What’s it like to build and grow a business in the age of COVID-19? We sat down with three top e-commerce industry growth leaders to find out.
Harini Karthik, the Director of Data Science at Shipt, a delivery service owned by Target Corporation.
Bryan Mahoney, the Co-Founder & CTO at arfa, a consumer goods company that develops personal care brands.
Lex Roman, Founder and Growth Design Lead at lexroman.com, a design wunderkind who focuses on growth, design, and analytics.
Each member of the panel brought a unique perspective on the state of e-commerce during the COVID-19 pandemic from both their personal and professional experiences. Their discussion ranged from how the e-commerce industry is being affected as a whole, to how individual businesses can use data “the right way” in a time of such uncertainty.
Dive into the conversation below, or watch the full on-demand webinar here.
Key takeaways from the panel
Over-index on being nimble. Abandon the idea of planning six months ahead. It’s impossible to know what that market landscape will look like. Instead, ask your teams to plan six weeks, or even one week ahead, and make resolute decisions knowing that you may have to pivot. Experiment aggressively to determine where there are potential pockets of growth.
Use data to determine new customer needs. Your customer needs have undoubtedly changed, and it’s vital you can adapt to them to retain their business. Making sure your data is organized and accessible is also more important than ever given the remote working environment. Everyone in your company should be able to see and understand the trends amongst your customer base in order to make data-driven decisions.
Focus on customer LTV, but from a different perspective. Because the LTV of a customer is dictated by how much you spend to acquire them, it’s worthwhile to think about how to make that first interaction profitable. Using data and marketing tools to help customers find the right products or services quickly can be a smart way to boost LTV and customer satisfaction.
Embrace authenticity over perfection when it comes to content. While video marketing is proliferating, there is a growing desire for a more “authentic,” less polished approach. Your customers have started to become accustomed to life at home, and that means changes to the type of content they consume, and how it’s consumed. Moreover, from a practicality standpoint, it’s much easier to produce “authentic” content over a perfectly polished ad given the remote work environment.
Be a good global citizen. While we all navigate these unprecedented times for our businesses, there will be setbacks, frustrations, and the development of a “new normal.” Despite this, there are also tremendous opportunities to re-envision company priorities, reflect on our contributions to the world, and make a lasting impact on our consumers. Caution: don’t be cute or tricky about it; customers will see right through it.
Can you share your take on the impact COVID-19 has had on your company and the e-commerce industry as a whole?
Lex: A lot of new products have come forward as a result of this crisis. Since so many businesses are being forced to go digital, I’m working with a lot of local organizations to figure out how they can sell online, how they can build an online presence, and how they can communicate with their base differently than they did before.
Bryan: Arfa launched right when COVID-19 began. We’d been working so hard toward an e-commerce goal, and we were so excited to share it with the world. We knew we had product/market fit, but we paused to decide: Is this the right time to try to bring a new product into the market?
Within 72 hours, we changed our launch strategy and changed our website. It’s a testament to arfa’s ability to be nimble. Like everyone else right now, we are trying to find new ways to work, to be collaborative, and over-index on being nimble. Despite all of our prior planning, so many things right now are a guess.
Harini: Yes, I agree with Lex. Right now, so many companies are being forced to have a digital transformation, be it working remotely or getting their products to have an online presence. Digital transformation has been a key for businesses, but I think that on a personal front, we are having internal transformations as well. We are reflecting on health and family and what is really important for us.
Shipt is an online grocery delivery service, and the demand has spiked tremendously. Our product teams are working on launching newer features that will increase member and shopper safety. Our other focus is on how to meet the higher demand.
What changes have you made in terms of product strategy?
Harini: We are creating small groups to brainstorm ideas around what they are seeing in the data. What are the gaps? How can we provide better service? What are members requesting? What are shoppers requesting? What is the data telling us about these things? We look at all of that data together and then determine: What product features should we be launching?
From there, we scope out those ideas to understand the effort versus the impact. It’s definitely accelerated development driven by the health and safety of our members and shoppers and the data that we are receiving.
Bryan: Yeah, to follow up on that, we are being really careful with the data that we are receiving right now because the economy has really slowed down. So we are giving ourselves license to do the same.
We don’t want to start chasing something it’s the new normal because we don’t really know what the new normal is. We are going to be getting data we’ve never seen before, so we’re asking ourselves: How do we identify real opportunities? How can we come up with a “generalizable approach” to take advantage of those opportunities so that it will also be useful when we return to “normal,” or a “new normal,” and whatever that looks like.
I don’t think we can “data” our way into identifying what that new normal is, so we need to fight the instinct to chase these new opportunities that might not last. Cooler heads should prevail.
Lex: I think it’s interesting to see people reacting to the new data, which is emerging every day. I think there is an argument for stepping back and seeing where the chips fall. One of my recent clients was Gusto, the payroll and HR company. They took a look at their roadmap and asked, “Ok, what can we do to help our customers now?” Their customers are mostly small businesses.
So, they are now looking at things like webinars, education, giving people breaks on payments. This is Gusto’s way to support all of these restaurants, coffee shops and fitness studios who are now trying to make ends meet.
Gusto's Small Business Relief Finder
This presented a really cool opportunity for product and growth teams to shake up that road map and ask themselves, “What do our customers really need, and how can we deliver on that now?” I think it’s really cool to be able to ship value that is aligned with your customers.
Harini: One thing I’d like to add is that some of the things that we’re seeing now in the data likely will stick. Take working from home, for example. We were already trending in that direction, and now people are discussing if this will be part of the new normal.
So, I think companies need to keep in mind that although some of these trends may not have the exponential growth curves that we’re seeing during this digital transformation, it’s still important to understand and reflect on how your business will work in this setting.
Do you see a future with more or less commissioned-based marketing, specifically for direct-to-consumer brands?
Bryan: I think that’s an excellent question. I’ve spent the last 10 years in the direct-to-consumer space and part of that playbook is spending on ads to find customers for your products.
Now, at least at arfa, we’re trying to find products for our customers, and how we think about growth is through that lens. That may be a cheeky way to answer a question about ad spend, but what I mean is that we are not motivated to spend money to try to convince you to buy our product.
Instead, we want to use our tech resources and marketing know-how to have better conversations with our customers, to really find out what they need, and then we’ll find products for them, with them.
That’s how I want to grow products and brands. That’s how I want e-commerce to move forward, and I think that’s the promise of direct-to-consumer (DTC). I guess a more direct way to answer this question is: We are not spending more on ads during COVID-19.
The impact of COVID-19 on online advertising.
COVID-19 has changed your customer needs, how has that influenced your roadmap or prioritization of existing product development plans?
Lex: I’ve been really impressed by local restaurants and how they are changing their marketing strategies because they can no longer rely on foot traffic. They are relying heavily on email marketing, offering delivery, curbside pick up, some restaurants are even offering groceries.
Really paying attention to your customers is your best growth tactic, and I’ve always felt that way. And now is a really good time to be listening to them, interviewing them, understanding their mindset, their emotional state, their situations. Then you can respond with messaging and offerings that are relevant to them.
Bryan: I totally agree. Now is the time for entrepreneurship, and the restaurant example is a good one. We see people being entrepreneurial in the sense that they are doing what they need to do to survive.
Harini: On the topic of ad spend and growth, with so many people at home now, I think there will be shifts in paid ad spend budgets, skewing more towards digital channels rather than other channels.
I also think companies should focus more on creating a “growth loop” where the product has a viral loop by itself. I think these external channels can be good at triggering these loops, but ultimately, you have to have a good product/market fit and add value to customers. So, the focus should be more on making sure we are delivering good products and in parallel leveraging channels to help drive some of those loops. That will be important.
How has the use of video and video content changed since COVID-19?
Bryan: Video is incredibly important. What I’m noticing is that it's not important to be perfect anymore with content, especially video. Content creation is becoming far more democratized. We are also seeing more content that is not created by influencers who make it “perfect.” And the more we see ad spend shift there, it will become a movement that snowballs and that can be really powerful.
I think this ties back to the idea that we are going to see more entrepreneurial shifts during this time, and this feels really related to that. I’m fascinated to see how this all plays out.
Lex: I think authenticity is really important. For example, if you're creating from home, just be really authentic. It’s important to realize the moment we’re in and communicate about that. We can’t be tone-deaf and just blast things into the ether like we used to.
We’ve seen a lot of companies transition their businesses to provide much-needed services during COVID-19 like Brooks Brothers, AB InBev, and more. What advice would you give to a smaller company that’s looking to do something similar?
Bryan: I’d encourage companies to do good for the right reasons—don’t make it a marketing stunt. As a company, just make it clear what your intent is and do that. If you try to get cute or tricky, customers are just too smart and they’re going to see right through it.
Lex: Also, I think you can collaborate with other companies. For example, if you feel like you can't do enough on your own, try teaming up with companies adjacent to you.
The other suggestion I have is to reach out to your local legislators because they also have a list of needs and they might have ideas for you. You can reach out to your state or city legislators to ask what they need to solve.
How can e-commerce companies grow LTV? What are some specific tactics you’d suggest to retain customers and grow your relationship with them?
Bryan: I think it’s a good time to focus on profitability, which may not be the most popular answer right now. You think about the LTV of a customer, in part, by how much you have to spend to acquire that customer. Now is a good time to review that—maybe you’re doing it wrong. So, how do we think about being more profitable in that first transaction? How do we think about creating products so we don't need to convince people (by way of traditional marketing spend) that it’s the right thing for them?
I don’t know what the new normal is going to be. But I hope it’s a move towards brands that resonate a bit more with better product/market fit, more word-of-mouth, and less of that traditional marketing playbook.
Lex: My career has been focused on how the design of your product really drives that impact. The way you build your customer’s experience drives impact. When it comes to LTV, how are you reducing friction for those customers? How are you responding in a way that makes sense?
How are you measuring new customer behaviors, and how are you making sure that you're delivering what customers want and not just what you think they want?
Bryan: Yeah, we’re still figuring that out. The honest answer is we don’t know. We’re doing our best to continue to collect data and have a real, hard look at it and decide where we want to go with it.
Harini: At Shipt, we test all of the new features that we're launching. We run A/B or multivariate tests and monitor our KPIs to understand the impact. We make sure that we’re doing all of the correct event tracking, which is where Segment comes in. We make sure we run the tests properly, then we measure the results and build out the dashboards and communicate the test results.
Given the scale of Shipt, we are deeply involved in every product release, and data has been a critical part in trying to understand what features we need to build, in testing it out, and in seeing if it will help ease any of our metrics because there is such an increase in demand.
Lex: I would also say that from the UX side, especially for anyone who is working on a two-sided marketplace, and anyone who is dealing with manufacturing or any kind of supply chain, make sure you’re thinking of the human impact of the decisions you’re making. These KPIs are human beings on the other side. How do you make sure that you’re accounting for that as you’re measuring the success of your company?
Harini: Absolutely, I second that. We are a four-sided marketplace. We have members, shoppers, retailers, and CPG partners. I agree that so much can be done using the data, which is really the voice of all of the customers, B2B or B2C, which is definitely the most important during these times.
What challenges do you have collaborating as an organization around your customer data while also working remotely? How do you gain consensus on growth decisions and make sure you're making the right decisions?
Lex: I love this question. I think this is a great time to take stock of your analytics tools and processes and figure out what’s broken within them. For example, are there people on your team that can’t access data or can’t understand data? Is there something you can do to address that, like changing tools or offering training or some additional kind of support?
I would also look at the cadences in which you are reviewing data. Are people doing it on their own? Are they just kind of throwing it over the wall to each other? Is it something that you bring into your process? Are you looking at it together, perhaps in a standing meeting? I would strongly suggest you incorporate a regular cadence where you’re looking at data.
The other thing I’d mention is to make sure that you’re pairing qualitative research with your quantitative data—especially if you’re seeing changes in the behavior of your product. So, more usage, less usage, erratic behavior, anything different—reach out to those customers, interview them, try to understand the “why” behind the data.
Bryan: I absolutely agree that you need to balance the qual/quant data, and now is a great time to reach out and interview your customers. If you haven’t developed that muscle as an organization, I’d encourage you to do that now.
COVID-19 has created a lot of emotion among the customers that you might need to serve. What digital signals can you use to understand, quantify, and react to that?
Harini: Sentiment analysis is the best way to measure emotion. If companies are truly trying to understand customer sentiment, they could look at social data like Twitter. You could see what your company is tagged in and do sentiment analysis on that and measure real-time NPS.
Lex: Yeah, I’d look at all of your channels including social media channels and customer support channels. What is the feedback that you’re getting on your website? In your app? Customer calls? This way you have sort of a broad qualitative pulse on your customer base, and you can reach them in a more meaningful way.
If you want exclusive access to AMAs and other live events like this in the future, sign up to the Growth Masters community today.