Since it was famously discovered by the Germans in 1904, San Diego has been an underrated center of innovation in technology, healthcare, and science. But recently, the city has emerged as a hub for exciting new eCommerce shops.
To help these entrepreneurs build the future of eCommerce, Dylan Whitman founded BVAccel, a digital design, development, and marketing agency and Dynamic Yield partner based in downtown San Diego. We chatted with Dylan about delivering great digital experiences, the importance of delivering on a brand promise and the golden age of competition in eCommerce.
DY: BV Accel works with founders and executives across many of the hottest eCommerce startups. What keeps most of them up at night?
Competition. You have to be totally on your game as an entrepreneur because competition has never been this fierce.
Think about the online mattress market. Casper introduced a new product to the world and had a slew of viable competitors seemingly overnight.
A lot of eCommerce brands right now are an attempt at retail arbitrage, essentially just a repackaging of things that aren’t fundamentally differentiated. This leads to increased competition which pushes quality up and margins down. People are going to have to be ready to get squeezed.
DY: Speaking of Casper, how is that we live in a market with 5+ mattress in a box startups? Is this sustainable?
DW: Sure it is. This is what the “collapse of retail” is fundamentally about. For decades, retail had strict barriers to entry in logistics, sourcing, manufacturing, and marketing that made it very hard for new brands to reach customers.
Technology has broken down nearly all of these barriers. Getting to the customer has never been less expensive and allows for many brands to emerge around a single product.
As an eCommerce brand, it’s never been easier to get bigger and never harder to get huge.
DY: So with all this competition, is raising more money to pursue hyper-growth the best way to separate from the pack?
DW: It’s often exactly the opposite. Raising money is actually one of the worst things you can do in this market if you do it too early.
If you raise too much money, you are forced to become a company that you aren’t necessarily trying to be. Bonobos raised too much money and had to vastly change its identity, culminating in the sale to Walmart.
DY: So what is the key to differentiating in such a crowded eCommerce space?
DW: It fundamentally comes down to delivering on your brand promise.
For Amazon, the brand promise is low prices, fast delivery, and vast selection. And they’ve delivered on that for two decades. Other companies have promised little in the way of quality or customer service but guaranteed the lowest prices.
When people talk about building brand equity in eCommerce, what they are really talking about is fulfilling the brand promise over and over.
DY: So to build great brands, where should early stage eCommerce companies focus the bulk of their marketing efforts?
DW: The critical thing is to be systematic in your approach. Ruthlessly prioritize your strategy to look for low-effort, high-impact opportunity.
Look at all available strategies, tactics, platforms and technology investments and use the following framework:
- What is the level of the investment?
- What is impact?
- What is confidence of impact?
Using this simple thought process makes it easier to see how you can deploy technology to eliminate barriers to getting where you want to be.
DY: Are there any particular low investment strategies that are consistently driving great results for the brands you work with?
Text messaging/MMS marketing. We’re seeing 10X ROI from SMS than we are from email in some cases!
DY: Come on, I already get enough annoying texts. Are you saying more brands should text me?
DW: It goes back to delivering on that brand promise. Think about your favorite consumer product. Would you be open to receiving promotional offers when that product goes on sale?
When you consistently deliver on a brand promise, more and more marketing opportunities open up.
DY: What are some common areas where eCommerce companies are missing opportunities to convert website visitors?
DW: The biggest opportunity is making sure you have an experience that really works on mobile. I’m still shocked at how many brands are not investing appropriately in mobile.
After that, the next thing is carving out an identity with great design and copy. A novel aesthetic and fun, conversational messaging go a long way in engaging your users.
DY: As the lazy days of summer wind down, all eyes in retail move towards the holidays. Looking forward, what is going to be the big story coming out of Black Friday/Cyber Monday 2017?
DW: It’s going to be a tough Cyber Monday and retailers better be on their game.
Facebook and Instagram are the major ad platforms driving revenue in consumer retail and they are simply running out of space to run more basic eCommerce ads. Merchants are going to have to find other ways to stand out.