Black Friday and Cyber Monday Lessons From a $40 Million Makeup Business

On this special Black Friday/Cyber Monday episode of Shopify Masters, you’ll hear from Quan Nguyen, Director of Technology at 100 Percent Pure, a fruit pigmented cosmetics and all-natural, cruelty-free skin care brand. Find out how this $40 million Shopify Plus business is preparing for Black Friday and Cyber Monday 2016, and what you can learn from their BFCM experiences in past years.

On this special Black Friday/Cyber Monday episode of Shopify Masters, you’ll hear from Quan Nguyen, Director of Technology at 100 Percent Pure, a fruit pigmented cosmetics and all-natural, cruelty-free skin care brand.

Find out how this $40 million Shopify business is preparing for Black Friday and Cyber Monday 2016, and what you can glean from their BFCM experiences in past years.

You'll learn:

• What it’s like to run 20 Shopify installations.
• What it means to think about your operations as its own product.
• How to manage a successful partnership when outsourcing to digital marketers.

Listen to Shopify Masters below…

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Show notes:

• Store: 100 Percent Pure
• Social Profiles: Facebook | Twitter | Instagram
• Recommended: Returnly, ShipStation, Online Marketing Gurus

Transcript

Felix: Today, I’m joined by Quan Nguyen, the director of technology from 100percentpure.com, 100% Pure is a fruit-pigmented cosmetics and all-natural cruelty-free skincare brand which started in 2006 and based out of San Jose, California. Welcome, Quan.

Quan: Thanks for having me, Felix.

Felix: So yeah, tell us even more about 100% Pure. What are some of the products that you guys sell?

Quan: All right. We sell natural cosmetic [inaudible 00:01:31] products, as well as skincare and bath and body products.

Felix: Cool. What was the … You mentioned to me off-air that the business was started almost ten years ago, 2006, but you joined three years ago. Can you give us a little bit of understanding about the back, and like how did the business get started?

Quan: Right. The background was Susie, one of a co-founder of the three, was working in a lab, and she was working this vial, and she knocked it over. Then she came back to the lab next day and saw the table was warped. She realized, “Wow, this is the stuff that people put on their skin.” A lot of people don’t realize that about 40% of this stuff, the skincare products, are makeup [inaudible 00:02:16] absorbent to your skin. So that’s when it kicked off. She wanted to create something that’s natural, organic, and is come from fruit pigment and vegetables-based. So it’s healthier alternative.

Felix: Very cool, it makes sense. When you joined the company three years ago, what was your background? How did you get involved in a business like this?

Quan: My background has always been in e-commerce. I actually started a web hosting business back in ’98, and did it for about 5, 6 years. But I was young. I was 17 years old, I didn’t know much about management. Didn’t know much about working with people. So I changed career path and went into IT. From there, I just learned about IT, and then I just somehow ended up in the cosmetics industry. I love it here. I think it’s a great industry to be in, and making a lot of impact in terms of lives. Build our e-commerce stores and help the business bring the products to the world.

Felix: Very cool. What was the technology like for 100% Pure before you joined on? Was there somebody that was already in charge of this, or did they bring you on for specific plans for growth? What was the situation before you joined?

Quan: Yeah. Our CEO, Ric Kostick, he made a investment in technology to help grow the e-commerce site, and add technology into the store and distribution channel as well. When I joined the company three years ago, we were on Volusion. The site was kind of rough in terms of operation, there’s no fulfillment back end, there’s no integration into our QuickBooks, or our ERP system. So that’s when I joined. Ric and I had a discussion. Since we’re kind of starting out from scratch in terms of IT infrastructure and e-commerce, we decided it’s best to build a custom integration on the Cloud using Software as a Service model rather than a Microsoft model. So I looked at Shopify among other, see what was out there, and it seems like Shopify was the better platform for developers to build integration around the operating sides of things. But we don’t have to worry about the infrastructure. We’re not in the business to host data centers or server cluster. So that’s why Shopify was, at that time was our best choice. And it’s been working very well.

Felix: Yeah, it’s, I think, one of the biggest benefits of coming to more of a self-hosted solution … sorry, coming to more of a hosted solution is that you don’t have to have those headaches that you were talking about. Was there already a ton of volume coming through your door where it necessitated this kind of change or investment in technology, or was it just kind of investing for the future plans to drive more traffic and sales through the store?

Quan: The company has a good amount of success online. I think we were doing about four or five million at that time, on Volusion. But it’s really hard to update a website, and be the developer and internal team. We didn’t have the flexibility of doing custom coding. So we made a strategic move to use a platform to allow us to do custom coding in the back end, but using the API on Shopify to do promotions, to do integration with social media, and also to do fulfillment in the back end of the business. [inaudible 00:06:17] integration, with batching and picking … basically the full vertical of operating the back end business.

Felix: When you talk about custom coding, can you get more specific about what you guys were doing with the Shopify API? What did you need to build right off the bat once you joined the company?

Quan: We were doing a pretty big promotion every quarter. It’s called “Gift with Purchase,” where the user buys $35 of retail products, and they will receive a five piece gift worth over $100. The strategy behind that was to get new users, new customers to come in and try out new products, as well as existing customer receive this five piece product in different product category, so they can try out the products, hoping they would like the product and continue and purchase in the future. With that custom code required on the back end, coding solution … Actually, the funny thing was, the way we executed that was using JavaScript. When the cart hit the threshold for $35, then add this item in for free … We found that there’s a lot, quite a lot of people very tech-savvy, and all they did was turn off JavaScript, and they got the free item. But actually, Shopify recently released their Shopify Scripts, so we’re able to do it on the back end without using JavaScript. That was pretty cool.

Felix: Yeah, definitely cool. [inaudible 00:08:07] shock, wondering why there were so many of these free orders that were coming through. Was this something you guys were already, this kind of marketing or this kind of promotion that you guys were doing, was it already something that was done manually at the time and you wanted to apply some automation to it, or did you not even try, attempt to do it without having automation?

Quan: With automation in terms of when we were on Volusion or on Shopify?

Felix: Yeah, it sounded like this promotion that you ran, that … I’m sorry, what was it called again? Gift of purchase?

Quan: Gift with purchase.

Felix: Gift with purchase. It sounds like a promotion that has been a mainstay for your business, for your marketing for a while now. Was this always something that you were doing that did not have the automated capability to add this gift in automatically in the shopping cart at checkout, and you needed the technology or needed to automate that piece of it? Or did you guys just find a way to do it manually before having the technology in place?

Quan: Yeah, we were kind of doing it manually. We just display a banner saying, “Okay, you will receive this gift with your order.” We’d just add it in on the back end when we shipped the order, we just add the item in. This wasn’t on a pick ticket, it wasn’t relieving inventory in real time. So that’s why we wanted to take the automated approach.

Felix: Did you also find the customers liked seeing it in the cart? Was that also a big part of the reason why you wanted this technology, or was it more just to have better control over the inventory that you guys had in stock?

Quan: Actually, yeah. Both. So it’s affirmation to the customer, or peace of mind, “Hey, this is the gift you’re getting. This is the value you’re getting.” Show in their cart, as well as deducts the quantity in our inventory in real time.

Felix: Got you. Cool, so this promotion that you were running was one of the big projects it sounds like you took on when you first joined the company. Were there other kind of steps … At a point of four to five million dollar business, that’s already a pretty sizeable business, probably much larger than a lot of listeners on here, but what were some of the other projects that you knew that you had to take on when you first hit the ground running? When you hit the ground, and you got a kind of good lay of the land in terms of where they were technology-wise, what else did you feel like you wanted to focus on that would deliver the most value for the business?

Quan: Good question. After we implemented Shopify and run it for about six months to a year and we found it was to be the platform that we can scale with … So we looked at our operations and automate that. Like I said earlier, we wanted to take a custom approach and see the business operation automation as kind of like a product, similar to how Tesla called their the Gigafactory. So we want the e-commerce to pull in orders and have a batching solution that scale to our iPad, and iPad would be kind of like a digital pick ticket.

Right now, actually, we’re looking for next year to integrate autonomous bots in the warehouse. It’s kind of like a moving shelf, or like a conveyor belt. There’s a company near our office called Fetch Robotics. They have the autonomous shelf. It’s quite amazing. With the iPad, we can … The picker can start a batch, they’ll probably pick like 16 toward to 50 orders, and our solution will kind of sort the items based on bin location, and start the process. It will automatically pull … The robots will come and follow the picker, based on the GPS location on the iPad. The picker just walk down the warehouse, and just pick all the items in order that’s shown on iPad. Then when they’ve complete batch, then the next bot will automatically come out and follow them, and the one that’s completed will go to the packing station.We wanted to add automation in the operation.

Felix: When you think about automation, there’s a side of the camp that says that you want to do things that are not scalable at first. Obviously, the scale of your business is probably different than a lot of people, it’s definitely had more success than … Or it’s at a stage where a lot of people aspire to get to. What made you guys feel as a company that it was important to focus on automation rather than investing the technology dollars elsewhere and developing … I guess I’m not sure exactly what else you guys had in mind, but why was it that automation was such an important area to focus on for you guys?

Quan: You look at every business, even in marketing nowadays, you kind of need to know about technology. Even for [inaudible 00:13:30] ads, for Google Ads and Facebook Ads. It’s about automation now. It’s about making API call to Facebook and AdWords and create your ads in real time. Based on your ROI, you can adjust your budget in real time. We’re not there yet, but I think we’re starting to see we’re going that direction. We tried Facebook Ads and Google AdWords early this year, and it was chaotic. Because we couldn’t track which channel attributed to what order. So I think that’s where business are going. Even every department in the business should be tech-driven and automating these, to have the competitive advantage.

Felix: Yeah, [inaudible 00:14:28] everything does start manually at first, right? Whether it means packing the orders, distribution, setting up these marketing campaigns and optimizing these marketing campaigns, it all does kind of start manually at first, maybe at least the first day starts manually. When do you know when you should be removing those manual aspects and automating it instead? How do you guys make this decision? Not just when it comes to the operation style, but just in general. How do you know when you should just stop doing things manually, and invest the time, maybe even take a step back at first, so that you can build automated solutions instead?

Quan: I guess it’s based on how much the overhead is, how much you’re spending, or your employees spend their time going through creating the ads, or creating the look-alike manually. Creating the speadsheets. Again, the digital [assets 00:15:30]. What’s the total cost to that? You should start out with doing them manually, and then if you see some traction there, there’s increase of budget slowly, and as you scale up, there’s going to be more overhead. Once you look at the ROI, and [inaudible 00:15:56] the cost. So does it make sense to use a tool or integrate a tool to do that, the automation part.

Felix: Yeah, and there are kind of extremes. There are people that sometimes spend a lot of time in preparation for scale by automating everything, even before the cost of automation is eclipsed by the gains of efficiency. They spend a lot of time building systems before there’s a lot of dollars, or even traffic or orders flowing through the door. Then the other side, there are people that wait until they’re nearly bursting at the seams. Everything’s on fire all the time before they implement automation. So it’s very much of a sliding scale. For you guys, how do you determine when you should step in and automate? Do you do it by preparing, or do you do it when it’s obviously painful for the business, then you decide to automate?

Quan: We visit the project every quarter, and we do analysis on every project. We measure, “Okay, three months ago, we implemented this. What has been the impact, and what has been the overhead?” And where this is going. So is this something that we’re … want to continue on doing? If it is, then okay, how can we make it better? Is there a tool out there or an app out there than can do this for us? If it [does 00:17:31] meet all the requirements … if it doesn’t meet all the requirements and scale with the business, then that’s when we decide to bring in-house and build a custom solution for it.

Felix: When you’re doing this kind of build in-house, or I guess “buy or build” decision that you’re going through, do you ever kind of hit a middle ground where you decide to buy a solution, or I guess pay monthly or whatever for an app or for a solution, then also layer on some customizations to it? How do you balance between the two? Or do you always go 100% app or 100% in-house?

Quan: We take it as a integration approach, where we actually operate more than 20 Shopify [inaudible 00:18:20] stores now, even though we started out with just one. We look at what’s in the App Store and what’s out there. If it meets the requirements, we try it first. For exactly, we use Returnly for our returns. One of our great vendors I like. We like working with them. So we kind of scale with their business. We launched free returns [inaudible 00:18:47] more than a year ago. We were one of the first to do this on the Shopify platform, because there wasn’t anything out there at that time to do free returns. So we hooked up with Returnly, and they had solution for us to use our own carrier as part of the requirements for our customer to do a self-service return, to select the item, select the reason, and then it will generate them a return label.

Recently, we have a new business requirement. We started to see a lot of returns coming in, and the most, 80% of them are not returnable, or it’s been used. So we can’t resell it. So why don’t we tell the customer to keep it? But that would require some kind of business rules, like, “Okay, if this customer is a first-time customer, they never return anything, so let’s tell them to keep it.” So we go back, we work with Returnly, “Hey, can we implement this?” If their platform doesn’t support it, then that’s when we decide, “Okay, can we bring this function in-house and build a custom solution for this?” Because there’s nothing out there for it.

Felix: Makes sense. If you are a small company, or for any small companies out there, where do you think that they should be investing their technology budget? I think by four to five million, like you were saying, it’s a different scale of business. But when you’re much smaller, you do maybe six figures a year, what do you think … How do you … What kind of advice would you give to these kind of store owners so they can invest appropriately for a business of that size?

Quan: You have to pick the front end or the back end of the business.

Felix: Your choice, maybe both.

Quan: I think you have to invest in both. The front end of the business is to generate more buzz, generate more content. We recently launched our new website two months ago, and it’s doing really well. What we learned from that is the content of the site. Our site has better photography, better copy. It helps create trust with the customer. We see our bounce rate went from 56% to 11%, and average time onsite from four minutes to … It’s going close to six minutes now. Conversion is also up from 3.8% to 4.2%.

Also invest in social media. I think this would be a pretty big thing in near, short-term future, when there’s apps out there that can kind of work with the ad spending in real time and control the [suspending 00:21:44], and you can set a budget based on ROI. That would be great, but we’re not there yet. Things will get there soon. This’ll … Content and social media for front end, and back end, look at how you can automate things for … Like [chip station 00:22:05]. It’s like $145 a month, and it’s been so much value in terms of automating your back end, and it has the API. Look at how you can bring all the data to accounting efficiently, using an app. There’s quite a few apps out there now, for most ERP systems. This really … Automation, and think about automation in the future as you grow and as you scale. Always work towards automation.

Felix: You mentioned earlier that automated operations is obviously very important for you guys, and you think of operations as a product. Can you say more about this? What does it mean to think of operations as a product?

Quan: As a product … If you think of the business as a vehicle, a car, there’s different functions of the different departments, but they’ve all got to work in tandem together for things to flow, for business to move. So every department … I guess everything can kind of revolve around data, every department. Use data to make business decisions, and put tools for the data to flow, to automate the data. I think that’s the best I can describe it right now.

Felix: But what kind of tools do you guys use to automate the data to make sure that it is at the right place at the right time for all the systems that are connected in your business?

Quan: We started out the first year when we were first on Shopify platform three years ago, there was an analytics platform available with Shopify, so what we did was we consume all of the data from all the stores. Because we operate more than 20 stores, so we use API and consume all that data and put it all in a database, [inaudible 00:24:00] SQL. The data … All departments should have some kind of metrics. They can make them more efficient, and then add the tool to achieve the metric and the goals that they have for each department.

Felix: So it’s kind of like you have to first be able to see the data before you can actually act on it, but then once you are able to act on it, you need to have the tool in place to do what’s necessary to reach those goals?

Quan: Right. Having a real-time database with KPI and metrics for each department is very helpful, so you can make the maneuvers before you find out that that project didn’t go well, or [inaudible 00:24:47] something that the profit margin just got hit like two months later.

Felix: Yeah, so you mentioned a couple times now, and I want to definitely touch on it, is that you guys run 20 stores. So you’re talking about 20 different stores other than just 100percentpure.com?

Quan: Yes and no. Most of them are 100% Pure. The reason why we have to use multiple stores, because we have international sites, websites. We have US, Canada, EU, and UK. Each has their own store and their own requirements for accounting, and we have 12 POS stores. With Shopify, you can use one instance that you can have multiple POS in different location, but for us, we have a different requirement where each store has to go into each bank account, different bank account, and then each different warehouse at that time. That’s why we have to split it up.

Felix: Okay, yeah that’s interesting then. So yeah, you have different stores for the different geographies. US, Europe … US, UK, you said Canada?

Quan: Yes.

Felix: Okay, cool. Why’d you feel the need to split it up in that way?

Quan: Like I said earlier, we had a business requirement that each store has to go into different bank account, and Shopify currently doesn’t have the ability to go in, based on currency, it goes to a different bank account. At that time, it was easier for us to do different localizations like pricing and language, yet there’s apps out there that let you convert that in real time, but we had … I forgot the requirement, but we thought it was better just to separate it and manage the content locally on each site. And the promotion are slightly different on each site. That’s why we had to-

Felix: Makes sense. Yeah, I can imagine it being a big kind of headache to manage all of this and make sure everything’s interconnected. Has it played out where you recognize that the pros have outweighed the cons by having so many different installations?

Quan: Yeah. One of the challenges we’ve ran into is that how do we manage the products from all channels? When we launch a new product, the product information got to go to each of the stores, and we have to do like 20 times. So we built a in-house tool to do product management, to where we can … It’s called Purity Toolbox. We create the item in there, and then we have a sync tool that sync to all the stores, and propagate it to other stores. We also built an internal tool to manage all the stores in one console.

Felix: This business requirement of having different bank accounts for all of the POS systems and all the different geographies, can you share why there was a need for that?

Quan: I’m not particularly sure, but it was given by our CFO at that time. Yeah, I’m not sure.

Felix: Yeah, I can imagine … I guess it must have been a really good reason, otherwise there was a ton of work that kind of fell out for taking this approach. One thing that you mentioned before was about the KPIs that you’re measuring for all the different projects, for all the different departments. How does it work when it comes to … I guess the things that you touch. How do you guys decide what should be the … KPI, key performance indicator. How do you decide what that should be, and what the number essentially should be for each indicator?

Quan: We’re on the IT/engineering side, so what we do is we work with business leaders inside our company, and department heads. Each department head, we go to them, “Okay, what kind of information do you want to see in daily basis, and weekly, and daily.” Did I say … Yeah, daily, weekly, monthly, and yearly. So that their team can be more efficient and more cost-effective. We work with them to [inaudible 00:29:20] the KPIs, and then we have like an all-in-one reporting dashboard that each department uses.

Felix: Based on what you’ve seen, what are some of the most important metrics that every store owner should be paying attention to, whether they’re large or small?

Quan: Not sure there’s a clear answer to that, because it’s subjective to each company or business.

Felix: Just based on your experience.

Quan: Experience, it’s like, what I see is profitability. We can run really good promotion and big promotion, but if we don’t make money from it, what’s the point, right? So we have a KPI that we add all the sales for the day, and [inaudible 00:30:11] up all the spending. Ads, and then all of the operation costs, the shipping cost, the product cost. Then we aggregate all of that, and then we have a profit margin number for that day. So we can see, pretty much close to real time, like how’s the promotions doing.

Felix: Are there any metrics that are extremely hard to capture that you wish there was a better way, or maybe you wish that you could capture if you don’t have today?

Quan: Yeah, ads. Like I said earlier, Facebook Ads and Google Ads, they all have different attribution definition. For example, if [inaudible 00:30:54] an ad on Google Ads, and then you go to our site, and then you didn’t buy, and then you went on Facebook, you saw the same ad, and then you click on our site, and then either you buy from there, or you went back another time and buy it. So how do you attribute that sale to that channel?

Felix: Right. Because then you have to make a decision, [inaudible 00:31:15], should I invest more in Google or should I invest more in Facebook, but it’s hard to tell what actually drove that sale?

Quan: Right. If you look at Facebook Ads report, and Google AdWorks, they both say that they did it. They attributed to it. So now you end up with an exploded number of ROI.

Felix: Right, makes sense. So you mentioned something in the pre-interview notes or questions about how one of the other key marketing channels that you guys focus on is with SEO. What’s the strategy like for SEO for you guys?

Quan: Yeah, SEO is very important. Our biggest channel of revenue is e-mail, and then SEO, but I’m starting to see, e-mail is starting to decline slowly. I think in the future, the near future, it’ll be about social media that will be on the rise. But SEO is our second-largest, and I think it’s the cheapest way to [inaudible 00:32:13] customers. We work with a company called Online Marketing Gurus, they based in Australia, and they helped us with SEO, creating copy for the site, put in metadata, creating a feed to Google. Yeah. SEO, I think good investment to put your money in.

Felix: Yeah. You guys work with these consultants, you outsource a portion of your SEO. For anybody out there that needs to do it themselves, whether for budgetary reasons, or they’re just getting started for the first time, what do you think they should invest their time or dollars in early on to make sure that their site is optimized for search engines?

Quan: A lot of it they can do themselves. There’s apps on the App Store that help you … I saw a few, I haven’t tried it. But they can help you optimize with the keywords for the page, and creating copy for the page. There are copywriters out there, for freelance, that you can get quite … With a small budget to help you with the copy. [inaudible 00:33:19] right keyword and submit to Google, and have a lot of pages. A lot of URLs. There’s more that index as well as getting … [other big sites 00:33:31], and link back to your site. That will really help your rankings.

Felix: That makes sense. So for folks that do have the budget to hire … Outsource, essentially, the SEO, the copywriting, tell us a little bit more about your experience in … How do you make sure that you have a good relationship or a good partnership with an outsourced consultant when it comes to SEO? What do you make sure that they have from your side so they can do their job, and what do you expect to get back from them in terms of deliverables or reports to make sure that they are doing their job?

Quan: With the team, OMG, that we work with, we have a weekly call with them … Let me go back and … Part of the selection process. When we set out to find an SEO company, we looked at what industry they specialize in. I think that’s important. You probably have better return if they are more familiar with your industry, as far as being in the cosmetic industry, so they can write better copy, help you with better copy, better keywords. Look at trends, Google Trends. Get some referrals, and talk to some of their reference or referrals. See how the business, making sure it’s working out, and seeing what their posts … What they can help you with, and what metrics they can help you with. How they can help you in three months, six months, towards to a year, and what you can expect. OMG did that for us. Then after, we had relationship with them. We have a weekly call, and just go over all the metrics. What would be our current strategy and future strategy to bring up the rankings, and for what keywords.

Felix: Makes sense. So what do you need to provide them with to make sure that they have what they need to do their job?

Quan: Provide them with content. I guess the process … We start on the content, and they kind of overlook it and they change our … give feedback, like, “Hey, we should put in these keywords for this copy, so people can search for it.”

Felix: Okay, cool, makes sense. So you mentioned that social media, you believe, will be on the rise. That it might eclipse e-mail marketing for you guys, which is currently the number one marketing and sales channel for you. Why do you think that is? What makes you have such a strong focus on the future for social media?

Quan: Well, I think people behavior kind of change from checking e-mail daily, where they can open up like Google, I mean Facebook Messenger, or chat apps that they check in like 20 times a day. I think e-commerce going to shift a little bit over towards conversational commerce. I mean, that that’s the thing now. Facebook’s trying to push, to put that box in everything on Messenger. A lot of it comes from China. If you look at China market, how the consumer are interacting with brands, everything is through the chat app. You can get a taxi, or get a ride, or buy a product, or order food through one app. I think that’s where the social media over here is going towards. You can talk to a bot and get your questions answered, and place an order through a bot.

Felix: I think this is a great topic, especially for someone with your experience, because automation has been such an important focus and investment area for you guys. E-mail and SEO can be automated, or at least can be outsourced to a point where it doesn’t have to be hyper-personalized for each individual. When it comes to conversational commerce, do you feel like it could be a much bigger challenge or harder challenge to automate, because maybe the environment that you’re interacting with a customer in is expected to be more intimate? Because it is a one-on-one conversation through chat, which is typically how they use chat, to talk one-on-one with their friends?

Quan: Yeah, and that’s the app that everybody opens every day. Multiple times a day. I think e-mail, it seems kind of like a to-do list now, whereas the chat is now about relationships. If you’re running business, you want to create that relationship with your customers. Having that real-time chat and connecting with the customer is … I think that’s where it’s going.

Felix: Do you plan to then build a team of people that are just on chat, or do you have plans to add some automation aspects to when you’re investing in the conversational commerce channel?

Quan: Yeah, we’re absolutely looking into that. Right now, on our website, we have a live chat during business hours, nine to six. We see a lot of people are using it, and it’s already really helped conversion. When somebody ready to convert and they have a question, if they can get the answer right away or [inaudible 00:39:11] coupon code to push them, that’s instant peace of mind right there for the customer. The live chat, I think, is going to start going towards more of the messenger route, like a WeChat, here in the U.S.

Felix: When you say that, you mean that people are going to go off of the site to chat with, to connect with the brand?

Quan: Yeah, I think there will be a mix. This will open a new channel. You can open your chat app and chat with a brand like 100% Pure, and like, “Hey, I have a question about this product.” Or, “I want to buy this product.” And you can do it inside the messenger app. You don’t have to open your browser, or go to the website, and then go through the checkout process, normal checkout process. You can do that in your messenger app.

Felix: Makes sense. I read now that live chat, I’m assuming is manned by your customer service team, by actual humans. Do you plan to automate that more? If so, which pieces do you want to automate?

Quan: Well, there’s this … Absolutely opportunities to automate certain things, but not everything. For one, it’s questions about products. May need a bit of customer service or human interaction, especially for our market. I mean, the bot will, you will tap into a database, knowledge base that we have, or we built in the back end. But for more streamlined process like ordering, that one can be automate by a bot. The return process can be automated by a bot. You start a conversation, like, “I want to return the product,” and then API will know who the customer is, and then just give them a list of products to return, and the customer just interest through the messenger. If that interaction isn’t … The bot doesn’t know the answer, they will ping a customer service person to come in and join the chat, and answer the questions.

Felix: Yeah, so I guess not everything can be 100% automated, but you can automate as much as you can, so that it can solve for the majority of the cases, and then bring someone in for more of the edge cases, which is exactly your example. So we’ll talk a little bit more about the promotional strategy that you’ve gone with, especially by the time this episode comes out, we’ll be very near Black Friday/Cyber Monday. One of the reasons why I wanted to have you on was because of your experience with Black Friday and Cyber Monday from previous years. Can you give us a little bit of an idea of your strategy in previous years for ramping up to Black Friday and Cyber Monday?

Quan: Last three years, we’ve been doing a … What we called a “10 for 10.” 10 item for $10. It was a big success, in terms of how people react to it. Three years ago, it was just a weekend. We started about a day earlier for Cyber Monday and Black Friday. Then last year, we started three days earlier. I think this year, we’re going to start a week earlier. That’s what we notice as a trend. People are just starting their Black Friday and Cyber Monday promotion earlier. So we want to be the first one to send out the e-mail to catch the shoppers’ attention. We noticed when we send out e-mail, we have time and we look at the report [inaudible 00:42:52] what is the best time to send it out when people are checking their e-mails? Early in the morning, or at noon? So as soon as we send it out, it’s like, boom. They just reacted, and there’s thousands of people onsite at the same time. Last year, even though we did $10 for 10, we look at analysis afterwards, and we actually didn’t make money.

So this year, we implemented a new strategy, and we implemented a threshold. Like, if you spend $35 on a regular priced product, then you unlock the 10 for 10. We’re able to do that now with Shopify Scripts without anyone turning off the JavaScript and just bypass that threshold. So that’s what we’re going to do this year. It’s pretty cool.

Felix: Very cool. So the way it’ll work is that they have to have $35 in their shopping cart before they have access of this, I guess, secret catalog?

Quan: Yeah, so there will be a landing page with 10 or 20 items for $10 each, but it will show regular price until you add $35 worth of retail products, and then you add these 10 items, it’ll automatically discount it to $10.

Felix: Makes sense. So you have a promotion specific for the Black Friday, Cyber Monday, I guess week for you guys. How do you actually market something like this? Because having a promotion like this on your site obviously is great to have, but then if no one actually sees it, no one knows about it, then it’s actually useless. So how do you market a promotion like this, a Black Friday, Cyber Monday promotion like this?

Quan: We heavily depend on social media for this year. Facebook, AdWords, and also affiliates. And influencers on the affiliates channel, to help spread the word.

Felix: Because the sales and the promotion period is such a concentrated, small window, at least a weekend for you guys previously, but now just a week long, still kind of short … How do you manage all that? How do you make sure everything falls into place, or that the affiliates, social media posts, and the marketing behind it all kind of, not collab, but all come together at the right time so that you can make the most out of that week?

Quan: This goes back to the analytics, the KPIs that we have in place so that we can see in real time how each channel is doing, and what’s the ROI in each channel. Having an analytics tool that give you this information is very important in managing and seeing how your promotion is doing.

Felix: Makes sense. When you do ramp up for a time like this, and you need the affiliates and everybody else to push the promotion, how do you guys manage that portion of it?

Quan: We manage the affiliates and the ad [stream 00:46:03]?

Felix: Yeah, because again, it’s such a small window. It’s only a week long, and this coming Black Friday, Cyber Monday for you guys, how do you make sure that everything’s hitting at the right spot? Because if you are running a much longer promotion, you kind of have the opportunity, have the luxury of taking care of one thing at a time, but because it’s still concentrated, you almost have to make sure everything is working right off the bat, and no kind of room for mistakes. How do you, I guess, prevent or lessen the likelihood of missing or dropping the ball on something when there’s so many promotions going on?

Quan: Yeah, in the company, we have what we call a blackout period for Q4, internal department projects. So no new projects for Q4, anything has to be implemented by August, September. Like include our website. We recently launched our website, and we [inaudible 00:46:59] decide, “Okay, we have to launch this by September so that we have enough time, a couple weeks, to fix any bugs.” Then we prepare for Q4. Our company is … Most of, a lot of the revenue are coming from Q4. Our operation team is aware, and we look at inventory, we look at changing things in the warehouse. Basically in the business, there’s no new big changes after September.

Felix: That makes sense, it’s kind of [code-free 00:47:36] this blackout period, because you don’t want to divert your attention from that Q4 period, and you don’t want to implement something that might break the site, and obviously be a big kind of sabotage for the business. Now the day of, the day of Cyber Monday to Black Friday … I guess it’s more appropriate to talk about Cyber Monday. On that Monday, what is your team doing to make sure that you’re prepared for any potential fire drills, or potential … How do you spend your time analyzing the data … What are you doing on that actual day?

Quan: For our team, the engineer/IT team, we’re always 24 hours on call. This year, we’re doing something different in terms of company-wise, that we’re letting our employees be with their family. Not working. But the promotion we run, we’ve prepared for it, we’ve been planning it for the last few months. We have backup inventory. We have backup items in case things sell out. We have procedures in place in case the promotion go down, our website goes down. We work with Shopify, our account manager, and make sure we have enough bandwidth and server load to handle the traffic for Black Friday and Cyber Monday.

Felix: Very cool. I like how that because you are super prepared, you don’t have to have somebody on call, you don’t have to have your employees working on the holidays, because you have that preparation in place. I think that’s definitely a goal that a lot of stores should aspire to. You don’t have to always be on call all the time, if you are putting in the preparation for it. So again, the business has been around for ten years, you guys are operating 20 installations now of Shopify, can you give us an idea of how successful the business is today?

Quan: Yes. We’ve been growing about 45% year over year. We should be hitting our $40 million next year.

Felix: Wow, very cool. $40 million, that’s amazing. I think that the growth, like you were saying, from 4 to 5 million when you first joined to, essentially 10x by next year, I think that that’s an amazing growth. What do you want to see the company in the next year, especially from your perspective as somebody that’s in control of the technology, how do you want to see the business evolve from a technology perspective?

Quan: That’s a good question. I like to see the business go more into chat bots. Not just chat bots, but just bots in general. Kind of like our industry, there’s Sephora, they have a bot that you can talk to and get your lipstick picked out for you. You can upload a photo, and do color-matching. There’s many ways you can use bots for e-commerce, like the customer service portion, doing returns, and placing the order for a customer … Letting the customer know what the package is, which Shopify already doing. Yeah, I think it’s pretty exciting things coming out next year for e-commerce.

Felix: Very cool. So thanks again for your time, Quan. So 100percentpure.com is the website. That’s 1–0–0-p-e-r-c-e-n-t-p-u-r-e.com. Anywhere else you recommend the listeners check out, they want to follow along with what you guys are up to?

Quan: Our social media. We’re pretty big on Instagram and Facebook, and we also just implemented the shoppable Instagram. That’s actually a pretty good tool if other want to try that out.

Felix: Oh, very cool. Yeah, definitely recommend people checking that out. You have it live up on your Instagram profile already. Definitely recommend people checking that out as well. Yeah, thanks so much for your time, Quan.

Quan: Thank you, Felix. Thanks for having me.

Felix: Thanks for listening to Shopify Masters, the e-commerce marketing podcast for ambitious entrepreneurs. To start your store today, visit shopify.com/masters to claim your extended 30-day free trial.

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