Personalization in Ecommerce
In this session, Sean Clarke, Co-Founder of PacificIQ, dives into the profound impact of personalized shopping experiences in the realm of ecommerce. Discover the significance of tailoring customer journeys to individual preferences and needs. Sean will unravel the intricate role of AI in achieving hyper-personalization and share actionable insights on how brands can seamlessly integrate AI-driven personalization strategies into their ecommerce solutions. Join us to explore the future of customer-centric shopping experiences and harness the power of AI for enhanced customer engagement.
(upbeat music)
- All right, and welcome to our next session
with Sean Clark from Pacific IQ,
not just Pacific IQ,
the founder of Pacific IQ.
Sean, how are you doing today?
- I am great, thanks Brian.
- Yeah, so let's just get right into it.
I love just getting right into it first, before anything.
Tell us a little bit about your background, Sean,
and how you kind of wound up in the spot
of finding your own Shopify Plus
agency of Pacific IQ?
- Yeah, yeah, definitely.
I mean, I like a few other agency owners
came from the brand side,
so I kind of learned this craft out of necessity
for many years.
I was doing e-commerce in a few brands that I created
before Shopify existed on things like ZenKARF
when it was open,
and then was using Shopify in its first iteration
when it was almost like Wix was terrible.
So basically now it's like,
I've been here with it's the best platform out there.
So yeah, I sort of crafted my way
and learned everything that I know today
through mostly experience and made a lot of mistakes,
earned a lot of money on bad tech, bad ad buyers,
all that sort of stuff,
and now I've developed all that experience
into the agency that we have,
and also training our team,
but that's kind of one of the things
that we look for in the staff member too,
is like brand side experience versus just like marketing grad.
So that's kind of our difference is
we're a bit more holistic around the P&L,
a balance sheet logistics.
We can kind of speak to the whole e-commerce business,
not just like web design, web dev,
which is our specialty,
but being able to just talk to COO,
the CTOs, CEOs of the brands that we work with
and be able to understand what their goals are
and how we can, I guess,
adjust that to incorporate e-commerce is kind of our edge.
- And just on that subject,
so it sounds like you've hit on everything.
Are there consistent patterns that you've been seeing,
say, just in the last six, 12 months of brands coming to you
or you're finding brands
and the questions that are coming up,
are they pretty like still spread apart
or have you seen patterns of what people are trying to
either get to or start overcoming and certain challenges?
- Yeah, and I would say that there's a pretty common thread,
which is just brands reach a point
where they know what they don't know
and they just need to shortcut that learning curve
around like, how can I improve my conversion rate?
How can I get more out of my, you know, an SMS,
how do I deploy loyalty, right?
You know, all those sorts of things,
which is where we help to shortcut that learning curve
and just get it right on day one
and let them just focus on great product.
But yeah, I think, you know,
more and more we're getting asked about
like, how do I incorporate AI into my business
to either sell more or be more efficient?
Like, I think there's two channels where AI is useful
and it's like reduction of labor or supercharging staff members.
And then it's just like, how do I get more revenue out
of this thing that's AI?
Like, some people just don't know,
even when to deploy it because somebody iterations of it.
- So you brought it up, let's just go right into it.
So specifically around AI and customer experience,
I guess my first question to you is,
how have you learned about everything
that's out there so far?
Like, because, and I ask that just because there's so much
amounts of resources out there that you can learn from,
so many people putting out new features,
new AI functionality.
And you have your, okay, side job of just also doing
the regular things for all these brands.
Like, where have you learned what's kind of out there?
- Yeah, I think it's a mix.
I mean, for me, you know, I'm not ashamed to say
a lot of it's social media.
So like, I, you know, look at what's going on on Twitter
and LinkedIn pretty frequently.
There's a lot of like new release sort of stuff there
around what's happening.
If you follow the right people,
which I think is interesting.
And then, you know, podcasts like I'm a big fan
of like the all in podcasts, which is not even about AI.
It's like a general world view type thing,
but they talk a lot about it.
And I think they make the most sense of like,
where it actually is today and how it can be deployed
that's useful rather than just like the hype behind it.
So I think, you know, you've just got to find the channels
that resonate with you and find the right people to follow
and just commit the time to actually ingesting,
reading, learning, which is hard to do.
But just, you know, half a day a week, sit on YouTube,
sit on Twitter, just digest it, let it like,
percolate in your brain.
And that's kind of the best way I find to like work out
how to actually use it.
- I mean, you gotta just be curious at the end of the day.
So let's kind of start with the basic bones of AI
and customer experience.
I guess brands coming to you today that say
that they want to utilize AI.
What are the questions?
Where do you lean them in?
Where I guess do you start on this journey?
- Yeah, I think it's a good question.
I mean, it's a little different for everyone else,
but I think, you know, different for every customer,
I should say, but for us, it's just,
let's have a look at the data that you've got
'cause you need to be able to like feed the model, right?
So that's kind of the first step is like,
what zero-party data do you have?
Do we need to improve what that collection flow looks like?
And then where do we feed it to be useful?
You know, I think the customer experience side
is where you're gonna see the biggest,
like it's still absolutely astonishing to me
that sometimes you can sign up for a, you know,
an email newsletter, a well-known brand,
by five products that are all mail,
but still receive their EDM every week
with female products in the email.
And that's just to me like unacceptable.
And AI is way beyond that, but like sometimes we're seeing
that like there's no segmentation whatsoever.
So I think segmentation's the first step
and then getting into AI is the,
is kind of the pro version of that.
And I think, you know, I always say that, you know,
our clients, it's like, you know,
meta knows you better than you know yourself.
And that was just like in the ad world,
around the data points that they can see what you're clicking
and what you're watching and serve up content to you
that was kind of more relevant.
But AI takes that to a whole new level of like
recommendation based on so many factors
that we can't even think of
'cause we don't really know what's going on inside
this little AI black box most of the time.
But the outputs are always really, really powerful.
And so I think for us, you know, like customer is a big,
you know, driver for actually using AI.
I think, you know, no stow tools like that
where we point people generally.
But we've got others that just run like Excel sheets
through like chat GPT or bard to just get insights, you know,
like there's so many ways you can use it.
How important is the first party data?
And if you don't have that,
can you start somewhere else or it always has to be like,
nope, you gotta figure out how to collect first party data.
- Now you can definitely do it without it,
but I just don't think that's the right method.
You know, I think, you know, you can use browser sessions
to train the model.
So they're not necessarily personalized to a user
or a token or an ID.
But as we go into like the cookieless world,
zero party data or first party data is just so valuable.
You just have to know everything you possibly can
about your customers because drives more sales
also drives along the lifetime value.
Like it's been interesting to me the last few months
who've been working really heavily in the wine industry
and how many brands have like personal advisors.
So like if I spend a thousand dollars a year with, you know,
a certain producer, I'll get assigned a wine advisor
and move that person's just a sales person.
But they'll call you every quarter.
They'll look at your sales history.
They'll look at what you bought and say,
"Hey, we just released a new Cabernet and a Filipino.
"You know, it's got these flavor notes.
"We think you really like it."
That's really just gonna,
that will absolutely be replaced by ours very quickly
and it already kind of is.
But yeah, it's interesting.
I strongly believe in zero party data is the step one
so that you've got stuff that you own
and you can use that as a base to train the models.
- So I guess let me ask you a follow up on that,
which is, and correct me if I'm wrong,
you work with Shopify Plus brands, correct?
So there was a little bit larger in size
than just a Shopify basic brand, correct?
- Yeah, correct.
- So if I'm gonna take that and make an assumption
out of that where it's like, okay,
there's a lot more data starting to come in into the system.
I guess the question I have is from your perspective
and your client's perspective,
it's like where does the data like stay
in Shopify Plus right now?
Like are you trying to work on getting that data
to other systems?
Is it all in Clavio right now?
And I'm not proposing it to go anywhere,
but I'm curious, like, where do you propose all this data now
that is rapidly scaling up in a brand
that's moving really fast to go?
- Yeah, the customer side data is definitely quite clavio.
That's where we prefer to keep it.
It's accessible, it's queryable,
which is why we like it there.
On the product side, you know,
that's really stored in Shopify still,
or depending on who you're using
for like product recommendations.
So something like ReFi,
they may or may not be ingesting your order history,
putting it into their data warehouse
to then create like the recommendations.
But really, yeah, Shopify Clavio
are the two primary locations we want that stored.
And we just want the ability to be able to pull it
if we need to and you can't,
'cause you own the store, it's your data.
- And more so out of curiosity, is it,
and maybe I apologize for the ignorance,
is it information and data going back
and forth from Shopify and Clavio,
or is it mostly going into Clavio from Shopify?
- It's mainly going into Clavio from Shopify
with the exception of like additional attributes.
So for instance, I'm a fashion retailer,
you know, you can assume things around what size people are
based on what they buy,
or you can just straight up ask them,
like, hey, can you please fill out some preferences
and we'll give you a gift card
or it'll help us serve you better recommendations.
And you can just put that straight into Clavio
as just a straight up data point.
So for the most point is just purely pushing Shopify
to Clavio information,
but a lot of the time we'll be connecting it
through like a pop up,
and that pushes straight to Clavio as like a,
almost like a CRM, yeah.
- So let me follow up with a question I've heard from,
just our audience more around as a brand scales
in size and orders and tickets and so forth.
The usual cases, you may have one or two people
that are working on obviously so many different things
with the help of an agency more foremost.
And then all of a sudden there comes
as part of the retention piece.
I guess the first question I have
is your recommendations around responsibilities
around the retention, like,
do you see most brands taking that person
that was doing all the marketing
and then putting the retention on them?
Do you start separating the two
and hiring someone specifically just for retention?
And there's someone just for acquisition new user,
so I'll be specific.
One is for your clients,
like what do you see?
And then what's your actual recommendation for brands
that are scaling?
- We definitely see both.
And when we identify someone that's either overloaded
or potentially doesn't have the skill set
to handle retention,
we always recommend splitting that out
because retention is such a valuable component
of your e-commerce store.
And I think it's very much overlooked.
But yeah, we absolutely advocate to split that out
and have someone purely focus on that
as a separate silo versus your point
like new customer acquisition.
That's a very different skill set, especially at scale.
Like if you're doing just say a million a month or more
in revenue, you need to take these things seriously.
So we absolutely advocate for splitting that out.
- Okay.
Let me just kind of take the next step into,
we talked a little bit about AI.
We talked about some technology stacks.
I'm gonna bring that together.
Have you seen any interests of yours
and exciting innovations from certain technologies?
And those technologies starting to use some AI functionality,
that seems pretty cool.
And then we talk about claviar a lot,
so I'm curious one, have you seen anything
coming out of that recently that you've utilized
for other inventors?
- Not, I would say it's still very early.
I think it's coming.
I think it's in development to the point
where it's still being worked out
how it's gonna be efficient and really useful.
But just to give some context,
I'll refer again all in podcast last week.
Like David Freeberg in his little science corner,
he's talking about Google's DeepMind division,
have created this weather modeling tool, right?
And he goes into, right now,
there's three data centers in the world,
one's in the North America, one's in Europe,
one's in Japan that does all weather modeling
for the entire world full stop.
These data centers cost, I think,
300 or 400 million to set up,
like there's that many nodes and clusters involved.
And I think they use close to a billion dollars worth
of compute a year to power our weather forecast
for the world, right?
So, billion dollars is going into energy
through these, you know, service, server farms,
whatever they are.
- That's why when I go to weather.com,
I get all those pop-ups
because they gotta make money back somehow.
- Exactly, exactly.
And so, Google's DeepMind with their AI system
that they've built,
which is, you know, powering the heart at the moment,
they can now do this.
They've had it deployed internally and tested it.
They've proved that it's more accurate
on just day-to-day weather and catastrophic weather events
than the old system.
And you can run it on a cell phone.
So, like, we're gonna have this absurd saving
of like, cost and energy with a better output.
And that's on like, weather data.
So, imagine what that's gonna look like
when someone actually applies that
in like a control model to like a Shopify Plus store.
Like, it will be beyond anyone's like wildest dreams,
I think when it comes to like,
product recommendations, advertising, personalization,
all that sort of stuff.
So, I think it's coming, it's there.
It's just being worked out by the clavios,
the rebis, the nostos, the customers,
all those brands, just, you know,
how do we deploy this and how do we control it?
But it'll come, for sure.
- So, do you think the impact of that will be
on the resources of a D2C brand?
Like, now you really don't need as many resources
to manage the SMS, the email at the end of the day,
or do you think that will go and change?
- Yeah, I hope not, you know.
I like to think of AI as just like an assistant
and like supercharging your staff.
So, just make them more productive
and generate more revenue.
I don't think it'll necessarily replace too many humans.
'Cause you're still gonna need oversight
to make sure this is on brand
and you want this going out this way.
I think it's just gonna be a new tool.
And I think new jobs will get created
around managing these new tools.
That's where there might be a shift.
Like someone right now that's, you know,
scheduling out email segments in clavio
might end up just being the person
that knows how to control the AI tool that does that.
And they'll be able to maybe do that more efficiently.
So, you know, I think, look,
jobs will be lost, but I think new jobs will be created.
And I just hope that brands don't try and use this
to the point where, all right,
we can just slash 20% of our staff.
I think you should use it to superpower
and supercharge the business,
not the other way around.
- Internally at Pacific IQ, are you,
or and your team utilizing anything around AI
to improve your productivity right now?
- You know, a little bit.
Yeah, I mean, we use like AI meeting, like notes.
So that helps us, we don't have to take notes
from our meetings, they're way more succinct,
they're queryable.
We'll use it for brainstorming quite frequently.
Like we'll type in, you know,
we use Google bar more than chat GPT.
And, you know, it's helpful with brainstorming.
Like here are the issues that I'm facing.
This is the industry of the client.
Make sure not to put in anything that's sensitive,
like client name or data.
And it's helpful definitely.
Like you can shortcut what would take us an hour
in a boardroom to come up with, you know,
we can get some talking points going in like 30 seconds.
So that's helpful.
We definitely have started using it in asset creation.
So what are brands that will come to us?
So it's gonna be brands that are massive on the B2B side.
Like huge wholesale businesses,
they're just getting started to take their D2C seriously,
have very limited assets.
And they don't have the network to turn that around quickly
with like content creators and all this sort of stuff.
So we've found that like with a mix of like, you know,
all of them, stable diffusion,
Dali, you know, all this sort of stuff,
we can actually create really compelling
and really specific image assets out of thin air,
which is a huge time saving.
- That has to be, I mean, before doing that,
I assume that several team members taking hours
and hours to create those assets, correct?
- It is, it was, yeah, definitely.
We'd send it out, you know, get a brief, get it back,
get it edited.
And now, yeah, you get the images
and then you just tweak them via text input versus,
I mean, I reshoot them.
- Do you feel bearish or bullish on the Shopify?
I was gonna say like the Shopify developments
and innovations around what they're trying to do?
Have you utilized any sort of new features
coming out of Shopify?
- Yeah, I mean, every day, I mean,
we're in the change a lot of daily just to see
what's going on and what's coming.
I'm always bullish, honestly,
like I think Shopify has reached a point now where
it's pretty well unstoppable.
And I think that the features that they're working on
are meaningful.
So, yeah, I mean, we're in there every day,
like, especially in the beverage alcohol industry,
there's so many weird nuances that we're having to create
like logic for through their new checkout extensibility
that's been, you know, being really helpful and great.
And a lot more, you know, enterprise-sized businesses
and now successfully migrate to Shopify,
whereas before they needed much more
enterprise-specific solutions.
I think Shopify has done a good job
of going after that sort of top-end.
- I have a follow-up and this is not really relative
to AI and CX, but I think you're,
I wouldn't even know who to ask outside of yourself, Sean.
When it comes to Shopify
and their ability to scale over the last five years,
why do you think they have been so successful?
And they're clearly the leader in the pack
when others, you know, are not even close at this point.
- Yeah, I think it's custom obsession.
You know, like, often we will run into like
conversations with merchants where they'll say,
"Why can't Shopify do this?"
And the answer generally is because
that's not important to a consumer.
It might be important to you,
but Shopify is more focused on developing
good consumer-side experiences.
So I think that's been their success.
And I think just, you know, being relentless at like,
where is going to constantly pump out new features
in the right order that we know people want,
has been their success.
And I think, you know, the pricing model
is actually pretty attractive, you know, to get,
I remember when I started doing this,
pre-Shopify, you know, you'd have to go and set up,
you know, virtual private servers,
and to get SSL certificates,
you have to have security teams, IT help desks,
just to run the website.
Whereas now it's like click button away you go,
$29 a month, it's a pretty amazing product for the price.
And then you can see the price scales with you as you go up.
- Has Urban and Influx, and,
actually I should note this,
but do you do migrations from one platform to Shopify?
- Okay.
- And have you seen Influx?
Have you seen Influx of those
coming to Shopify Plus more now than ever before?
- We have, yeah, in the last 12 months,
loads of enterprise clients coming into Plux.
Like they go through a pretty extensive review
to make sure it's suitable, but lots.
And like I'd love to say the names of the ones
that I've worked with, but I'm not allowed to,
I'm locked up and I can't mention their names,
but these are like,
these are serious brands that everyone would know
that are reducing their like tech debt,
like ridiculously, like they think Shopify
is almost free compared to what they've been paying before,
and the feature sets almost on parity.
- Now, I guess like this leads me to
just a suggestion and a question to you,
which is you have a big brand that is moving
from one instance, maybe very customizable,
maybe I don't know whether that be big commerce
magenta on their own, to something like Shopify.
It all comes to like connecting all the other tools together.
So I guess my question to you is,
are you seeing that when you are migrating
one brand over Shopify, are they completely changing
their entire tech stack?
And they have to look at everything from again,
email, SMS, personalization, customer support,
or are they able to like hold on
to their current technology platforms
and migrate to Shopify,
or is this like a big ordeal to make almost?
- They don't have to, like they can definitely just keep
there are the legacy tech stack.
I would say nine out of 10 migrate everything though,
because like Shopify, the customers of the world
are just to them, they're coming out of like this,
you know, archaic enterprise solution.
They come and look at something like customer
and they're like, oh my God, this is so much better.
It's gonna save us money, it's easier to use
and we're gonna get a better result.
And it's that times email, times reviews, times,
everything in their stack generally,
we're migrating them on to like, you know,
this little Shopify family that is, you know,
Shopify, a Kendo customer, et cetera.
They generally wanna move over it.
And I think that, you know, it's getting to the point
where it's like a landslide, it's pretty intense.
- You're making it seem so easy and simple.
So let me ask this, what is the biggest challenge
that you see for brands that are migrating over the Shopify?
- Oh gosh, it's different for everyone.
I would say the biggest challenge is actually scoping.
So, you know, as an agency, we spend tons of time
talking to everyone of operations through finance,
through marketing to make sure everyone's needs
are gonna be there.
But a lot of the time you just don't hunt earth,
everything into actually get into the weeds.
Sometimes it's things as simple as just customer data
migration and how that company's data privacy policy,
insurance, laws that they're governed by
need to be adhered to and then migrating the data.
So sometimes that's a big challenge.
A lot of the time they just don't have the creative assets
that maybe they need to realize their dream site
that we're trying to create for them.
So I would say the problems are expected and they're broad
and they're unique for everyone, but that's kind of,
you know, that's our job as an agency just to work it out
and advise them where to go and just get it done.
- But the positive spin here is that AI is a solution though.
I can just, I mean, we already talked about ad asset
or brand assets.
The AI can help you out with that.
Even with like migration and probably moving things over,
there's probably a lot that AI can help you with
to move this process from, let's just say, six months
to half of that or even two months at this point.
Would you agree with that?
Are we even there yet or is that something
that's still yet to come?
- No, I think we're close.
I would say, you know, I would say I could probably cut
the migration time down at the moment, 20 to 30%.
I think it will end up being like 80%
once the tools are developed better.
But yeah, absolutely like we can create content for the site.
We can clean data with it really nicely.
We can get insights as to like, I mean, some brands are so big,
they don't even know what their best-selling products are.
Like that sounds really stupid,
but they just have no idea.
I've got 10,000 products.
I don't know.
So like we'll run, you know, data models through AI engines
and be like, all right, well, here are the 10 most profitable
products that these ones that you want to continue with.
Okay, cool.
We're prioritizing the data on your new site.
So it helps in any way you want it to.
You just got to ask it the right question.
I was just going to say that, Sean.
It's like the answer now is there.
Now the challenge is asking the wrong questions, right?
And making sure those are the right questions
to continue growth.
All right, so one more thing, Sean, before I'll let you go.
And I appreciate your time again.
This is awesome.
Going into 2024, we're really close here.
I think that you look back at 2023, just so much innovation.
I hate to ask this, but what are you looking forward
to in 2024 when it comes to just customer experience,
AI and the CDC space?
Yeah, that's a great question, my God.
I think just better personalization.
That's my consumer want and that's my agency want is like,
let's just serve everyone better because it's much cheaper
to retain a customer than it is to acquire a new one.
So let's focus on that.
And let's see the product, you know, the tools and the product
that are available to merchants now evolve.
I think they're already very good, you know.
So that's, I think that's for me, what I'm excited about
and that's what I'm advocating for is like,
let's focus on the customers that you've got
and let's get more revenue out of those
than going and spending, you know, $2 million on Facebook ads
and, you know, burning through that and a moment's noticed
and then working out what we're going to do later.
Like, I think, yeah, for me, it's focusing on profitability
and yeah, higher spend for existing customer.
Awesome.
Well, fantastic.
Thank you so much, Sean.
I appreciate all the time that you're giving us.
Hope the audience got some great insights I know I did
and enjoy the new year and the holiday coming up.
Thank you, Brian. You too.
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