something on your social feed and just buy it there and then with your tokenized, which is your saved e-commerce credentials on your phone there and then. You can just buy that thing because there's a native link between your payment options and the product itself in the feed.
[00:07:42] The other thing is it developed further into managing things like booking doctor's appointments and visas. And, like, governmental agencies and stuff, you know, all kind of feed into this WeChat, I suppose, environment. And you can essentially manage your life from this one app. So, everything integrated WeChat and that's the thing. And it's native on your phone and it's 24/7, and it is...as you say it was leapfrogged. So, people just adopted this method of payment there and then. It's really a glimpse into the future for how if we in the West shifted our mindset and became more comfortable with things like paying with a mobile device rather than a desktop device, what the future might look like. So, if we're ever thinking what's coming down the road? A glance at East will definitely give you a good indication of what might be happening next.
[00:08:38] Will: Indeed. And I would be surprised if Mark Zuckerberg didn't have his eye on that prize. Facebook would be the natural kind of provider of that all-in-one service in the West. And I'd say that their aim is to become the WeChat of the West.
[00:08:54] Cathal: I think you're right.
[00:08:55] Will: He seems to be going in that direction, you know, the flow from seeing something on Instagram to buying has smoothed out over the last year or two in incremental steps and that kind of thing. So, it'll be very interesting to see that play out. So, in terms of marketing and e-commerce, what marketing are you seeing work best for e-commerce companies right now?
[00:09:16] Cathal: Yeah, I mean, I think your standard starting point for any kind of marketing with free-commerce is going to be PPC. It's a blunt instrument. It's get your visibility up when people are looking to buy things and when people are looking for solutions to needs that they have. So, what we need to always think about when we're doing any PPC is the analogy I always, always give is questions and answers. That Google is the questions and answers machine. And it's like people have a need or a want, and they will ask Google a question to help them resolve that need or want. So, the search query or just keyword is a question. So, we have to anticipate what are the consumers likely to ask Google?
[00:10:04] And then all our competitors are all giving our answers. There are ads. So, everyone gives a response and our answer has to be the best answer. And then once the consumer decides which answer they want to go with, they'll click on and then, you know, hopefully lead them to a path of purchase. But it's literally questions and answers. What are they gonna ask and how can we position our product as a solution to that need? And so, the channel, to begin with, more than likely for everyone, it's expensive, it's time-consuming, and it can be a little bit complicated is paid search because it'll just get you to the top of Google when people are actively looking for solutions.
[00:10:44] The thing is it's probably and, unfortunately, it still is the kind of the main channel for a lot of organizations. But we can make incremental improvement to other channels. So, obviously, organic search is another good channel, but it kind of takes time to build up there. We'll also find with organic search consumers or info seeking rather than looking to purchase. And everything we do in e-commerce is "I want to buy something." So, we always have that final conversion in mind. And generally, the PPC works a little bit better for that at scale just because of how it operates.
[00:11:26] And it's interesting, actually, that you mentioned Instagram because the direct integration between something like Shopify, or Magento, or WooCommerce, or something like Instagram shopping or Facebook shopping where you can directly link your e-commerce catalog to the network just as you can do a Google Shopping. So all of your products can be tagged in a photograph, which will obviously have a price and then direct you to the landing page on your e-commerce site where you can go ahead and buy that product. Of course, the thinking is that an influencer or someone like that, a key opinion leader, KLL in China, is the difference. But anyway, I digress. An influencer might show your product and you can tag that of what that is, click through and you landed essentially on the page where you can buy it. So, the idea is that you can get that influence and that kind of recommendation and then remove as much friction as you can to get me from my Instagram to get my credit card out.
[00:12:33] So things like exporting your entire product suite to Instagram, to Facebook, to Google, to all of that stuff it's in its infancy, I think, I feel with the social channels and that's because we tend to not purchase all impulsively with social or even e-commerce. We tend to sit down in front of our computer and type something in, when we're ready, out of time, we're ready to purchase, but it can't influence the conversion journey. So, I'm interested in catalog sales. I think that's a good talking point.
[00:13:09] And then, I suppose, one of my favorite areas is affiliate marketing. If we can talk a little bit about affiliate because it is an incremental channel. It's not a high traffic channel. It's not a high volume channel for the majority of verticals, except for things like gambling maybe or something where you'd be given different bets, and different odds, and maybe coupon codes where it can drive a significant amount of revenue. But affiliate marketing is essentially when other people sell your stuff on behalf of you or give what appears to be a lovely third-party recommendation, and then a nice link to your website where you can buy it based on this lovely independent review that you've just gotten. But then, obviously, the review has been paid for in terms of when that link is clicked and the person goes ahead and buys, the affiliate who wrote that review gets a percentage of the sale.
[00:14:03] Will: So, when you say it's an incremental channel, you mean it's not a mass scalable channel?
[00:14:11] Cathal: Exactly. So, what I mean by that is your, like, traditional breakdowns and e-commerce would be maybe 40% to 50% of your revenue comes from your paid search, then maybe another 30% or 40% comes from maybe your organic search, a bit from email, and then affiliates might bring between 5% and 10% of your overall revenue because it's just not a mass-market channel. But what it is, and this is why I love it, is it's a low-risk channel. It's actually, if you do the maths correctly, it's a zero-risk channel because you only pay when someone buys something. So unlike PPC or things like that, like, where you pay for a click regardless if someone buys or not, you still have to pay for that traffic.
[00:15:02] With affiliates, if someone clicks through and you choose the commission model, you don't have to pay for that click. You only give them a percentage of the sale if a sale occurs. So, if you do the numbers right, you can say, "Well, I'm willing to give them 2% because that still gives me enough margin and they'll get paid. And if they don't make any sales, I don't have to pay them any money."
[00:15:27] Will: And is that something that any brand of any size can do?
[00:15:31] Cathal: Absolutely. I mean, and that's...
[00:15:33] Will: And how would you go about doing that for a smaller e-commerce brand?
[00:15:36] Cathal: Well, I'd use a network. So, what a network is it's an interface between you, the brand, and the affiliate or the publisher who sells on your behalf. So, if it's an influencer or if it's a website that does reviews or different things like that, you need to find the right fit for you as an e-commerce seller.
[00:15:58] Will: So you can go to networks that do all that work for you, or are you saying, as an alternative, you can specifically go to all the sites and influencers?
[00:16:09]Cathal: If you have an agreement with an influencer, you can use affiliate links to track their commission and sales. But if you want to just find, like, "Who should I work with?" There's a search feature in a lot of the networks and will just allow you to search different affiliate websites, different affiliate companies, different influencers that you can just pick and choose who you might want to work with. And I suppose the other thing is there's an inbound connection where if you are a recognized brand, people will reach out to you and say, "Can I join your affiliate program?" You can say yes or no. So you can either reach out to affiliates and say, "Would you like to join the program?" And based on your own feeling about are they a right fit? And do they drive the right amount of traffic? Or they can come to you. You generally find it's easier to approach them when you're a smaller brand.
[00:17:00] And the network will...like as part of your network fee, it'll cover all of this kind of functionality. So it'll manage hooking you up with the affiliate, managing all the tracking of their traffic to you, all of their commission that they may have earned from sales that they've done on your behalf. And then there's also fraud analysis in case anyone does anything dodgy. So, any kind of messing around or anything like that is all captured and is weeded out of the system. So, you can be fairly assured that any of the sales and commission that come through on your affiliate network are legitimate and you can pay the affiliate as per your agreement. But it's a great channel, it's just it's not talked about so much.
[00:17:47] Will: No, it's not. It's really not, I mean. And it seems to really be about PPC and not just search as well. I mean, obviously, it depends on what kind of product it is but social PPC seems to be particularly for smaller products for certain types of products like food, health, lifestyle, fitness, fashion, Facebook and Instagram ads also seem to be huge. But it oftens strikes me that I do wonder if those companies can be a bit too reliant on PPC. Is that a danger?
[00:18:17] Cathal: I think it's...at the moment as part of the play. So, it's just part of the environment. And like any kind of reliance on any channel, or network, or particular organization, it opens you up to risk, sure to be any shocks or disruption in the market. So, at the moment, it's just it's part and parcel of what you have to do. You have to get your Google Ads up there. If you got a certain price point, like maybe under $20 or $10, you can pretty much sell directly through the social channels like Instagram or Facebook. E-mail is always a great one, you know, but PPC reliance is, unfortunately, just something that it's part of...it's something that I still feel that can be measured in a transactional sense and that you can understand your ROI really well.
[00:19:07] Will: That's why marketers love it because you spend X and you get Y. And it's very, very clear. But the way you're talking, because you are an e-commerce expert, you're talking like a true performance marketer. And what I mean by that is you're very conversion-focused. And you're looking at those inputs of money spent on PPC and the outputs of revenue. Stepping back in a wider marketing context, that's very kind of bottom of funnel activity. Are you as interested in top and middle of funnel activity? Is that as important today or can people just set up shop and steam in and go straight for those conversions?
[00:19:54] Cathal: You can try but it is very, I suppose, cavalier here to do such a thing. My heart and my motivation is always in the bottom of the funnel, it's in the glory, it's in the tip of the ball over the line, it's Teddy sharing them, you know, that's exactly what I am. I'm the...like, you know, I haven't done any of the hard work, but I'm putting the ball over the line. That's where my heart is. To be honest, it is a wide ecosystem. If you think about the traditional purchase decision journey, it's like you recognize you have a need or a want then you go ahead and you look for alternatives, and you look for options, you look for all these things, and then you decide to purchase then you purchase.
[00:20:34] So, the purchase piece, and the PPC piece, and that conversion piece is when all the hard work is done. Brands still need to be built, trust needs to be established, conversations need to be, I suppose, disrupted in order to get people thinking in different ways that if you are cavalier and just, like, set up your Shopify and spend €10,000 on PPC ads with Google Ads and bidding a bunch of generic terms, no one knows your brand term and different things like that, it is not going to succeed as you would like would be my absolute, absolute guarantee nearly. I've never seen anyone just crack open a store and succeed without having a definitive conversational social strategy to just to brand build.
[00:21:30] Will: There's this whole phenomenon at the moment of drop shipping. And, I mean, this has been going on for years, but it's particularly in the last couple of years it's become one of the go-to make money from home methods, hasn't it? And there's a real dream being sold online and Shopify is a big part of this. I mean, I'm not saying in a pernicious, or bad, or misleading way, just Shopify has emerged a platform where within about an hour tops, you can actually put together a really legitimate, truly legitimate e-commerce store, stocking all your favorite stuff, none of which you have to warehouse, or even touch, or see in your life, and start selling it and then having it shipped and fulfilled on your behalf by these big kind of providers like, you know, Oberlo and Sprocket and what have you.
[00:22:28] So, how has that changed the e-commerce landscape? Because you've got all these players entering the landscape who aren't building any brand. The brand very much takes a backseat, they put their cool trending products in an Instagram ad. People click it and they buy it and they barely know who they're buying it from because all these shops look the same.
[00:22:51] Cathal: Well, I know you're right...
[00:22:53] Will: Has that made things hard for you, I mean, or how's it changed the e-commerce landscape?
[00:22:57] Cathal: Well, that's the thing, it's specifically in retail, for the most part, to be honest. I suppose, when I was kind of yakking out about building the brand and stuff, it's like if you're a producer and you want to sell online, you do have to build your brand. But if you're a mass manufacture or you're kind of...
[00:23:20] Will: Selling fidgets [inaudible 00:23:21].
[00:23:21] Cathal: Yeah, something like that. Something that's transactional and it wouldn't be like...what I find a lot of dropshipping is it's things like T-shirts, and it's mugs, and it's kind of low cost and is not a big decision going into it. So, I'm happy enough to drop $10 on a Beastie Boys T-shirt. All you have to do is make sure that they've got the dates right for when the Beastie Boys are active. And that's what I discovered recently. So, you can get some inaccuracies in your product. So, for dropshippers, it's definitely worth sense checking the accuracy of any of those kind of things like if it's books, or if it's mugs, or if it's anything like that.
[00:24:10] Will: What do you mean exactly?
[00:24:11] Cathal: Well...
[00:24:13] Will: The story.
[00:24:13] Cathal: Yeah, yeah. No, I've noticed on Instagram or Facebook that, you know, I get, like, pictures of different bands that I like. And, like, maybe the singer is holding up a T-shirt with the band on it, but it's just kind of a photoshop of their heads stuck on a generic body. And it's blatantly obvious what this is and that won't succeed because, unfortunately, what happens even though you don't have to stock the product underneath your ad, you just have all these comments from hardcore fans calling it out. So, I mean, with dropshipping, no matter what you're selling, if it's leveraging another brand like it's been recommended by someone or something like that, you have to check the legitimacy of it people because it can just come across as fake or rubbish.
[00:25:04] And that, unfortunately, as you know, has been associated with a lot of dropshipping products. So while there is money to be made, and it's certainly a good business model, it is transactional and it may be just a finite stepping stone until brands, as they always do after disruption, reestablish themselves as the main players with a market.
[00:25:26] Will: And talking about disruption, how has the emergence of Amazon Marketplace disrupted e-commerce?
[00:25:35] Cathal: Yeah. I mean, it is the great disrupter to everything over the past number of years. My interesting story about Amazon actually is when Jeff Bezos started Amazon, he registered a website called relentless.com. And if you type relentless.com into your search engine, it will redirect to amazon.com. So, it's a little guy that still exists obviously in his history, but relentless.com does redirect to amazon.com.
[00:26:07] Will: Wow, it was almost a more appropriate name for the organization.
[00:26:11] Cathal: And that's the thing. It is the great disruption of the past number of years that the postal services all over the world were dying. And now, with e-commerce, you're finding that this older industry that e-mails are placed in letters and online statements are placed in bills and different things like that that seem to be no reason for the postal services and they're closing post offices, they're doing all this stuff. But actually, a lot of postal services all over the world are now in profit because of the amount of e-commerce parcels they're delivering. So, you know, it's disrupted the commercial model from the high street perspective.
[00:26:49] Will: But does it mean that your average e-commerce store also needs to list their goods on Amazon?
[00:26:57] Cathal: Well, that's the next step after their kind of initial disruption is, now they're disrupting the online space where they already operated. So, when you're on google.com, you may be in an e-commerce or purchase mindset, but you may be in an Infoseek mindset. When you're on amazon.com, you're much higher intent in terms of purchasing.
[00:27:19] Will: You feel closer to purchasing.
[00:27:21] Cathal: Yeah, absolutely. You are absolutely end up... The only reason I'm on amazon.com is to buy something and get off. You know, I'm not there for the experience. I'm not there to do anything other than find exactly what I need, find out what it costs, put in my credit card details and go somewhere else on the internet that isn't amazon.com. It's internet like a bank robbery. And that's the beauty of it because it's a much more efficient way to purchase. But at the same time, it as a marketplace is after opening not only a whole new world, a whole new way to buy online, you're buying...I suppose you're putting your product in front of people who are only there to buy.
[00:28:11] Like, let's say only a certain percentage of Google's users are there to buy and the rest are there to find out information or look at a map or picture, or something like that, when I'm an Amazon, there's only one thing I want to do and that's to buy. So, that's the value-add that being on the Amazon Marketplace is that you're only ever talking to people who are going to take the credit card out.
[00:28:36] Will: Well, and there's been this change of behavior, hasn't there, where people go. So, if they're looking for videos, they don't Google it, they go to YouTube, you know, this is a off the side stat that YouTube's the second biggest search engine after Google. And similarly, there has been a trend observed where people go straight to Amazon rather than search and that's been part of Amazon's growth because it's become such a reliable place to get the stuff you need. So then, if the audience moves there then, yeah, e-commerce brands have to go there too. But that inevitably kind of productizes, it commoditizes what we as e-commerce brands are doing. So, how are e-commerce shops still managing to deliver an experience rather than just supplying cold products? Are you seeing anyone succeed doing that?
[00:29:29] Cathal: Only brands really, like, big brands like in the jewelry market, you find [inaudible 00:29:36] stuff or in the fashion brands you might have some experiential. But even at that, when I was getting the train into the studio today, I was just...I didn't mean to, but I just happened to notice that the woman beside me was browsing an e-commerce store in her phone. And it wasn't a very rich experience in terms of visual design, it was just products being laid out and she was just scrolling through. So, I don't know what the value of an onsite e-commerce experience is other than transactional. It has to be in and out because that's why we don't go to the high street. That's why we do it from our phone, from our computer, whatever it is.
[00:30:21] Where e-commerce can have an experience is in the social channels when people are there for a non-transactional purpose. So, you can talk about any kind of brand advocacy you're doing with maybe charities or foreign aid, or different things like that, or any causes that you champion, again, maybe you can do a little bit of light trolling, like the way that Lego did with the new Jeep that Tesla released there. I don't know if you saw it. Did you see that? Actually, it was very funny.
[00:30:53] So, that's where you can build an experience is in the social world. And that kind of goes back to what you were asking me about the channel piece around, like should we just focus in on search? It's like to a point you can, but you do need to still plant that seed and think about the old school to marketing which is consideration sets, and front of mind, and brands that you like, and different things like that. And that world, people don't want that world on your website beyond your brand colors and your logo. You know, they just want to get to the product, get to get to the checkout, make it easy, it's done. When they're in the mindset for brand engagement, it's on social.
[00:31:39] Will: A very good point, isn't it? It's a very good point. It's kind of the difference between when you go to a very specific shop or when you just go kind of browsing down the high street to kill a bit of time. You know, and this is the kind of online version of that really and sort of really good things for people, anybody who's listening who works in e-commerce to think about people do that less purchase intention, brand engagement in social and that's why that's so important, isn't it? It's going to build the personality of your brand and build a relationship over the long term with your potential customers, your existing customers.
[00:32:21] Cathal: Yeah. But when they're ready for... The thing is we can't make anyone do anything they don't want to do. So, if we put up a load of brand engagement stuff on our transactional website, it just gets in the way. It adds friction to their journey because people don't want that. They want to be in and out and they want their stuff in the post as quickly as possible. They want to get that email that says, "Great news, your stuff has just been dispatched. It's shipping tomorrow." Or the text message that says it's arriving between 2 and 4. That's what they're there for. Otherwise, they go to the high street. But when they're in a conversational, when they're in a expansive state of mind, that's when they're not on your website. So, there's room for both but not in the same place.
[00:33:05] Will: And do you think loyalty and repeat purchase is easier or harder to drive online?
[00:33:12] Cathal: I think it's easier to drive online.
[00:33:14] Will: How are the best brands doing it?
[00:33:17] Cathal: We have all these great tools. Like, I mean, we've got, like, the retargeting tools, we've got things like coupon codes for past customers, we've got reward schemes, we've got point schemes because everything can be tracked. Because if you've bought off anyone on a website, you will have a customer profile with all of your interactions, commercial, and non-commercial. And you can build different profiles around what are the best ways to engage these people. And I think it's easier to get someone to, like, kind of recommit to a purchase that might take 15 to 25 seconds down to jump in a car, and go to a shop, and do a thing, and park the car, and take out your credit card, and stand in the queue, and maybe it's not going to be there. I think it's just easier.
[00:34:11] I think people have fast-paced lives and are purchasing smaller basket sizes, but we're purchasing more frequently. That's the thing. So, it's whereas we purchase larger, think about it, we purchase larger basket sizes because it was a pain to go shopping, but now it's not such a pain to go shopping. We purchase more frequently, but just what we need. It's not such an event. So repeat purchases online, I do feel are...
[00:34:43] Will: Because all people need is that little nudging remark to that or an email with an offer.
[00:34:50] Cathal: Exactly. I mean, you know who they are, so you know how to reach them. And if you've given them a positive experience first time around, that's all they really need when the next purchase requirement comes in. And what I mean by positive experience, and this is an interesting concept, you don't have to go above and beyond just doing what you're meant to do. If I buy something and you say it's going to arrive in three days and it arrives in three days, I'm happy. It doesn't need to arrive in a day. You know, if it just does what I expected to do, that's all that needs to happen. You don't need to go above and beyond to win consumer loyalty with any kind of online interactions.
[00:35:35] Will: You just need to be reliable and consistent.
[00:35:37] Cathal: Do what it says [inaudible 00:35:40] kind of thing. You know, like you said, you were going to do it, just do it.
[00:35:43] Will: I'll tell you something that I always ponder about, I often ponder about with e-commerce is why is it that some of the really big brands, I mean, some of the biggest brands on the planet really struggled to get their e-commerce game on? Why is that?
[00:36:02] Cathal: Yeah. I mean, it's baffling. But I think a lot of established brands just were in their comfort zone. They had a monopoly in the high street. They were able to force smaller retailers out. So, they just they own the original market. And then when this internet thing came along, it was just a bit of a fad and they didn't think that it was going to last or...
[00:36:27] Will: They didn't take it seriously.
[00:36:28] Cathal: I think so. I think they just went, "Look, sure, we've been doing this for 150 years," and then there's just this whopping change in how people do things. And they came late to the game. And they came late to the game where they're entering a new high street where there's different players, more established players in the virtual high street that they will struggle to compete with. And then you do have other things, you have, like, logistical things where they're warehouses instead of free-commerce or they don't have the proper type of TPL, which is a third party logistics setup in place, they don't know how to handle returns, they haven't worked with a traditional advertising agency who can't do online.
[00:37:12] And I think a lot of brands, you know, there's a step-change in between just when the smartphone really took off around 2008 and then around 2014 where a lot of the traditional players just got edged out. They just got edged out and they haven't been able to work their way back in. They may work their way back in because they are brands, but what I still find is the only time I see a TV ad is in like my parent's house. And the only brands I see are those brands that struggle online, the ones I don't buy from. So, they may still be continuing to do the wrong things for a younger market like me and my younger two decades. But anyway, that's fine. We will move on.
[00:37:58] Will: Because I think we saw that in fashion, you know, for instance, where big players like ASOS came along, boohoo.com really ran that marketplace. And then the people from the high street, the brand from the high street very much struggle to compete with that because they hadn't ironed out the logistics, they hadn't ironed out things like returns and online sizing and product matching, product cross-marketing. I mean, yeah, it's just fascinating with all the resource that they had that they just couldn't kind of get their act together. Now, if someone was listening and they wanted to start their own e-commerce company brand, what would be your kind of really distilled key bits of advice to get them on their way as quickly as possible? What are the things they should really sort out urgently when they start?
[00:38:54] Cathal: Yeah. Well, the first thing is can they legitimately sell online? Is there a market or is it just, "I want to get onto this e-commerce thing and see how it goes?" So, it should be a defined strategy that yes, there is actually people do...like if you sell confectionery, you're probably not going to...unless it's very bespoke art design or something, you're probably not going to have market online for selling this type of product because it can melt, it can do all kinds of things that will cause you difficulty. So, the first starting point is actually kind of sell online. Then the starting point of everything is what does my website look like? Because your website is your storefront.
[00:39:37] So we've got a number of options here. We've got the kind of enterprise-level solutions like Magento and we've got the more kind of mass-market quick setup solutions like Shopify, there's other website builders with different e-commerce plugins like WordPress and there'll be Wix and there'd be all kinds of stuff that you can potentially use.
[00:39:58] Will: So, would you suggest that people choose a platform rather than to build something bespoke?
[00:40:03] Cathal: I would absolutely recommend that because the platforms, they're well supported and they do things like they integrate with your tracking tools, the Google Analytics, like, Google Ads.
[00:40:16] Will: It works out the box. It's like Shopify. It really works out.
[00:40:20] Cathal: Exactly. Shopify you just enter a couple of numbers, you enter your GA code, you enter your Facebook pixel, and then everything just works. Whereas if you're paying a developer, you're paying hours for him to code or her to code. Like, your e-commerce output and your thank you page to push all the data to GA so you can track it. Putting pixels, everything is just hours and hours and hours. And then if it goes down, it's more hours. And then if there's a new type of security threat for online payments, you need to get that sorted. So, bespoke stuff is not the way to go. Not the way to go at all really for anyone starting off. Even big brands, I think, shouldn't really, you know, go bespoke unless there's some really critical business reason that they need to go bespoke because you can do a lot of the out-of-the-box solutions.
[00:41:11] Will: I agree. I mean, even if a sizable retail brand came to me, I'd suggest that they use Shopify because for all the reasons you've suggested, it's supported. You're paying someone else what is actually a very small cost relatively, to provide a really well-supported robust piece of technology. And let's say I've got €1000 burning a hole in my pocket as a marketing budget and I've got till next week to get this thing running, and rolling, and selling product, where should I put that first bit of budget?
[00:41:46] Cathal: First bit of budget should be split. I would probably put it 70/30 between paid search and your preferred social channel. Paid search just gets those people there to your website to see your product vendor in some kind of purchase mindset. Because obviously, the keywords you would choose your paid search. Say you're selling phone cases then something would be buy an iPhone case or buy iPhone 5s case or something like that to make it maybe less short tail and hopefully a lower cost per click. But paid search will be because it's e-commerce because it's transactional, you need to get those purchasers to your website.
[00:42:32] Then to build the brand to kind of keep it front of mind to maybe retarget people who have visited your website via a search click, which will be expensive, you can retarget them for a much lower cost on different targeting platforms or retargeting platforms like Instagram, like Facebook, maybe not Twitter, it's less effective, definitely not LinkedIn for B2C, and maybe something like the Google Display Network. So you can pay for that initial high purchase intent, expensive click through a search click, and then retarget those people with cheaper clicks from Google Display Network, from Instagram, from Facebook, or the social channels. And that allows you to get more out of that expensive click at the start and still hit those people up who did show some intent that they might have bought your product.
[00:43:27] You can set different variables around they must have spent at my site according to Google Analytics and I can push that into an audience list and retarget those people. So, you're only retargeting high-quality search visitors. So, I think the way I'd kick it off would be set up the website, make sure everything's tracking up as you would expect, 70% is search, 30% it's social and work like that. And then test and grow, pick a market rather than going global. Like, probably pick your city, pick your delivery area. You know, you don't need to be targeting the other side of the world or indeed trying to enter the Chinese market on day one. I do think that you can just pick a home market, make it easy. And then use your home market as a kind of a bed to learn the nuances of your e-commerce activity and then iterate on that. That will be it, 70/30, yeah.
[00:44:28] Will: That sounds great. That sounds really good. Just to pick up on something you said as well about Google being basically an answer engine. So, people are looking for solutions. They're looking for answers to their questions. Is there a role for content marketing there? So, if I'm an online jewelry store, is there a role for not just having my products and pages trying to get them into the first page of Google, but actually to write content, produce quality content, informational content?
[00:45:04] Cathal: Yeah. Yeah. I mean, I think 100%. Because, like, when you're doing your research phase of your purchase journey, you're asking things like, "How can I size cycling shorts? Or what's a ring size for my engagement?" Because you certainly don't want to get that wrong and different things like that, these important purchases that may require a little more than just pick size and go. So, there's...
[00:45:36] Will: So, it's sort of a job for people like for e-commerce brands to actually think, "What are the informational needs of this audience? How can I provide them as another way to show up in organic or even paid search results?"
[00:45:51] Cathal: Yeah, I think organic is better because you wouldn't be able to justify to spend those informational searches with your PPC budget. And that's just a rule of thumb, you just couldn't do it. So be in the organic world, but at the same time, it does require that more longer-form discourse around like how do I size a ring...
[00:46:20] Will: Oh, it's proper authoritative information content it's written for. There's not a thinly veiled marketing. It's actual high-quality information. That's the idea, isn't it?
[00:46:30] Cathal: You know, so when it comes to e-commerce, you can do things like how to choose the best hotel, how to choose a good city break or something like that. Like, you'll often find, and this is where affiliates thrive actually, is a lot of travel companies do things like, "What are the top 10 places in Europe?" So, you'll find the likes of [inaudible 00:46:56] and your British Airways, Aer Lingus do a lot of things like "The top 10 places to visit in Europe," and who you're going to book the flight with. So, people do the search, "What are the top 10 places to visit in Europe in 2020?"
[00:47:11] And then you've all these long-form pieces of content, the choice of Paris, and Prague, and Warsaw, and Vienna, and then a link at the bottom that you can buy that flight. So, before people buy a flight, they want to know where they're going. So what you're doing is you're using the content piece, that content play to help them along their journey and then be the solution to their needs when they're ready to pull the trigger on the purchase piece.
[00:47:38] Will: That's great. That's a fine advice. Well, I think that's very insightful and there's plenty for people who work in e-commerce to takeaway there, I think.
[00:47:48] Cathal: Yeah. I mean, it's channels and it's metrics.
[00:47:50] Will: Yes. Yes. Well, Cathal, thanks very much for that. That was really interesting.
[00:47:57] Cathal: Well, no, it's been fun. It's always good to talk to another e-commerce head about things. It's like rekindled spirit.
[00:48:05] Will: Indeed, indeed. Well, thank you very much. And thank you very much for listening.
[00:48:10] Cathal: Great stuff. Cheers, Will.
[00:48:13] Will: If you enjoyed this episode, subscribe wherever you get your podcasts. And for more information about transforming your marketing career through certified online training, head to digitalmarketinginstitute.com. Thanks for listening.