eCommerce Fastlane

Shopify Brands Can Now Acquire New Customers Without Expensive Acquisition Costs With David Perry Of Carro

EP231 Carro

In today’s Shopify eCommerce podcast, my guest is David Perry the CEO of Carro. They are an amazing Shopify app and platform that introduces brands to the social media influencers that love them.

With over seven million introductions later, Carro now also helps Shopify online stores to build incredible partnerships with other brands they love.

Over 35,000 Shopify businesses have installed Carro as a sales channel in Shopify and are now truly living up to their mission to help direct-to-consumer (DTC) Shopify brands “Sell More, Together.”

Get today’s Shopify ecommerce podcast show notes, full transcripts, actionable DTC marketing strategies, and tips to fast-track the growth and profitability of your Shopify ecommerce business.

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What You Will Learn Today

  • Why your next marketing channel should be cross-store selling.
  • Increase sales by supplying or retailing high-quality products with other top Shopify brands.
  • How virtual inventory empowers you to try new products and ideas, risk-free.
  • Learn how Carro powers partnerships between top Shopify brands that unlock new customers, sales growth, and co-marketing opportunities.

Links And Resources Mentioned

Connect With Carro

About Our Ecommerce Podcast Guest: David Perry

ECF 231 David | CarroPerry is the CEO of a new e-commerce partnership network that over 30K Shopify brands have joined, providing over 320M visitors a month. GetCarro.com helps brands gain attention, sales, and new customers by partnering with other brands in the network. “The goal is to keep users on your store adding all the things they need directly into your cart. Carro provides all the other products they want that you don’t currently sell.”

Before Carro, Sony PlayStation acquired Perry’s last company Gaikai to establish leadership in the future of streaming video games from the cloud. This service is called PlayStation Now. Before that, Perry was the Co-Founder & Chief Creative Officer of Acclaim Entertainment, helping introduce “free-to-play” gaming to the western markets. Disney acquired Acclaim. Perry founded the game development company Shiny Entertainment based in Laguna Beach, CA.

Shiny was first acquired by Interplay to capture the rights to Earthworm Jim, then again by Atari, to obtain the rights to the games based on Warner’s Matrix movies. After 39 years in the business, Perry remains one of the best-known video game industry veterans, with multiple #1 hits and the Develop – Development Legend award. Perry was awarded an Honorary Doctorate in Engineering from Queen’s University, Belfast, and an Honorary Masters in Game Development from Westwood College. He was one of the longest-serving members of the Game Developer’s Conference Board.

A common keynote speaker, with past speaking engagements including: TED, E3, Hollywood and Games, Stanford University, MIT, USC, UCI, UCLA, DICE, GTC, GDC, AMD Conference, MGS, Digital Hollywood, What Teens Want, 3D Gaming Summit, EurekaFest, The Cove, Casual Connect and many others.

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That is it for this episode. I would like to thank you, a loyal reader of the show. I hope this show is offering you a ton of value through growth strategies, tactics and exclusive insider tips on the best Shopify apps and marketing platforms, all with my goal to help you build, launch, grow and scale with Shopify. Thanks for investing some time in the show. I am so proud and excited that you have a growth mindset and are a constant learner. I truly appreciate you and your entrepreneurial journey. Enjoy the rest of the week and keep thriving with Shopify.

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Welcome back to the fifth season of the show. If this is your first time here, this is an eCommerce show where we have honest and transparent conversations about building and thriving with your store powered by Shopify or Shopify Plus. If you are an ambitious lifelong learner, which you probably are since you are here, you are in the right place. New episodes are available twice weekly with your favorite podcast apps like Apple Podcasts, Stitcher, Google Play, Spotify and many more. You can also stream current episodes, including a very relevant back catalog directly from eCommerceFastlane.com. In this episode, my guest is David Perry, who is the CEO of a company called Carro. They are an amazing platform that introduces brands to the social media influencers that love those brands. Over 7 million introductions later, Carro helps many Shopify brands to build incredible partnerships with other brands they love.

When we talk about the two parts, this platform is interesting. Over 30,000 Shopify businesses have Carro installed. It is a sales channel inside Shopify, not just an app. That makes it very unique and special. They truly are living up to their mission of wanting to help direct-to-consumer brands to sell more together. We are going to talk about how these platforms work. David, welcome to the show.

Thanks for inviting me.

I love Carro. This is your second time on the show. One of the things I love about Carro is the fact you have an amazing feature that allows brands to understand the social footprint of their existing customers and then give them a workflow to say, “I did not even know the social footprint and the impact that my customers have socially. Is there an opportunity out there to work with them?” Thanks to Carro over thirty thousand customers are using this solution!

Many of my brands are using Carro. They love it because I have mentioned to them how amazing it is to truly understand how you could work with influencers instead of getting into a marketplace and trying to find someone who might like your product versus someone who owns the product. This is your time to tell me about Carro. I love the influencer side but maybe let’s talk at a high level overall. There are two parts to the platform. What problems are you solving for a lot of these Shopify brands that are connected to Carro?

I got to spend time with social media influencers. I found that when you talk to a bunch of them, they feel comfortable telling you what is going on in their world. Their biggest frustration is they want to work with brands that they love, but instead, they are constantly being harassed on Instagram by belt companies and candle companies for things that they would never wear or buy. It is frustrating to them.

I have had this conversation over and over with them. A friend of my daughter who’s twelve is making $30,000 a month. Makeup companies kept sending her makeup and she’s like, “I don’t wear makeup.” She had this white backpack. Some other girls at the table said, “I love your backpack.” She said, “I love this backpack. I take it everywhere with me. It is my absolute favorite.” I am thinking to myself, “I would rather be the backpack company than the makeup companies that are wasting their time harassing her.” I was processing this.

I watched this famous YouTuber whose name is Casey Neistat. Someone at Emirates Airlines, when he was traveling, pointed to him and said, “This is Casey Neistat.” They upgraded him to first-class and he then made a video about what it is like to fly first-class on Emirates Airlines. I did not know, but you take a shower and that was crazy. He got 100 million views for the different things he has done with Emirates. It is a crazy amount of views. It all came down to the fact that somebody pointed to him and said, “That is Casey Neistat.” If no one ever points to him and says, “That is an important person,” they would get on the plane, and that unbelievable opportunity slipped by.

This is what we are finding. Brands tend to hire an agency or somebody to go and start asking random people on Instagram like, “Will you promote our stuff?” That is not the best way to go about this. The thought was, “Can we help you work out who seems to like your brand or who has been buying your products?” That was something we spent some time solving. We started this virtuous loop where the brands will give away their products and then the influencer ends up connecting to our platform so that they can go through that process of receiving the free product. Our goal is to make it effortless for everybody.

 

Stop selling alone. Sell more together.Click To Tweet

 

Brands have influencers that they are talking to. They are trying to keep Google spreadsheets and hire more influencer people to manage all of these conversations. What is occurring is the influencer is shopping through some human being at the brand’s office. That person is putting sunglasses in a box, labeling it and trying to get them out because this influencer is about to go to Coachella tomorrow and it is an emergency. We are like, “There has to be a better way to do this.”

With Shopify, at the end of the day, you have a store. Why don’t we make it so that the influencer can come to the store, choose whatever they like and effectively do their shopping, which they are very happy to do? They are going to discover products they like, in which case, they can then request them. We get rid of the whole problem of needing contracts because we have all that built-in. We have them tell you what they are going to do with the product. We verify they are who they say they are. The net result for the brand is they click approve or deny.

If they like this influencer, they invite them in and are happy with what they requested. Once they click approve, we generate the order and place it in the Shopify queue. We got this down to one-click approvals and the product then goes to the influencer. I still like Facebook better, but it is called Meta now. Facebook ended up writing an article on this. They wrote a success story on Carro because we were focused on authenticity.

I was speaking at a conference and this lady came up to me and goes, “You are ruining my job.” I go, “What is your job?” She says, “My job is to look on Instagram and choose influencers for brands.” I said, “Data is going to do a much better job than you randomly choosing people.” The response from the influencer is generally, “I love your brand. I have been buying your products for years. This is so exciting. I would love to work with you.” That is a game-changer.

I had a call with a brand that has 88,000 influencers in their data. Seriously, how long is that going to last you? It is insane. In total, we have pointed out 7.6 million influencers to brands that they did not know about. Carro started by us thinking, “How can we help brands gain more attention?” The reason we did that is that attention is arguably the most valuable thing to brands because you will never meet a brand that says, “Please, no more attention.”

They can never get enough. They are paying Google and Facebook. If you could somehow sit back and look at all of Shopify’s brands, to some extent, they are buying the same category and same clicks over and over to try to get sales. Our thought was, “Is there any way these people could work together or at least different brands have a certain amount of traffic they control? What if they all joined together?”

The concept of Shopify is they are going to make it very easy for you to do business, but it is you doing your business. You go do your business, which means that there is no one necessarily helping as far as sending you traffic. Our thought was, “Is there some way we could help all of these different people?” In a way, we’re building a new website and the tagline is, “Stop selling alone.”

We do not want anyone to feel like the only way to get traffic is to go buy it. That is not necessary. There are influencers out there that love and buy your products and would love to work with you. Secondly, our thought was that you could get these brands to collaborate, which is not easy. They did not get up this morning and go like, “I would love to collaborate with other brands. Let’s stop everything so we can do collaborations.” It is not top of mind. When you think about it for a few seconds, you start to go, “Hold on. That makes sense.”

Our installed brands have 350 million visitors a month, hitting that collection of brands. If we double the number of brands, it will double that number. In reality, that traffic is there. The question is, “How do you get your products pushed into that traffic that other brands are getting?” The answer is partnerships. It is hard. The conversations have been frustrating. We will get somebody to sell spaghetti and they will be like, “I am in the spaghetti business.” “Yes, you are in the spaghetti business, but look at your website. You have these beautiful recipes on beautiful tables with beautiful cutlery and plates. The recipes have more ingredients than just spaghetti, but you refuse to sell any of that stuff.”

What do you think people are doing? They are moving over to Amazon and buying everything else. This became part two of Carro. Part one was, “Can we help you with attention?” You can see how our mind was still like, “Can we help you with attention if we were to get your products into other people’s traffic?” We have realized that we have to help with the second thing, sales. At the end of the day, attention is wonderful, but sales are even better. We are like, “What can we do to get you more sales?” We can’t fundamentally redesign your business. That is not going to work. The question is, “What is missing?”

 

ECF 231 David | Carro
Carro: Most influencers just want to work with brands that they love. Instead, they’re constantly being harassed on Instagram for things they would never wear or buy, which is frustrating to them.

 

The example we like to use is easy to grasp. If the store is missing something like they sell bicycles, but they do not sell helmets, people who buy bicycles will go buy a helmet somewhere else. You are sending them off to Amazon or a competitor. “We have loads of helmets. Why don’t we put helmets into your store?” This is where it got interesting for us because once we started to wire it up like, “Here is a helmet company that is great. You are a cool bicycle company. We are going to wire you two together,” at the time, people were like, “That is going to get hard. That is not going to be easy to get these relationships to work together.” We did end up getting the code to work, so it is seamless.

What occurred was instead of us taking one helmet, putting that into your website and then you can sell helmets, you are connecting the supplier’s inventory to the retailer or the brand’s store that is selling the helmets. Suddenly, their inventory is connected. The supplier’s inventory becomes the retailer’s inventory. You suddenly have all the colors and sizes of the helmet.

We found this interesting because imagine if you are paying to build the helmets, you are always saying to yourself, “What sizes should I do and what colors?” If you are buying from wholesale, you are always restricting how many of something you will buy because you do not want to be left with a warehouse sale trying to get rid of it in the end.

Wholesale is a little broken because it is complicated. You have to freight the products into your warehouse, insure them and all the rest of it but by taking their products and moving them somewhere else, you wasted margin during that process. You better sell them or you are going to have to sell them at a discount or you will have restocking fees if you try to return them.

This started to get us into this world of, “What is that? Is that virtual wholesale?” It is not. We realized that if you partner with good brands, that brand can do the shipping for you. The helmet company is perfectly capable of putting the helmet into the mail and delivering it. We go, “You are a dropshipping company. Is that what this is?” We are like, “No, because drop shipping has already got a stigma.” We had people testing Carro at the start and the first thing that comes out of their mouths is, “This is drop shipping.” Immediately, when they say drop shipping, they are like, “I do not like dropshipping because everything is going to come from China.”

This is why this is so interesting because what we are doing is connecting cool Shopify brands to cool Shopify brands. These are not drop shipping brands from China. It is like a dating app where everybody is opting in. You are not working with brands that you do not want to work with. You are working with brands you do want to work with. We suffer from all the same problems as a dating site. On a dating site, you get some super popular people who get annoyed because they are too popular. They are getting too many requests.

That brand that I spoke to, they installed and has not started to lean into the platform. They installed it and are swamped with requests to work with them. The way we ended up having to solve this was we created a verification system like the blue checkmark that you get on Instagram. We have the same concept in Carro where with large brands, we try to reduce the amount of noise because there are so many people who want to work with them. The net result is we come to work every day inventing because we are at the very tip of the spear, which is very interesting.

Our tagline is, “Sell more together.” I dream that the brands will start to help each other. They are collaborating as a business deal and are making money that way. We have brands making hundreds of thousands of dollars in additional sales from Carro. In reality, what we would like to see is for them to take that final step of people who are experts to help others like, “How do you reduce shipping costs and get better product photography?” All of those subjects that can help a business, I would love to not have Caro have to make all that content.

For an example of that, there was Clubhouse that came out. It was this huge viral success with everyone helping each other. It got a little salesy, but the initial concept of people helping people shows that people are willing to do that. I am originally from the video game industry. I was on the board of the Game Developers Conference, which is the biggest game developers conference. I was on there for ten years. During that time, the sharing that went on blew me away. I knew we are all in our silos too. We are trying to run our game companies, but at the end of the day, we are all in this together and can we help each other do better? My ultimate dream for the platform is that we can get that sharing going on.

It reminds me of the open-source community because that is the crux of even WordPress. All these companies are making SAS products. Anything with technology, everybody wants to get involved. The code is publicly available. Anybody can modify it, work towards versioning it and offer enhancements to it. I love that helping part. Some of the Shopify react framework and different things are all public repositories of information that are shared. Some people take more leadership roles in its development, but that is what I am impressed about with Carro.

 

Attention is wonderful, but sales are even better.Click To Tweet

 

Every month, I have a book of business that I had managed inside Shopify Plus. Part of their questions to me more as of late and I am sure you are feeling the same thing, this is the benefits of Carro, is the fact that some supply chain problems are happening. The cost of containers has gone up to $1,000 apiece. It is ridiculous. Also, the lead times, not to mention warehousing costs and ROAS in general. Think of the cookie-less world and future, iOS 14.5 upgrades and all these different things that have happened.

I have brands come to me say, “Steve, on a granular level, how do we monitor and track return on ad spend?” I said, “We are going to have to do a blended ROAS because that is the only way. This much money in equals this much money out. It is what it is. Unfortunately, that is where we are at.” I bring up the Carro situation and say, “There is an opportunity for you to expand your product mix. There are ways of building relationships with other non-competing people in your vertical.”

We have one case study about Super73, the eBike company. I tell my brands, “You are experts in what you do and you have amazing product-market fit. However, is there an opportunity to get involved?” For example, I have a coffee replacement company. Is there an opportunity for them to sell other coffee gear or frothers and other different things? The answer is yes.

Do they want to import all of that and get involvement? No. I have a water bottle company too. Why don’t they get involved with flavored water mixes that are premium and are market-leading products out there that add flavoring and whatever the health benefits are? You have a water bottle. They have the stuff that goes into the water.

There are so many great cases. I keep bringing these up to merchants who are like, “That is a great idea.” I said, “This is the platform that does that. It makes the introductions and then you can work together.” Let’s unpack. I would love to understand more about how that all happened and the relationship between the success of that campaign.

Super73 is a Shopify store. I went and met with the CEO, John Kim. It was fascinating skinning a tour and see how they were thinking. At the end of the day, the bicycle industry is pretty packed and even electric bikes. It is quite a tough business, but he learned the value of working with influencers and customization. Those two things became so evident. Will Smith is riding a Super73 and all the celebrities are. What happens is once all the influencers are riding them, then he starts getting entire sports teams. That means you can customize it.

Let’s say they wanted to make a New York Yankees edition for all of the team members. They could easily do that. It’s this idea of embracing customization and influencers. It is a cool brand and product. It was perfect for us. You can imagine people want to work with them. It is endless. We started with partnerships around some simple products that they did not have. They wanted certain cases and things for phones and helmets. As far as the brand goes, then you start going, “What about lights or titanium bike locks?” We have an endless supply of these things.

Initially, we thought we were in the business of getting a product for you like, “Can I get you a helmet?” Whereas what we realized when we are in the category business was, “What about having a selection of helmets, socks, gloves, shorts and all these other things that are part of the lifestyle of the brand?” I tend to look at what photographs people put on their websites. If you are a bicycle brand, which there is another one called State Bicycle, what is in your pictures? What are the people wearing?

The interesting thing that has changed is influencers are starting to realize they need to become brands because they do not get to keep their customers. They send all the clicks to Amazon and have no idea who bought. If you are an influencer reading this, please open your Shopify account and start collecting your customers. Carro will help you with that. That customer database is invaluable when you are doing brand deals. The fact that you already have 100,000 people who bought eBikes because of you and they are your customers, please stop sending affiliate clicks off.

The second thing that we do is Amazon will pay 3% to 5%. With Carro, the influencer is the retailer in that relationship. They get the full retailer cut. I want to be crystal clear on that. They get an affiliate fee on some small percentage. You can be the retailer because you are the retailer. You went and found the customer and got them to buy. It can be life-changing for an influencer. It is usually around ten times what they used to earn, depending on the product category. It is much more than they are getting and owning the customers. All it requires is a Shopify to collect that information for you and also with Carro to form partnerships with the different brands. Say you wanted to sell Super73 bikes, then that would be the way to do it.

 

ECF 231 David | Carro
Carro: Attention is arguably the most valuable thing to brands. You’ll never ever meet a brand that says, “Please, no more attention.” They can never get enough of it.

 

This idea of helping these people partner as categories, you can imagine that it starts to change your thinking a bit. We have had brands come to us and their vision of who they are is bigger than what they are selling on their website. There is a brand, Chubbies, which is a great brand. Our brand is the weekend and looking at their website, there are other things that you could include if you want to be the weekend and we are here to help. That is what we do. They can add those things.

That means that you are going to increase the number of sales per customer that comes in, so your average order value and the lifetime value of the customer go up. I keep getting asked, “Why do you focus on average order value?” It is because there is a cost to bringing people in and if you can increase your average order value, you can unlock your marketing team even more. It is the fuel for your marketing that brings even more attention. What is better than that is partnering. If Thousand helmets put their helmets into Super73, they go to deal with Bird with us.

Bird scooters started stocking Thousand helmets. They can start doing all these partnerships through Carro, but traffic is free. All of it. They do not pay $0.10 for any of that traffic and that is because of partnerships. That is why our mission is to try to help people start to think this way because the partnerships are so incredibly valuable. Brands tend to already know who they like. We have had brands come in and have ten more Carro installs simply because they already know who they want to partner with. Those are the brand’s installs, so they can link together. We do not necessarily have to do much heavy lifting at all.

Another good example is a brand called BlendJet, which does this portable blender, which is a neat idea because when you blend something, it tends to settle. If you blend before you drink, you are always drinking it at the perfect blend. It makes sense logically. Give it a zap before you drink and you are going to enjoy your drink more, but they did not have a way to sell what goes in the blender because they did not have refrigerated warehousing. The conversation goes along the lines of, “We would love to make money from what goes in the blender.” We say, “Why don’t you build a marketplace and partner with lots of different companies?” They all want to work with BlendJet because it is cool.

As a result, they get a huge AOV lift. They are not just selling what goes in the blender. They are selling subscriptions to what goes in the blender, which is genius. That has made them even more successful. It is fun to watch how people do it. I will give you another example. If you can build any category in your site from partners, why not build a mini-store inside your store? That would be the equivalent of a pop-up store.

“It is going to be Halloween, 4th of July, Valentine’s Day or Black Friday. Would you like to have a pop-up store?” In the pop-up store, you can then include those other items. Going back to your other point, which is the supply chain problem. I live down by the ocean near Laguna Beach and I see the ships. All we did was spread the ships out so they would say that there is no supply team problem. I am staring at ships 24/7. The ships never go away. They are there permanently. This idea of being able to set up a pop-up store for a special event like National Yoga Day is a thing. If you look through the calendars, there is a day for everything.

Let’s say yoga is your thing. We have Manduka as one of our brands. “What about on National Yoga Day? Would you like to do a pop-up store?” This will cost you nothing. This is just merchandising on your store, saying that it is National Yoga Day and then placing products that you would like to sell from cool brands in there. When that day or week is over, you can take it down. This is virtual inventory and virtual warehousing in one pod. It is so freeing. Doing that makes your site feel more alive because it is not the same thing every day.

The other thing it allows you to do is to work out, “Why don’t you try a product? I am not sure if they would want to buy brushes with my makeup, but they might. Let’s try some brushes with my makeup or nail polish remover for my nail polish.” Try different companies and brands. Work out what your audience likes and keep an eye on your AOV as you do it. This is a healthy way to work with other brands.

I want to talk about the actual technology and how it works. It is important for those reading to understand about ownership of the customer. Let’s say you are in the shoe market, but you see benefits in selling another Shopify brand which is socks. You do not want to be involved in the sock business, but you want to test the market out. That is a good value add an accessory item for a shoe store, which a lot of shoe stores probably do not do, which they should. Carro can facilitate that.

Walk us through what happens. We make this arrangement between the two parties. They both agree to have the Carro app installed. The two stores are synced, so I get to select the skews that I want and bring them over to my stores. I am merchandising my site with fulfilling parties’ inventory images and descriptions. When someone makes a purchase, they buy the shoes and the socks together. What happens to the order? Where does it go? The confidence factor is, “It is very clear that I’m going to fulfill my end of the bargain by shipping the shoes out.” Most people think if I order multiple skews, they might be coming in multiple packages and there is not any communication required.

 

The way networks work is the more people use it, the more valuable it becomes to the people.Click To Tweet

 

What is the next step? How does the sock company that is on Shopify know they have an order? Does it show up as if it is their own? Is it tagged? How is the financial arrangement between the two parties facilitated? They came to buy shoes, but they also added a pair of socks to the mix. Thanks to this other partner over here. I am assuming its in the other partners’ admin to be fulfilled on behalf of the original. Where do the tracking numbers go? We have two tracking numbers. Walk me through a little bit of the tech stack and the steps to what happens.

With all of these different relationships, you can imagine that we have seen every possible question and combination come up between relationships. In a way, our platform is all that intellectual property of how to handle the complexity of so many different relationships. What we wanted to do is to try to make it simple. When two brands agree to work together, the simplest equation ever is, “What are the supplier and retailer making?” How we make money is we take 5%, which is 5% for effectively making a whole new revenue stream.

What happens is that someone buys the product and they pay like normal. It was very important to us not to change anything for a customer’s experience. The Shopify checkout is like every other Shopify checkout. Once that is over, the retailer has taken the full amount for the shoes and the socks. We have to get that money over to the supplier, the one that is going to send the socks. We take our 5%. The supplier gets paid at the same time as we do and the supplier, on receipt of that, will mail out the product to the user.

I am very excited about Shopify’s investment in distribution because someday, we are going to be a poster child for that. What is going to happen is you might buy a helmet and gloves. Technically, the helmets and gloves come from two different companies, but they can be placed in the same box if they come from the same distribution center. This idea that Shopify is investing in distribution is wonderful. These things will make this even cooler. In reality, people have no problem getting multiple boxes in the mail. The question that you had is super valid, however, which is this idea of, “What if they do not ship or they take forever?” Imagine they take forever. That would be awful.

Behind the scenes, we have a brand store for each brand in our network. We are paying attention. It is a very interesting thing. You see this in supermarkets. If you are the guy supplying the apples in England to Marks & Spencer, it is an almost unbelievable contract ever. If you screw up and start giving them bad apples, you lost all of Marks & Spencers in the United Kingdom and your sales dropped by 95%. That is what Carro is.

If you were asked to leave our network, you are going to lose access to 30,000 brands. I hope at some point, one million brands. If you leave, that is a major loss because not only will you be asked to leave and will never have contact with those brands through this technology again, but you will also have all your current partnerships removed.

Your store is going to suddenly have those relationships cancel. Do you want to be a good actor inside this new ecosystem that is going to be critical to the future of eCommerce or do you mess around to give bad service? That would be a horrific mistake and a huge misunderstanding of the value of partnerships going forward. I do believe in this idea.

The way networks work is the more people use them, the more valuable it becomes to the people. What is interesting is building networks is very hard because it is hard to get that critical mass to start, which we, thankfully, have managed to achieve. Getting started is key. Think about those big networks that are out there. OpenTable is one where you can book tables at restaurants. That is a good example. Uber is another one with the drivers and the customers. OpenTable is interesting because, on a lot of networks, one side of the network does not want more of their side.

If you are a restaurant at OpenTable, what advantage is it to you to have more restaurants for you to invite more choice for the customer? It is not the best thing. That is a problem. In our situation, the brands do want more brands because it gives them more partnerships and traffic potential. It is an interestingly healthy network because everyone is helping each other versus one where there is an adversarial aspect to it.

That makes sense and that is the thing that I always wondered about. I understand that once an order is created, the other party for adding on the skew, which is the sock company, for example, is in their best interest long-term to continue cultivating and building that relationship up. They have singled you out and want to sell your socks, so deliver them quickly with a smile.

 

ECF 231 David | Carro
Carro: How do you get your products pushed into that traffic that other brands are getting? The answer is partnerships.

 

At the end of the day, I would argue that you should co-own that customer to a certain degree because it has arrived and the other person is in the sock company’s admin. Are there other opportunities down the road? Could the sock company start selling shoes or a dropper campaign? Yes, there is that opportunity.

I love the idea that they collaborate on social media together. Going back to the influencers having their stores, it is a huge opportunity for Shopify. I am estimating there are 60 million influencers in the world that need stores. That would be a big growth for Shopify if they could make that happen. Secondly, most of those influencers do not know who they influence. With this idea that you could change their life but also grow Shopify even more, the net result would be even more awareness.

I keep getting into that loop about awareness, traffic and people seeing your product. That is the most valuable thing. They are like, “It is sales.” You go, “It is sales, but the sales come from attention.” “I need more sales.” That is why we have to focus on those two key components. It is like this virtuous loop. It is funny because I come from the video game industry, so who am I to be involved at all in eCommerce? What am I even doing here? I should be making games somewhere. In reality, this industry is fascinating and the people that you get to meet are so cool.

When you get to walk around Super73 or one of these brands, they are such cool people who, ultimately we can help them. We are bringing technology that they are never going to build. They are not going to hire a whole bunch of engineers. We are not doing machine learning. A couple of other things we are building are bundles, which allow you to have an entire outfit by an influencer with one click or by a brand like, “Buy that whole recipe with a single click.” You could put a brand on it or have Mariah Carey’s all-day skincare regime and sell that as a single skew. That is something else we have built that quietly launched. That is available if you contact our support.

Another thing is upsell. It is interesting because we all have seen recommendation systems forever, but we come along to it and we are like, “We do not want it.” If you are selling an electric toothbrush, should we be trying to upsell something from your store, meaning an electric shaver? Do you want me to put an electric shaver with your electric toothbrush? That is not going to convert. We have the data and understanding of what will convert and what is also hot. In which case, we are calling it network-based recommendations.

It is not recommending and recycling your products. It is recommending what is going to convert. That is a very different way of thinking, but we have the data. The answer is with an electric toothbrush, put Kendall Jenner’s toothpaste. Kendall Jenner’s toothpaste from Moon Oral Care, which is on Shopify, will convert way higher than any product from their store. What we are saying to the brands is, “Work with us and try this. Let us prove to you that this is the way you should be thinking.” That is all machine learning, as you can imagine. As that machine learning gets better and smarter, I can see what is going to happen. In the future, you will be like, “I want to add this snowboard.” We are going to be like, “Are you sure you want that one?”

You are going to sell them 2.3 times as many if you add this snowboard. Why not add it as well and see what happens? That is what is fun about this. You can add things at no cost. Why don’t you give it a try and see what it does? We think that is going to be critical. What we are effectively doing is building all of these different pieces of the puzzle. The theme of all of it is getting brands to work together. That is the key core piece of it. When you do that, everything changes. That makes recommendations way more interesting because your site is staying relevant based on what is hot.

If something is taking off on social media, we know that. In which case, that recommendation for that product will suddenly start appearing in your checkout. Brands come and say, “Hold on. We have to control what appears on our checkout.” We built that in so you can approve the brands that will appear. It is a bit like Elon Musk’s self-driving cars. His whole point is at some point, cars are going to perform better than humans. Technically, they are there. Meaning the number of miles they have driven without accidents is better than the number of miles that humans have driven with accidents.

When you compare them, at some point, that would be a fun goal for us to be able to say that to our brands. What Elon is saying is if you touch the steering wheel, you are going to introduce error into your driving. I would love that someday to be true for merchandising, which is, “Are you sure? Please type in yes. This is not the best thing for your business.” That would be cool.

I feel so blessed being in this position to have the opportunity to interview founders because I love the problems you are solving. At the end of the day, everybody wins. Shopify wins because the GMV increases and people are spending more AOV, platform fees and payment gateway. The whole thing wins for each of the parties on either end. The influencers win too through your platform and can find brands.

 

Awareness, traffic, and people seeing your product are the most valuable thing. Click To Tweet

 

I love what you said that there’s got to be an opportunity long-term for those influencer, creator type people that are reading about creating their property powered by Carro, getting the products on their dedicated website, becoming a business owner outside of your influencer capabilities, being able to talk on camera, showcase products and recommend things with your audience, directing people back to the mothership of your home site where you own the customer, the customer journey and the life cycle of the customer all powered by Carro. Select the companies you want to work with, populate your site, and start building a brand around products you use and love. Get paid way more money because of it versus an affiliate link. That is money to me, which is fantastic.

There is a good example store called Teddy & Bear, which is a Shopify store owned by an NFL player and Olympic gold medalist. Together, they decided to build a kid’s store. We power the vast majority of it, but it is interesting to see how seamless that is. Go to TeddyAndBear.com and you will see how seamless. Those are virtual inventory and virtual products, but it allows, in this case, an influencer family who would normally get paid probably $25,000, $30,000 a post to have your products put in there for free. You are not getting charged for any of those posts.

I want to talk about the future of the product. It has been a while since the last time we chitchatted. It is exciting where things are headed. Where do you see 2022 with BFCM? There is so much stuff that people have to start thinking about and planning for the busy time of the year. Where is Carro headed? How can they assist brands that want to diversify their product mix, make more revenue and get involved with influencers? Is there anything else that you want to tell people about where you are headed and how you can help?

Influence is the secret. I would love to work with Shopify because we have done so much research in this space. I would love to work directly with them to make it effortless for influencers to get on their platform. If we can get a lot of influencers on the platforms, then as brands, you must realize that they can’t have lots of the same thing. There is going to be a little bit of a land grab. Do you want to be the eBike company that gets the relationship with them and get into that real estate where you are not paying for their posts?

It is already here. There are huge influencers. Leo Messi’s store is on Shopify, the Dose & Co from Khloe Kardashian, all of these different people are installed. The stores are installed in Carro, but they are also huge influencers already on Shopify. If you have got a major brand with cool products, you should be partnering. It is not just the big influencers. There are a lot like the ones out there that have a lot of fans that they highly motivate to buy. They need a system to do that. My recommendation would be with brands is to get ready. When I say, get ready, there are already influencers on there, so go ahead and start doing some relationships.

Work out which brands you want to work with and get all of this nailed before you come to Black Friday. On Black Friday, build a pop-up store too. You will get the largest year of sales you have ever had. It is a case of embracing the future. It is inevitable. My last company was cloud gaming. We streamed from the cloud to let games be on any device without having to buy a console and PlayStation bought the company.

In a way, it is inevitable. I believe this is inevitable too. At some point, getting all of these people to work together more efficiently is important. That is what I would say to them. Get started, get ready, learn how to use the system, get your best partners to install and connect directly to you so you can start doing real business.

The real winners, the people who make the most money on our platform, are doing it when they collaborate. They are not just adding each other’s products and then never talking. It is like, “Let’s work together on partnering.” Sometimes you will see them post the same pictures on social media or will do an email campaign. Collaboration is important.

How can people learn more about the Carro solution? Where can people learn more and get started?

The best thing to do would be to go to GetCarro.com/Fastlane.

 

ECF 231 David | Carro
Carro: Building networks is very hard because it’s hard to get that critical mass to start, but getting started is key.

 

GetCarro.com would be a good starting point. Even in the Shopify app stores, type in and the app in Carro will show the app there. It is free to install. I love the initial onboarding sequence that happens when you add Carro because it ingests all of your order data and understands, “These are all your customers and here is the social footprint of these customers.” It starts giving some ideas about, “What do I do? I have 40,000 customers. I understand who they are. How do I start building relationships with these people? How do I find other partnerships?” That is the other part of the platform that you can turn on too. It is exciting where everything is headed.

You asked one question that I did not answer regarding the data. To be clear, the brand owns all its data. We do not own its data. The influencers they have are their influencers. They are not our influencers. Effectively, what we are doing is showing them their data in a certain way. Under the rules of Shopify, if they lever leave our platform, they will be taking all their data with them. It is zero issues there. I want to make sure to answer that question. That is one of the things that is very good.

What brands need to understand more is that Shopify protects that. We even do security audits like penetration tests because Shopify requires us to do that. They must understand that we protect their data. We are trying to help them understand that there is value to their data if they were to look at it in a new way and build partnerships from it.

There are almost 2 million merchants on Shopify’s network. There is a certain sweet spot or a starting point. They have a little bit of product-market fit. Usually, $5,000 to $10,000 a month in sales is a decent starting point in understanding who your influencers are of your existing customers and then starting to build some brand partnerships. Around the $5,000, would it be fair to say that is a good starting point?

That is a good start. Build your brand. Once it gets about $5,000, then you are ready to start doing partnerships.

We have a special offer before we go. For those who sign up, we will offer three months of free service available who see that this might be a good value for them to get involved with the brand partnership side of Carro. Thanks, David. I massively appreciate you coming on the show. I always joke every episode, but I have a copious amount of notes. It is a life of learning. That is my mantra. I do not know everything in commerce. I learn a ton from the people that I get to interview. I want to thank you again for coming to the show.

I want to flip that on you. I want to thank you for doing this because this is helping a lot of Shopify store owners to hear from lots of different perspectives and technologies. I am very excited about the idea of trying to make it quick and easy to learn. This is incredibly valuable to people. Being in the conference and seeing how this works and the impact you can have on people’s lives, you will not feel it right away, but I guarantee you in the years to come, you are going to have people coming up to you saying, “I read this thing and I changed the way I was doing.” Thank you so much. You will impact a lot of lives by what you are doing.

Thank you so much. I appreciate that. I wish you continued awesome success. Congrats on being an actual sales channel in Shopify. It is very challenging to become that level of connection to Shopify. I do appreciate that that’s where you are headed and throw out a good word internally about trying to figure out the creator and the influencer side of the business to see if we can work together in that capacity in the future.

I would love to collaborate on that for sure. Thanks so much.

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