It’s here. And it’s glorious!
🤑 Bryan Porter reveals Simple Modern’s +$100M technology & vendor stack
📦 Mike Beckham shares how AOV & CRO can make “free” shipping … profitable
📊 Connor Rolain shows you why hard + soft metrics = (new) winning ads
Along with this week’s top-five trending stories, links, and executive summaries.
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Connor Rolain
Head of Growth, HexClad
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How to Find New Creative Winners (That You’re Probably Missing)
Finding new ads that outperform the scale and efficiency of legacy winners is nearly impossible.
Thankfully — when it comes to creative testing — that shouldn’t be your goal.
Your goal should be to find winning creative tests … and turn them into winning scaled ads.
At HexClad, we do that through three steps.
First, define two types of “winning” ads.
- Ads whose in-platform ROAS or CAC achieve your modeled performance for profitable, blended growth. When an ad hits your target, that’s obvious.
- Ads performing marginally better than a comparable control metric — e.g., a static ad test against all statics or all statics in testing. Far less obvious!
Second, you need an account structure that lets new winning tests become winning scaled ads.
- Creative Testing Campaigns: Where we launch all tests in their own set with minimum spend thresholds.
- Scaled New Winners Campaigns: Where we duplicate winning creative tests — excluding scaled winners.
- Scaled Winners Campaigns: Where we duplicate new winning ads — including legacy winners.
Third, you also need an easy way to compare both hard and soft control metrics.
For example, here’s a snapshot of our scaled Micro Influencer ads versus Testing ads vs Testing Micro Influencer ads with soft metrics visualized:
- Thumbstop
- 15s/3s video retention
- CTR (Outbound)
While losing against our hard metrics (ROAS), the Testing Micro Influencer ads are significantly beating our soft metrics.
Especially CTR: +109% vs Testing and +85% vs scaled Micro Influencer ads.
In other words, these ads aren’t winners … yet. But they could be. Even better, they definitely contain winning elements!
From there, we know where to invest in Frankensteining and iterating on the offers + ad copy, video endings (last 5 seconds), and link destinations.
HexClad, Ridge, and Jones Road all use Motion to drive better results through creative insights.
Plus, tell them Connor sent you and …
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Bryan Porter
Co-Founder, Simple Modern
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Editor’s Note: This is the first of five tech + vendor stacks we’ll release — one for each of the Operators’ brands. Once complete, we’ll compile them all into a single database.
No links have been included, and no recommendation has paid for placement.
Simple Modern: 15 Tools & Vendors
For Simple Modern, channel strategy is essential to our website’s identity. We sell most of our units on Amazon and in-store.
Our margins can’t afford heavy marketing, and everyday low price works better in our mass channels.
Put in terms of Aaron Orendorff vibes: Product is the vest (core), marketing is the glasses (essential), and your stack is the hat (non-vital but takes vibes to the next level).
Our stack didn’t matter until we figured out our website’s strategy.
Since then, it’s been growing alongside our understanding of channel strategy and (of course) our annual revenue.
When we decide to partner with a vendor, that’s our 5-star rating. Instead of scoring …
I’ll rank each by the amount of Annual GMV — total sales with DTC being a main channel — for when adding it starts to make sense.
Shopify Development: The Vaan Group
Annual GMV: $50 million
Start with a budget Shopify dev solution. It took six years to learn how to scale DTC in our channel mix. With a website identity, Vaan was a perfect partner to rebuild our site last year and continues to develop it.
Xavier Armand and his team combine performance and branding beautifully — including our custom-built cart with multiple thresholds, cross-sells, and upsells manually merchandised by Excel.
In fact … the full history of our AOV, conversion rates, and margins related to shipping costs is below (by Mike).
Customer Support AI: Siena
Annual GMV: $10 million
Siena responds to 52% of our customer interactions, with room to increase. Responses get rated as well as human agents. Its product is industry-leading and getting better every month. Big fan of the founders, Lisa and Andrei.
SMS: Recart
Annual GMV: $20 million
Recart increased our SMS subscriber rate by 290% over Klaviyo. SMS is our fourth strongest DTC revenue driver, and 25%-40% of traffic to our major events is now through SMS.
Its combination of technology and hands-on support has been a game-changer.
Online-to-Offline: StoreLocators
Annual GMV: $50 million
StoreLocators is a very cool app for omni-channel brands. It pulls exact inventory amounts by SKU for every physical retailer in your area. Its branding gives us legitimacy that major retailers have decided to sell our product.
After shipping cutoffs for the holidays, we push customers directly from our site to in-store.
Our retail partners appreciate this feature.
Mobile App: Tapcart
Annual GMV: $50 million
Push notifications and early access to product drops are the main value adds. There’s the age-old question of filtering in your best users vs adding value. Tapcart is easy and affordable.
Even if our best users drive performance, we see value in the channel they like best.
Mail: Post Pilot
Annual GMV: $3 million
Post Pilot is the platform for Shopify mail campaigns. We get a 7+ ROAS on mailers and can deliver to customers who are not on our email lists. On top of driving revenue, the mailers provide a great brand impression.
Landing Pages: Replo
Annual GMV: $0
Replo has changed the game in performance marketing for us. We now have full creative freedom in a way that we never did with our traditional Shopify pages.
Where we once were confined within prebuilt grids, we can now truly do whatever we want to best represent our products and our brand. I have loved learning how to use the platform and seeing what is possible.
Site Speed: Edgemesh
Annual GMV: $50 million
Edgemesh has provided a significant boost in site speed. Its service caches our content every 15 minutes, increasing page load times. This helps marketing efficiency and makes more sense as traffic scales.
It also made a version of Google Analytics with the most reliable data.
Onsite Search: Algolia
Annual GMV: $10 million
As our SKUs and variants have grown, giving shoppers an easy but still comprehensive way to search for products has become increasingly important.
We use Algolia both to power our onsite search — with suggestions and visuals — as well as to manage our complex but necessary filters.
Customer Support: Gorgias
Annual GMV: $20 million
Gorgias isn’t the cheapest. But for an ecommerce native brand, it is great. It integrates with all of the platforms we use. We switched to Gorgias from Zendesk this year, and it has been an improvement.
Email: Klaviyo
Annual GMV: $0
Klaviyo is the standard for a reason. It does everything we need it to. The only downside is pricing.
Reviews: Okendo
Annual GMV: $10 million
Great value for our uses on PDPs and Google search. If you’re below $10M, Judgeme has a great reputation.
Customer Metrics: Lifetimely
Annual GMV: $40 million
Makes tracking LTVs easy. You can get enough answers through Shopify; I’d wait on this until the cost isn’t as material.
ERP: NetSuite
Annual GMV: $100 million
NetSuite was incredibly painful to integrate. We took steps back on our ability to sell because of it. However, being a large omni-channel business, it had to be done. NetSuite is the foundation we need to operate at the scale we’ve achieved.
Bryan Porter is co-founder & Chief Ecommerce Officer at Simple Modern. If you have questions about any of the tools, hit reply … or reach out to Bryan on Twitter (X) or LinkedIn.
Ecommerce Comeback
How We Set Goals, Attribution Limitations & KPIs for Growth
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Mike Beckham
President, Simple Modern
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‘Free’ Shipping, AOV, CRO & Profit
We live in a paradigm where everyone knows shipping is a significant cost, but customers expect inexpensive or free shipping through subsidization.
How you handle this issue is one of the most important decisions you face.
Here’s the story of how our approach has evolved + a shocking change we recently made.
When we first started, all of our sales were on Amazon. We didn’t have the economics to drive DTC traffic, so we added an insert to every bottle that offered a discount for a free accessory.
All the customer had to do was pay $5.99 for shipping and handling.
Lots of people took us up on this offer, but we weren’t having much success selling our core drinkware products. At the time, most of our products were $20.
Customers didn’t see any reason to pay $5.99 in shipping on a $20 item when they could get it shipped for free by Amazon.
Our website’s AOV during this period was a paltry $22! We knew we needed to get our AOV up and encourage people to buy more drinkware, so we instituted a new shipping policy …
Orders over $10 shipped for free.
This change kicked off a phase of topline growth. Customers bought more bottles and tumblers. AOV went up, and our sales were not as concentrated on Amazon as before.
Just one problem: Our economics were terrible.
We were bleeding money. Gross margins for the site were unsustainable. So we changed our shipping policy again …
Now, we would offer free shipping on orders over $30.
This change slowed our revenue growth but created much healthier gross margins. The change was worth it.
After all, what use is growing your website really quickly if it isn’t generating any contribution profit?
Gradually, we increased our threshold to $50. Then to $75.
Every time, we saw AOV grow and margins improve. While this was happening, another major development occurred.
We started selling a lot more items that were $30-$60.
The only problem was our conversion rate kept dropping — close to 1% some days. We took a fresh look at our numbers and decided we needed to retest a much more aggressive strategy …
Drop the free-shipping threshold back down to $25.
It was a bold move. Margins as a percentage dipped, but it was more than outweighed by the performance unlock.
We saw conversions triple from users who had a cart value between $25-75. As a result, total contribution profit shot up dramatically.
What did I learn from this experience? Three lessons …
1️⃣ Beware of proxies
Proxies are metrics that you use to gauge your health in an area, but they are indirect. For us, we had come to view website AOV as a proxy for overall website health.
The problem is that proxies aren’t actually the thing that matters. They only point towards the thing that matters.
Organizations forget that important fact. As a result, they optimize a proxy even if it no longer drives success.
We needed our AOV to go down for our website to grow.
2️⃣ You must retest your assumptions
A wise man once said, “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”
It is easy to run a split test, note the result, and then hold that as gospel truth indefinitely.
Here’s the challenge: The world changes.
We’d run tests saying that a higher free-shipping threshold was better for us. But our business evolved. We began selling many items that were $30-$60 to a much larger customer base.
It was critical to retest to see if the new environment called for a different approach.
3️⃣ Leadership is about judgement
Ultimately, we decided to retest because a key member of our management team was willing to say:
“I think we are getting this one wrong.”
Not an easy thing to do when all the previous data points in the other direction.
Your role as a leader is to leverage good judgment to determine where to test. Even when that test is already “settled.” And especially when it takes courage to challenge assumptions.
This week’s top-five trending news stories, curated by the editor of CPG Wire
1. PepsiCo Buys Siete Foods for $1.2B: CNBC
Siete Foods, an Austin-based purveyor of Mexican-American pantry staples, has been acquired by PepsiCo for $1.2B. Siete launched in 2014 and expects to hit $500M in sales this year. In 2019, Stripes invested $90M at a reported $400M valuation.
2. Lucky Energy Bags $11.75M: PR Newswire
Better-for-you energy drink brand Lucky Energy secured nearly $12M in Series A funding. Investors include Brand Foundry Ventures, Sapphire Sport, and Sugar Capital. Richard Laver, the co-founder of Kate Farms, launched Lucky Energy last year.
3. LVMH Divests Off-White: Retail Dive
Luxury giant LVMH has sold streetwear brand Off-White for an undisclosed sum. The buyer is brand management firm Bluestar Alliance. LVMH also acquired a minority stake in French Bloom — a purveyor of sparkling non-alcoholic wine — last week.
4. Mondelez Bets on Better-For-You Donuts: Food Dive
Mondelez, the confectionery giant that’s worth around $95B, invested in Urban Legend, a UK-based producer of healthier donuts. Urban Legend utilizes an air frying technology that reduces sugar, fat, and calories by up to 75%.
5. Sofie Pavitt Face Closes Seed Round: Beauty Independent
Sofie Pavitt Face, a skincare line designed for acne-prone skin, secured seed funding from True Beauty Ventures. True Beauty’s previous investments include Crown Affair, Dieux, Youthforia, and K18 — which was acquired by Unilever late last year.
We’re still trying to determine the best way to host our comprehensive tool + vendor stacks.
Next week will be Jones Road Beauty.
After they’re all wrapped up …
What’s the most useful way to share them? Google Sheets? Notion? Something else?
Hit reply and let us know!
With thanks and anticipation,
Aaron Orendorff (Executive Editor)
PS: Special thanks to Motion for backing us as a sponsor even before day one.
