Using Data Responsibly in Ecommerce to Build Trust [Weekly Loop #15]

 

Weekly Loop #15

Using Data Responsibly in Ecommerce

 

Data, privacy, and security are increasingly poignant topics as data collection becomes more ubiquitous and new security breaches occur. In ecommerce, as with any online business, data plays a crucial role whether as part of marketing, product research or custom contact info.

In a recent Stratechery article, Ben Thompson wrote about how personalized ads, entirely reliant upon users’ data, have served as a huge catalyst to niche businesses that have been able to grow to existence due to the internet. Like Ben, I too am a fan of personalized ads, and often feel lonely in taking that stance.

While I have previously discussed data from the perspective of a seller, typically regarding the need for ecommerce businesses to own their customer data rather than letting 3rd party marketplaces like Amazon, my positive take on personalized ads includes experience as a consumer. There are many brands, products, and businesses that correctly targeted me and introduced things that ultimately added value to my life. That’s not always the case and in my experience, but I’ve had an easy enough time hiding those ads, unsubscribing, or otherwise blocking a company from getting my attention.

Most consumers accept that sharing a certain amount of data is part of the transaction cost of doing business, realizing typically it’s a better alternative than shopping with cash in person. Some, as Ben points out in the same article, would be fine sharing even more data in exchange for lower prices.

Certainly, ecommerce sellers should use available solutions to make data secure (ssl certificates, services like Cloudflare, offsite payment processing, etc). And consumers that prefer to be more cautious can use one-time email addresses, private browsers, temporary credit cards, etc to further protect themselves.

Ultimately, the nature of delivering products requires a shipping address and thus, at least some amount of customer data must be shared. (I’m not aware of legal solutions for getting mail at a US address without an ID).

When an ecommerce business collects customer data, no matter what it may be, the customer is implicitly trusting the business. Every business has a responsibility to their customers. By using data wisely, i.e. providing real value and not treating customers like “data” but like humans, long-term relationships are formed and lifetime value is maximized.

 

GoodsLoop

Take a look at an excellent standalone ecommerce shop for inspiration

GoodsLoop - DoneGoodDoneGood.co is a site I came across this week for the first time, after seeing it listed on SeedInvest, an equity crowdfunding platform. The site has been around since 2016 and seeks to “make the world better with every purchase.”

The site features over 300 brands that fit DoneGood’s criteria for bettering people and the world. Included on the site is the selection process, as well as a list of values (eco-friendly, empower workers, vegan, women/military-owned, toxin-free, gives back, upcycled/recycled, organic/GMO-free, cruelty-free, made in USA) with each product & brand listing featuring icons of the values met.

All product listings appear to click through to brands’ sites, without any shopping occurring on DoneGood.co directly. Revenue most likely comes from affiliate commissions, though paid promotions are mentioned on SeedInvest as well. The product section features a wide range of types of products, with varying price ranges and photo styles.

DoneGood is a B corp and donates 1% of revenue earned to the planet, both fitting their overall brand story of making the world a better place. While not a traditional shop, the strong brand message appears to resonate with consumers and is worthy of emulation.

 

Recommended Links

 

Each week, we read and watch articles, blog posts, videos, infographics, books and more related to ecommerce. We share some of our favorites links on Twitter, Facebook, and LinkedIn.

In our weekly updates, we pare the links down to our favorite seven links from the past week.

Have a suggestion of something to include? Get in touch.

 

— [DATA & PERSONALIZED ADS & BLOGGING] Inherent to online business is the use of data. The first article here discusses how data is used and new data is created. This can be hugely profitable for a niche business that can use it correctly, as discussed in the 2nd link. Lastly, it’s important to remember that the number of people searching for terms typically grows over time, making it even more meaningful to cement a lead a particular niche early. 

Personalized ads are “critical component of building a future where anyone can build a niche business thanks to the Internet…”

Data Factories
Ben Thompson Stratechery by Ben Thompson

“Moreover, establishing clear requirements that users be able to view not only the data they uploaded but their entire processed profile — the output of the data factory — would be far less burdensome to new and smaller companies that seek to challenge these behemoths. Data export controls could be built in from the start, even as they are free to build factories as complex as the big companies they are challenging — or, as a potential selling point, show off that they don’t have a factory at all. This is much easier than trying to abide by rules that apply to every user — whether they want the protection or not — and which were designed with Facebook and Google in mind, not an understaffed startup.”1

 

“We talk about what makes a great Facebook retargeting, and we talk about fighting ad fatigue, managing your budgets, a ton of stuff.”

Getting 20x ROAS with Facebook Retargeting Ads
Andrew Youderian eCommerceFuel

“We’ve created an integration with all of the major product review apps, and so we pull all of those five-star reviews and turn them into a catalog and demonstrate that. It’s like basically works as if a dynamic product ad catalog, but the product in the catalog are content that is pulled from the product review apps. So, we do that pretty seamlessly.
If people wanted to do that on their own, I think a couple of the review apps do, do that natively. Otherwise, you know, you can always export that into a CSV and then upload it into a catalog in Facebook and then almost do it the same way that you do a dynamic product ad. It’s tougher when you do that manually. It’s hard to keep it up-to-date if, you know, new products are coming and going out, but it is possible, manually.”2

“As more people come online, it doesn’t mean they search for brand new keywords. It means popular terms get more popular”

A Blog Isn’t a Blog, It’s a Business
Neil Patel Neil Patel

“As more people come online, it doesn’t mean that they search for brand new keywords. It just means that the popular terms get even more popular.”3

— [ETHICS IN MARKETING]

“So what is the ethical line? The truth is we aren’t even fully sure what it is.” Read on for a pretty clear cut example.

Ethical Line of Persuasion
Frictionless Commerce Conversion Ideas

“The “347 comments” (seen in the first image of this article) is not actually a clickable element, meaning you can’t sort the reviews. Even worse than that, the comment box was literally just a screenshot, so you couldn’t even leave a comment if you wanted to! The buttons at the bottom of each comment (reply, like, follow post) aren’t interactive and the timestamps for each comment aren’t correct (I viewed this article in the morning and it’s now the afternoon, much more than 13 minutes ago).
Seeing this fake customer comment interface left me absolutely flabbergasted. This is a clear example of crossing the ethical line. Remember to be mindful of all the tools we have as marketers and make sure we are using them ethically.”4

—  [BLOCKCHAIN FOR ECOMMERCE] Most blockchain solutions appear to offer solutions that require sellers and users to become dependent upon new 3rd party solutions

“The key benefits that drive this growth are lower transaction costs, increased security, improved tracking, and enhanced convenience.”

Blockchain Vendors with Solutions for Ecommerce
Gagan Mehra Practical Ecommerce

“Blockchain use is evolving. Coupit, for example, uses blockchain technology to help retailers by centralizing discounts, rewards, and transaction histories.
In “10 Ways Blockchains Can Benefit Merchants” and “10 Retail Blockchain Vendors,” I covered, respectively, blockchain examples for merchants and vendors that offer solutions.
But blockchain use is evolving. There are many new companies and features. The key benefits that drive this growth are lower transaction costs, increased security, improved tracking, and enhanced convenience.
In this posit, I’ll list examples of ecommerce vendors that use blockchain technology in their products.”5

— [GETTING STARTED + PRODUCT SOURCING] Need a product to sell? Try one of these 12 strategies for selecting a good first product – or check out some recommended dtropshipping apps for Shopify. 

“One of the biggest challenges aspiring entrepreneurs face is finding profitable, in-demand products that will sell”

Find a Product to Sell: 12 Strategies for Finding Your First Profitable Product
Richard Lazazzera Shopify Blog – Company

“Choosing the right product or product category can be instrumental to your success. The products you choose and the niche you operate in will shape your entire business, from marketing, to shipping, to pricing, to further product development.
One final reminder I’d like to share is don’t be afraid to look at smaller product categories and niches. Even though a niche is a smaller subset of a larger category with fewer overall customers, it often makes up for this shortcoming by way of fewer competitors and a more targeted audience. Competition is good because it validates existing demand for a product, but the right amount of competition is even better because you’ll have the opportunity to fill a unique need and reach your customers in a cost-effective way.”6

“some of the best Shopify dropshipping apps to start you on the right path.”

10 Best Shopify Dropshipping Apps
Joe Warnimont Ecommerce Platforms

“Not all dropshipping apps are created equally. In fact, the dropshipping industry has plenty of downsides, especially if you partner with the wrong supplier or app. Here’s what to look out for:

The best Shopify dropshipping apps let you choose products from Shopify or instantly sync your chosen products with your shop.
Look for apps that curate quality suppliers. This involves some research, but you can usually find ratings and reviews on the suppliers.
A big problem with dropshipping is longer shipping times. Look for apps with suppliers from all over the world (or at least near where your customers are). For instance, a merchant based in Chicago would benefit from finding suppliers in the US. Otherwise, your customers will potentially wait a month to receive deliveries from places like Vietnam and China.
Another difficulty with dropshipping is keeping prices low but margins to a point where you can still make money. Since you’re not handling shipping or storage, dropshippers tend to charge you more than wholesale pricing. The key here is to research suppliers on each app to see if you can actually make a profit without gouging your customers.
Does the dropshipping app provide great customer support? You’ll definitely need it if a customer is angry with you or if people start making returns.
Are you able to get product samples? This is one of the only ways to maintain quality control with dropshipping.
Are you able to put your own branding on the packaging? I’ve dropshipped before with some Southeast Asian suppliers and they often come written in a language like Vietnamese and lacking in any branding from my own store. That’s not all that helpful for my own brand, and it’s confusing for customers.”7

— [AMAZON] The ecommerce giant has agreed to pay a miniumum of $15 per hour to all employees in response to growing criticism. As part of deal, some bonuses have been taken away and they are clearly pressuring competitors to match their wages. 

They’ve also announced a new store in New York and numbers show a quickly growing 3rd-party marketplace in India. 

“Starting on November 1st, Amazon will pay all its US employees a minimum wage of $15 an hour”

Amazon raises minimum wage to $15 for all 350,000 US workers following criticism
Jon Porter The Verge

“This $15 hourly wage will be paid without the need to hit any targets, the company says. Operations and Customer Service employees who already make hourly salaries of $15 will also see an unspecified increase. Wages for retail sales workers in the US average $13.20, according to the Bureau of Labor Statistics.
“We listened to our critics, thought hard about what we wanted to do, and decided we want to lead,” said Amazon CEO Jeff Bezos in a statement. “We’re excited about this change and encourage our competitors and other large employers to join us.””8

“At the current pace the marketplace will have grown by 150,000 sellers in 2018. It took more than 3.5 years to reach that number when first launched.’

Rapidly Growing Amazon India
Marketplace Pulse Marketplace Pulse

“Amazon launched in India in June 2013 and according to our research it took the company 37 months to reach the first milestone, 100,000 sellers, in July 2016. It then took 11 months to double to 200,000 sellers in June 2017. Since then the marketplace growth has accelerated reaching 300,000 sellers in 8 months in February this year. Only 7 months later it reached 400,000 in September 2018.
Five years after the marketplace launched sellers now offer over 170 million products to customers. Prime selection in India includes more than 40 million products. In fact, when Prime launched July 2016, India became the fastest-growing market globally. Within a year, one-third of products delivered were in Prime.”9

“The store is located in one of New York’s most vibrant neighborhoods—SoHo—on Spring Street between Crosby and Lafayette Streets.”

Introducing Amazon 4-star
By Day One Staff US Day One Blog

“Amazon 4-star is built around our customers— what they’re buying and what they’re loving. Everything in the store is rated 4 stars and above, is a top seller, or is new and trending on Amazon.com. We also have local features like “Trending Around NYC” and “Top Selling Around NYC” that make it fun and easy for customers to shop.

In Amazon 4-star customers can test-drive Amazon devices along with smart home accessories that work with Alexa—you can ask Alexa to turn on the light or lock the door. Customers can also shop other popular consumer electronics like headphones, speakers, fitness tech, wearables, computers, and more.”10

  1. https://stratechery.com/2018/data-factories/
  2. https://www.ecommercefuel.com/facebook-retargeting-ads/
  3. https://neilpatel.com/blog/a-blog-isnt-a-blog-its-a-business/
  4. https://betterretail.wordpress.com/2018/09/28/ethical-line-of-persuasion/
  5. https://www.practicalecommerce.com/blockchain-vendors-with-solutions-for-ecommerce
  6. https://www.shopify.com/blogs/blog/12932121-what-to-sell-online-8-strategies-for-finding-your-first-product
  7. https://ecommerce-platforms.com/articles/10-best-shopify-dropshipping-apps
  8. https://www.theverge.com/2018/10/2/17927478/amazon-minimum-wage-15-dollars-increase-bernie-sanders
  9. https://www.marketplacepulse.com/articles/rapidly-growing-amazon-india
  10. https://blog.aboutamazon.com/shopping/amazon-4-star
  11. Photo by rawpixel on Unsplash

Andrew @ EcomLoop
Are you looking to start or grow a standalone ecommerce shop? I help independent businesses achieve success on the Shopify and WooCommerce platforms. As the owner of multiple ecommerce businesses, I've had the opportunity to get experience with nearly every aspect of the ecommerce industry. I started EcomLoop to help other quality independent businesses using my knowledge and experience. To stay on top of new ecommerce developments, I publish The EcomLoop Weekly Loop, a blog and email newsletter with original thoughts and curated links to help independent businesses improve their businesses.