On August 17th 2019, after a two-hour conversation with an old friend, in which we talked about the changing landscape of commerce, both retail and digital, we agreed that without a fundamental shift in mindset, long-standing household brands were about to be disrupted. I explained what I had learned on my journey to becoming one of the top marketers in the world and the enormous opportunities that I had identified. That single conversation would lead to the incorporation of LevyX Limited, a full-service commerce agency specialising in the communication channels of today.
Over the past five years, I have personally witnessed what stops the big brands from growing and it's not a lack of expertise or experience, it's the lack of ability to work fast and test new, scalable ideas. After the call in August, it took months of testing, deploying, and iterating; testing all of the fundamental ideas across numerous Shopify stores, before deciding it was time. Choosing to focus on small businesses was done out of the desire to fulfil the mission of fuelling the growth of the new titans of commerce. That means small, nimble brands who aren't afraid of innovative ideas and who want to get closer to their customers. The current solutions being leveraged by most startups and larger e-commerce businesses are showing diminishing returns. Now is the right time to move the commerce world in a new, better direction.
Jordan Levy, Director
The previous decade was tricky for those trying to get into e-commerce. The pandemic spiked competitiveness and the old ways of Direct-To-Consumer (DTC) that were "oh so promising" and an "easy" way to drive growth in both emerging and established brands, led to a set of new roles within the digital marketing space, all whilst attention continuously shifts at a rate dissimilar to other categories.
At a very high level, the unit economics of DTC look very promising; bring in a customer for £40, they spend £180, you keep the margin. This is the dream of every founder. The only thing is, at its core, every founder is touting graphs of their perfect model going up and all the way to the right whilst the retention of those customers is non-existent. The perpetuated promise of more customers is slowly eroding as the cost of Facebook goes up and businesses still, in 2022, are not executing on the fundamentals. Collecting a email doesn't mean they're going to come back. What is not being thought about in the DTC space is that every founder and business owner can have a Shopify store, Facebook Business Manager and an Instagram account, so DTC is, by its own nature, a commoditised industry.
Here lays very little barriers to entry on both the supply side in securing products, and the demand side of getting customers. In every industry, from high-end fashion to furniture, opening a Shopify store has never been easier and getting people to the store can be worked out. With just a few steps you can be in the game, but then what? Are you going to run the same ads and the same messaging in the same places as every other brand? Are you going to offer a discount to customers for their first purchase? How are you going to stand out? The lowest common denominators are always the first sought after, and by and large, the poorest performing.
But how do you beat the big brands you may be asking? Heinz has recently joined Shopify, how can I possibly compete against them? As the biggest brands in the world are quickly realising that defensibility is a must, they are now acknowledging that "what got them here won't keep them here" and more fundamentally, "won't get them to next level". Where they will struggle is still within the speed of the organisation. The idea of having the key disciplines, strategy, growth, tech, operations and creative as individual departments no longer works very well, and if you have a Media Agency of Record & a Creative Agency of Record still in 2022, and they don't speak to each other every day, we really should talk before you end up dead in the water. This is the first step in winning and why we chose to focus on our Strategy, Media & Creative disciplines first. The upside of having a smooth rolling train here is astronomical.
How do brands not waste time, become more nimble and efficiently integrate e-commerce and growth systems into their innovative culture? How do fast-growing startups break out of the inherent limitations of the commoditised marketing systems that every other startup has access to? Those are the questions we seek answers to.
The e-commerce industry went to Box Office during the pandemic and many challenger brands still haven't taken the plunge. Large brands will need support to overhaul their legacy infrastructure and the challenger brands will need to maximise this time before the opportunity goes away.
Unfortunately, the prescribed medication to known e-commerce problems are fundamentally broken. The world is split in two between Facebook brands and Google brands and each set of third-party measurement tools have their own issues, especially since iOS14.5. An industry of e-commerce agencies has emerged, where agencies of yesterday have re-branded themselves as agencies of today whilst continuing to sell the mediocre, undifferentiated "value-add" services. Brands have fallen victim to this classic level of passivity and false collaboration model whilst those agencies don't have the in-house knowledge and capabilities to truly deliver on what they sell.
Over our initial months working together, we will be sharing our perspectives into what we see as the future of e-commerce and technology and guide your marketing execution to a world of growth, whilst exploring the keys to unlocking creative content at scale, building new sources of value creation, finding new monetisation models, leveraging new growth measurement frameworks and many more...