2X eCommerce Podcast

The New Playbook for Scaling eCommerce Brands in 2024 → Kunle Campbell
===

Kunle Campbell: [00:00:00] The three pillars, right now, Your product innovation the efficiency of your marketing, as well as the efficiency in your operations. So if you're thinking about growth, if anybody tells you ~who ~I grew this business and all they're talking about is ~meta ads, ~growing with meta ads or with email and SMS, it's not the full picture

So on today's episode of the 2x e commerce podcast, we're diving into the new playbook for scaling e commerce brands in 2024 and beyond focusing on product innovation, efficient marketing, and operational excellence. Great episode. You don't want to miss it. Do stay tuned. This is the 2x e commerce podcast hosted by Kunle Campbell.

So welcome to the 2x e commerce podcast. I'm your host Kunle Campbell. In today's episode, we're taking a deep dive into the key pillars that will drive growth for e commerce brands in 2024 and 2025, whether you're in the health and wellness or any other vertical. These insights are [00:01:00] crucial for scaling rapidly in the modern landscape.

We'll discuss how leading brands like Seed Health, Athletic Greens and Mudwater are innovating with simplicity and minimalism, focusing on fewer SKUs while maintaining higher quality products that retain customers would also explore the importance of balancing marketing efficiency, strong operational practices, and financial knowledge.

If you want to build a scalable business, this episode is packed with strategies you can implement right away. Don't forget to follow us on your preferred podcast platform.

Let's get started.

Kunle Campbell: So welcome to the 2X eCommerce podcast. Kunle Campbell, and this podcast is dedicated to rapid growth in online retail. We speak to e commerce operators. I'm an operator myself and marketers. And essentially every time you listen to an episode in this podcast, I promise is you'd have an idea. You can test.

Right away at some point in your [00:02:00] e commerce business, it's hypothesis. We provide you on this podcast. ~And ~this one is different. We're not interviewing anybody today. You're going to be hearing from me. And what I want to talk about is the DNA, the modern DNA of growth and e commerce businesses in 2024 and 2025.

Now I'm a wellness person. I'm very focused ~in, ~in the health and wellness space. The brands we own are in the health and wellness space. And I want to speak. Largely to it, it would still help if you're in other verticals, particularly verticals that lend themselves well to subscriptions.

Even then listen through, if you're looking to essentially understand the fundamentals now in 2024 to 2025, that high growth companies, high growth consumer brands using e commerce as their primary channel utilize [00:03:00] to skill to get that agility, to grow. Extremely fast. I spoke about this in my newsletter called the conscious commerce newsletter.

If you haven't subscribed yet, it's on subscribe dot 2X eCommerce dot com. It's a fascinating read. I think we're in issue seven now have a subscribe to it if you haven't anyway. So what are the fundamental ways in which brands like seed health. Athletic Greens, Modwater have been using to make waves to growing their businesses with simplicity and minimalism moving forward.

I think this is ~the new playbook, ~the new e commerce playbook for growth in the health and wellness space. So that's what this episode is all about. So I'm going to speak into ~three pillars, ~three pillars of [00:04:00] growth. And. ~There's ~along with those three pillars, there's also going to be a finance layer.

Now, if you want to grow an e commerce business and you're not financially educated by that, ~you can't, ~if you cannot read a profits and loss and understand the fundamentals of a balance sheet. It's not to say you will not be able to grow. It's just going to be very difficult to comprehend the velocity of growth and The net impact.

Sometimes growth comes at a cost. I can tell you that myself. We've been able to grow brands ~in, ~in my company ~at ~at the detriment of the long term detriment of the brand. And at the same time, we've been able to grow brands ~at, in, ~in our business ~for ~with long term alignment. So having that fundamental finance layer is very important.

We're going to talk about that a bit later, where we want to start now are three pillars. The three pillars, in my opinion, right [00:05:00] now, Your product innovation, the efficiency of your marketing, as well as the efficiency in your operations. So if you're thinking about growth, if anybody tells you ~who ~I grew this business and all they're talking about is ~meta ads, ~growing with meta ads or with email and SMS, it's not the full picture to really grow a brand.

~You need three things. You need to, ~you need three things. And if these three things don't necessarily work in sync, you're not going to get sustained growth. So what are those three things I mentioned earlier? It's product market. So product market fits products, your marketing and your operations. And they shouldn't really be glossed through.

It's just, it cannot be glossed through. So let's start out with product. What do I mean by product? [00:06:00] It all starts with essentially a great product, right? ~All brands, if you all brands, you admire ~all brands, you admire, have products. That you love that work, right? So they've undergone a thorough rigorous product development ~cycle ~life cycle, right?

That ensures that offering delivers the results and retained customers. Everything comes to crap, absolute crap. If your product ~is, ~does not deliver what it says, but you're efficiently running, your business from an operation standpoint. As well as growing through marketing, it will come to a halt.

That's what kills dropshipping businesses. The issue with dropshipping is down to products most of the time. And I'm talking about this low [00:07:00] quality dropshipping. It is down to product. Product price mismatch and the inability to retain customers. So ~what are the things you need to what's the nuance in product?~

What is the nuance in product? Now ~there, ~if you listen to my last interview with Kelly Thornton, who was from Tidjhani, the men's skincare brand. One of the reasons why they've been able ~to essentially ~be profitable for the last five years, except one year, which you mentioned, I think that was 2022 was primarily down to their ability to switch manufacturing partners.

Due to cost. So ~they're developed, ~they'd already developed their own formulas with higher efficacy ~that work ~that will get people using it over and over again. That's a given. And he mentioned the fact that [00:08:00] there was, ~a product, ~a chief product officer. And his team that was just a genius ~in doing that ~in producing high efficacy products, with that gentleman, ~just ~in charge of all of that, in terms of the end product, they own their formula. And when they own their formula, they were not tied to some contract manufacturer who was just doing a buying and selling, essentially. They owned their product ~with, ~they can continue to improve by the way.

They own their IP. And then as a result of owning their IP, they're able to maneuver from an operational standpoint. I'm going to speak to operations a bit more, but your love and care for the customer through the product is Essentially manifested through the amount of toll you put ~into the product, ~into building out your product in the health and [00:09:00] wellness space.

It is so important to do that R and D to own the IP. Because when it comes further down to an exit, which many of us will eventually want to do, that increases your multiple, the fact that you have IP on your formulas increases your multiple, it means that if I want to go to a new market, say Saudi Arabia or the Middle East, I.

Essentially just take my formula with me and I find the right contract manufacturers to manufacture to that formula. As against trying to ask my suppliers say, can you, how can we, so do you have facilities in the Middle East so we can buy and sell in those regions? So owning the product innovation is so important.

And it brings me to the other point about modern brands like Seed Health, AG1, [00:10:00] Modwater, what they do is they minimize the number of SKUs they have. So their focus on product ~is laser. It's absolutely ~laser. Now I can understand like in beauty categories where you have makeup and different tones of color, you just can't get away with it.

But truly in product, less is more. Particularly in the beginning, in your first 25 million or so in turnover, less is absolutely more. Go on a skew curl, understand your numbers, see what the sales velocity is, look at your loss leaders. If there are any loss leaders, and see how you can curl your skew counts.

So you can focus your energies on delivering high quality products that get customers. To use over and over again to get hooked. Essentially. [00:11:00] I can't emphasize this enough. If we're speaking in this, if this was a SaaS e commerce business, it's the same thing. The SaaS e commerce business is focused on product is the heart, the end.

And when you look at it, holistically, Your entire brand is a product, the ability for your operations to sync well ~with your with the ~with marketing, ~your ~ops, ~marketing, ~finance, that symbiosium creates a product, right? So the entire way you deliver the message, your brand, the entire thing is a product.

The entire experience is a

product, but when we're looking at developing the product. You've got to put your love, sweats and tears into really testing and developing a product that would resonate very deeply with your audience. [00:12:00] And you could start out with white labeling initially, get feedback, but the end goal after that.

Is building your proprietary products. That's where the value is. It is where the value absolutely is. And then product, you can look at it from a point of view of manufacturing owning manufacturing eventually. Now that then makes you ~a, ~an asset heavy business. It may work and it may not work.

I remember Harry's, ~the ~the men's, grooming brand. I think they do like shaving sticks, blades, basically. And all sorts of products for the shaving experience. And when Harry's really wanted to expand and double down, they bought ~our ~factories ~in, in, ~in Germany. Manufacturing factories in Germany to just have that ability to scale.

But that was fueled by a lot of venture money, right? But at the basic [00:13:00] on your formulas, work on owning your formulas, work on owning your product. Because ~you, ~when you get that feedback from customers, you're able to amend and, adjust and iterate on your product, right? So product first.

So we're thinking product first, if we want to grow that step one, I'll be talking about step two shortly after this break.

Remember our chat in May earlier this year, episode 33, to be specific with Sam Piliaro about scaling from 1 million to 10 million with Google ads. We touched on something crucial, trust signals in your Google search results. Let's dig a little deeper. You've seen those stars next to some websites on Google, right?

Those are seller ratings and they're game changers for e commerce. Let me explain these aggregated ratings come from your customers reviews about their shopping experience on your website. They can seriously boost your visibility and credibility with potential [00:14:00] first time customers on Google search results.

Research carried out by Reviews. io found that seller ratings can increase click through rates on Google Ads by up to 17%. That's a lot of extra traffic. But it doesn't stop there. There are also product reviews that show up on Google Shopping search results which are equally powerful. Unlike seller ratings, These reviews focus specifically on individual products, and they can bump up conversions by as much as 26 percent while improving click through rates by 5%.

Higher click through rates mean lower ads. Which is pretty impressive, right? Now, you might be wondering, how do I get this reviews working for me on Google? That's where reviews. io comes in. They've automated the whole process for e commerce operators like you, from collecting reviews to displaying them where they matter most on Google.

Reviews. io Doesn't [00:15:00] just do text reviews either. They're big on video reviews, which are fantastic for creating engaging user generated content. This stuff is gold for boosting trust and conversions in your Google results. Once you take your Google presence to the next level, right now, you can get 10 percent off your first year with reviews.

Just reach out to the team by a chat or email and mention 2x e commerce. The offer is for new customers only. Terms and conditions apply. It could be just the thing to supercharge your e commerce store and dominate Google search results.

Okay. So ~the second. Pillar or ~the second cog for growth, you want to get a grip of is your marketing. Now, most of what you [00:16:00] listen to on this show is about marketing. Although ~we, ~we speak, from time to time about operations and finance, bring these guys in and we've even spoken about product innovation.

I would link to some of the product innovation episodes we've done in the past. But. Marketing is a very important pillar, as you can imagine. And I wrote about all the aspects of marketing quite extensively in my book, e commerce growth strategy. Which is there, if you're watching this on video and essentially marketing is split in two and a half.

One is demand generation and the other is demand capture. You want to focus a lot of your efforts on demand generation. What is demand generation? It's. Putting out content that attracts an audience and a community that would eventually convert to customers. So at its [00:17:00] widest net, you're reaching out to an audience that resonates with key features of the product that you're building.

And then when you essentially find that audience, you build a community around that audience by. Owning some data, ~some ~having some more information ~about those ~about the audience, bringing them together from time to time and eventually selling to them longer term. Now, ~I'm not to say ~this is not to say that, some people would not just come across your brand for the first time and essentially impulse buy.

It happens every day. Like impulse purchases do happen particularly when recommendations are made. The key thing here is building a community and. The most effective way of building community now is to essentially connect to other community leaders or nodes, as I call them, and tapping into their communities to build your own larger community.

What do I mean by that in plain [00:18:00] English? Influencers, simply creators and influencers. So using creators and influencers on a long term basis, right? So the idea of influencer marketing is not necessarily to make, it's not necessarily for performance. Performance is great. We've used performance in influencer marketing a number of times to its full effect, but.

You want longer term advocates, more or less brand ambassadors that represent your brand that when the audience or people come across them they don't need to relate with them too long or consume much of their content too long before they know that particular person of influence.

Endorses your own brand or is associated with your brand. You need to build some sort of association. So it's a very careful selection. And when you look at brands like seed or AG1 or Mudwater, they select these people of influence [00:19:00] very carefully. ~They, ~they look at podcasters, ~in, ~in the health space, in the health and wellness space specific social media platforms.

~people, but ~people who are creating educational content in the wellness space, I'm speaking to educational content at scale, relating to health and wellness and seeing if their values, their philosophy to health aligns with your offering. So if you are, bringing ~a ~vegan. Products to markets, there's no way you're going to start to reach out to a carnivore person of influence.

There's just no alignment there. So it's really looking at your DNA, having absolute clarity of who you are as a brand is an organism. So what are the values of your brand? And how those values essentially align with the values of the people of influence ~and ~in modern day now it's [00:20:00] really ~educate, ~edutainment.

So at the core, you're educating a market with a sprinkle of fun to it. That's how I define edutainment. ~And. ~That's the first bit, all that bit I've talked to you about is the first bit of all of your marketing. So it's really get into that acquisition ~bits. ~And then the other ~bits ~of your marketing essentially is the retention and it's a very important bit because if you have ~retention rates of.~

Decent retention rates. ~You don't you're, ~you become a farmer, you're nurturing customers and you have a business that actually is taking care of its existing customer base. ~So ~with retention, ~there, ~there are many, and I covered this ~in my, in, in, ~in issue six of ~my email in ~my newsletter, the conscious commerce newsletter, where we talk about the.

Visual engineering, the user experience engineering for retention. And again, if you're in the health and wellness space, most of your products will lend [00:21:00] themselves to a subscription model and how to use the power of default ~to, ~to drive more subscription. ~So that's a retention ~that's a way to engineer retention visually.

And, effortlessly for the user and at the same time, you have many other layers to this, how well you communicate and how often you communicate the frequency relevancy, of your communication with your customers. For me personally, I'm not a retention experts. Retention and communication is my weakest spot as an individual.

But I would without a doubt plug in a retention manager at the moment and I can afford, retention person in my business as quickly as possible. If I was to start an e commerce business, many of you would have one already. Having an agency is not good enough. You need to essentially have a lead of retention.

Naked wines do it. I did a few years ago, I wrote ~a, an ~a, it was more or less a breakdown or [00:22:00] a teardown ~of, ~of naked wines, their subscription business. I wouldn't sell alcohol, but they do sell alcohol and they're very, ~fairly ~successful in their own right subscription business. And I spoke about the way they.

engineer retention into their model, you can't just buy naked wines without having to subscribe, as an angel in the first place and an angel, essentially subscriber. And the way it's engineered is very intentional. ~And you can take those learnings and the way ~This is managed that there's one person in their company that actually manages retention and it's held responsible for their retention rates, essentially.

And when you get into retention, the world of retention, you need to understand, churn, you need to understand how many people are falling. And if you're bringing in more people. Then you're losing people fall out for many reasons, and then engineering some sorts of feedback system to understand why people are actually ~on ~subscribing.

So [00:23:00] you can see if it's a product problem. An operations problem, maybe ~with delivery product problem with taste or with the product itself or an operations problem ~with delivery or a financial problem, where, ~like the, ~you price yourselves out. Understanding all the reasons why people and aggregating it ~to, ~to get some sort of intelligence on ~Chen.~

Will be a game changer for your business. So I just wanted to touch on that. So ~with markets, ~with your marketing, you're only trying to find a fit for your product and your product has to have it's why and it's values. And it's who it's addressing it to. And then you're meant to find ~the, who, many, who's ~the many sorts of profiles and segments out there that will get the, who, that's at a top level is what marketing is all about.

It's about acquiring people into your system and ensuring that fewer people. Come out of your system, then they leave working with community leaders or people of influence, creating [00:24:00] content that attracts ~the, ~who you're trying to define and. Systems for retention that's marketing ~in a goal ~in a nutshell.

Now, Brandon is the personality. How, who are we turning up to? I was reading an article from, or a post from someone at I think it was the CEO of liquid death and they essentially are ~selling water. The same way they're ~marketing water and branding water, the same way that you would market and brand beer, like lager or craft beer, that was his exposition.

And when I looked at it again, I was like this looks like a beer can. Their marketing is so extreme. It's actually more extreme than anyone selling beer, really. But ~what ~it's out there. ~Yeah. ~So that's a personality on the brand there, which accelerates. Your marketing efforts, ~right?~

The brand is that soul it's the [00:25:00] 360 of who we are. So if we were a person, who are we? And then the marketing essentially takes that to market, ~takes that to market ~with the use of ~psychology, ~psychology and, psychology tactics and, ways to influence people to take action.

That's it in a nutshell, then we go into manufacturing operations, ~rather, ~which many people look as a cost center, from a financial standpoint, but ~it's, ~it really isn't. It's actually a growth center. Yes. It has costs. In it, but your operations, if you are really good at operations, you can minimize cost because operations essentially is this nice mix of people, processes, and systems that, Essentially deliver your manufacturing and your supply chain to the last mile delivery [00:26:00] to your customers and even customer support, right?

Operation keeps everything moving, smoothly from, manufacturing to the end user. And if at every step of your ops, you're being efficient and you can control costs, you leave more revenue for your customers. Marketing and ~product innovation or research ~product research, R and D, which in of itself grows the business.

So with an efficiently operated business. You can grow further and it doesn't necessarily handicap, your efforts in growing that is ~where, what I'm, that's ~a key point in operations. So it's really behind the scenes efficiency and not many podcasts speak to the importance. Of operations. And I'm going to change that in this podcast.

We [00:27:00] need to get into the nitty gritty of operations and that's because ~they, ~as much as ~their ~principles in operations, there's no set playbook that will teach you how to manufacture more efficiently. It's ~that, that it's ~nuance, right? But there are some core principles to operations, which we'll bring in, but we don't necessarily want to get into.

An e commerce operations, podcast, your manufacturing, you will know, again, you remember when we talked about like IP and owning your products, owning your formula, owning your IP. Those are little bits of detail that ensure that your operations. We'll be going in the right direction from a cost efficiency standpoint, particularly when you're now making decisions around manufacturing, right?

From a supply chain and last mile delivery [00:28:00] standpoint. Simple things like your box standardization, just your packaging standardization can save you or, cost you money. I remember my first Amazon business we were selling we were selling. It was a brand. It was actually a really nice band.

It was a baby safety brand and we're selling these corner guards and I decided to, we started to sell like extra large versions and. That's changed the category of of of our warehouse cost with FBA, would you use an Amazon FBA and it significantly had an impact on our margins.

It almost took us out of business by, by, by going for an additional extra size, because many customers wanted to go for that exercise. And we couldn't necessarily, we're pressured from a price perspective due to competition. So little pieces, little attention to detail [00:29:00] like this really matter.

And they can save you. Cents on the dollar, but at scale thousands, if not millions. So operations is really key and getting experts at specific aspects of operations will help you customers experience. The customer service is part of operations. It's where you fix issues, and.

Your ops really need to be well connected. Your ops and product people need to be really well connected to what you're doing at the customer service, because that is getting firsthand feedback from customers. When you have all this in place, some sort of financial model has to run it. If you're bootstrapped, there would be a limited number ~of of points ~of lever points you can operate.

If you're financed, [00:30:00] externally with some angel funding, some VC funding, ~which can happen ~It will be a ~different sets on a different approach. You will take, it will be ~different sets of people you plug into your business, finances is ~the, is ~your scorecard, at the end of the day, I often say, once you satisfied customers, ~to, ~to the highest degree, your scorecard really is your P and L.

~And, or ~your profits and loss statements ~and ~what's on your balance sheets. So with leveraging all of these three key points and understanding what financial profile you are, you will get that ~on ~fair advantage because all of this would uptake your retention rates and the value of a customer to you, the longterm value of each and every customer to you.

~And. It's ~exemplifies the relationships you've built that enables customers come back for more at the product level, at your ability to deliver ~your own, ~your promise ~through, ~through effective operations [00:31:00] and the message you've sent, ~in, ~in your marketing and with this consistency.

You will find, and you can plug in, you have scalable growth, right? You have very scalable growth. You can then pour in more capital into your marketing to continue to grow the brand. Now with your addressable market and marketing, you might start out a bit. ~Niche initially ~with your marketing and then slowly expand your target, audience over time.

There's one other trend I want to talk about before I wrap this episode off. It's just the power or the trend of simplicity where brands are having, less than five SKUs. And hitting over 100, million dollars in valuation. ~And ~just by focusing on a few very powerful, high [00:32:00] quality products.

So again, this is down to the efficacy of the product. And many of the time you find that these brands are first to market ~or the first markets ~in marketing these products in a unique way. But the key thing is this power of focus, right? The ~power of focus on ~power of minimalism. ~And it just makes, ~if you look at athletic greens, for instance, ~it's just the blend of greens, whether you like the brand or not, ~it's just, Their formulation, right?

Their micro nutrient formulation. And they walk that message over and over and over again. Till you get it ~or you want to, ~there are now many me too brands, associated with the same offering and trying to develop more products. But AG1 was first to market.

People saw their success and then they copied. Now that's not to say there's not enough. In the space, but ~it's ~it's almost a winner takes all, approach in terms of their market share in that segment. Same thing ~with ~seed health, ~they're pro is it pre or pro pre approved probiotics.~

~I think ~they're probiotic company. So they sell probiotic, supplements ~and ~in a capsule, I'm sure that ~many other ~many other probiotics in the market, but they've done it in a unique way, [00:33:00] they've used influencers ~to, ~to really drum that message. It's a singular, almost singular product.

I think they only have two SKUs. They brought in a new SKU after, the success of the first SKU. They just drum the message over and over again. If you think about, ~rainbow, is it called rainbow dust by let me look ~rainbow dust, ~mushroom powder. It's, yeah, it's ~by Space ~Goods. How many ~goods I'm not sure how many SKUs.

~Yes. ~Space Goods don't have that many SKUs themselves. The UK brand and yeah, it's this focus ~on the one ~on the singular and not necessarily just UK. Going full breadth. Now you can go full breadth, but you just have to have that promise. What I find is that when you go full breadth, you're not going to own all the formulas, most of the time, ~you're not going to own all the formulas ~which is ~okay, but it's ~okay to start with, but eventually you want to own the IP.

So yeah, ~that's, ~those are the pillars. Of strategic growth. This is what I call the new playbook for growth ~in, ~in e commerce. Yeah, I think that's it. I just want to thank you all for listening to [00:34:00] this episode. If you have any questions, shoot me an email. Remember to subscribe to the newsletter.

Because I put in my thoughts on commerce that I give a commerce tip, ~in, ~in every issue. And I showcase a hundred million dollar in valuation e commerce business ~every now and every, ~in every issue and we speak, around health, so yeah, definitely want to subscribe, just head over to subscribe.

suexecommerce. com. For more on that and until the next time, folks, thank you for listening. Have a good one. Cheers.

Mhm.

Kunle Campbell: Thank you for tuning into this episode of the two X e commerce podcast. I hope you found our discussion insightful, especially as we explored how successful brands are scaling with focus on product innovation, streamlined operations, and. And targeted marketing. If you enjoy this episode, be sure to subscribe to be sure to subscribe on your favorite [00:35:00] podcasting platform.

Your support allows us to continue to bring you the most valuable content and incredible guest. Please leave a review and share this episode with fellow e commerce entrepreneurs and operators who would benefit from these strategies. Until next time, keep pushing the boundaries of e commerce growth.

Thank you for listening.