New year, new ecommerce landscape: In this episode, Taylor and Richard make 6 resolutions for the ecommerce industry, breaking down the strategies your business will need to thrive in the coming year.
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[00:00:00] Richard: Hey everyone, welcome to the E-Commerce Playbook podcast. I'm your host, Richard Gaffen. I'm joined today, our first episode together of the New Year by Mr. Taylor Holiday, CEO of Common Thread Collective. Taylor, how you doing?
[00:00:12] Taylor: Doing great, I love the New Year, always take a new starting line as an opportunity to feel energized again, so big New Year's guy.
[00:00:19] Richard: Yeah, same. It's you got a clean slate, none of the problems I had in the past apply anymore. So I can just...
[00:00:24] Taylor: Leave them back there.
[00:00:26] Richard: Exactly. Yeah, that's right. And actually that's what we're thinking about for the industry at large for this specific episode, is what we wanted to do is sit down, I'll frame it this way, every year since I was a kid, my dad has made New Year's resolutions for us.
[00:00:39] Taylor: No way.
[00:00:40] Richard: Yeah, it's a joke, but we're gonna do the same thing for the e-commerce industry at large.
[00:00:46] Taylor: Got it.
[00:00:46] Richard: Of course, a lot of these resolutions that we're making actually mirror some stuff that we're doing for ourselves, but the idea here is we have six New Year's resolutions, for the e-commerce industry in general and for ourselves. So we're gonna roll through them, obviously it's a New Year, it's a very new environment, and it's gonna require some brand new approaches.
So, we'll start with one that's not gonna be novel to anybody, but I think the New Year's resolution that frames a lot of the other ones, especially tactically and strategically, is the idea of profit over growth.
So, Taylor, let's break that down a little bit. We've lived in a world where the growth was the watchword for a long time and now that's just not gonna fly anymore. So what are some ways that we're bringing that to bear on CTC itself and some ways that the E-com ministry in general can?
[00:01:27] Taylor: Yeah, if you look at the growth of CTC over the last decade, it mirrors the, basically the exact trend line. If you've ever seen that graph of e-commerce revenue as a percentage of retail, it's like nice linear growth, 2020, 2021, explosive movement, and then a step back to the old trend line, which means revenue moving in reverse.
And that's been our experience as an agency, and it's been a lot of our partners experience as well. And I think for us as an industry as whole, what it means is that we're moving outta an era, these are all well worn ideas, this is not novel in any way, but it's certainly the case that this is a year about prioritizing, profit over growth is that we have come out of an era where we've ballooned the revenue, cost rose with it in the support of that idea that was gonna continue, and now we're all looking at it and going, okay, it's time to show that we can create leverage as a business such that it produces shareholder value in the form of profit.
And it's time for our industry to prove that we can do that. And so as we look at the resolution, there has to be nothing else at the top of the list besides prioritizing profit and proving that we can as an industry produce shareholder value in the form of operating income.
[00:02:33] Richard: Yeah, and we'll revisit this one as we go through the rest because obviously it's the guiding principle for all of them. So the second New Year's resolution that we've come up with here that I think is really interesting, one is this idea of we resolve to get really good at controlling costs. One thing you were breaking down for me is this idea that nobody has the skillset, to become efficient at cost and expenditure because we're not used to having to care about that. So yeah, break down that for us a little bit further maybe, like how are we gonna have to do that?
[00:03:00] Taylor: In a season of abundance, marginal increases in cost, meaning small increases in things that don't get a ton of attention. They aren't the most important thing because you are in a market capture mindset. You are going out and the way that you're gonna improve as a business is by driving top line growth, and so small cost issues don't become very important to manage, they become, they take a back seat or maybe they should be more important, but they just aren't generally.
And now when you get to that revenue flattening or even moving backwards, if you're gonna produce profit, the way you're gonna do it is not through a bunch of initiatives to make top line revenue grow, it's to control and tighten the costs. And so some of the very practical ways that shows up in e-comm in particular is, we are going to see a massive reduction in the number of apps that are used in the average e-commerce store.
If you go into a tool like BuiltWith and you pull up a website and you look at how many different applications are just Parasitically siphoning, 9.99 a month out of every business, you're going to see that begin to go through with a fine tooth comb.
And if your application is not providing a very clear return on investment and it's going to be gone. And you're gonna see the rise of Google Sheets coming back for all the, applications about reporting and you're gonna see a rise of these things that are free solutions to problems that historically we got really bloated on tech that maybe was valuable and maybe wasn't.
And it's funny, I this got so bad that, I've had application providers tell me that we're just a resource. It's your job to make money with us as a resource, and let me tell you right now, that's not good enough anymore. If you're gonna say to me as an entrepreneur, like we just provide you a solution, it's your job to make it profitable.
Then you're just gonna be gone, cause I'm not gonna take the time to figure out how to do that thing, I'm gonna find an alternative solution that better meets me there. And so I know that we've been going through this at CTC is like, how many Adobe instances is there? Wait, do we all need Calendly links?
How many, slack users are there? What, somebody booked this newsletter, get rid of that, like everything, every dollar suddenly becomes critical and everyone becomes hyper aware. So we're cleaning out our closets, we're cleaning out the app stack for sure.
[00:05:00] Richard: Okay. So that's more of the smaller costs, although obviously they add up.
But in thinking about you, had mentioned before some discussion that you had around like, how many ads do you need to produce per month? To succeed and so now more than ever, getting that number right is really important on the cost side of it. So maybe let's talk about that a little bit in terms of ads and then we can maybe move to other cost like staffing?
[00:05:21] Taylor: Right
So if we think about the three, let's go to four quarter accounting, so you can break your revenue down into four quarters, in a e-commerce P&L. You have what we would call cost of delivery, so these are all of the variable marginal cost for the product. Your payment provider, your shipping and handling all the things that go up, as orders go up.
Then you have CAC, what you're spending on advertising, and then you have opex, the things we just started talking about and inclusive of payroll, and then you have profit. So we use benchmarks of 25% of your revenue to each category, and you can use that as a way to view your P&L and figure out where your overweight or underweight.
I think we have to think that maybe CAC, is not going to be the marginal gain for us in the near future. We know that those costs are really difficult to move dramatically. It's not gonna say we're not gonna effort towards that, what that means is that we're gonna start tightening around the cost of delivery.
We're gonna go negotiate with all our payment providers, we're gonna make sure we're not paying outrageous fulfillment costs. We're gonna look into last mile solutions on shipping, we're gonna go to our manufacturer and try and get every little piece of our product cheaper. We just talked about cleaning up the opex, cleaning up the software side.
The other big chunk then is obviously payroll, it's how we manage people. And so the thing that you just brought up was a conversation that I put out. I put out this tweet asking how many ads a month do you need to make and how do you know? And this is a thing we're thinking about on resourcing as an agency, we have to produce ads every month and we have to be able to answer this question.
And what I saw was basically that nobody really has clarity of how much they need. So what that means is that there's no way that there isn't a bunch of design resource or production resource sitting inside of organization that's either excessive or is just not being totally, they're not functioning at maximum output.
And the reality is people will expand their time to any allowable. If you have a full-time designer on staff, they're not going to come to you at 2:30 and be like, hey, turns out I have no more work to do, so I'm just gonna head out, they're gonna find something to do. And that thing may or may not be, the most useful thing to do.
So with ads is a great example because, the amount of ads that you make every month is not consistent usually cause your spend goes up and down depending on the season. Maybe you have one ad that's working really well and it's like it's carrying the ad account for a long time and so how much output you need changes a lot on each month.
And so flexing that staffing model up and down relative to that required output is really important. And so you're gonna see more of this production level outsourcing to partners, and anything that's like a functional service that moves up and down with revenue, you're gonna see a lot more flex or variable resourcing for it.
And so, just forcing people to answer some of these questions that operationally, again, they weren't forced to answer because, ah, if I was a little overinflated on staff, no big deal because again, we're in this growth era. The second, that's not true, you have to squeeze every minute out of every resource and try and map it as appropriately as you can to the level of production that you want, and so again, the level of scrutiny on payroll and staffing going way up.
[00:08:15] Richard: Yeah, one metaphor we used to use when I was on the creative side was something along the lines of like workload is a gas, not a solid. In other words, like it'll expand to fit whatever container that you give it.
And so the idea is you have to, if the container is 40 hours a week, then it's gonna fill 40 hours a week, but if all of that is not efficient, then you have a problem, you have to figure out how to make smaller containers for it.
[00:08:35] Taylor: That's right, that's a great metaphor.
[00:08:36] Richard: Okay, so let's talk then about, let's move on to the next one. So this can definitely be a personal resolution, maybe should for all of us, but we'll call it the, the Dave Ramsey resolution here, pay down your debts, right?
[00:08:48] Taylor: Let's try and avoid the Dave Ramsey metaphors too much here, but I think what we want to do is we want to acknowledge, that as an industry, we got hooked on some predatory debt that was really harmful, and we need to take a step back and go, okay, was taking a variable rate loan on the basis of my media performance really a great risk evaluation for me? And how could I move some of those costs into a more clear fixed structure where possible, even if Is perceived to be slightly higher. Understanding the costs in a way that I can trust the partner consistently might be useful, or can I be aggressive about in the short term, rid myself of those before I build back up opex before I make that decision for that employee higher? Before I make that investment in that new product development, can I eliminate what has been a stack?
Of really aggressive loans into the e-commerce industry, how quickly can I rid myself of those to increase the overall unit economics of my business?
[00:09:50] Richard: Yeah, makes sense.
[00:09:52] Taylor: What I'll say is that I think you're gonna see a lot of, the way that this is actually gonna happen, unfortunately, is gonna be in bankruptcy, in corporate restructure.
Is that you're gonna have businesses that at their current, the money that they raised their last round at, even the preference that those investors have relative to the price inclusive of the current debt, the businesses are just gonna be upside down, and what's actually gonna make the business more valuable is to actually push it into bankruptcy, restructure it, and have someone come out the other side.
And I think, unfortunately, As an industry, we actually probably need to clean up a lot of these businesses cause the expectations of the growth are forced by these obligations to these debts that just make the businesses untenable. And so I think in some ways, unfortunately, some of this is gonna be a flushing out of corporate structures.
And you're seeing that already start to happen in a few cases, but I think on the other side, there're gonna be businesses that can maybe grow in a healthier way without these obligations that they took based on growth rates that were never gonna be sustainable.
[00:10:51] Richard: Alot of the BS getting flushed out, like the kind of, the famous D2C unicorn type of scenario is just not gonna happen anymore because so of that is built on a foundation of sand in a lot of ways.
[00:11:01] Taylor: That's right.
[00:11:01] Richard: So, okay and we'll actually, we'll probably, touch on that in a couple resolutions, let's say. But let's jump to the next one real quick because in some ways this could feel like it cuts against some of the resolutions that we've listed earlier, and that's this idea that we, at least at CTC, are making a resolution to move back to a hybrid work structure or to at least bring people back into an office.
And in fact, Taylor, you are in one of those offices right now, so you're putting your money where your mouth is, but talk to us about that. So obviously, the idea behind remote work is that on paper it's efficient. It costs, you don't have to pay rent on anything, but now we find ourselves in a WeWork.
So what's going on with that? So how do you think about that?
[00:11:40] Taylor: So my experience is that the cost of doing business in a remote setting is incredibly high if you did not build the business, to have work systems from the very beginning that support that kind of workflow, and that requires a very specific set of infrastructure, information systems, work design, communication standards, just how you do what you do in a remote world.
There are companies that I think have their sort of core ethos is built around that idea and from the beginning they've built the infrastructure to be really effective at that. I have found for a company that was fully in office, and then suddenly transitioned into a remote setting that the cost of doing business in that way was actually incredibly high.
And that was illustrated by like really slow uptake in training, the amount of time you have to spend communicating to get an idea absorbed is like really high. So just thinking about how many times I have to say something in order to create organizational adoption. And if thinking about that as a cost of myself, I think about the inefficiency of the labor as a result of that.
And so what I'm theorizing is that the cost of the rent, which is an obvious line item, so it's easy to point your finger at it is actually less expensive than the cost incurred by the inefficiency of my staff as a result of our current information systems. And again, there are people who I believe can solve that operationally, and they're gifted at that way, and they understand room won't work at a level.
I'm not sure that's us as an organization, at least not at this moment. And so we are going to find ways to create efficiency through more hybrid in-person interactions, both in an office as well as getting people to gather more frequently to try and accelerate some of the development that's so critical to our product, which is people.
[00:13:29] Richard: Yeah, what I wanted to do is revisit your point around what I thought was really interesting, this idea that unless you bring a workforce in that is trained in remote work, which is a very different, that's mindset.
Really it would be like you bring your company is just like freelancers who are all decided to come together and work together. You're gonna have an issue because people are just like not natural. Good at that, or most people, their backgrounds is in office work.
[00:13:51] Taylor: Well that's exactly, so I think what you're describing is that remote work is a skill okay, and you have to be good at managing your time, you have to be good at managing communication with your peers, and I'll tell you what, we never hired or interviewed for that skill, and I think that some of us just didn't have it at the same level.
And so it means that even though we want it, or it's enjoyable in some ways, it means that organizationally you're inefficient because it is a skill. And so I think to just assume that everyone's good at remote work, I think was part of the error in my assumption about how it would all happen. So I think that there's some learning there for sure about what actually enables, any sort of modality to be effective is not just like an agreement that we're gonna do the modality, but actually training and specific skills related to whatever you're trying to do.
So I think it can work. It's not that I'm dismissive of remote work generally, it's that you have to have a specific set of skills present, and ingrained in the organization in order to make it work.
[00:14:46] Richard: Okay, so here's a question. What kind of work do you think should happen in the office?
[00:14:50] Taylor: It's a great question. So I think that onboarding and learning is a really important thing to establish initial relational equity and to accelerate the rate at which you can absorb information and understand culture, easier is a thing I've thought about.
I think there are obvious things like collaborative, brainstorming around a specific customer, in our world I think in terms of customers, like we were just talk, we was actually just having a conversation with one of our people. So like an example would be that ahead of a key QBR quarterly business review for a customer, getting the team together and doing three month planning of an idea what you could accomplish in like a single day together.
The way that we do an executive offsite or a marketing team department offsite, like when you're trying to build roadmap and consensus for the future, having a large block of time where you can see and interact with each other is really effective.
Obviously like doing individual tasks is not so much the point, but I think it's those sort of any team interaction that require multiple inputs of people is really difficult to accomplish in a Zoom setting. And then the new people thing, I would make new people watch other people work, and it's just really important to absorb the pace, the timing, the rhythm, the expectation.
There's a lot of things like that, I think people are unsure on how long it should take. Like in our world, like if I'm gonna build a growth. Is that a 30 minute activity? Is that an hour activity? How long should I spend on this deck? Like those kinds of standards, they can be documented and written down, but if that infrastructure doesn't exist, you need to actually encounter someone doing the work, leading a client meeting, be able to sit and interact and listen, see their preparation, there's just so many pieces of it.
So I don't know, I don't know that I have it all figured out. I also think there's, in our world, so Tony Chop, who runs our paid media, he has this great line, which he says is like, the value of the office in a moment of struggle is trench humor. It's this idea that like suffering presently with other people, seeing them, knowing they're there, being able to make a joke, to lighten the mood is an underrated asset of the office that doesn't exist alone.
And I think especially in this moment, hardship, which I think we're in a season of collectively as an industry, is best encountered together and not alone, and so I think that's another big piece of it as well.
[00:17:03] Richard: No I do think that there's an argument to be made that human beings are happiness when they are in struggle together with their team.
And so there's this idea that what you have an opportunity to do here is to transform a hardship into actually like the greatest asset you possibly could, which is people being motivated in a way that they couldn't have been in boom times, so I think maybe you could break it down as a summary is like planning.
Should happen in person production, should happen remote or something along those lines.
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[00:18:33] Taylor: Yeah, I think that's a good idea, and then I think there is this question of like I think a lot of it, like we said, we just think of it in workflow and I also think of it as like a deeper human experience question, which is like, where are joy and laughter as an important part of the workflow.
And I think that what I have found for me personally is that they're actually really important, that my experience of the work matters as much as the work itself. And that the isolation of feeling alone amidst really hard moments versus like just being able to make about It sucking actually makes the hard thing worse. And so I think just trying to get through some of that, and consider the very human impacts on the workflows. We think so much in workflows and systems and people versus no, these are humans with emotion. And loneliness is a thing, lean towards a state of depression, which can make your activity level decrease and your, what you can withdraw from task versus lean. There's just all a very very human element to what's happening here.
[00:19:26] Richard: Yeah, totally. I think, like for me, one of the most practical ways that plays out is just the anxiety of the unknown. Like when you're sitting by yourself in a room and you don't know, let's say what your boss is thinking right now, or there's there's not a conversation that you can have.
There's a way that like, at least in the remote world, some of that is, that anxiety is just dispelled by getting on like your weekly call or your morning standup or something like that. And that's an anxiety I didn't feel in the office at all, because that could be continually dispelled cause you were with people the whole time.
Okay, so this next resolution in some ways ties all of them together, but we'll have that lead into our sixth as well. So the fifth resolution is to prioritize the long term, prioritized longevity over the short term, to frame the short term in terms of the long term outcome.
This is obviously something that sounds like it's a good idea all the time, but in practice people have a difficult time letting that play out. So let's talk a little bit about how are we thinking about shifting our lens towards the long term and away from the short term, and how are we creating scenarios where the short term can play a role in how we think about the long term.
[00:20:32] Taylor: So I'm gonna use a fitness metaphor, stay with me. Okay, so Peter Tia is a doctor, I love his content and the way he designs the program that he offers to his patients is around longevity, right? And so he has this sort of thing he calls the Centenary Olympics. It's this idea of a set of activities you'd wanna be able to do when you're a hundred years old.
And it includes pick up a toddler, walk up the stairs without railings. There's certain set of physical activities that if you could do at a hundred years old, your life would still, you'd still be pretty autonomous and able to live a productive life at a hundred years old. And so what he does is he then says, okay, in light of that, here's what you need to be able to do at 90, 80, 70, 60, 50, 40, all the way down to you now have a set of tasks for today.
So I wanna be clear that when I say long-term thinking, that doesn't mean that you don't have short-term action or accountability like you, of course, you always have to boil things down to what are you gonna do tomorrow? And you might be going, taylor, I don't know if I'm gonna be alive in nine months.
And this is exactly my point is that part of the sets of behaviors I think that we got ourselves in was that we had, and I put a tweet about this the other day, was that I had too little of a consideration for how wide the possible outcomes were both on bad and good. And when you're thinking long, long term, I think you have more consideration that what you think is going to happen in the near future is less certain than you realize. And so you begin to hedge more, and so I think that, there's this process by which you begin to consider survival as the ultimate, responsibility, and that building a thing that could survive in any environment then becomes the most valuable task, hence anti-fragile e-commerce playbook, right?
And so then you start to build a set of behaviors. That lead to more anti-fragility, lower costs, more flexible resourcing, less debt, like the kinds of things that as we've all now experienced, what could possibly kill us, aware of those things and we seek to eliminate them really quickly.
So maybe it's like the quitting smoking of longevity. It's like that is a thing to do right now that's about surviving this year. But it's also the thing that if you can get through it will set you up for a really long-term gain. So I think we all would do well to step back and go, okay, there's so many short-term pressures.
What needs to be true in order for me to be here in a hundred years or in 50 years, or in whatever long window, to survive, not just this recession, but any other future, one that comes through it, and then build a set of actions that correspond to that. And so, I know many people are feeling a very acute pressure and I want you to know, like I feel that with you, but it's really important, and then a midst of that to not make another set of corresponding decisions that sort of just slowly kill you, in the name of Surviving tomorrow.
[00:23:13] Richard: Good example of this, I guess is or maybe what we should do is break down like what does poor short-term thinking look like in this moment right now? Because I have a good sense of what poor short-term thinking looks like a couple of years ago and maybe it all kinds of looks the same way. But if we're not in a situation where like bad short-term decisions, let's say, used to look like, let's spend an extra 9.95 on this thing, it'll be fine. The chickens aren't gonna come home and wrist on this for a while, but what does it look like now? Well
[00:23:36] Taylor: I think, mainly what it, is like not taking the medicine of cutting the costs in the way that it's actually the hardest decision and taking on that bad debt. So like that's the short term decision that I saw people make that solved a problem on that next 30 days of cash flow that actually made you more likely to die in the next nine months, right? Because what you did is and this is what I saw, like this progressive stack of higher and higher interest rate loans with more and more taking from you that gave you cash, but it never actually solved
the underlying core unit economic problem of your business where what you actually need to do is you need to cut your opex by 50% right now so that you can breathe and then begin to assess some of these problems, not go get a higher rate loan. And I think that's the kind of example that like one would solve a very short term action you may think that it gives you an opportunity to do dadadada,
but there's a lot of really hard decisions that are actually the ones that probably give you the chance to solve the business on a more holistic fashion that I think I've seen us get in a habit of ugh. Or another example is run the sale, squeeze the sponge, right? 50% off site wide may get you cash tomorrow, that gets you alive for two weeks, but next month you have zero existing customer revenue cuz you brought it all forward and you still haven't solved for new customer acquisition.
And so the thing, never happened. So again, instead of doing that, control the cost go back further. So you don't need so much revenue. And I think those are the kind of examples I'm thinking of.
[00:25:11] Richard: So in terms of bad short term decisions, let's think about what are bad costs to cut? Where can you make a mistake there? That's what I'm interested in.
[00:25:19] Taylor: that is a hard question. I would say that, there's very few because you can almost always add back costs. It's very hard to add back revenue, like revenue's not this thing that ever comes back if you wanted to, but, there's certainly people that I think you can get yourself into a position where, If you're not clear on who's really impactful inside of your organization or who's really critical to the sort of perpetuation of the mission and the existence of the thing or the relationship with some supplier that's connect, like there could be a person or somebody that is like absolutely, fundamentally business critical.
But I'll tell you, and I say this as the CEO, is that I'm not even sure, that's me. Like I think that there are ways in which the thing could perpetuate in the absence of almost all of us. it could, now you want to fight to be really critical to the thing, and working to become that.
But go too far there because, It's challenging. Now, the one, the obvious one in e-com is you have to buy the inventory, you have to make the inventory purchase. Now, again, though, I'd be careful, how much do you need to buy? Could you pre-sell it? There are ways that you could even be careful there, but fundamentally, if there's no product to sell, there's no thing.
So that's, one like probably can't stop paying for your Shopify like, it's got, there's gotta be somewhere to buy the product. there's probably a hierarchy of things that I would cut absolutely. But for the most part, almost every cost should be worth considering, I would say in this moment.
[00:26:38] Richard: Yeah, okay. Let's then let's move on to our last one. Cause I think this one in some ways the most interesting and it's this idea that in the world of marketing itself, we're gonna move into an era where message matters the most. And so the idea, I guess the resolution would be, make your message matter most.
And so the idea is that exists in contrast to something we've been saying for a while, which is that performance tactics on whatever platform, choosing the right channel, whatever, like those things will become less and less important. And what's gonna become more important is the things that you can build for the long term, like brand, and so forth. So break that down for us?
[00:27:13] Taylor: So I think I've heard so much argument over the last 12 months about Facebook versus TikTok, Google Search versus YouTube, right? Like we're at this like platform level question as if the distribution itself is somehow the value proposition. Now I get it, there's like a tactical ad product efficacy question there, and we would certainly have opinions on which it matters the most but
I think that what we're entering into and I more than ever before, again, I keep referencing tweets that I put on because it's like spurring a lot of my thoughts about what drives advertising success and at the top of my list was brand. I've just worked with so many businesses and done so many different forms of creative that I know.
What makes a business work best is like people know about the product, they have trust in the product, it matters to them, it has a deep connection with who they are as people. That's the number one thing that drives ad account success. And so this idea of what is the message or brand or purpose or why that in a moment when everybody's gonna cut costs, we're about to go into an individual like consumer level,
crisis on recession and debt, I think personal opinion. And in that moment, you know what you do. do, if the thing you're buying does it absolutely fundamentally matter to you, it's gone. And so the question is, why does your thing stay in that moment when every commodity and app that sort of matters is gone?
Why does your thing have to stay? And I think there's this question about identity that is really deeply rooted for people in products that's like, how are you going to have a message that matters so much that the medium is almost secondary, it's inconsequential. You could put it on Facebook, you could put it on YouTube, you could put it on tv, you could put it on radio, you could put it on anywhere, and people would care about it.
Like that is, apriori to wear is what? So Matthew Bertelli, who runs a company called Lomi, put out this tweet just a second ago asking like, hey, if you were looking to develop trust with your consumer, which platform works best? And so my response was, I think it's more about who than where, right?
It's the same idea, which is that, what I think matters the most in this message, whether you're building trust or building brand or building, is what are you saying and why does it matter to people? Why is it interesting? Why is it so compelling that I have to learn more? And I think that's the thing that we're all gonna be challenged with, is we just can't anymore arbitrage this ad product that goes.
Grab anything, smack it on product, on white, run a conversion campaign and it's off to the races. It's gonna have to be more compelling than that. And so I think as that's really good, cause I think good businesses get built that way, is that there's a premise that actually really deeply matters, and I think that's what you often hear is that in the moments of struggle, the things that rise out of it is actually something with substance.
There's an actual forced quality that has to occur, or it has to be really compelling in these moments. And I think that's what we're gonna see is we're all gonna dig in and go, shit, why do my shorts matter? Why does my beverage matter? Why is it actually necessary in the world? Why do we need it? And the brands that can answer that question, don't make it. No, they'll come out of this in a way that's gonna be really, impactful.
[00:30:16] Richard: Yeah, I think there's a question too here about, what it means to execute your brand. Because I think that there's like often a misconception that brand is, obviously like a pretty website and a nice brand book and whatever, when in fact brand is just the sort of aggregate things that means something about you to your audience, right?
And what does it look like for, what does it look like to do this well like bridge that gap with brand in this moment?
[00:30:43] Taylor: So I think, I'm thinking about this at CTC a lot, right? Like, why do we need to exist? What is our sort of place in the world and how does that inform then every single thing that I do, cause I agree with you, brand I think is, the collective sum of everything you do, it's the quality of your customer service, it's the experience of your unboxing, it's how your ads appear in someone's feed, it's how your employees talk to other people in the world, how they treat their partners and vendors, and how your, booth looks at a trade show.
All of these communicates something about who you are, and so you could never say that you are a premium brand and then have at a trade show, your booth falling apart. It just wouldn't work, you wouldn't connect the dots and make people believe the thing that you're trying to represent in the world.
And so I think what it forces people to do is like every decision that I make, every single one of 'em goes through this lens and get brand can be anything. You can be, we are the cheapest, highest value thing in the world, and then everything you do should, I think people make this horrific mistake that brand is expensive videos.
Like that is the furthest thing from understanding what brand actually is. Brand is how your people show up on Zoom and what they look like, right? It's like literally every single thing that you do is a communication of your identity as a business. And so I think the ones that do this really well, people for whom they have a level of intention about every touch point,
they are willing to scrutinize every experience of them in the world and ask, the question is that what I want people to understand? Am I reinforcing my idea in the world? And again, that draw out a timeline of every interaction with the customer from the ad, to the website, to the email, to the customer service, to the unboxing experience, to the post-purchase flow, to all of it.
And they can go, I will make sure that the thing that I matter, we call it, mission, magic, money. We used to use that old phrase, it was like, how does every touchpoint communicate these things about who I am? And what I'll say is that I think in this moment, people will continue when you've given them a clear reason why and they continue to experience that why, over and over again, such it reinforces the decision that they made to be a part of your thing.
And communities get built that way. And like passionate cult followings get built that way because they are constantly reminded of why they made the decision to be a part of your thing, cause every touchpoint is magical that way.
[00:33:05] Richard: Yeah, I think that there's also, whenever these moments come around where people talk about, brand matters the most, message matters the most, like this does happen. But, so I will say specifically, it now matters more than it ever has before for sure.
But I do think one thing that happens is that people can miss, on thinking about what's spoken and what's unspoken. And so I think particularly let's say your example was shorts. Let's say you want to your brand is that they're the most reliable shorts, whatever that means, they don't fall apart, they don't come apart of the seams, whatever.
Maybe the best way that you can present that brand to the world is not by saying your shorts are reliable or spending a lot of money on a brand book, it's being the most reliable company that sells shorts. So we can always get you on the phone or whatever, they're easy to make contact with the shorts themselves, the product's really good.
There's all sorts of elements where you can take that core idea of reliability and live it out in a lot of ways without actually saying it or showing it per se.
[00:33:57] Taylor: Website is never down, it always works. Like you've gotta reinforce the idea everywhere. And I think, a simple way to think about this is let's stick with shorts as our metaphor is if in the good times people bought five and now they're gonna buy three.
Why do you make the list? Because the answer was easier before because if I was buying five man, I was willing to take, consider more things. if I'm choosing three, I'm being more intentional with my purchase. I'm being more thoughtful about it, and so only the thing that matters to me the most makes it through.
And so whatever that is, for some people that'll be performance, some for some it'll be reliability, some people will be price, some people like whatever it is, only three, make it through the filter then you've got a higher standard to getting to that purchase. you've gotta have deeper consideration to get to that same end result of being in the drawer.
[00:34:43] Richard: thanks again for joining us on the E-Commerce Playbook podcast. Please remember to rate and review if you're watching on YouTube, and subscribe, as always. If you wanna know more about how we can help you execute your e-com New Year's resolutions, go ahead and drop us a line at commonthreadco.com. We'd love to chat. Have a good one, folks, happy New Year and happy scaling.