Recently we were delighted to spend an evening at the Canadian Embassy in London’s Trafalgar Square. Sponsored by our partners SellersFunding, we hosted an intimate audience with Dragon’s Den star and entrepreneur Steven Bartlett, and were joined by some special guests:
- Shimona Mehta, Managing Director EMEA, Shopify
- Leo Felisberto, Global Head of Business Development at SellersFunding
- Paul Hunter, Director at Ernst and Young
- Jason Stokes, CEO of Eastside Co
Masterfully hosted by our CMO Louis Thompson in the opulent surroundings of Canada House (many thanks to the staff there for the fantastic hospitality), the evening was a fireside chat with the panel to discuss how businesses can cope - and thrive - in periods of economic uncertainty. With an audience of 100 guests from the world of ecommerce, a superb evening was had by all and a whole host of great insights were shared by our speakers.
The recording of the evening is available to watch below (if you're reading this on mobile you can watch the recording on YouTube here) - and we've also put together a breakdown of some of the key takeaways and messaging from the evening.
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Uncertainty is an uncontrollable.
Across Steven’s business portfolio at the moment, many of the organisations are playing defence: operating as though the worst will happen but working with a high level of optimism.
When it comes to optimism, the studies are clear - it is not just a fluffy concept to keep you in high spirits, but it’s proven to positively impact team and individual behaviour.
In Dragon’s Den season 1, the Dragons saw over 100 entrepreneurs, and the main issues they were facing revolved around the iOS changes that were coming in at the time - and the fact that changes to paid marketing and attribution had kneecapped their business.
The big difference with season 2 is that entrepreneurs came in talking about everything: from supply chain issues, currency problems, inflation worries, difficulties hiring people. It was a perfect storm.
Leo of SellersFunding told us how mindset is important as we move towards a period of downturn. We are at a turning point. After 12 years of low inflation, interest rates and steady growth, this is all changing, and we are heading towards a recession.
Businesses need to position their product or service as being essential to consumers as their spending is reduced.
What Challenges Are Merchants Facing?
Eastside Co CEO, Jason Stokes, referenced a study that shows brand searches are down 13% this year, and that conversion is down across the board for ecommerce. It seems consumers are showing less commitment to purchase. This is probably down to the fact that disposable income has been reduced, and people ‘may consider not purchasing the sofa they might well have bought last year without a second thought’.
The other situation we find ourselves in is that merchants have grown over the pandemic; they have hired and built teams to support that growth. Now that pace of growth has slowed and investors need to be appeased. It’s not an easy time.
One output of this is that, as times become lean, businesses are learning to be good retailers again. You can’t just sell easily to customers trapped at home during lockdown. It is now necessary to be more strategic about proposition, audience and marketing, as consumer purchase habits change.
Is Consumer Behaviour Changing?
Shimona observed that we saw the huge shift to online shopping during 2020 and 2021, but we have now seen some people returning to in-store shopping, spending in restaurants, and holidays. There is no longer a captive audience for ecommerce retailers. Shopify’s research shows that consumers are planning on spending as normal this holiday season - in preparation for tightening their belts and saving more money next year.
‘Connect to consumer’ is a concept which is all about fostering relationships with your customers to deepen the relationship through a more luxurious and personalised customer journey. It is all about making sure that using data, we build relationships and community.
The world is smaller thanks to social commerce.
Paul from EY opined that the modern consumer needs to be respected - they are knowledgeable and savvy.
Social Evolution
When it comes to the constant evolution of social platforms, Steven said it’s key to take advantage of new technologies and features as they emerge - but be aware that they decay quickly as new ones come in, and attention is diverted elsewhere.
How do you prevent a graveyard of social networks?
You need to move your audience to a space where you can continue to engage with them - for example newsletters or SMS. Untapped, emerging markets (that are sometimes actually old markets). He has 1m on TikTok followers but attributes a low value to it. He knows that unless he can move them to a different space quickly, he will lose the connection to them.
Discord is decentralised and community centric. It feels like it is the future of workplace and social communications.
Building communities is the staple of marketing.
Louis said it’s good practice not to build your house on rented land. You need to own the data and the relationships. Instead of working tactically, you should work strategically.
While many emerging merchants sell their products through Amazon, there is a danger to allowing the platform to cannibalise your sales, own your brand searches and reduce your ownership of your own branding.
Securing Investment and Loans
Leo Felisberto talked about how liquidity is drying up in the market as a result of two things:
- some players are leaving the space
- banks are becoming a lot more conservative in how they underwrite business loans.
If credit is available and you can lock it in, even if you don’t need it, Leo’s advice was to do it, as it may be more expensive later on. If merchants get the cash, it is key to understand what do you plan to do with it, to deploy it most effectively to get through the next two years? That is what lenders want to see.
Steven reiterated the importance of conviction and sticking by your decisions. When Facebook realised they were late with the move to mobile, Zuckerberg only took meetings about mobile until it was solved.
A culture of change is important. Some companies have made change an exciting thing, not something to be feared.
Failing Faster
Towards the end of the talk, the panel talked about the importance of failing faster. It is key to outfail the competition to get to the right answer more quickly.
The amount of experiments is more important than the amount of successes. Experimentation is the strategy.
Shopify’s Founder, Tobi Lütke says ‘a failure is just a successful discovery of how not to do something’. Steven follows this thread with something he’d noted in his diary:
‘If failure is feedback, and feedback is knowledge, and knowledge is power, then failure is power.’
His advice is to make decisions quickly, as it will get you to the right place more quickly. He’s seen firms go bust while they hesitate over making decisions.
Check out the full video to hear more insights from the panel, plus a Q&A session from the highly engaged audience. Be sure to follow us on social media to stay up to date with our upcoming events to be in with a chance of securing a seat. See you next time!