Finding solutions for your problems
App - or solution - discovery for brands is more broken than we think.
Shopify just announced upcoming App Store changes, eliciting stakeholders' mixed emotions.
This is barely a Shopify problem, though, and it extends far beyond the kind of discovery that can happen on an App Store. The reason I mention Shopify's App Store here first is that I'd argue that for years it has done a much greater job than WooCommerce or Bigcommerce in helping their merchants get connected with the solutions that can drive commercial growth.
What made Shopify's App Store great at first has also probably become its Achilles Heel now: With 7000+ apps active on the app store, discoverability is just harder. How does a sophisticated merchant find the best solution for a specific problem?
The same challenge has been prevalent in the WooCommerce ecosystem for ages. Woo has always tried to get "the best of the best" extensions for its platform listed on WooCommerce.com, but due to the open source and decentralised nature of the software, there were always hundreds or thousands of alternatives scattered all over the web.
The other vector here is just the immense proliferation of new products being built for ecommerce. There has just been an incredible amount of capital invested in ecommerce enablement in the last couple of years, giving merchants more choice than ever before.
I now track almost 300 companies for this newsletter already. I'm still an active operator and investor with 15+ years of experience building in this space. I'm regularly surprised when I find new solutions that I didn't know existed. Fully understanding what each solution does and comparing solutions against each other is challenging for me. So I can only imagine how tough this is for merchants who don't necessarily have my tech experience.
Below I've tried to take stock of where I think we are today. I don't have solutions for all the problems that I will point at, but I have tried throwing a few balls in the air to see who will catch them.
Understand the search engine you are using
I've already touched on the platform-specific App Stores above. These are curated search engines for solutions specific to your platform and are often a good place to start.
The first thing to understand is the difference between a specific utility and a more all-encompassing solution (i.e. email marketing automation). The former is why there are thousands of apps on Shopify's App Store, and I only track less than five percent for this newsletter. The way one evaluates these should be different. Finding & picking a specific utility is also likely easier because it needs to solve a single need, and it is thus easier to search for that.
The other consideration I think is often overlooked is that good solutions are usually listed on App Stores. Take everyone's current cult favourite: Triple Whale. They have a Shopify integration but are not listed on the App Store.
Or consider something like Motion, which is the creative hub for many DTC marketing and growth teams. They don't need a Shopify or WooCommerce integration (so they aren't listed in those app stores) but are already working with hundreds of merchants for both.
Google is still one's friend here, but because it's less curated, you need to be clearer in what you are searching for. (This creates a bit of the "I don't know what I don't know" problem.)
You can use a third-party search engine like EcommerceTech, where you are relying on someone else's curation. It's not an exhaustive list, but you may find what you discover some solutions you were not aware of.
The third option is to look at review/comparison websites like G2. This tends to be most helpful when you have a clearer idea of what you are looking for and you need to evaluate alternatives.
The (expensive) cream rises to the top
I also touched on this in the previous issue: Some parts of the DTC tech stack have been won.
Think about Klaviyo & Omnisend in email marketing (along with the slew of other options up and downmarket). Gorgias for chat and support. Yotpo for reviews.
I'd argue that any of those are great solutions for any brand doing more than $1M a year, and that is why you see that most brands in the $1M - $100M have very similar tech stacks. As these companies have succeeded, though, it creates two challenges:
- They're not "cheap" anymore. I'm not too fond of the word because it suggests it might not be valuable or ROI-positive. The reality is that bigger brands can easily spend thousands of dollars on software every month, and the best solutions in the space have used their growth to be bold in their pricing.
- When some categories have been "won" like this, some brands will likely settle for a good solution versus the best one. Since the path to discovery for these winning solutions is so easy, I wonder how many brands are going the extra mile to evaluate whether an alternative solution could be better for them.
Both of these create a bit of a self-fulfilling prophecy, too: Even though there is more capital going into startups in the space, some spaces are just too crowded to eke out a little market share. Having competed against Klaviyo and Omnisend, I can tell you that I'm now happy to build in a space that doesn't have two such behemoths. 😎
Integration support will matter more than ever
The solution I recommend to other software founders/teams most often is Segment. It's always one of the first solutions I switch on in new companies I work on. So what happens today is that when we look for new tools, we will always prioritise tools with a Segment integration since it greatly speeds up our implementations.
Within the DTC tech stack, I think the same consideration should be prioritised by brands, especially so with the greater fragmentation of the tech stack. Finding tools that can connect well is important. This is where I think some bigger apps should build their own mini App Stores (ShipBob is a great example).
Beyond having the necessary integrations available, this also creates the need for brands to understand how these integrations work. Thinking about this, though, reminds me of how complexity in communication increases the more people you add to the mix (which means I'll save talking about this for a future issue):
Your best bet: Peers?
Talking about humans, they are probably brands' best bet to find the best solutions. The ability for humans to have a conversation about working through some complexity or uncertainty to get to a recommendation is - for the moment - still greater than any programmatic system.
I see this playing out in two ways:
- Brand founders or operators often come together in private communities or smaller groups. This is where knowledge sharing occurs, and solution recommendations are often traded amongst each other. I'm not sure how objective those recommendations are at all times, and I suspect some herd mentality would be prevalent. I also have no doubts that these conversations and insights are invaluable.
- The other group of humans who can be helpful are the app / software developers themselves. If you came to Cogsy and asked us for an IMS or ERP recommendation, we could share everything we know about the individual options since we already integrate and work with many of them. We shouldn't make email marketing recommendations, but we're not a bad source for things adjacent to our expertise.
I wish I had a better solution for the problem(s) I have pointed out here.
Maybe someone builds something or emails me with better recommendations. My inbox is open and I look forward to the conversations.
In the world of ecommerce enablement
Interesting bits of company and product news coming from the diverse world of ecommerce enablement.
- I had quite a few conservations with people smarter than I about the missing customer data layer I spoke about in the previous issue. I was surprised by how many builders are (or believe they are) trying to solve this. The other thing that surprised me was how they think about data warehousing. My gut feeling was that one would do the ETL (extract, transform, load) and warehousing. Almost everyone I spoke to agreed that the warehousing should be passed to a specialist provider. So what was interesting was to see Peel announce their Snowflake integration for what I can only assume are similar motivations and reasons.
- Hawke Media announced the launch of hawkeAI (along with an acquisition to compliment it). It's always interesting when agencies build products. My assumption is that they live very closely to the problem space and have identified a big need for their agency clients. I'll be following this closely.
- Okendo announced a new partnership with Walmart to syndicate its reviews. Review syndication is something I only recently learnt about, but here's the tl;dr -> Effectively, if you are a brand selling directly on Shopify. You have collected thousands of reviews from customers using Okendo. You now start selling on Walmart, and instead of having a cold start with your social proof, Walmart says that they trust Okendo enough and that your customer reviews are legitimate. So Walmart pulls those reviews in from Okendo for you. Bazaarvoice has had the headstart on these syndication relationships for years, and it's good to see others making inroads now.
- Preventing churn - and passive churn specifically - seems topical for quite a few. Subscription platform, Smatrr, announced new churn prevention functionality. Recharge is extending its partnership with Churn Buster (one of the original churn reduction solutions in the space).
- Nosto added support for Instagram Reels. My immediate reaction is to balance Nosto's strengths (holistic or site-wide personalisation) with the strengths of a more specialised platform for UGC. I think when it comes to displaying UGC on your website and turning UGC into shoppable experiences, Videowise is a much better bet. But when we talk about the challenges of solution discovery, deciding between Nosto and Videowise is comparing apples and oranges.
Some of new discoveries since the last issue of The DTC Stack:
- Lucky sells itself as "omnichannel fulfilment and inventory availability for modern brands", and it looks like a well-built solution. I've not seen a full demo, but what resonates with me is how more DNVBs are pushing into retail sooner. That, however, presents an inventory and working capital challenge where both your availability and planning must be top-notch to avoid running out of stock. Lucky can help address that problem by essentially enabling decentralised fulfilment. They seem to already support integrations for Nordstrom, Sephora, Target, Best Buy, CVS, Walmart, Walgreens and a few other retailers. I'll be watching this closely alongside the new projects we are working on for Cogsy, where our focus is on brands that sell multichannel and have inventory in multiple locations.
- Sizing is probably the biggest challenge online shoppers have when purchasing any fashion or apparel goods (especially when doing so from a new brand). One would think a UK size 10 shoe is the same for all brands, but alas... Brands are currently solving that with better returns policies and operations, but these are costly. I like what Easysize have built: a simple survey-based tool that likely does some "machine learning" (I suspect it's simpler than what it says on the box) to help shoppers figure out sizing. And then, on the other end of the spectrum of technological complexity is Fit Match which promises to create your "Digital Twin" using Lidar technology. In both cases, I'd imagine you can help shoppers find a better size at first, which should reduce the costs related to returns and increase conversion rates.
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