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No successful business venture is ever made without a few mistakes along the way. It’s the inevitable nature of both life and business that we must learn from our mistakes to grow and improve—which makes mistakes an essential part of success.
Naturally, this applies to the world of ecommerce too. Many merchants strive to avoid failure at all costs. Yet rather than yield prosperity, this can actually lead to a halt in progress.
This is because being too cautious leads to varying levels of risk aversion. This often leaves merchants failing to see the forest for the trees—something that Phillip Jackson, CCO of Rightpoint, has seen all too often.
Thanks to this, Phillip decided to spearhead the retail media research startup, Future Commerce, as its Co-Founder. Phillip is no stranger to surpassing risk aversion, all for the sake of growth, which is why Future Commerce is dedicated to helping commerce merchants learn and grow.
To explore this, we discussed market research, changing landscapes, and failure’s part in ecommerce success with Phillip.
Can you tell us a little bit more about your projects and how you help ecommerce merchants?
Phillip Jackson: There are two ends of the spectrum.
There’s the operation of your ecommerce business—ecommerce today is so pervasive that there are all sizes and shapes of merchants. There are those who are, I would say solopreneurs, who are on Shopify, who has experienced explosive growth and have had to learn how to build teams and build a sustainable business. They are hungry to learn, and they’re eager to consume business media in order to help them to learn, grow, and scale their business.
For them, Future Commerce exists—these days it’s its own growing media business. We publish five or six pieces of content a week aimed specifically at merchants and retailers of that sort.
We have multiple podcasts. We have Stairway to CEO, hosted by a woman named Lee Green, who’s a serial founder herself. I co-host Future Commerce, which is a podcast that has nearly 50,000 subscribers these days. My co-founder and I started that four or five years ago.
Then we have a quarterly series called Step-by-Step. We also publish essays and original research because a lot of podcasting and newsletters these days are really focused on the news cycle. I feel like it gets a little fatiguing to only talk about what’s happening right now.
Obviously, ‘future’ is in our name, so we have a research arm, where we conduct primary research. We then use that research to power our content, which I think makes us very different from anyone else in the space.
What we’ve learned through that is that there’s always a ‘next step’. There are companies that are looking to take their enterprise ecommerce investments to the next level. Some of the biggest brands in the world in video gaming and metaverse, you have Bungie who operates some of the largest video game franchises in the world. You have folks like GM who are doing connected car experiences that are now creating the next evolution of shoppable online car purchasing.
We have Rite Aid and Nestle, and so many others who are trying to go direct-to-consumer in the way that they’re doing ecommerce—and for that, you need a capable team.
My mild-mannered ‘Clark Kent’ alter ego is helping them to do that in my role as Chief Commerce Officer at Right Point Commerce. I help them define a vision and a strategy for their business and help them to make a business case for making continued investment in ecommerce at an enterprise level.
So you can’t just talk about it—you also have to do it. I think being in the work helps me to understand what’s coming in, what’s next, our unfair advantages I have, I can see what RFPs (request for proposals) and RFIs (request for information) are being shopped around by some of the brands that are making the largest ecommerce investments in the world right now.
I know where they’re heading in the next three to five years. I think that helps me to understand where commerce as a whole is going in the future of customer engagement. That’s a very long-winded answer for you, but I think it’s important for you to understand the context as we go forward in the questions.
How research sets you apart and helps you soar above the competition
While discussing Future Commerce with Phillip, it quickly became clear that they set themselves apart from the crowd by engaging in unique research.
There are few podcasts or media publication companies that offer this. This suggests a natural evolution of the content that they provide.
This raises the question of how they’ve developed and what Phillip views as vital for merchants aiming to separate themselves from the competition.
You said that you have evolved the content you’ve made to push into more of what you’re doing with enterprise solutions. How did your content evolve over the years?
Phillip Jackson: This is a really important point here. I think it comes down to proof points—there are no assurances that we have.
We’re all kind of making educated guesses and making strategic bets on where to fund parts of our operation. You learn over time what works, you form a hypothesis, you test the hypothesis. You learn from that and it helps guide future hypotheses. What I found is that you can make better-educated guesses when you have better information.Phillip Jackson, Co-Founder of Future Commerce, CCO of Rightpoint
I’ve been doing A/B testing at scale for ecommerce brands for well over a decade. It’s very in vogue and fashion—and there’s a lot of tools to help you do it easily. I spent half of my career building direct-to-consumer startups—both working as an engineer and leading engineering teams for direct-to-consumer brands.
Back then, we didn’t have a fancy term like ‘direct-to-consumer’. We just said we were doing ecommerce, and we were selling vitamins. But that’s what we call it today. The way that we got better over time was by having better data. But most of the data points, the proof-points of the way that customers shop today, are not the kinds of things that merchants tend to spend their time in search of. They’re not necessarily capable of spinning up a research team within their own four walls.
Unless you’re a very large and well-funded brand, you’re typically not performing consumer research. We set out to, again, kind of divorce ourselves from the news cycle. I think the news cycle has its own agenda. A lot of retail trade media is governed by performance marketing dollars that the tech businesses in retail trade are spending to try to acquire customers.
So you just think about some of the largest retail tech companies that exist—they’re going to tell you what they want you to hear in the space. If you look at these trade publications, they’re funded by tihose ad dollars.
Our goal here was to create content that’s freely consumed. I come from the open-source community. All of our content is free to access. We have no membership model of future commerce. We are in the business of sharing insights and ideas publicly as a benefit to the community. We do make our money from ad dollars, but what makes us a little different is that our research is not governed or controlled by our partners.
We come together to generate insights and research that will fuel our content cycle because having the best content in ecommerce is what will set us apart. I think it does. It is informed by being in the work every day. It’s really hard to be talking about things—I’m not a journalist, right? I’m an operator.
Having been on the brand-building side, and then having run strategy consulting for eight or nine years now, I have two different perspectives that I think helped me guide to what kinds of research brands are looking for. And out of that, we found some really interesting things.
There are things that are talked about in the culture right now that we created the conversation around. We created a persona called Carly back in 2019 that describes a Gen Z consumer, who spends money that she doesn’t have. She’s early in her consumer journey, she’s pretty discerning about the things that she spends money on.
She has no understanding or awareness of a monoculture, like a time before, where everybody’s experience in the culture was the same. Her’s is very tailored to her because a lot of what she sees is algorithmically driven. She’s a social native, we called her Carly, which is an acronym that stands for ‘Can’t Afford Real Life Yet’.
This is the kind of consumer who has the same types of behaviors that you’ll see from a millennial counterpart. She still stands in line for a shoe drop, but the person that she’s standing in line for a shoe drop for isn’t Kanye at the Adidas store, it’s for Post Malone at the Crocs store. The level of insight that you gained from something is really interesting.
It’s very, counter-culture. Crocs were not in fashion in 2019. We noticed an upswing of sort of ironic and meme-driven behavior that nobody else was really paying attention to. We put pen to paper. We did some deep research in June of 2020, and we released a report called nine by nine which dove deep into Carly.
It got picked up by broad media—Adweek had a homepage feature on our piece. GQ picked it up, and Carly basically had a whole feature and it went global. But the fact is, we’re creating research that is defining the terminology and the taxonomy of current ecommerce and consumer culture. We’re trying to help businesses figure out how they use that to build a brand on top of and to engage with the consumers of the future.
Surpassing the fear of failure
Phillip discussing how brands can engage with the current ecommerce culture brought many questions to mind. Anticipating customer needs in the future requires just as much experience as handling their current wants.
This means merchants will need to learn many lessons to maintain and continue their growth.
With the immense ecommerce experience that marketers like Phillip have, there will naturally be many lessons that can be learned—especially if they’re lessons that have had to be learned along the way.
Phillip has practical and theoretical experience in spades—both with conducting research and engaging in actual physical practice. This makes him a source of wisdom for all things ecommerce.
If you could go back in time to when you started and give yourself a piece of advice, what would that advice be?
Phillip Jackson: I don’t know that I ever truly will be prepared for this type of question—it’s hard not to be trite and spew platitudes. Let me say it this way—if every A/B test you’ve ever run succeeded in the hypothesis that you set out to try to prove, you’re doing something wrong. You have to fail at some point. There has to be a moment at some point where something that you tried didn’t work.
This is true whether that was back when I was leading engineering teams, or much later when creating a media business, or even when I was doing strategy consulting for ecommerce and customer experience. There have to be things that just do not work because if you knew all the right things to do, then why would you even bother testing them, right? Why even apply a hypothesis? You’d just go forward and go do it—I think there’s always an amount of uncertainty.
There will always be some amount of failure—and I think failure is undervalued. Failure teaches us a whole lot. If I had to go back to the beginning of my journey, I would say a lot of the things that probably seemed like setbacks were the things that I probably stood to learn a lot more from.
There’s a lot of risk-averse behavior in ecommerce, especially at the enterprise level. It’s the reason why we have so much disruption in the space right now. I’ll give you a really good example—there’s a lot of conversation happening around web 3.0 and NFTs at the moment. You’re not going to see big institutional brands do anything more than dabble or do a marketing campaign around something like NFTs where you see real innovation. The next generation of what commerce will be defined as around crypto and NFTs are from upstarts who have nothing to lose—and they’re not afraid to fail.
There’s something really powerful about the mindset of setting out to try to do something really big and risky. Then you grow up one day and you realize, “I’ve become extremely risk-averse and can’t fail” and there’s no appetite for failure.
To avoid disruption, a lot of brands are going to have to get an appetite for trying things that don’t work—especially in a world that’s changing so fast. We’re on the precipice of a new paradigm shift probably more dramatic and disruptive than the shift to mobile was. Web 3.0, NFTs, decentralization, and cryptocurrencies stand to bring that kind of disruption.
We’re probably in the middle of the hype cycle right now—give it five or seven years. There are going to be people who are putting in an extreme amount of work and innovating it. It represents a major shift in the way that we’ll buy and consume things in the future, as well as how we view how things hold or represent value—especially around digital goods.
Ecommerce, as an industry, is itself a disruptor. With every transaction, even physical transactions, we have what I call a ‘digital veneer’ over top of it. Everything that you interact with in the physical world has some form of digital social media presence. There’s not a single physical good that you buy today that doesn’t have a performance marketing campaign, brand awareness campaign—some sort of digital social media presence. Even things like how the prices are set, how objects are placed on the shelf and in the store are all driven by footfall, heat maps, and algorithms to optimize it.
Everything that you interact with in the physical world has some form of digital social media presence. There’s not a single physical good that you buy today that doesn’t have a performance marketing campaign, brand awareness campaign—some sort of digital social media presence.Phillip Jackson, Co-Founder of Future Commerce, CCO of Rightpoint
For example, in my local grocery store, they just changed every aisle for the first time in 10 years. The cereal is now three aisles closer to the produce aisle and I have to think, why? Was that a data-driven decision? Everything that we interact with now is being optimized and considered digitally.
That’s just the world that we live in—ecommerce still makes up less than 20% of all retail. As an industry that’s disrupting the dominant physical brick and mortar mode of purchase, there’s now a sort of this digital interaction with every purchase.
We need to act more like disruptors and get back to the root of not being afraid to fail—not being afraid to try things that don’t work. We shouldn’t suppose that those things somehow set us back. We actually benefit and stand to benefit from trying to test those hypotheses and prove them to be wrong quicker.
Adjusting and adapting to marketplaces changing
From large businesses to small companies, change is inevitable. Chasing trends and adapting to customer wants and needs are challenges every merchant face on a daily basis. However, these challenges are considered smaller issues compared to some of the larger problems that affect marketplaces and industries as a whole.
Sometimes, universal, essential, and foundational issues arise for businesses. These often affect enterprises and large businesses, but their effects can often be felt by everyone in the industry. This isn’t to say that small businesses are completely without the power to change though, as the likes of innovation and major shake-ups often come from more budding stores and brands.
Phillip understands this better than most, having experienced ecommerce from both an enterprise-level and more humble stores. His diverse portfolio of experience, ranging from engineering to ecommerce research, presents interesting insights into how risk aversion is handled by some and potentially cripples others.
Would you say that risk aversion is probably one of the biggest ecommerce brand mistakes that you see brands making, or would you pinpoint something else as being a larger mistake that merchants make as a whole?
Phillip Jackson: Big brands have challenges at a level that we can’t even begin to fathom. Their risk aversion comes with the fact that a lot of these companies are publicly traded. They have a responsibility to their shareholders and their stakeholders to produce a profit—they have to produce a measurable amount of growth under incredible constraints and different types of compliance.
I’ll give you a good example from my engineering background, working on my very first enterprise. True enterprise, Fortune 500 projects were so frustrating in the ecommerce space because every single release that we did required two days of regression testing. Every single change that we made required a full team to manually test things and make sure that they’re, passing a whole bunch of compliance measures. Add to that that we had to fill out all these forms that were approved by the IT department as an act of governance.
There’s a whole set of IT requirements that are governed by public organizations that came through Sarbanes-Oxley. Sox compliance is a huge factor for releasing software. This applies even if you’re just trying to sell widgets online—it’s not like you’re launching rocket ships. The amount of red tape that has to be put into place when you’re at that scale is amazing and you’re not going to move through it fast.
From the world of ecommerce, there are much smaller brains. We would do two to three releases a day and had a lot of automated testing. Sure, there were mistakes that were made and stuff gets rolled back. But you fix it up and you go at it again.
A lot of these enterprises operate at a glacial pace—and it’s shocking how glacial their pace is. They’re not going to be the ones that are going to change the culture. Eventually, they will adopt the new paradigms, but risk aversion is part of their nature. Layer on top of that, their sheer scale and responsibility to all their stakeholders and you see they have a lot more to worry about organizationally.
They also have more to worry about than just driving market share. There’s also social responsibility. For example, they have this new project called ‘Project Gigaton’, where they want to remove a gigaton of carbon emissions from their supply chain. That means they have to go to every vendor, check all these products that are sold in all of their stores, and talk to everyone they do business with—even consider their cloud computing, their infrastructure partners, and delivery, logistics, and supply chain partners.
Everybody has to take account of how much carbon they emit in their business and think about each and every impact because their vendors have vendors too. It’s a very deep rabbit hole.
There’s a real leveling happening in every marketplace. Merchants are going to have to learn how to innovate in a world that they didn’t create for themselves—one that others are imposing upon them. That’s a really fascinating thing to watch happen.
How COVID has affected industries at every level
Change and growth go hand in hand with ecommerce. Merchants should always strive to adapt to their customers’ wants and needs. They can settle and go steady, going with the flow, or they can strive to blaze their own trail.
However, sometimes external factors can disrupt this and nothing has disrupted ecommerce more than COVID-19.
No industry has truly been safe from this worldwide collective trauma. Experiencing this has affected different merchants with various side effects—smaller merchants rushed to get online while larger merchants scrambled to reinforce their online presence.
With COVID now being commonplace and some arguing that the worst is behind us, there are many that have begun feeling something akin to survivor’s guilt. This is just one effect COVID has had on the world of ecommerce, which we discussed further with Phillip.
What was COVID’s effect on your projects and what were the effects on some of the merchants that you were serving in particular?
Phillip Jackson: Let’s just say that it’s difficult to celebrate growth or wins in the realm of ecommerce because so much from ecommerce boomed last. It’s hard to celebrate anything in the face of a global pandemic where there’s tremendous suffering and tremendous loss.
A graph from McKinsey suggested that the industry as a whole has boomed in the last 10 years—but I wish people would look closer at this graph. It included online grocery and online car sales, which have never been included in a factor of online or ecommerce activity. McKinsey compared apples to oranges, saying “look at all this activity and growth in this area”—it’s a gerrymandered chart.
However, even if you took that out, it is still a tremendous amount of growth. A lot of that has been retained post-pandemic. I would have probably said that this conversation was kind of a moot point. We haven’t really addressed the systemic issues and inequalities that created the problem in the first place. We haven’t really begun to address the social issues that came up during last year in the summer. We as an industry have a lot more work to do, but reopenings will have a tremendous impact.
I wrote a piece earlier this year for the future of commerce. I asked, what do you do as an ecommerce team when you were faced with broad reopenings on a state-by-state basis? What do you do as an ecommerce business when you’re definitely not going to comp up your numbers over the last year? What reasonable goals can you set? The fact is that ecommerce is still often seen as its own P & L (profits and losses). It’s not seen as a cooperative channel across all of a brand’s revenue—in fact, it’s often seen as a competitive channel. So how does ecommerce influence in-store purchases?
We should be thinking about how we win collectively as a business—not how channels compete against each other. Businesses should think about how to win at all costs. When you’re faced with new COVID variants, like the Delta variant and apparently Delta plus, we might be faced with a fall and winter that looks a lot more like the spring and summer of last year—regarding ecommerce penetration and growth.
On a positive note, we’ve all learned how to do our jobs in a decentralized way. The fact is, ecommerce can happen from anywhere.
However, we have very few new people entering into a rapidly growing market. It’s not impossible to hire marketers—it’s impossible to hire developers. There’s just not enough talent to go around, and we’re faced with a bunch of contributing factors and knock-on effects that happen in a fully employed market, which means that you have to do a lot of recruiting and, often, poaching to get jobs filled.
That’s just moving the net balance of talent—the pool of talent isn’t growing in any form of commerce right now. It’s sort of stalled out and folks are just making lateral moves. That’s good for the talent because they can find a work situation that fits best for them, but it’s not great for customers.
We have a constraint of our logistics infrastructure that can only handle so many packages coming. We have a constraint on folks who actually make work or make products get to your door. I’m talking about people that are making sure that revenue is hitting balance sheets after an order is complete. This includes people that are handling returns and logistics. We have people that are working CX and customer service.
You may buy from a brand once, but if it takes six weeks to get a package to your door, then you’re never able to return it or if you do return it, you don’t get your money back on your credit card afterward. If this happens, you’re never going to buy from them again, so we have all these systemic issues. This hampers growth in ecommerce that and there are not enough people to do the jobs.
If we hadn’t had the Delta variant, I think we would have had time as an industry to try to grow the workforce. We’re going to see a lot more problems. Supply chain constraints aren’t going away anytime soon—just do a quick Google search. Boats are backed up at ports for months, so supply chain woes aren’t going to go away anytime soon.
These COVID-related effects are going to provide challenges for all of us in ecommerce over the next six to eight months. They’re solvable problems, but they’re problems that don’t get solved. They’re not the type that gets solved over six months—they get solved over a number of years.Phillip Jackson, Co-Founder of Future Commerce, CCO of Rightpoint
This turns into wage growth and competition in wage growth because there are fewer people to do these jobs. They’re demanding higher salaries because they’re in higher demand. This leads to higher prices and inflation for ecommerce goods for the consumer. These effects are going to provide challenges for all of us in ecommerce over the next six to eight months. Is that COVID-related? Absolutely.
They’re solvable problems, but they’re problems that don’t get solved. They’re not the type that gets solved over six months—they get solved over a number of years. So, yeah, it’s going to be a fun, fun holiday for all of us in ecommerce.
How changes to privacy affect performance marketing
The more we spoke to Phillip, the more the topic of industry-wide and ecommerce-particular challenges impact both customers and merchants arose. Thanks to this, it was inevitable that our conversation would shift to something prevalent in the industry over the last few years—privacy.
Marketing channels, such as Google, Facebook, and Apple, have been busy making big changes to how they handle privacy. Naturally, here at Omnisend, we’ve foreseen that one update, in particular, will send shockwaves throughout the world of ecommerce—the iOS 15 update.
However, while it’s easy to focus on how it can hamper and make marketing more difficult, we decided to talk to Phillip about how it can be beneficial. After all, it presents an opportunity for merchants to become more creative with their marketing.
Above everything else, changes to privacy like iOS 15 are ultimately created to benefits its users. As merchants, we should strive to put ourselves in the customers’ shoes as often as possible. With this in mind, we explored how privacy updates and changes to metrics are potentially helpful to both consumers and businesses alike.
What are your thoughts on the iOS 15 update and its impact on brands? Are there any other metrics that you think might be at risk?
Phillip Jackson: We’ll separate the folks who have a brand and those who do not. At the end of the day, performance marketing is an important part of the modern toolkit. However, folks who did brand marketing 20 years ago didn’t have the same sort of data and insights that we have today.
There’s always an instinct to develop what will resonate with your core audience. You can have an intense focus on making sure the product gets better over time—there’s nothing that sells and no better advertising than a product that delivers in spades on what it promises.
On the whole, we might see fewer Instagram brands or breakout brands of the direct-to-consumer set because so many of them were dependent on an audience that came in through performance marketing. Having less visibility in email is going to be a hampering factor for creatives.
We spend a lot of time doing a lot of performance marketing, creative testing, and very little time thinking overall about the general promise and the general desire of a consumer to have a product that is deeply satisfying. Instead, I see a lot of performance marketing and a lot of teams that are just throwing everything they can at the wall to see what sticks.
Apple isn’t altruistic and working for the good of humanity. Apple and others are making these changes, are doing so because they wind up creating ad networks that benefit those who take money for advertising. After all, CAC (customer acquisition cost) has gone up a hundred percent in the last year and a half.
That’s because it’s more competitive than ever and because you’re seeing your money being spent in an opaque way—so you’re not really sure what’s working. You have fewer insights as to what’s working and what’s not these days. It’s a very nuanced problem. If it were any other time in history, I’d tell you I think there’ll be enough blowback that the acceleration of this change will eventually decelerate and it’ll be a much slower rollout than what is being proposed.
However, I think we’re in disruptive times and I don’t see this changing. This is just something we’re all going to have to contend with. At the end of the day, it might give traditional brand marketers a greater seat at the table in digital. We’ll just have to see how it all plays out.
Regardless of massive shake-ups, merchants need to not only be able to adapt, but to know how they should adapt. Not all solutions work for all merchants—something that Phillip understands by embracing market research and being braver with risk aversion.
Disturbances to the status quo aren’t always detrimental to success. Even if they create problems or halt pre-ordained progress, every challenge presents an opportunity to overcome, adapt, and grow.
How merchants choose to handle a challenge can make all the difference in the world. Their approach can vary from tactfully cautious to brazenly brave. If talking to Phillip has taught us anything, it’s that no matter how you engage with a challenge, you shouldn’t be afraid to take risks.