On this episode, you’re going to learn about how to prepare for 2023. I’m going to start out with macro trends that you should be very much aware of in 2023 and I’ll follow up with marketing actions you should consider taking and then operational actions you should be taking in 2023. We’re taking these actions.

I’m seeing with my small community of eCommerce operators that I coach, they’re taking some of these macro actions. Some of these might apply to you, I’m not saying everything. It’s worth the read to the very end. Pay attention, there are about ten key actions, ten things that could turn the tide for you in 2023. I reckon you should read this one and enjoy the episode. Thank you.

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Welcome to the 2X eCommerce Podcast. This show is going to be different, you’re going to be learning from me. I’m going to be shedding some light on what you need to be doing in 2023 if you’re an eCommerce operator from my perspective on two bases. I’m an operator myself. I operate a food and beverage brand called Lean Caffeine and Clean & Pure in the UK.

Also, I’m an advisor and coach in eCommerce. In fact, that’s my background in terms of advice and coaching eCommerce operators. This is digging into conversations I’ve had with my small community, my clients, and as well as firsthand experience. My team and I are facing now on decisions we’re having to make on a regular basis.

First off, how’s 2023 thus far? I’m recording this on the 26th of January 2023. Whenever you read this, I want to know how this year has panned out and what you are doing. I’m going to be doing more solo shows because I feel they’re important for you to understand where I’m coming from. It’s okay that you’re watching my interviews and me asking questions from other practitioners, other proven experts, and other entrepreneurs but you should hear from me every now and then.

In 2023, you’re going to be learning a lot more from my voice and my perspective moving forward. I’d also be running some episodes where I’ll specifically be speaking to Octillion, which is our holding company for clean food and beverage, as well as skincare brands. There’ll be some episodes dedicated to what we’re up to so stay tuned for that.

Without further ado, I’d like to start out with 2023. I have lots of notes here. I have notes I put down on a notepad. I’m finding that putting my ideas on a notepad reveals more in comparison to typing them out. That’s just me, it’s different for some people. I’ve typed out my intro, which is, what’s happening? I’m going to speak to the trend first. What exactly is happening in 2023? I’m going to speak to specific actions you can take that would no doubt allow you to thrive this 2023.

Let’s start out with 2023, the trends, and what exactly is happening. 2023, believe it or not, for the vast majority of the population, and it doesn’t have to be you, is a year of a contraction. Things are shrinking. Consumers are looking to reduce. Businesses are looking to downsize. That rule doesn’t have to be you and I’ll explain why later on and why you shouldn’t adopt that mentality this 2023.

With the contractions, as you can see, you’ve heard about the Big Tech layoffs. I put out a LinkedIn post around the share numbers of tens of thousands of employees, particularly in the United States, that have lost their jobs. These are white-collar jobs. Most of these jobs are six-figure jobs and that is demand for stuff you’re probably selling as an eCommerce operator or eCommerce brand.

One trend you need to take in 2023 is consumers are driven by value. For a large part in 2023, it’s clear that they’re looking for deals. A lot of consumers are moving and they’re switching from brands. They’re switching brands that offer the same utility due to price. Consumers are price sensitive. Before we jump into the price sensitivity of consumers, let’s look at the UK. In the UK grocery scene, for instance, the major winners in Q4 were discounter grocery stores. There were brands like Lidl and ALDI. They promised to price match and bring things down and it matched consumers’ unique circumstances. That’s what happened in Q4.

This is anecdotal, I do think that the economy would rebound at some point this year, it will rebound. For the next two quarters, consumers are still reeling. There are many protests and strikes in the UK at this point in time as you can imagine. In the UK, 65% of UK adults are spending less on non-essential items. UK consumer confidence remained below -40 for the ninth month in a row in January, these are stats I took note of, marking it the longest period of retail pessimism in 50 years. This is the UK.

In the USA, retail spending fell in December at its sharpest pace in 2022 marking a dismal end of the holiday shopping season as rising interest rates still high inflation, and concerns about the slowing economy pinched American consumers. This is from Bloomberg. Purchases at stores, restaurants and online declined a seasonally adjusted 1.1% in December prior to the month, December to November. This is the US. Sam’s Club, which their discount is wholesale discounters, same-store sales estimates including fuel went up by 5.5% in November 2022 to 9.7% in January 2023. The same can be said for Costco’s wholesale and BJ’s wholesale, including fuel.

This circles back to my point, which was probably prematurely mentioned, which is consumers are driven by value for a large part in 2023. Let’s have that in mind, consumers are value driven this 2022. Two key opportunities. On the other end of the scale, you have luxury. I’m not talking about sub luxury where it’s like a brand that’s not ultra-luxurious, where it’s aspiring to be luxurious like Michael Kors or what have you. I’m talking about ultra-luxury.

There’s also this new appetite for ultra-luxury. A lot of people have made money in this inflation. On the two ends of the scale, you have discounters, which will be thriving this 2023, and then you have ultra-luxury. China is opening so if you are an international luxury brand, which is probably not the case for most readers of this podcast, the Chinese customers are back. There’s no more COVID in China. They’re looking to haul through their shopping appetite. They need to get in with luxury shopping. Let’s put that aside.

Another major trend this 2023 is generative artificial intelligence AKA ChatGPT. ChatGPT is one of many but it’s the main tech in generative AI. If you are not using it already or trying it out already, you’re behind the curve now. That is going to make up for certain things that are going to happen in 2023 in terms of loss of personnel. I see generative AI as an opportunity for additional staff, intellectual manpower. We’re going to put that aside.

We’ve talked about this value-driven customer. The second is luxury for international brands will still benefit in 2023. Generative AI is a big macro trend. In light of all of this, what lies ahead in 2023 for eCommerce operators? That’s what the show is all about. I’m going to split this out from a marketing standpoint and operation standpoint. With operations, I’d also throw in a few tips for finance. From a marketing standpoint and an operation standpoint, I’ve listed a few items. There are a total of 10 items, 10 things you should be doing, and most of the items you should be doing. It’s not a broad-stroke thing but it would apply to many. Pick and choose and we’ll get right there.

Point number one is focusing on your brand. I had a conversation with William Harris from Elumynt. Elumynt is an agency. There is still competition from a performance market standpoint. Whether you are selling through TikTok or trying to generate awareness and attention through TikTok or you are trying to generate attention and awareness through Facebook or the Meta ecosystem, which is Facebook and Instagram. If you’re going social, there’s a lot of noise and you need to cut through that noise. The brands that are cutting through the noise are brands taking branding seriously.

In November 2022, Ayo and I, my business partner, sat down with brand strategists and their name is Cali and Emma. We sat down with them for one full day, a full-day workshop on strategizing the next steps for Lean Caffeine, which is the brand we acquired, which, interestingly, is an Amazon native brand. They’re doing things quite Amazon-y, let’s put it that way. There’s so much opportunity when your brand led. You do things slightly differently.

Everybody seems to be doing the same thing, working with the same creators, and using the same format, “TikTok made me do this.” The same opens and the same hooks. Everybody seems to be doing the same thing and using the same creators. To make an impact, you need to be a distinctive brand. What do I mean by distinctive brand? Look at Liquid Death. I was in Chicago over the holidays. Liquid Death is not in the UK, it’s in the US only, a $700 million company. That’s not the point. I call them a death-obsessed CPG brand that’s doing good for the planet. It has that humor. It’s death-obsessed. It’s theoretical.

Let me read this to you, this is from a can of Liquid Death, “This infinitely recyclable can of stone-cold sparkling water came strict from the Alps to murder your thirst. When a group of teenagers set off into the mountains for a weekend of drinking regular water in plastic bottles, they became haunted by an aluminum can of mountain water that was dead set on merging their thirst and recycling their souls. Once cracked open, no thirst is safe from Liquid Death.”

“After ritually dismembering its thirst victims, this brutal can of water used the severed body parts of dead thirst to build itself a flesh suit, which is used to disguise to get a job in marketing. Liquid death never took the job, it just murdered a bunch more thirst instead. Ingredients, mountain water, and CO2. #DeathToPlastic.” They say, “We donate 10% of the profits from every can sold to help kill plastic pollution.” If you haven’t heard of Liquid Death, I would encourage you to jump into your socials, particularly YouTube, and enjoy the storytelling experience from this brand. It’s more towards entertainment.

You need to figure out your brand core. Your brand, in 2023, is an identity. If you have not honed in on that identity, double down on it. You are just moving products. You’re shifting products and that will lead you to raise your bottom where consumers would switch. Switching costs, in their minds, is easier if they’re buying your product for the utility’s sake of it. If they’re emotionally connected to you, you’d find a cohort of your customers sticking with you even as you may want to increase prices or things change on your brand.

You need to think about brand and cutting through the noise. Also, you get a higher return on your advertising spend, and your marketing works better for you. For more mature brands, you should be spending 60% of your budget on brand and 40% on performance. It may not always be the case but always think about brand. Brand does not necessarily mean it’s a logo or it’s a copy. Yes, it’s a copy. That’s all parts of it.

Brand can also be executed from an organic standpoint where you have a YouTube channel and you’re investing in the content and reaching audiences. In that YouTube channel, everybody distinctively knows your brand through YouTube. That, in essence, is making your performance marketing a bit easier. This is also off the back of the fact that you know that your product over-delivers from a utility standpoint. From a marketing standpoint, Branding in 2023 is so important. I employ you to get that done ASAP.

The second point is cutting slack. There are some categories doing well in this recession. We talk about Primark, for instance. Primark is a value clothing brand in the UK. They’re looking to open hundreds of more stores. If you’re on the value end of the scale, as long as your messaging is right and your audience and customer base know that there is value, you are going to make a killing this year. On the other hand, if you’re not value-driven and you are somewhere in the middle, you’re going to struggle. If you are in the wrong category, you’re going to struggle even more.

Reducing your budget accordingly in line with macro trends might be the best thing to do. I’m speaking to performance marketing because if a macro trend indicates that coffee mugs were in a decline and you are now amplifying or keeping the same, it means that people in that market are not necessarily that excited about coffee mugs. You’re spending $500,000 in 2022 on social advertising and now it’s still declining. Would you still spend $500,000 because of your margins? The return on that $500,000 is certainly not going to be the same as in 2022. If it’s not, why do that?

You need to reduce your spend if trends are indicating that and focus, as I said in the first point, on brand, on content, on telling the message, on cutting through the noise, and on re-educating the market. Cut the slack accordingly. Look through your profits and loss, your P&L. Look at all your expenses.

Sadly, if you’ve overhired in the years past, in the boom of 2020, you are hired and you are on a spree, you may need to cut those overheads. It’s a reality. I hate to be the bearer of bad news but you need to look at all of your expenses. Let it run for this quarter if required. If the signals are still going in that direction, you need to cut your overheads.

I’m going to give you some tips on expansion because I did talk about expansion, which is critical in this period. You need to face the reality accordingly if the market isn’t in your favor and if macro trends are not appropriate for you. Tip number three or action number three from a marketing standpoint is to embrace organic. I put TikTok especially there. Why did I put that? It’s one of the places where you could be there for three months and amass 100 million views. Why wouldn’t you want to be part of it? Why wouldn’t you want to test such a platform?

You have to embrace more organic. People need to know you. You need to build audiences and then you need to convert those audiences to prospects by capturing their email, capturing their SMS, and continuing that fascination, that emotional connection with your audience in those new channels directly. At the same time, you’re still doing what you’re doing on the outside. Attention is the major currency.

Two episodes ago, I was speaking to Jake for Mid-Day Squares. You’re going to read the episode on the next episode. I had an interview with him and he was talking about how his entire marketing team is a bunch of creators, forward-facing creators, editors, and videographers. In his world, in the world of Mid-Day Squares, they’re producing media. They’re a media production company. Their marketing is media.

You need to embrace media. Don’t tell me how boring your product is. You need to embrace media. Video is a gold standard and then you use other formats to support video. Embrace that. Podcasting is a fantastic platform if you have the resources and if you can execute at the highest level. If you’re doing podcasting nowadays, it has to be with video. I hope this is all coming through.

Number four is to embrace earned media. Earned media is coverage from third parties about you because you’re interesting and you have a story. It’s about your story and not just you. This brings me to a subpoint, which is, what is your story? If I asked your customer, “Tell me the story of your brand,” would they be able to tell me your brand story? What is your story? Your story doesn’t stop at the founding story, that’s one story, but there are many other stories.

Are you telling that story? Are you being proactive? Are you learning to do PR? Do you have a podcast outreach strategy? How are you getting your brand name out there? Are your products media-worthy or story-worthy? Is the quality of your products worth a mention in your favorite magazines, both consumer and business? Earned media cut through that noise. As I said in point two, cutting your performance marketing means more focus on your organic and earned.

PR is key whether it’s a social media post or a profile speaking to you or a mass of social media conversations through hashtags and the like, speaking about your brand and your product offering or the press. If the previous happens, which is lots of people speaking on social media about your brand, the press will pick it up. It’s like vice versa but with more people. It’s the power of the people that drums up that attention from the media and then you proactively tell these stories through to journalists and the press. I’m going to get someone on PR to do a masterclass so we get into the nitty-gritty of how to get your PR done this season eight.

ChatGPT, that’s point number five in marketing. This generative AI will help plug in the void of lost personnel. I asked ChatGPT to write me a response letter to a duo who was interested in doing eCommerce coaching with me. I gave it a lot of context, I was like, “I spoke with Ben and Frank and they’re looking to launch a CPG drinks company and they need my help as an eCommerce coach to help them pass the ideation stage, product development, market launch, and promotion. Can you write me a letter?” It spat out a nice letter for me.

You don’t copy and paste it. You adapt it to your unique circumstances. That saved me time. I take my time when I type. I’m one of those people that take their time to construct emails. With that framework, it allows me to go through all of the structural bits, delete, and change. We’re using ChatGPT, our company, for writing job descriptions. I don’t know about you but we use Upwork a lot and PeoplePerHour for UK resources. We use Upwork a lot.

One of the roadblocks for Upwork is listing and getting jobs done. A lot of the time, it’s all about the who and not the how. You know what you want to do. When I know what I want to do and I know what it entails, I’m looking for who’s going to solve it for me. Sometimes it’s freelance and sometimes it’s a full-on job on LinkedIn jobs. We’re using ChatGPT to generate job descriptions for us regularly and it’s working. AI is your friend. AI is like an additional member of staff, that’s what’s in my notes, so don’t take it lightly.

Point number six is it’s time to humanize your brand. It needs a face. If it doesn’t, have one already. Your brand needs a face. What do I mean? You need to humanize your brand. It doesn’t have to be you, that’s the nice thing about it. It doesn’t have to be you. It could be either a creator or a group of creators. When people see your brand or see that creator, it’s almost synonymous with your brand. I’m talking about 2023 and the advantage of this is you are making another emotional connection with people because people make decisions on emotions and then they justify it with logic. 2023 is a year of emotions.

Most of the tips here I’ve given you are hacks to garner more emotion. These are the marketing tips, six of them. I’m going to repeat them again. Focus on brand, get a brand strategist on board, cut the slack, reduce budgets, reduce overheads, look at your P&L, embrace organic, TikTok especially, and use ChatGPT generative AI. Embrace AI. The final point is it’s time to humanize your brand.

Let’s get to operations. Operation is the boring part. No one talks too much about operations. You hear more on forums and social media. You hear a lot more about marketing, growth, and all that. That’s the exciting bit. What makes growth exciting is operations at the back end, which nobody glorifies as the back end. My one tip with the operations is infusing agility in your product development, the lifecycle.

By now, you should have known the importance of product launch cadence, that’s an important thing. As a brand, you are regularly on a schedule. It could be once a year or twice a year. I don’t what business you’re in. It could be once a quarter. You are releasing products that appeal to your core and secondary base consistently. That needs to be agile. You ask, “Why does it need to be agile?” I talked about value. Remember the macro trend we talked about where 2023 is for a large part value?

I have a coaching student that has, for the large part in 2020, launched a record-breaking product in the automotive space. It was brilliant timing. All that happened in 2020. They released it and it set sales records across the board. No other product category had ever done what this product has done. It was a premium product. This past four months, when we look at the data, we’re noticing that there is a decline in demand.

One of the conversations we’re having and actions that’s been taken now in that particular brand is we’re going to release a value range. Rather than having to discount over discount and lose intrinsic value by over-discounting over this period, let’s go back to the basics. Let’s create a basic line that still delivers 80% of what this signature or flagship line of products does so that we maintain and drum up demand and even potentially grow through 2023.

The nuance here is slow down your product launch cadence but be more agile in your product development to cater to the macro trends you are seeing, which, in most cases, is value. how can you tweak your offering in a way that value is appreciated at a price that works without diminishing your entire brand’s value proposition to the market? That’s a big thought. That’s point number one.

Point number two, which we are exploring personally in our brand, is geo-expansion. If you’re in the United States, it may or may not apply to you. It can apply to you in the United States. I know some US brands that do not even sell to Canada. I know Canada is, in many cases, a fifth of the US market. Here in Europe, there is a massive opportunity in the UK. Many UK brands have always been selling nationally in the UK.

One of our growth plans is an aggressive European expansion, this is through our Amazon. It’s hard work. You’re talking about translations and you’re talking about packaging. You need to rethink everything, the supply chain, stock, and taxes. Let’s not talk about taxes. There’s so much involved. Imagine putting your head down over the next two quarters and getting products into another geo. That will help. With our UK sales, we’re 15% down. Because we are constantly expanding in other European geos, we’re not noticing that 15% down, we’re growing in small increments.

Point number three is to use debt. In business, debt is time. Money is time. Money is the way we quantify time. Nothing replaces time and life, that’s the core reality. Human beings are not perfect. We’re shoddy beings. We can’t reinvent time. Our translation or manifestation of time is money. Debt is time. Debt buys you time. With time, it buys you time cashflow. You don’t have to expend too much.

I’m going to be interviewing one of the founders of a European inventory finance company. In the past, I’ve interviewed the US equivalent. With inventory finance, it’s one of the things that’s helping a lot of brands. You’re paying your suppliers today through their service and, in 90 days, you start to pay them with 3% interest rates. It all depends. This is not financial advice. Cleverly utilize debt. I do not personally guarantee because I want to protect my wealth, my family, and the interest of my family. That’s just me. Use debt effectively in 2023.

I watched the snippets around revenue-based finance being a scam. If you use an RBF and it works for you, it’s worked for us, the ease of access to the funds and the ease of the way it’s paid, for us, it’s worked. We use it sparingly. You shouldn’t be on RBF all year long. You should use it quite strategically. Also, plan. We have a fractional finance director in our company and she puts on models. She puts in all sorts of business finance models for us to plan well ahead.

Debt buys you time, that’s been my takeaway about debt if used well appropriately. You definitely use debt for inventory and use debt for marketing, not speculative marketing but strategic marketing. Use your business charge cards. Business charge cards are so helpful, they buy you 28 days in terms of cashflow. Use debt effectively. Don’t take on debt you can’t afford. Use debt.

Point number four in operations is to embrace generative AI. It’s my second time saying it. In operations, here are four use cases, drop descriptions, canned responses in emails, product descriptions, and template generation. The list is endless. You get the drift, you get the point. Use generative AI. Let’s say you’re frustrated and you want to reply to a customer and you don’t have very kind words. You could put the unkind words into ChatGPT and say, “Could you please rewrite a more polite sentence for this sentence here?” It will churn out and then you do it. ChatGPT is your personal assistant both in operations and marketing, use it regularly.

My bonus point in operations is, if you haven’t already, go wholesale and start to look for other channels. Wholesale might be an opportunity to double down on and use. There you go, those are my ten key takeaways for 2023. In operations, I said to infuse agility into your product development but slow down your product launch cadence if your overhead is hold up. Number 2 was geo expansion, 3 was to use debt effectively, 4 was to embrace generative AI, and the bonus was to embrace wholesale if you haven’t already.

If you enjoyed this podcast, there’s more coming from me. You’ll learn directly from me because I realize that people don’t know how I think. I don’t go on other podcasts, which is going to change this year. I’m this humble leader and I listen to a lot in the podcast and ask questions. People say that I ask good questions. People enjoy the experience. Most guests who come to this podcast often say, “Kunle, that interview, I enjoyed it thoroughly. You’re a great interviewer and all of that stuff.” With the latest format on the podcast where I want to get into the story, it bridges a connection between me and my guest.

You’ve got to learn more about me. I need to change things up a little bit so you learn where we are going. I’m operating an eCommerce business. I work with a group of eCommerce students or eCommerce operators. You deserve to look under the hood. I need to shed a bit more light on what is going on and what my thoughts are on specific things, specific trends, and specific ways of doing things. You deserve it and that’s what this is all about.

Feel free to reach out to me, I’m on Kunle@2XeCommerce.com. If you have any questions and if you have any feedback, and if you haven’t already, definitely leave us a review on your top podcasting apps. Spotify has a star review system now and Apple Podcast allows you to give a full-on review. If you enjoyed this, definitely give us a follow and review on whatever podcasting platform you access this. All the best for the rest of the day and the rest of 2023. Ciao.