Here’s what I learned this week

2024 is about to be rough from both a consumer point of view an economy point of view.

Tech is announcing major layoffs, including 30k being let go from Google, replaced by AI.

This is the tip of the iceberg, Google has a huge market cap and doesn’t “need” to let people go. They are making a bet on the future and the future economy.

These are all largely sales people in their ad unit.

Tech has laid off a lot of people in the last year…

As of December 21,1,169 tech companies had let go of 260,238 workers in 2023, according to Layoffs.FYI.

Millions of student loan borrowers aren’t making repayments.

The writing is on the wall for a rougher than normal 2024 across the board.

There’s a lot of LinkedIn posts coming out about companies that have been in business for a number of years cutting operational bloat and being flat year over year with projected savings coming from cutting agencies and technology from their marketing stack.

I posted earlier this week about tech consolidation.

The truth is you can’t outrun unit economics and a lot of brands are finding out about this the hard way.

I’m hearing a lot about companies being flat YoY but being more profitable. I’m hearing others are down but more profitable or up but approaching brake even.

Here’s my list of things that I’m focused on in the coming year to ensure that not only can we weather the storm, but make the proper changes to adapt to the new normal.

The List for 2024

1. Newsletter Creation for the brand lifestyle

People don’t buy products just as products, they search for products that fit their lifestyle or their lifestyle goals, with acquisition getting increasingly expensive, building a newsletter with data related to purchase behavior relevant to a lifestyle can become a stand alone asset.

It’s a hedge against acquisition costs long term. This is sort of what CBD companies have been moving towards, think of any field where ads aren’t the best route and you’ll see why everyone should be working on a standalone asset in the lifestyle of their business.

Whereas a typical list building on your ecommerce website would focus on quality visitors likely to purchase, the lifestyle newsletter simply needs to entertain and provide relevant information about the lifestyle that the brand is related to.

This should be separate from the brand itself, but there are ways to write into the terms of service that you can share the data with 3rd parties. (consult your attorney on this front)

You can run giveaways via social media to build a list cost effectively.

If you do this you’ll want to really understand the laws around these things and you’ll want to collect zero party data relevant to the lifestyle NOT your products.

I tested this last year, it worked well, and the audience stayed engaged.

My goal for 2024 is to run this same playbook for Krakatoa Underwear, building out a fun website full of content that properly aligns with the lifestyle.

The future is about distribution, not sales.

People don’t have trouble making things, they have trouble finding the audience to sell them too.

Sales are a result of really solid distribution and targeting the right audience.

All brands should look to create a stand alone asset in this space that can be built up to be used in conjunction with other co-marketing activities.

2. Co-marketing activities

This has been a theme of my past few newsletters and I’m very bullish on brands that can pull this off properly. In fact, I think it has the potential for having the largest impact on a brand’s bottom line.

It’s complicated, it’s tough, most brands won’t be able to do it, so the value goes up for those that are able to pull it off.

Skip social media as the reach is pretty dead these days, but double down on email in a solid and repeatable manner.

For a lot of brands with low quality lists, clean them.

We just looked at our list and of the 60k active subscribers, 40k have purchased something from us. This is one of the healthiest lists I’ve ever seen.

We’re going to leverage this list with other brands to grow our business through an email cadence we’ve already been testing and set up.

Something you could setup in a weekend and get great results from too.

If you need help getting something like this started shoot me a message.

3. UGC on autopilot doubling as product feedback and reviews

You’ve heard me talk about this as well, basically, I’ve developed a system to sell goods and exchange video reviews and UGC for cashback or store credit rebate.

Rather than everyone else that’s just giving away margin on the first sale or a rebate for the purchase, we’re going to tie content creation back to the purchase to unlock the rebate.

I’m excited about the possibilities behind this one, testing should start really soon and it will be exciting to see how it works out.

For a lot of brands UGC is time consuming and difficult, I think this method will allow us to scale UGC in a way that populates our socials with lots of content that we can repurpose.

This would be unlocking UGC at scale in a way that paves the way for a whole bunch of other longer term plans.

Take the time consuming parts out of this marketing headache.

4. Raising prices

We’re raising prices, unlike in the past years, we kept our prices consistent, new year, new prices. This has to happen for a few reasons, we’re underpriced v. comparable products, we have built in discounts for volume, and our generous policies around quality of product for returns took a bit more of our margin that we would have liked last year.

Massive growth isn’t always super positive.

One of the other things we’re looking at is how we can position ourselves to allow for free shipping. We’ve flirted with this in the past because we’re feeling the pressure from Amazon and the vast amount of options out there, currently our biggest hit has been on larger orders in terms of costs.

So raising prices then working towards free shipping, long terms I think most brands will be forced to make the swap to be customer friendly for any purchase less than $50.

There’s always a balance with these things, some people will complain, but margins matter.

5. Going back to the basics

I’m a huge proponent on the basics, doing things that scale and can position for long term growth. After multiple years pretty much relying on ads to drive revenue, our list growth is large enough to make the transition to co-marketing.

I try to stay focused on the big picture, most businesses I come across are just trying to do everything to grow, but instead not really setting themselves up for long term success.

Last year was a huge shift from growth to profitability for a lot of ecommerce brands and unfortunately a lot of brands found that it wasn’t really possible to protect margins.

There’s a lot of things changing in the ecommerce landscape currently and the lack of innovation is pretty clear.

A few of the things I’d like to see solved in 2024

Behavior flows from email campaigns

It’s silly that Klaviyo doesn’t do this, someone could just build this and automate it with rules and use AI to update emails in a sequence based on actions. This is easy money that isn’t being made, there’s probably and easy 15% in net revenue to be made in doing this correct.

I’ve seen this exist from a few other platforms and with ai and the proper automation this one feature should be something everyone is using.

But I don’t want to add another one for one platform anymore, I’d rather just consolidate under one company.

Structured Reviews

I still can’t believe this isn’t standardized across review platforms. I see a huge need for structured video reviews. Laws are changing around these things too, so interested to see what happens in this space.

Product Discovery

There’s a huge gap in the market for product discovery, there’s some very interesting things happening in Shopify’s eco-system that I’m paying attention to, long term I see things changing wildly in this space. See my note from before about lifestyle

Custom Goods Direct from the Factory

This already exists, I’m interested in seeing what this is like in the future.

The Takeaway

2024 is going to be all about actually understanding the changing landscape of ecommerce as a business, the brands that are able to eliminate or massively cut back on paid media ad spend will crush it.

There’s a way to make this happen.

I also think I have too many projects going on right now, but the more I operate in these businesses the more gaps I see that are preventing people from growing and they all need real solutions.

Have a great week!

-Jon

P.S. If zero party data is on your list of things to collect in 2024, give me a ping I’d love to get you setup on Formtoro every account comes with a free 30-day trial.