[EP 22] Modern Merchant Podcast: Jeff Campbell w/ aiCommerce

Below, you will find a transcript of the episode.

Austin Rose:

Hey everyone. And thanks for tuning in to another episode of The Modern Merchant Podcast. My name is Austin, I’m your host. And with me today is Travis Mariea, CEO of FlxPoint. And in today’s episode, we have a special guest. This is Jeff Campbell, co-founder and president of aiCommerce. Jeff, thanks for jumping on.

Jeff Campbell:

Hey, thanks for having me guys. I’m excited.

Austin Rose:

Us too. We’ve had a few conversations in the past and super stoked to get you on. We know you have a good footprint in the ecommerce space, so really just to get us started, all the viewers and listeners out there, give us a quick little personal background on yourself.

Jeff Campbell:

Yeah. From a personal background, I’ve been doing digital marketing and media for over 20 years. Started back in really, before Google AdWords was around and grew through watching the rise of Google, then the world of social and Facebook and the third wave of Amazon. And that really led me to move from founding my previous agency, which was heavy search and social to Aicommerce, which is very focused on marketplaces. We certainly still are the full digital performance agency, but specializing really in ecommerce and in marketplaces. So an exciting time to be in with all the growth of Amazon, the dominance and the other players that are getting in the space, that I’m sure we’ll talk plenty about.

Austin Rose:

Perfect. So sticking on the Amazon train for Ai, and I’m sure maybe you guys do some other things outside of just marketplace. I saw something else that you guys help out with, buying ecommerce businesses as well.

Jeff Campbell:

We do. And I think that’s what really makes aiCommerce unique. So we started as business owners, as the direct-to-consumer, ecommerce brand and grew a brand to over $50 million. Meanwhile, we had a bunch of people in the industry that we knew coming to us and saying, “Hey, help us out. Help me do what you guys did with your brand, for ours.” And we’re like, “Cool, that’s kind of an agency model.” So we started at an agency model and then we found more brands in that aggregation space that wanted to be owned or partially owned. So while I run of the agency, the services side for marketing, my partner is out there buying brands and running brands. And that again, gives us that differentiator for when a client’s like, “Hey, I need help with a customer service arm. I need a warehouse.” We have those things. So we can bring those into the mix beyond just the media and marketing services that’s our main day to day.

Austin Rose:

Excellent. Yeah. So I was actually just about to ask how Aicommerce started up. And it’s funny that you said that, because that just seems to be a reoccurring theme with either agencies or platforms. I started out selling, myself, found something that didn’t work and then started helping others out. So that’s really cool to see. And were there any other, I guess, inflection points that you guys saw whenever you started aiCommerce, back in… When did you guys start the agency?

Jeff Campbell:

Yeah, so we started in, it was I guess, technically we started in 2020 for the agency, and then had been doing this with some contractors and on the side for a few years prior to that, for the different brands.

Austin Rose:

Gotcha.

Jeff Campbell:

In terms of inflection points and just along the way again, it was going a lot of shows honestly, and talking to the agencies that were out there and the folks that were doing this. We had a pretty unique approach in terms of looking at product level and skew level profitability. And going back to my experience with a lot of the major brands, I talked about my previous agency, I was managing about $4 billion annually, in US media spend. So we were top three with Google, top three spender with Facebook, managing wonderful, great brands from Dicks Sporting Goods, to Lowes, to Apple, to FedEx and Mercedes. So these big blue chip clients and they were great. Most of those clients all give me a $6 row as, give me a $12 row as goal.

Jeff Campbell:

And we’d work to hit that singular goal. Where were with Aicommerce and some of our own brands are looking and saying, “Hey, if you’ve got one product that’s $20 and one that’s $200, those cost of good sold are extremely different and the gross margin dollars are extremely different. So it would be very shortsighted to say, “Hey, give me a $6 row as, for all that.” And it’s like, well, oh wait, let’s really dive into the shipping and selling cost, the cost of good sold, the cost of your agency if you need one, bake that in. And then, knowing the algorithm of Amazon rewards you organically, in your rankings when you’re taking advantage of all of their advertising spend, both the quantity of spend you’re putting through their platform, but also, all the different ad types and betas and things like that.

Jeff Campbell:

And even when you’re starting to push some of your Google and your Facebook, traditionally from your website, but maybe trying and testing a little bit into Amazon, they see that outside traffic. So that’s really where we’re like, “Hey, I think we’re onto something.” There’s not a lot of folks looking at product level break even, or margin levels. And that’s really our focus. So we’ve built everything from strategy to technology around that focus area. And again, probably another big differentiator on top of us owning brands. And it’s wild, google, you’re spending a billion dollars with a year. And if you had asked them a single question for your large paying client that you’re working with on SEO, they literally slam the door, hang up the phone and good for them. It’s a true, honest separation of church and state. Amazon, not so much. It is definitely directly correlated and related. So again, it’s just crazy over the 20 years to see the different players emerge and sometimes have some contrast in the way they do business.

Travis Mariea:

That’s interesting. I hadn’t heard that. And when you were saying that they reward you for more use of their ad spend organically. That was interesting. I don’t think a lot of people know that. So it’s basically, them looking at brands saying you’re a good partner. You’re driving traffic to us, you’re buying ads. We’re going to reward you across the entire platform, sounds as their approach.

Jeff Campbell:

Yeah. That’s exactly right. And some would say, who can blame them, if they’re building out all these different things, features, promotion, discounts, lightning deals, the different ad types, the DSPs, if you are one of their merchants selling, you’re not taking full advantage of their platform until you’ve tried everything. So it does build in some incentive and some rewards to try those things, make sure they work as designed. And then again, reap some of the benefits and really your profit through that organic side of the mix.

Travis Mariea:

So that brings up a good question that just popped in. Really, when you’re working with a brand, maybe a couple skews, anywhere from 10 to 20 skews, maybe less, who knows, but a smaller brand. Would you say that they’ve got a Shopify store, let’s say, and they’ve got Amazon, they do Amazon FBA. What’s the structure there, the advice there on driving traffic to their store versus Amazon? I’m sure everyone’s a little bit different. I’m curious how you tackle that, where you can double down Amazon and really focus there. But seems like a lot of brands I speak with are like, “I want to get people on my Shopify store. I want to get that data.” So I’m curious how you tow that conversation.

Jeff Campbell:

Right. There’s definitely pros and cons. Where I usually end up is, fish where the fish are, and that’s on Amazon. People are expecting the Prime guy probably to show up every day, every other day already. They trust the platform, the delivery, your credit cards saved in there. Conversion rates are 15%. Now, on the con side, there’s a 15 percent-ish commission that Amazon is going to charge, you also don’t get that customer data. So if you want to follow up with them, it’s tough to build that long term relationship and lifetime value.

Jeff Campbell:

So it’s usually a recommendation of doing the market research and just seeing, using Jungle Scout and Helium 10, some of the tools out there, some of the scrapers that we’ve built that are proprietary, but understanding, what are the sales in that category and showing them the numbers and using those to compare to their current website numbers and say, “Hey, all right. You’re doing 30 K on your website a month or a week. But you can add five or six zeros to that on Amazon.” So you are able to get that data. You are able to see what the market leaders are doing. And I always look at that data and we make those suggestions and “Hey, you are going to have to buy your way to the top at the beginning, earn that trust of Amazon as you earn it through Amazon’s customers. And then you’ll start to see those organic listings where the profitability lies, start to flow in.”

Jeff Campbell:

And then you’re able to look at that total row as, or that total A cost of the metric to make sure that’s coming to light. But a lot of times, that can be a significant investment, even three to six months as we talk about a marathon, not a sprint. The websites are great. I wouldn’t say stop using the Googles or Facebooks for search and social, you still want to appear. A lot of the incoming traffic from your website when you look at your analytics, is coming from Amazon. So people find you on Amazon, they’re doing a little research, they’re hitting your webpage as part of that, try and capture them there.

Jeff Campbell:

And if you have to choose, you want them to convert on your website. There’s no doubt, but average website conversion rates, 1% to 3%. And we have clients who say, “Listen, I’m willing to pay the Amazon fees, their commission, because I can enjoy a 15% conversion rate and just convert on Amazon.” And it’s a little counterintuitive. You’d think they’d want it. But again, that conversion rate is really the big difference maker between a website and a platform, even with some of the considerations like losing some of that direct customer relationship data.

Austin Rose:

Yeah.

Travis Mariea:

Yeah. Since we’re on the topic, initial thoughts on Buy with Prime button that they just released a couple days ago.

Jeff Campbell:

Yeah. Big, big news. For those who don’t know, you can now, on your website, add a button that says Buy with Prime, and then all of your stuff that’s in those Amazon warehouses are then shipped out under that move. So I would say, a pretty big move that might open some eyes in Washington around Amazon’s dominance. If you’re in big commerce and Shopify and some of those providers, probably did not like that news so much, but from a consumer standpoint, as I mentioned, my credit card’s there, I’m used to the Prime guy, he knows what door to deliver my packages. I’m probably going to use that. So strong move by Amazon, in more ways than one.

Travis Mariea:

Yeah. Completely agree. Huge news. People talking about letting the fox in the hen house kind of move, letting Amazon show up on your website. But I agree. I’ve talked for years about, the only thing that individual brand sites are missing is that trust factor. Like you said earlier, you know the Prime guys going to show up to your door, Amazon fulfillment’s going to show up every day at a certain time, it’s going to get delivered in one to two days. So as a consumer, I love it. I’d love to be able to buy directly on the brand site and know it’s going to get fulfilled. I think Shopify potentially, Buy and Deliver might be a punch back and give that same trust on fulfillment, but exciting times for ecommerce, there’s no doubt to see a how that shakes out the next couple years.

Jeff Campbell:

Yeah. And as a consumer, I just don’t want to just take the time to enter in my credit card information. I can never remember that three digit code. And it’s like, “Oh, I just click one button, I’m golden.” That’s a pretty big deal.

Austin Rose:

Yeah. Jeff, is there any other trends? That was a good point that you brought up, Travis, about the Buy with Prime button, and then Shopify would deliver, that’s been some big ones, at least for us that we’ve been noticing talking about lately. Any other trends in the eCommerce space that you’ve been keeping an eye on?

Jeff Campbell:

Yeah. A couple I’ll point out. One is the lower price competition and heavily coming from a certain Asian country. So I think I saw a stat where it was 70% of new sellers on Amazon are based in China, in the last year. So that’s concerning to a lot of US manufacturers who might have just more expensive supply chains, or are using China somewhere in their development or sourcing process. I think all know that they lack regulation around some IP and their competitive nature is rough there. But their price always made you turn a blind eye. Listen, the penetration of retail and digital in China, they’re about 54, 55% digital in their purchases. So they’re buying online more than they buy in-store. US is 15, 16%.

Jeff Campbell:

That’s the latest e-marketer stats. So they’re really good at online and shipping and sourcing and maybe even some could argue, better than what we’ve done in the US, just because they’ve dealt with more volume wise. So it’s a scary thing for a lot of folks, to see some knockoffs and some shady practices. We’ve seen fake reviews, we’ve seen counterfeit products. Again, some clients who are storing their… If I’m selling an iPhone 11, if I’m shipping in a bunch of boxes, they could be commingled with somebody else, selling iPhone elevens in those warehouses. So a counterfeit unit could go out under my account and sell, and that’s a real problem. But again, the lower prices are scary. In Amazon, I tell people three things.

Jeff Campbell:

One of the three, you either have to have the lowest price, you have to have some strong differentiators or a brand that people are really having that trust with, that they’re willing to pay up for. So ideally, you have more than one of those things, but if you’re somewhere in the middle, like so many people launching an Amazon do, you need to think about differentiators and building a brand, because again, those low price competition from abroad taking out many of the middlemen are going to be your competition.

Austin Rose:

Yeah. I wonder how much Amazon’s going to help with that. And they’re giant and I feel like they’ll put some things in place to help solidify where their market is. Whether that’s protected in the US or not, market in that front, but that’s a really good point that you brought up.

Jeff Campbell:

When you think about it this way, Amazon gets paid a percent of sale. So more sales are happening, if they can sell two things at $10 versus one at 15, they’re going to yield to the $20 total. So that’s interesting. And you’ve seen them with China, where they are finding a lot of these new sellers, they’ve set up shipping lanes and inventory solutions directly for those folks, training specific in Mandarin and other relevant languages, call centers, et cetera. So Amazon’s actually doing a lot to bring more of those sellers onto their platform, which is interesting and I’d say maybe even angering some of their longtime, US based competitors that weren’t dealing with these folks five years ago. So it’s been an interesting trend for us that we’re following closely.

Austin Rose:

Gotcha. That’s a good point, in something that honestly, I haven’t quite thought about myself with what we’ve been reading about. One thing I want to shift over. You guys are in the marketplace game for a good bit and we’ve been talking about Amazon this much. Are you guys helping out with other marketplaces? And then going off of that, is there some emerging marketplaces that people just aren’t keeping an eye on and something to keep in mind? Because, the reason why I ask this is we’re starting to see, or at least I’m starting to see some of our users trying to get on Walmart and really trying to excel on Walmart. And then, we see some of these grocery brands, retailers that are reselling grocery items that are really doing a good job on Walmart, versus an Amazon. And so, I’m always curious, you guys are in the marketplace mix. What does it look like for other marketplaces outside of Amazon? And are there any other ones we should keep an eye on?

Jeff Campbell:

Yeah. Absolutely. So we have active accounts and clients on Target, Walmart, Bed Bath & Beyond, Home Depot, Lowes, Wayfair, many, many more. I think we’re cheering on most of them to take a bite, almost like Microsoft bidding against Google, the world needs some competition. So we want to see that and encourage it. I think to date, we’ve been a little disappointed with Walmart, hoping that would be a little stronger opponent or alternative. The numbers and the results have been tougher across our client base. They certainly cater to big spenders. If you have millions of dollars in annual spend, there’s some really cool programs and platforms and customizations that Amazon will roll out for you. For the smaller and the mid mid-market folks, very limited in ad spend… Or I’m sorry, very limited in ad technology.

Jeff Campbell:

So the types of the ads, the amount of control you have, some of those buttons and levers that I’d want to push is an optimizer to improve my presence. So we’re again, cheering for Walmart and hope they improve their platform more. In some of the recent conferences talking to some Walmart people, they seem to be focused on making sure that well optimized products don’t need massive ad spend to get exposure, which is somewhat refreshing, versus a heavy pay to play Amazon model. So we’ve been watching there. I’d say, we’re still probably ad supported for most anything that’s getting traction. On the emerging space and what we’ve seen working really well, is Wayfair. That’s been good for a lot of our clients. And while home goods is their core, anything related to home goods or home has been doing pretty well.

Jeff Campbell:

So one of our clients is kids nightlights, and again, who would have thought that did well on Wayfair? But again, as people are buying kids bedroom sets or whatever, some good complimentary and showing that ad at the right time to people in that mindset, we’re seeing some good surprises there, so happy there. And then, Instacart I think is a big question mark, but it’s doing really well for some of our food brands. They’re rolling out, I think improved advertising opportunities, improved keyword targeting. There’s not a ton of competition there. So CPCs are reasonable. And so, performance, when it’s managed, going really well. The big question for them is, post pandemic, are people still going to use food delivery systems at the same rate or even half the rate? So we’re watching for that.

Travis Mariea:

Yeah. So talking a little bit about multichannel marketplaces, multichannel ecommerce to multiple marketplaces, I’m sure you obviously consult brands on doing this and they set up a commercial relationship with Wayfair, Instacart and whoever might be. Can you talk about some of the things that brands may be prepared for, as they go multichannel and as they open up their catalog to these new retailers?

Jeff Campbell:

Yeah. The pricing strategy is the big one. And again, in lessons learned, if you’re a brand that’s thinking about really going to all these different places in a decent way, I would think hard about unique offerings. So we’ve all been to Costco and we’re researching the product, and we’re like, “Numbers are a few off from what they sell over here or over here.” It’s that type of strategy that you really need to think hard about, to make something a little bit unique for everyone that’s just going to save you a ton of headaches and price matching and map pricing and all that as you go out. So that’s probably the biggest one I’d call out.

Jeff Campbell:

Other than that, you get into this mile wide inch deep. There are so many platforms. And again, I’ve worked with clients with digital budgets, well over $100 million, sometimes three and $400 million on an annual basis, there is never enough money, even at those levels. So, you got to pick your battles, you got to make sure that you are properly staffed. You don’t want to just set it and forget it. So pick those battles. And again, try to be, instead of a mile wide and inch deep, maybe a inch or five wide and try that mile deep there.

Travis Mariea:

Yeah. When you talk about, almost adding an exclusive element or being unique to each, is it bundling, or I guess, what are you referring to as far as the pricing strategy and having something that’s different than the other channels you might be selling on?

Jeff Campbell:

Yeah. So assuming you’re not a resell and you’re a manufacturer, you’d have one product and let’s use water filters. And maybe there’s just a slight difference in the filter that you’re selling to Lowes versus Home Depot. And you could therefore, price them a little differently, and then you’d have the one on Amazon, which is going to demand the lowest price. Well, hey, Amazon’s the place you can find that filter. So I can be a little more aggressive with that price and maybe Depot, and Lowe’s when I need to be without violating any Amazon policies.

Travis Mariea:

Got it. Cool.

Austin Rose:

So one of the last things that I definitely wanted to ask and get in here before we come up on time is, you mentioned it earlier, you work with a lot of these big household, old name brands. I noticed there’s Lowes and you said, Dicks Sporting Goods, and a lot of these other really big companies you’re working for. What were some fun things to do? What were maybe some big wins or big losses, or just good experiences that you got out of working with some of these really big names in the retail side?

Jeff Campbell:

Yeah. It’s been great. So I think the most important, that is probably the hardest to do is building a brand and Apple’s just the best at that. And without giving away too much, let’s just say they’re very focused on brand building ahead of things like ROI. The ROI comes if you’ve got a strong brand, because then, you can price higher. So some of those lessons about focusing on differentiators and branding sometimes is going to reward you more than the race to the bottom if you’re just ROAs or ROI focused for efficiency standpoint. Another story with a home improvement company is, we tested everything for search and social, we did a lot of holdout marketing. So you’d have a group of stores and a couple markets that would be very similar from a data standpoint.

Jeff Campbell:

And they’ve got whole divisions looking at this. And if the only difference is, we wouldn’t have paid search in some of the markets, and then we could, assuming weather stays the same and some other factors, say any change in sales, offline in those stores, could be attributed to paid search. So we went through a lot of that type of analysis to understand how much we should spend, and what’s the true incrementality of digital media. And while it had some great things and we saw true ROI, I still remember the conversation with the CMO and me, waving a whole bunch of data around saying, “You should be tripling down on your budgets.” And he said, “Hey, listen, if I just looked at the data”, he’s like, “In our print newspaper, it would be a 20 ounce bottle of Mountain Dew on sale, is actually what drives the most people into our stores.”

Jeff Campbell:

That’s what happens if I look at the data, I’m going to be a Mountain Dew company and you’re just like, “Oh, all right.” So again, the balance of data coming from a guy who looks at data all day and makes decision on data, was refreshing to see that bigger concept of strategies. So that, and then the lessons of medium mixed modeling. again, when you can afford the probably 200K a year investment and really understanding the attribution and the incrementality, it’s still probably going to be directional at best. It’s still going to probably look a quarter in arrears and it’s still not perfect. So no one really has that silver bullet, even these massive companies with big budgets. And like I said before, no one’s budgets are ever big enough to pay for all of the, even just keyword searches being made around their products. So don’t feel bad to have 5% or 10% share a voice or share a shelf. It’s still a growing digital shelf and you can still definitely build a business on those lower numbers.

Austin Rose:

Good point. Travis, any last thoughts on your end or any last questions for Jeff?

Travis Mariea:

Yeah, I was just curious. I came by and I know you mentioned it, but I just saw it just briefly. You’re going to be at Retail Innovation speaking, right?

Jeff Campbell:

That’s right. May 12th in Chicago, I’ll be leading a panel of clients that are all seven figure ,hired sellers, sharing what they’ve learned and advice for others. So yeah, come and see us.

Travis Mariea:

I will, I’m going to be there. So I’m going to come by and check it out.

Jeff Campbell:

I love it.

Travis Mariea:

Anything else that we didn’t touch on, that we should have, or any other gaps that we didn’t touch on at all?

Jeff Campbell:

One, if you do hit Retail Innovations and see, that I will remind you, it only takes one person to start a standing ovation But yeah, other than that, I think the takeaway is really, you’ve got a very competitive world of marketplaces now, a lot of new competitors and really having to understand your cost of good sold and your profitability at the skew level, is what folks are going to need to do. And again, the marathon versus sprint. Amazon and others aren’t looking to make overnight millionaires. They’re looking to have good customer service and experiences. If you’re running out of inventory after a couple months, if you’re changing things that shouldn’t be changed, they’re going to wait and see and make sure you’re a long term partner. So again, those things people have to just keep in mind.

Jeff Campbell:

And a lot of times it takes investment, just like if you were opening a physical retail store, rent and inventory. That could be 100K. And again, I don’t think Amazon’s model is too different from that sort of investment, to really improve out another storefront. So it’s been a wild ride again, living through the Google, the Facebook, and now the tripoly with Amazon. It’s just been crazy to watch and we’ll see who’s fourth and next, and then understanding that whole media mix is just a blast. I’ve loved doing it.

Austin Rose:

Yeah. I was about to say, this year’s going to be crazy, next year will be crazy. Everything’s just been hyper accelerated. So it’ll be fun to see what’s trending.

Jeff Campbell:

We live in dog years. Every one of our years in digital marketing is worth seven.

Austin Rose:

That’s so true. That’s going to be the quote of this podcast is, “We live in dog years.” That’s so true. Yep. Excuse me. So last thing, anybody that wants to check out aiCommerce. Why would they want to check out aiCommerce?

Jeff Campbell:

Yeah. I think finding a partner in this world and a partner that’s going to work on a performance basis. So when things sell, when revenues generated, we get paid and really not before. Finding somebody that has owned brands, owns brands and works with them in all aspects. And again, really can sharpen the pencil on the financials and metrics and understand this ecosystem and how the trade offs have paid in organic and ad types and different marketplaces, all work. So excited to partner with brands and grow them into the next $50 million plus or more brands.

Austin Rose:

Yeah. And the importance of data, from a data automation platform company, as well as you talking about the importance of data, to an extent, is a real important feature to take a little look at. So obviously, anybody out there listening, make sure you go check out aiCommerce at aicommerce.com. And then obviously, if you guys love the podcast, make sure to subscribe and save and watch us on the next go round, up on YouTube, Spotify, iTunes, and all the other podcasts outlets out there. Jeff, thank you for jumping on today. I appreciate it.

Jeff Campbell:

All right. Rock roll guys. Take care.

Austin Rose:

All right. See you guys. Thanks Travis.

Travis Mariea:

Thanks.