We're back with another exciting week of news to share in the world of Shopify and e-commerce. If you've ever got news you'd like to share with our community, hit ‘Reply' to any of my messages or e-mail [email protected].
A Quick Request: Right now our “Shop of the Week” award is just a mention — a way to bring attention to Shopify sites with a positive mission. However, I'd like to start attaching some financial value to the recognition, so I've reached out to several app developers and ad networks to sponsor a weekly award in the form of free subscriptions and advertising credit. The goal is to create a prize value of over $1000 in SaaS products and services to help the Shop of the Week with their business mission. Do you know any companies that would be interested in sponsoring a portion of the weekly prize? If so, please put us in touch. In the meantime, if you'd like to nominate a Shopify store for our Shop of the Week recognition, please so do here.
And now, onto the 10th edition of Shopifreaks newsletter….
? Stock News
Mon, Mar 22nd – Open: $1,123.14 – Close: $1,160.00
Fri, Mar 26th – Open: $1,052.60 – Close: $1,065.21
Today (Mar 29th) – Open: $1,053.60
1) SHOP dropped 8% last week during the midst of a spree of block trades that erased $35 billion from the values of tech companies. Several major investment banks with ties to hedge fund Archegos Capital liquidated holdings which contributed to the slump in share prices. Goldman Sachs and Morgan Stanley also managed block trades that included ViacomCBS, Discovery, Farfetch, and Shopify.
2) Brazilian based e-commerce platform Nuvemshop closed on a $90 million Series D funding led by Silicon Valley's Acce, who believe that Nuvemshop has the potential to be the de facto e-commerce platform in Latin America. Nuvemshop grew revenue by 40% in Brazil last year as Latin America became more accustomed to making purchases digitally. As someone who has spent the last 8 years in Central and South America, I can verify that they've got a ways to go to catch up to USA online purchasing habits, but the market has plenty of room for growing market leaders to build brand loyalty and grow their market share early on.
3) Live learning platform, Disco, closed an oversubscribed $4.75MM funding round. Shopify angel investor Brandon Chu said, “Disco reminds me a lot of what we did in commerce. We empowered entrepreneurs to go direct to customers and disrupt traditional retail, just like Disco is enabling creators to disrupt traditional education.”
4) BEARISH: GuruFocus, a publication that caters to long term investors, says that SHOP appears to be “significantly overvalued” and warns that the long-term return of its stock is likely to be much lower than its future business growth, which averaged 50.2% over the past three years and is estimated to grow 38.20% annually over the next three to five years.
5) BULLISH: Baron Funds, an investment management firm, increased their position of SHOP in Q42020 and noted in their quarterly newsletter, “We expect Shopify will be a prime beneficiary of the secular growth of Ecommerce.” They expect that in the future, Shopify will better monetize the sales volume on its platform by increasing penetration of its payments, lending, business banking, and fulfillment services. (As do I.)
? Shopify News
1) Which business model are you? B2C, B2B, C2C, C2B? Shopify compared top business models and offered examples of each that are fit for e-commerce. In a separate blog post, they also dove deep into white labeling – which is applying your label / branding to products from another manufacturer.
2) Shopify added a directory of Asian owned businesses to its Shop app. This follows their Tweet last week reaffirming their solidarity with the Asian community and promising that action was to follow. In July 2020, Shopify added a directory of Black-owned businesses to their app as part of their ongoing mission to support more voices in entrepreneurship.
3) Netccentric, a Singapore based digital growth company, partnered with Shopify to provide integration with their live e-commerce platform.
4) Shopify revealed data showcasing how the pandemic altered the habits of UK shoppers. Skincare and alcohol were the two breakout categories with 109.2% and 96.7% growth, whereas apparel and cell phone case sales took a nosedive.
5) Ackroo, a rewards program and gift card platform, completed its integration with Shopify which now enables Ackroo merchants to redeem their gift cards through Shopify’s online store. In 2020, Ackroo merchants doubled gift card sales over 2019 which led to an increased demand for online redemption, which they hope to make easier through their integrations.
6) CASE STUDY: In the latest episode of the Shopify Masters Podcast, Felix Thea interviews SendAFriend founder, Tyler Macke, on how he built his stuffed animal care package business, including how TikTok helped him scale to $5 million in just two years.
? Tip of the Week
Each week we offer Shopify merchants a Tip of the Week to help them maximize the sales potential of their stores. If you've got a tip you'd like to share, shoot me an e-mail to [email protected] and I'll include it in an upcoming newsletter.
This week's tip is about the conversion rates.
What's a good conversion rate for your store?
It's a question that most store owners ask themselves at some point in order to determine if they're living up to average industry metrics and/or accidentally leaving money on the table with their existing customers / visitors.
It's a tough question to answer because a good conversion rate will vary by product, industry, and traffic source (to name a few factors). For example, with your Facebook ads, you may require a 3% conversion rate to breakeven on your ad spend. However you might be happy with a 2% conversion rate from your affiliate traffic because your customer acquisition costs are incremental.
To help answer the question of “What's a good conversion rate?” and provide some industry benchmarks, I'll reference a blog post by GrowCode who compiled conversion rate data from 12 studies done over the past 4 years.
The numbers below reflect the Median and Top 25% conversion rate of various product types:
- Food & Drink: 3.58% / 7.24%
- Health & Beauty: 3.08% / 5.24%
- Toys & Games: 2.43% / 3.59%
- Jewelry & Accessories: 2.14% / 3.52%
- Home & Garden: 1.81% / 3.44%
- Clothing & Fashion: 1.96% / 3.27%
- Sports & Recreation: 1.85% / 3.39%
- Electronics: 1.27% / 2.42%
- Furniture: 1.27% / 2.42%
What's especially interesting is how these conversion rates differ across traffic source:
- Direct: 2.2% / 3.9%
- E-mail: 5.3% / 10.2%
- Organic 2.1% / 4.1%
- Facebook 0.9% / 2.1%
- AdWords 1.4% / 3.1%
- Referral 5.4% / 13.5%
- Social 0.7% / 1.7%
Now you see why companies want your referrals and public reviews! Customers themselves have the most powerful voices in online shopping.
So while the metrics above can provide you some industry benchmarks to compare yourself to, they should not be your end all goal. And remember, they're just medians and averages based on studies with limited sample size. Results may vary wildly. For example, I've got a client with a b2b product that we average 16% conversion rate because our visitor targeting is so specific. Hopefully you will also shatter those metrics above as well, but at minimum, they can provide an initial benchmark to try and hit if you're not quite there yet.
What'd you think of our Tip of the Week? Would you like more tips like this or should we focus on other kinds of tips? Hit ‘Reply' to this e-mail and let me know.
? Shopify Apps
Last week Shopify added 42 new apps to the Shopify App store. Here are a few that look promising.
1) Advanced Redirectify – Remove broken links from your store's equation with real time tracking and bulk 301 redirect management including geographic conditions. $4/month or $36/year.
2) Tuecus Customer Dashboard – Bring all your customer data into one central place including their profile, order history, top ordered items, recently viewed items, and addresses. $4.99 – $39.99/month.
3) Wishlist Moji – Allow your visitors to save items as favorites without having to login or create an account and send them e-mail notifications when price or stock changes. Free – $19.95/month.
4) FontPicker: Easy Google Fonts – An easy way to add Google Fonts to your store without any coding. Free.
5) Instagram Reviews – Send automated emails asking for product reviews and offer discounts for Instagram reviews.
6) The Return Company – Automate and digitize the return process for big, bulky, and heavy items. Free.
7) Scaleup Multi Announcement Bar – Create unlimited announcement bars to promote different links including sliding, marquee, countdown timers, and call to actions. Free – $3.99/month.
8) Disputify – Connect your payment gateway and Disputify will scan your transaction data to identify risky customers and help prevent “friendly fraud”. $29/mo – $69/mo.
9) Age Yard Box – Notifying your customers about the age criteria for accessing your website with a simple pop-up. Free.
10) Hotspoty: The ImageMapper – Add clickable pins to any image and link them to your Shopify products to create interactive and engaging graphics on your site. $4.99/mo – $9.99/mo.
? Community Talk
1) Shoutout to Ryan Waldon and his new app Bag – a conversion optimized shopping cart that lets store owners grow their sales with in-cart progress bars and cross sells. It's one of the cleanest implementations I've seen of a cart upsell/cross-sell app. Bag is still a work in progress and currently in beta early release, and during this time he's offering it for free via the Shopify app store. I look forward to following the growth of Bag.
? Shop of the Week
Every week in the Shopifreaks newsletter, I feature a Shopify store with a positive mission. If you'd like to nominate a store, e-mail [email protected] or hit Reply to any of my newsletters and share their website and story.
This week's Shop of the Week award goes to MiamiFitwear.com – an apparel company on a mission to instill confidence and self-expression for people of all shapes and sizes.
While attending yoga class, founder Raquel Ponce was frustrated was frustrated to find less-than-stylish and ill-fitting yoga apparel in her size, so she set out to create the ultimate pair of yoga leggings that let women feel good and look good wearing them.
? Thanks for being a Shopifreak!
If you have any Shopify related news that's worthy of sharing in our next newsletter, e-mail [email protected] or hit ‘Reply' to this e-mail.
If you found this newsletter valuable, please share it with your favorite Shopify communities and help us grow.
See you next Monday!
Paul E. Drecksler
PS: How can you make the number 7 even? … Take away the “S”.