I'm launching a referral program for Shopifreaks soon. You'll have your own special link to share our newsletter, and you'll earn points for every new subscriber, which you can redeem for rewards.
What would you like those rewards to be? Please hit reply to this e-mail and let me know what type of rewards would incentivize you most.
I've got some great ideas for rewards, but I'd like to hear from you before I launch the referral program to make sure that I'm barking up the right tree with my incentives. So if you've got a second, let me know what type of rewards you would like to earn by referring new subscribers. Anything goes!
And now, onto the 15th edition of Shopifreaks newsletter….
? Stock News
Mon, April 26th – Open: $1,111.69 – Close: $1,166.00
Fri, Apr 30th – Open: $1,215.85 – Close: $1,182.51
Today (May 3rd) – Open: $1,186.73
1) Shopify announced 2021 Q1 earnings of $2.01 per share, outpacing the Zacks Consensus Estimate by 157.69%. For your comparison, Shopify reported an adjusted earnings of $0.19 per share in the prior-year quarter.
2) News about the stellar earnings sent SHOP shares surging 11.4% last Wednesday, closing at $1,288.80. However, the week ended at $1,182.51 — a more modest 6.3% increase over Monday's open.
3) Highlights from the earnings report include:
- Total Revenue: $988.6 million (110% YoY growth)
- Subscription Solutions Revenue: $320.7 million (71% YoY growth)
- Merchant Solutions Revenue: $668.0 million (137% YoY growth)
- Monthly Recurring Revenue: $89.9 million as of Mar 31, 2021 (62% YoY growth)
- Adjusted Net Income: $254.1 million or $2.01/share (compared to $22.3 million or $0.19/share in 2020 Q1)
- $7.87 billion in cash as of Mar 31, 2021 (up $1.5 billion from Dec 31, 2020 primarily from the net proceeds from Shopify’s offering of Class A subordinate voting shares earlier this year)
? E-commerce News
1) Weav raised $4.3 million to create a universal API for commerce platforms.
You're familiar with API, right? If not, I'll briefly explain. API is a computing interface that allows multiple softwares to interact and coexist with one another. For example, Shopify's API allows app developers to create additional functionality for stores while safely and securely interacting with their financial, product, and customer data. It's how Bold Commerce can integrate with your Shopify store to offer subscriptions, and how Klaviyo can integrate with your customer data to send e-mails based on their purchases.
While Shopify API is great for developers who want to create apps within their marketplace — it's also specific and proprietary to Shopify. That's where Weav wants to come in and build the first-ever universal API for commerce platforms.
By using Weav's API, companies can connect to other apps, online marketplaces, subscription systems, payment gateways, and so on. Weav, in turn, aggregates and standardizes the data so that it can be read, interpreted, and utilized by all connecting companies. Essentially it could allow Bold Commerce to create a subscription service that works with EVERY e-commerce platform — not just Shopify.
The idea of a Universal API is aligned with Shopify's ethos of supporting openness and decentralization, however, this particular instance of it could be competitive to their business model because it effectively opens the possibility of an app marketplace to all e-commerce platforms — a feature that has been key to Shopify's value to merchants. It's an exciting idea that I'll be following in the future.
2) Executive shake ups in the world of e-commerce
Two weeks ago, we reported that Shopify is losing three of its top executives. This week WeCommerce, a major Shopify app development company, announced that their CFO, Evan Brown, will be stepping down in June and they will be searching for a replacement. TikTok, an integration partner of Shopify, also named Shouzi Chew, who is the former CFO of ByteDance, TikTok's Chinese owner, as their new CEO. And of course, you heard the announcement in February that Amazon's Jeff Bezos is stepping down as CEO to be replaced by Andy Jassy, who is currently the CEO of Amazon Web Services (AWS) It's shake up season in commerce land!
3) Shopify was named as one of the TIME100 Most Influential Companies of 2021
Other e-commerce businesses to make it to the list include:
- Flutterwave – a global payment gateway
- Apple – you know who they are
- Mercado Libre – e-commerce marketplace in Latin America
- MasterCard – you know them too
- Stripe – powering digital payments across the web
- Alibaba – the Amazon of China
5) Shopify Capital has provided $2 billion in funding to merchants in the past 5 years.
Merchants aren't even applying for the loans. Shopify's machine learning models identify eligible merchants based on their sales history and makes them a pre-approved offer. If the merchant accepts, they receive funding in 2-5 days.
Shopify currently offers two types of funding — merchant cash advances and loans — both with a fixed fee on its financing. Repayment is based on sales, so if the merchant doesn't sell anything, Shopify Capital doesn't get paid back until they do. Quite the lending model!
6) MailChimp is launching its own e-commerce platform and appointment booking service for small businesses.
MailChimp is adopting a similar freemium model to their e-commerce plans that they did with their newsletter service, which attracted small business owners to their platform. Their new Websites & Commerce plans will start with a free plan that has a 2% transaction fee and move up to a Plus plan at $29/month with a 0.5% transaction fee.
You might recall a couple years ago when MailChimp and Shopify cut ties over a disagreement in regards to the handling of customer data. MailChimp, which was formerly Shopify's most popular newsletter app integration, has not offered direct app integration with Shopify since then, and Shopify in turn launched a basic built-in newsletter feature for their merchants. Now it seems that MailChimp is taking off their gloves and getting their hands dirty in the world of e-commerce as well. It's a smart move for MailChimp given the trajectory of e-commerce and their existing relationship with small business owners.
The new MailChimp plans are in beta. The e-commerce plans will become available to all Mailchimp customers in the U.S. and U.K. by May 18, and the appointments booking feature will go live for all users on April 28.
7) Non-Fungible Tokens (NFT) are taking the world of e-commerce by storm.
When assigned to a digital good, such as an image, video, or audio file, these tokens act as a certificate of ownership, proving that the person who owns the NFT also owns the digital file. However that doesn't mean that the digital file CAN'T be copied because, well, it's a digital file, and copying comes with the territory.
Owning an NFT is more like owning an autographed copy of a digital file, than the only version of it. And they've been all the rage this year with NFT art and music selling with price tags in the millions of dollars.
This article by Hyax offers some recent examples of how Creators are cashing in on the NFT craze.
8) New from the Shopify Blog:
Last week Shopify published a Guide to Loyalty Programs teaching merchants how to leverage points / rewards to keep their customers coming back for more.
They also published new posts about conversion optimization, selling furniture online, a case study on bundling, as well as a post profiling 5 Shopify entrepreneurs who are changing the world through what they've coined the “Shopify Effect”.
? 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.
To build on Shopify's Guide to Loyalty Programs that I linked to above, this week's tip is about creating attractive customer loyalty programs.
When executed properly, loyalty programs can be a very effective way to keep your customers coming back to shop with you. However, poor execution can rub them the wrong way.
You might not currently offer a loyalty program for your store, but at this point, you've got a general idea of how they work as a customer. There are the classic “Buy 10 Sandwiches Get 1 Free” stamp cards that we're all familiar with from our favorite sub shops, all the way to the more robust “Earn 10 Points For Every Dollar Spent” style programs that let you save up and redeem points for gift cards or products.
If you've got a loyalty program for your store (or plan on building one), ask yourself the following questions:
- Would these rewards incentivize me if I were a customer? – It's important to make sure that what you're offering is aligned with what your customers want. That's why I asked you at the beginning of this newsletter what type of rewards would incentivize you for our referral program. (I want to get it right!)
- Are the rewards fair or do they skew towards a particular demographic of my customer base? In a moment, I'll give you two examples of businesses that fail at this question in my opinion.
- Are the rewards attainable or am I asking too much of my customers? For example, can you imagine if your favorite sub shop offered a rewards program that was, “Buy 50 Sandwiches Get 1 Free”? LOL. I probably wouldn't even take the time to get my card stamped.
- Do I have enough products to even justify a loyalty program? Not every store has a wide enough selection of products or frequency of customer visits to warrant a loyalty program. For example, if a car dealership offered 10% off your 7th car — that probably wouldn't affect too many of their customers or have much stickiness to the promotion.
Here are two examples of stores that I think fail at their loyalty programs:
Example #1 – My local yogurt shop asks customers to enter their phone number at the cash register to earn a point for the visit. 10 points earns $5 off your next visit.
Here's the thing though… each transaction earns the same 1 point regardless of the amount. So if a single woman goes to the yogurt shop 10 times by herself and gets a small $4 yogurt each time, she'll earn the $5 off as quickly as a family of five who visits the yogurt shop and spends an average of $35 each visit. Essentially $40 in yogurt purchases are earning her the $5 off, whereas it takes the family of five spending $350 to earn the same reward (since it took them the same 10 visits to do so). Dumb!
Every time I visit that yogurt shop with my family and spend a small fortune filling up our cups, I think about how much I hate their rewards program and it rubs me the wrong way. Don't be that yogurt shop! Make sure that your rewards are commensurate with HOW MUCH people are spending as well as HOW OFTEN they're doing so.
Example #2 – My favorite chain shoe store has a loyalty program that offers a $15 gift card after you spend $200 — so each time I buy shoes, I enter my phone number at checkout to rack up my purchase points.
One day I was with my girlfriend about to buy some shoes, and I asked if I had enough points for the $15 off. The cashier said that I didn't have any points at all!
Turns out that you have to make at least one shoe purchase a year or your points start over again. I spend most of my year out of the country, which means I usually buy several pairs of shoes at once when I'm back in the USA to last me for the year. Given the frequency of my visits, I was never able to earn enough points in a year to redeem the $15 coupon. If I had purchased half as many shoes twice as frequently (and spent the same amount overall), I would have earned several coupons by now, but instead, my loyalty goes unrewarded. Don't be that shoe store!
The happy medium of loyalty programs.As a store owner, the goal of a rewards program is to incentivize your customers to keep shopping with you — which adds to your bottom line. You'd like to find the minimum reward that garners the maximum ROI. And as a customer, you join loyalty programs to be rewarded for your devotion and ongoing patronage. You'd like to get as much as you can in rewards. Great loyalty programs take both desires into consideration to find the “happy medium” that increases a store's bottom line while simultaneously creating happy, loyal, and appreciated customers.
Do you have a loyalty program for your store? Objectively, how does it stack up against your favorite loyalty programs that you're a part of as a customer? Do you fail any of the questions above? Hit reply to this e-mail and let me know how your loyalty program stacks up, or alternative if starting a loyalty program is right for your store if you don't currently have one.
? Shopify Apps
Last week Shopify added 32 new apps to the Shopify App store. Here are ten that look promising.
1) Skio Subscriptions – Get customers to subscribe with friends by giving them group recurring discounts on their subscriptions for their referrals. $50/month + 5% of group revenue, $8.30 per 1000 SMS notifications
2) Jump Links – Easily add a customizable table of contents to your blog posts without writing any HTML code .$3.99/month.
3) Viewed Products Assistant – Display recently viewed products on product pages and in the cart to remind customers of products they have previously been interested in. Free – $4.99/month.
4) MightyForms Form Builder – Build advanced contact and lead generation forms for your Shopify store with a code-free builder. Free – $49/month.
5) Smart Product Image Swiper – Transform your product images into mobile friendly swipeable images with thumbnails. Free – $2.99/month.
6) DiscountDuck – Offer your customers volume discount with multiple levels in an exciting and visually fun way. Free.
7) Firewall Country / IP Restrict – Detect visitors to your Shopify store from different countries and redirect them to your store domain for that country or block access. Free.
8) SocialChat – Engage and chat with customers via live streaming events where you can offer direct checkout discount codes. Free.
9) Pickup & Delivery Buddy – Add scheduled dates and times for pickup and local delivery orders with limited orders per timeslot to better prepare for spikes in traffic. Free – $5.89/month.
10) Bundle Products Custom & Deal – Increase the average cart of your customers with unlimited bundle offers. $12.99/month.
? 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 Alywillow.com – a botanical bodycare shop that exclusively offers products made from only plants and minerals.
Founder, Aliya Trinity, is on a lifelong journey of discovering the effects of plants on the mental, emotional, spiritual, and physical bodies. She was disappointed with all the synthetic ingredients found in even the most basic body care products and chose to follow in the footsteps of her Native American ancestors to create topical cleaners, creams, moisturizers, and other organic products with therapeutic benefits that are free of synthetic ingredients.
Alywillow offers over 150 products made by hand from hundreds of therapeutic, organic, and medicinal plants from around the world. Check out their shop and show them some love on Instagram & Facebook.
? Thanks for being a Shopifreak!
If you have any Shopify or e-commerce 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 & e-commerce communities and help us grow.
See you next Monday!
Paul E. Drecksler
PS: What are the two dirtiest farm animals? … Brown chicken brown cow!