What is Outdated in Shopify Marketing and What to Use Instead — Brandon Amoroso | Why Shopify Apps are Crucial, What Influences Tech Stack Choices, Why Fewer Apps Boost Performance, How Retention Strategies Work, Why Direct Mail is Back (#330)

In this episode of the Ecommerce Coffee Break podcast, we explore the Shopify marketing ecosystem with Brandon Amoroso, founder and president of electriq marketing. 

A Forbes 30 under 30 alum, Brandon shares insights on customer retention, e-commerce tech stacks, and the challenges of selling alcohol online. 

We discuss streamlining Shopify apps, boosting customer lifetime value, and how Brandon's company is revolutionizing alcohol sales in e-commerce following its acquisition by drinks.com. 

Topics discussed in this episode:  

• Why the Shopify marketing ecosystem has evolved towards consolidated platforms 
• How the selection process for Shopify apps has become more critical 
• What factors influence the choice of tech stack for different-sized businesses 
• How usage-based pricing models benefit both small and large merchants 
• Why reducing the number of apps can improve a store's performance 
• What key areas are examined in a Shopify store audit 
• How retention strategies are implemented across multiple channels 
• Why direct mail is making a comeback in e-commerce marketing 
• How drinks.com solves the complexities of selling alcohol online 
• What opportunities exist for non-alcohol merchants to add alcohol sales 

Links & Resources

Website: https://drinks.com/electriq
LinkedIn: https://www.linkedin.com/in/brandonamoroso/
X/Twitter: https://x.com/AmorosoBrandon

Get access to more free resources by visiting the show notes at
https://t.ly/_yeGc 

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Transcript

Claus Lauter: Welcome to the e commerce coffee break podcast. Today we discuss how to get a full grasp of the Shopify marketing ecosystem. Joining me on the show is Brandon Amoroso, founder and president at electriqmarketing.Com. So let's dive right into it. 

Voice over: This is the e commerce coffee break. A top rated Shopify growth podcast dedicated to Shopify merchants and business owners looking to grow their online stores, learn how to survive in the fast chain.

Voice over: eCommerce world with your host, Claus Lauter, and get marketing advice you can't find on Google. Welcome. Welcome to the show. 

Claus Lauter: Hello and welcome to another episode of the eCommerce Coffee Break podcast. Today we want to talk about the Shopify marketing ecosystem and everything that comes with it, and then we'll also touch on a couple of other topics that might be interesting to our listeners and therefore.

Claus Lauter: Joining me on the show today is Brandon Amoroso. He's the founder and president of electriq.Com. That's electric with a Q at the end, a Shopify plus certified agency. Brandon is an e commerce strategist focused on customer retention and lifetime value with clients like Wine Insiders, Florence Bumbles and HealthAid.

Claus Lauter: He's a Forbes 30 under 30 alum and host of the D to Z podcast. So always good to have another podcast host on the show and author of Think Z. In 2022, electric was acquired by drinks, a top rec tech provider, we'll dive into this for alcohol brands. So let's welcome him to the show. Hi Brendan, how are you today?

Brandon Amoroso: Good. How are you? Thanks for having me. 

Claus Lauter: Brandon, let's dive into Shopify marketing ecosystem. Um, I think that's something that specifically small and medium enterprises that are coming new to e commerce totally overwhelmed with. There's so many options there. Parts are integrated into Shopify. Other parts is like Meta ads, Google ads, retention comes up and so on and so forth.

Claus Lauter: Give me a bit of an idea of what you understand as Shopify marketing ecosystem. 

Brandon Amoroso: Yeah. So I think it's evolved a lot over the past five years. You know, Shopify, you can kind of think of it like the Apple app store in terms of just how many different, uh, apps there are that are, you know, downloadable can plug into your existing interface and it adds some sort of additional features or functionality ranging from really small, just like features all the way up to, you know, giant platforms that have raised hundreds of millions of dollars to build within, uh, the Shopify ecosystem.

Brandon Amoroso: I think, you know, three years ago, even. There was a movement towards best in class solutions and products. So a merchant's tech stack, you know, could look like 25, 30, 35 apps. I went into some Shopify stores and you would see, you know, 80 to a hundred, which was far too much, but, uh, that was sort of three years ago.

Brandon Amoroso: Now what merchants are encountering, both those who already are within the Shopify ecosystem, as well as the ones that are. Just migrating into Shopify or just getting started with e commerce is a Environment where a lot of these companies raise, you know significant amount of money and there's only so far They can go with their current product offering and so a lot of them are getting wider in terms of what they what they offer moving more towards, you know being a platform than just being a feature or a Product that you would plug into your Shopify storefront.

Brandon Amoroso: So, you know, some of our partners who just did SMS before they now do email, they now do reviews others who, you know, just did loyalty. They're now doing SMS, email subscriptions and something else. So it's a consolidation. And with that, I think the selection process actually. Uh, is much more critical because you're choosing a provider that's going to sit across five different components of your website versus choosing an individual provider for each component.

Brandon Amoroso: And it's a lot easier to hop from provider to provider when you're just making one transition versus if you're using a solution for. Email, text, your loyalty program, your reviews, you know, subscriptions. That's a lot within one platform and to unwind that would be pretty painful. So I think the, the vetting and selection process, you need to be extremely, uh, proficient with that and make sure that you exhaust really all options there.

Brandon Amoroso: But long term being in fewer tools is better than having, you know, 50 60 70 apps on your Shopify storefront for for a variety of 

Claus Lauter: reasons. Yeah, I couldn't agree more. Um, obviously Shopify just, I think last week or the week before we're bragging that there are about 12, 000 apps now in the app store, um, which might be smiling.

Claus Lauter: So I say that's, that's completely, you know, Sorry, my French bullshit doesn't really help anyone. And then you see the bigger apps that are around for a long time. We're talking about the clay views to draw just the loyalty lines that what you said have brought more and more features on their platform on in the app.

Claus Lauter: It's not really an app anymore on their platform. Now, when it comes to selecting the tech stack, For a store is the, the size or, um, the age of the brand for you, a selection criteria, or where would you start picking the right apps for a brand? 

Brandon Amoroso: Yeah, I would say age less. So it has more to do with the revenue that they're generating through their online storefront.

Brandon Amoroso: Uh, especially when there are certain solutions that have Really a minimum platform fee that's going to be associated with it. So if you're not making a significant amount of revenue on your e com website, you're not going to be signing up for some of these solutions that have that barrier to entry though.

Brandon Amoroso: A lot of the, the apps and platforms that we do use, It's much more of a usage based model, and so that allows for a smaller merchant all the way up to some of the larger enterprises on Shopify to be able to use the same product. And those are typically our preference because then a merchant can grow with the solution versus.

Brandon Amoroso: You know, having to use a 2nd rate or 3rd tier provider until they've gotten to a point where they then can make that transition to, you know, the better the better service offering. So, especially in a crowded marketplace where there's multiple providers for every single. Feature and functionality that you could possibly want.

Brandon Amoroso: Now, we typically go towards the ones that have some sort of a usage based component, whether it's based off of, you know, the total revenue generated from that item, whether it's based off of, you know, number of orders, number of email contacts, things like that, uh, is much better also for us as an agency, because then.

Brandon Amoroso: We can deploy the same playbook with everyone versus having to, you know, give the smaller merchants a lesser experience. So that, that really is what it comes down to is his revenue, uh, and also, uh, growth prospects. And for some of our merchants who are really tight with their financials, we can dig into it.

Brandon Amoroso: With them a bit more in terms of what their tech stack budget can be and what it should be. But more often than not, it is really based off of, you know, the revenue. 

Claus Lauter: Now electric as an agency, what you just mentioned is a small lesson audit that you do when you start working with, with your new customer, what does such an audit also involve when you're looking into an existing Shopify store and.

Claus Lauter: Yeah. Start working with the client. 

Brandon Amoroso: So four years ago, our audit was much more about adding apps and additional features and functionality that merchant might have, or might not have now, you know, merchants have way too much going on. And so it's the reverse it's, you know, you have 60 apps, but you know, we can get you down to 20 because you're not even using 10 of these and also you have.

Brandon Amoroso: You know, for solutions that are provided, uh, all by rebuy or like aftership, for example, and you'll actually, you know, not only save money, but it's a better product that will be able to help deploy for you. So, uh, the tech stack is a big component of it because a tech stack can hinder a merchant's ability to be able to, you know, effectively grow.

Brandon Amoroso: And then beyond that, we dig a ton into their onsite, uh, experience from a conversion rate standpoint. Do they have all the things in place for, you know, when it comes to the best practices for increasing AOV and then on the back, on the flip side of that is the retention experience. So we'll go through and place a one shot order.

Brandon Amoroso: We'll place a subscription order. We'll get all the emails and texts associated with both of those customer experiences. And we'll really dig in and rip that apart, especially if we see in the data analysis that there is a retention problem. Um, you know, there's, there's a lot more awareness of retention over the past year.

Brandon Amoroso: But I still think there's more room for it to grow. Sometimes merchants don't even understand, you know, you might be acquiring a customer, uh, for cheap in a certain ads channel, but it's a leaky bucket and only, you know, 20 percent of them are coming back and ever reordering again. And so, you know, you actually should prioritize the channel that costs a little bit more to acquire their customer, but they are repeat purchasing at a 40 percent rate and some of them are becoming subscription customers.

Brandon Amoroso: So, uh, a big part of what we do as well as help tie together. Uh, the disjointed like handoff between a paid team and a retention team, which merchants are getting better at, uh, you know, having those two teams work together versus in a siloed environment. Uh, it helps a lot when you're able to actually show the data as well.

Claus Lauter: Hey, Claus here. Just a quick one. If you like the content of this episode, sign up for our free newsletter and become a Smarter Shopify Merchant in just seven minutes per week. We create content from more than 50 sources, saving you hours of research and helping you stay on top of your e commerce game with the latest news, insights, and trends.

Claus Lauter: Every Thursday in your inbox, 100 percent free. Join now at newsletter. ecommercecoffeebreak. com. That is newsletter. ecommercecoffeebreak. com. And now back to the show. No, it makes perfect sense. I mean, ad costs are rising. Um, there's a bit of inflation there and reception there. So people are really careful where they spend money.

Claus Lauter: And once you have a customer, obviously you want to get a customer lifetime value out of them that lasts as long as possible. When their retention comes in, when it comes to retention strategies, uh, what's your preferred channel there? Is it email marketing? Is it SMS? Is it anything else? 

Brandon Amoroso: Yeah, we typically will deploy email, SMS and direct mail, um, push if they have an app, but those are usually the, the four main channels.

Brandon Amoroso: Email is a higher frequency and volume because you're not paying per email sent, uh, but also you have a little bit more leeway with a customer when it comes to how many times you email them. It's not as. Personal as a text message. And so opt out rates are going to be a lot lower as well. Texts, we will intertwine within those flows.

Brandon Amoroso: And also some customers won't be subscribed to SMS marketing either. And some customers want to be subscribed to email marketing, in which case the transactional experience that we create and deploy for them is, is pretty important. So typically we'll have a separate transactional experience for customers who aren't subscribed to email and SMS marketing, because on the order tracking page.

Brandon Amoroso: We'll incentivize them to sign up for email and SMS, uh, marketing so that we can communicate with them. Uh, direct mail is, uh, something that we're testing a lot right now, uh, in holdout groups within some of these retention flows. Because historically we had used it as a, you know, sort of a last ditch effort.

Brandon Amoroso: You know, it's been 90 plus days since you placed that order. Let's send you something in the mail. Now we're thinking about it more in a proactive sense. So it's been three weeks since your order. Let's send you a replenishment reminder via direct mail. Let's only send it to 50 percent of customers and the other 50 percent we'll just target with email and texts and push and see how that impacts what that repeat purchase rate looks like.

Brandon Amoroso: Um, But those are the, those are the main ones. You obviously have your advertising retargeting on your standard social channels and, uh, you know, some, some brands now are leveraging connected TV and other things like that. But, uh, the tried and true sort of retention channels are definitely email and SMS.

Brandon Amoroso: And then we layer in push and direct mail as well. 

Claus Lauter: Okay. I found the aspect of direct mail interesting because I'm, I'm a dinosaur. I'm a digital dinosaur. I'm doing this for a very long time and we're coming sort of 360 full circle here. It's like back in the time it's like, Oh, I got an email and now it's just the other way.

Claus Lauter: I got something in a post box. Yeah. You mentioned that some people are opting out of email and SMS marketing, but there's a certain business concept and that will bring me, bring me to drinks. com. Um, where people. Need to opt in to get onto your store. Tell me a little bit on the difficulties of selling alcohol and other beverages on on the interwebs.

Brandon Amoroso: Yeah, so I mean, the alcohol industry within the US is just really messed up. Um, it's because of prohibition back in the twenties when that was lifted, every state was left to their own. Devices basically to create rules and regulations around, uh, you know, how you could transact with alcohol. So you have states with very restrictive, uh, policies, like, uh, like a Utah or Pennsylvania.

Brandon Amoroso: And then you have very open states like a California because of the number of wineries and lobbying power that they have within within the government, but quite literally all the way down to the zip code. In each state, there's different rules. So, like, there's certain dry counties in Texas that you can't ship to and it would be impossible to just spin up an online storefront on on Shopify and start selling alcohol unless you want to go to jail because there's so many different rules and regulations within each state.

Brandon Amoroso: Like, there would be no way to keep track of it in Michigan. You can't ship above a certain amount of alcohol to an individual customer on a yearly basis. So, there's all these things that, you know, drinks built out into a rules engine that enables merchants to be able to sell direct to consumer on the Shopify platform.

Brandon Amoroso: The flip side of that for non alcohol merchants is, uh, giving them the ability to add alcohol as a category to their website. Alcohol is one of the most popular drinks. Frequently requested, like add on products from customers when they're shopping online, it typically adds about 10 percent of additional GMV for merchants.

Brandon Amoroso: So if they're doing 100 million in top line revenue, they could be doing 110 million in top line revenue if they add alcohol. And so. Businesses like Thrive Market, Misfits Market, Macy's, uh, companies like that, they offer, uh, like a wine club on their website, or they offer an alcohol, uh, you know, offering.

Brandon Amoroso: That's just all powered by drinks though, so they don't have to touch the product. They don't have to do the sourcing. They don't do the fulfillment. Uh, and our system just handles that for them. So, uh, we've, we've been rolling that out with some more, uh, some more merchants and getting some more additional like proof points.

Brandon Amoroso: Uh, it is, it's an interesting category because of the fact that it is relatively high margin as well. 

Claus Lauter: Just let me roll that up. So you're basically, you're a tech provider to make sure that. Wherever you are based, um, you can, or you cannot buy alcohol online. It integrates with Shopify and you also do the fulfillment.

Claus Lauter: Did I get that right? 

Brandon Amoroso: Yeah. So there's really two end customers. One, the first end customer is if you're a winery or a producer of alcohol, and you want to be able to ship direct to a customer, you have the drinks app, which handles all the tax and compliance for you. So that you don't, you know, break some of these rules or regulations within a particular state and all the taxes are calculated appropriately because there's different tax requirements and things like that.

Brandon Amoroso: The second is an offering to, uh, just regular merchants on the Shopify platform. So you could literally be selling shoes on your website and you want to add alcohol or you're an online grocer and you want to add alcohol. Uh, drinks has a plugin solution for that as well. Where you don't have to handle anything, the products and the offerings show up on your website.

Brandon Amoroso: It's the same checkout, but it goes out in two separate orders and drinks handles the fulfillment of the alcohol portion of that order. So those are the two and, uh, merchants that we're serving. 

Claus Lauter: Okay. So as every celebrity in Hollywood, um, the rock Ryan Reynolds sell either gin or tequila by now, it's obviously it's a huge market there.

Claus Lauter: Um, you were acquired by drinks. com. How does electric marketing play into that game? Are you helping with the setup or how does that work? 

Brandon Amoroso: Yeah. So we are really the like in house Shopify experts. Uh, we enable the rest of the Shopify ecosystem as well with education and. You know, materials around the alcohol opportunity.

Brandon Amoroso: So like we'll work pretty closely with other agencies who have alcohol clients that want to migrate over to the Shopify and drink solution. Uh, we will, uh, also step in where needed. If there is a merchant that wants to migrate over to Shopify. And they don't have the in house capabilities to do so. And they don't already have an agency.

Brandon Amoroso: And then, uh, we still have, uh, quite a bit of non alcohol merchants as well that operate, you know, with, with our agency. So, uh, it's moving more towards, you know, professional services organization though, that, that helps, you know, enable all of the customers of, of drinks. 

Claus Lauter: Uh, already gave me a bit of an, of an answer for my next question about who's your perfect customer.

Brandon Amoroso: Perfect customer. There's two. One, like for that first product, you know, anybody selling alcohol online, typically above, you know, 5 million a year, and they want a modernized tech stack on Shopify versus using some of the legacy tech that they've had to work with in the past because of all the rules and requirements.

Brandon Amoroso: Uh, the second is any Shopify merchant doing, you know, 10, 20 plus million dollars a year online that wants to add alcohol to their website. There are certain categories that make more sense if you're a meal kit subscription provider on Shopify. I mean, The alcohol, you know, take rate there will be significantly higher than, than 10%.

Brandon Amoroso: I mean, you could make a lot more money if you were adding a three bottle pack of wine to your, you know, your meal kit delivery, whereas if you are selling shoes, you You know, it's not as, uh, it's, it's, it's not as related, but you still see success with brands that have their customers, uh, sort of ear in selling through products that may or may not, you know, make the most sense.

Brandon Amoroso: For example, the wall street journal wine club is one of the largest wine clubs in the world. The wall street journal is a news publication. It just has to do with the fact that their audience. is more affluent, typically, you know, business professionals who enjoy wine. And so they spun up a direct to consumer wine club.

Brandon Amoroso: That's our two sort of ideal customer profiles. 

Claus Lauter: Okay. No, it makes perfect sense. If you have an audience that can relate to alcohol, to wine, put it that way, um, then, um, why not trying it out? It might just add to, to your bottom line. What's the onboarding process? Can you, can you walk me through the different steps within the onboarding process?

Brandon Amoroso: Yeah. So for alcohol merchants, uh, who just want to use drinks, tax and compliance solution for Shopify, they just download the app. They add in a few details and information around the licensing that they have, and then and then they're often running, uh, for some of the larger merchants, you know, we'll it's a little bit more of a white glove onboarding process because they usually have more complex nuances and requirements and then for, uh, adding alcohol to your storefronts.

Brandon Amoroso: Uh, it depends on the way that your website is set up in tech stack. It'll take about, you know, four to six weeks to iron out, you know, the contract details to make sure that you're good with the selection of products that are going to be shown on your website. We have a AI solution that will ingest all of your customer data.

Brandon Amoroso: And order data and then return, you know, these are the types of products that you should be selling. If you're a woman's clothing brand, it's probably going to be, you know, more rose and white wine than if you're a men's cigar, uh, club company, which will typically be, you know, um, More like red wine or whiskey, so that on its face is rather obvious, but it gets very specific around, you know, we have so much data.

Brandon Amoroso: We can see regional buying behavior and patterns across different types of consumer demographics. So, uh, it's a little bit of like a personalization engine as well, in terms of the products that do get recommended to, to the, uh, the customers that are going on your website. 

Claus Lauter: Very interesting topic. I've never heard about that.

Claus Lauter: Well, it makes complete sense because alcohol is sold in huge margins worldwide. So this is a huge market out there. And I think a lot of our listeners will be interested diving deeper into that. How do you charge for this? What's the kind of pricing structure for, um, having drinks. com integrated into your business?

Brandon Amoroso: Yeah. So if you want to add alcohol to your storefront, um, there's a base platform feed depending on the size of the, of the merchant. Um, and then also You know, what type of program so if you're a much larger enterprise, you might want your own branded program. So it'll be branded packaging branded products.

Brandon Amoroso: If you're smaller, just want to test it out and you'll be pulling from, you know, the source, the assortment of supply that that we already have. Um, and then it really depends on that front, but, uh, typically, you know, month to month contracts for our larger merchants, you know, obviously annual and commitments and things like that, but we're, we're relatively flexible at, at this point.

Claus Lauter: Before we come to the end of the coffee break, which I should rename for this episode, I think because we didn't talk about the alcohol break today. Is there anything that you want to share with our listeners that we haven't covered yet? 

Brandon Amoroso: Um, I think. You know, the unrelated to the alcohol side of things, I'm surprised how many Shopify merchants don't have a strong grasp of what their customer, you know, retention looks like, what that customer journey looks like after that first order takes place.

Brandon Amoroso: And at a bare minimum, download one of the apps that's, that's out there that shows you your month by month, uh, cohort retention, uh, look at, you know, based off of the first product that was purchased. How likely are they to come back and reorder, start to dig into that, because let's say you have 25 percent returning customer rate, you get that to 30 percent or 35%, you know, that just makes everything so much easier for you from a financial perspective and will allow you to invest more in, in growth and customer acquisitions.

Brandon Amoroso: So that's, that's really the biggest thing that I would, that I would stress. 

Claus Lauter: Yeah, that's, that's a good takeaway for our listeners. Um, instead of chasing new clients out there and going for cold traffic and spending on meta ads and whatsoever, um, work with what you already have. It's just easier to get more money out of a existing client.

Claus Lauter: Very cool. Brandon, where can people, where can people find out more about you guys? 

Brandon Amoroso: Yeah. So drinks. com, uh, very straightforward, literally drinks. com. Uh, you can find out more about drinks there. You can find out more about electric marketing there as well. And, uh, you also reach out to us on LinkedIn, uh, contact form on the website as well.

Brandon Amoroso: And, uh, one of our team members will get back to you, uh, same day. 

Claus Lauter: Okay, cool. I will put the links in the show notes as always. And you're just one click away. Brandon, thanks so much for giving us an overview. I think drinks. com, uh, it's a perfect domain. I'm not sure how you got that, but it's a perfect domain for that business.

Claus Lauter: And I hope a lot of people will check it out and get in contact with you. And maybe there will be more drink sellers out there. Thanks so much for your time today. 

Brandon Amoroso: Thanks for having me. 

Claus Lauter: Hey, Claus here. Thank you for joining me on another episode of the e commerce coffee break podcast. Before you go, I'd like to ask two things from you.

Claus Lauter: First, please help me with the algorithm so I can bring more impactful guests on the show. It will make it also easier for others to discover the podcast. Simply like, comment, and subscribe in the app you're using to listen to the podcast, and even better, if you could leave a rating. And finally, sign up for our free newsletter and become a smarter Shopify merchant in just 7 minutes per week.

Claus Lauter: We create content from more than 50 sources, saving you hours of research and helping you stay on top of your e commerce game with the latest news, insights, and trends. Every Thursday in your inbox, 100 percent free. Join now at newsletter. ecommercecoffeebreak. com. That is newsletter. ecommercecoffeebreak.

Claus Lauter: com. Thanks again, and I'll catch you in the next episode. Have a good one.