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E129: Mark Mikkelson

How Merchants Can Utilise Their Shipping Process To Increase Their Sales and Cope With High Demand

mark mikkleson guest on ecommerce podcast ecom@one

Podcast Overview

Do you constantly feel attacked by the pressure and high demand of shipping ? Don’t worry, we are here to save the day. We understand the struggles that can come with the super mission of shipping. 

Shipping is one of the key elements to success in your company as a merchant and it’s easy to tackle with a few steps. Hundreds of businesses worldwide lose customers and drain their retention by ruining their shipping routine and letting people down, this won’t be you. 

In this episode Mark explains the biggest mistakes merchants are making that are leading to failure with shipping and how, on the other hand, you can utilise shipping to increase profits across your company.

eCom@One Presents:

Mark Mikkelson

Mark is the Co-Founder at Shiptheory, a flexible shipping rules engine that allows you to create simple and complex shipping rules. Mark has been in the world of eCommerce for years now, from starting by building stores to co-founding Shiptheory in 2016. 

In this episode, Mark dissects the key to utilising shipping to increase profits and explains the greatest tactics to battling high pressure and demand in the shipping world. He tells us the opportunities for retailers over the next few years, the best shipping system to put in place and so much more.

Tune into this episode to perfect your shipping system to retain customers and increase profits from the intelligent wealth of knowledge from Mark Mikkelson. 

Topics Covered:

1:54 – How Did Mark Get Into The World Of eCommerce 

4:39 – What is Ship Theory? 

5:50 – The Biggest Mistakes In The Shipping World

19:50 – How To Reduce Returns At Christmas 

28:00 – How To Handle The Pressure Of International Shipping

34:08 – What Opportunities Is There For Retailers In Economic Uncertainty 

38:50 – Where is Shiptheory Going In The Next 12 months

40:35 – Book Recommendation 

Richard:
Hi, and welcome to another episode of eComOne. Today's guest, Mark Nicholson, co-founder at Shiptheory. How you doing, Mark?

Mark:
I'm good, thank you Richard. And you?

Richard:
I'm well. I'm very well, thanks. I'm joking because... I'm laughing, I should say because I was just saying to Mark how I've got a bit of a flu at the moment, so I am fine, but I am bugged up with a bit of flu. But hey, the show goes on. Hey, Mark?

Brilliant. Oh, dear. So I think it'd be great to kick off and tell our listeners a little bit about how you got into the world of e-commerce and shipping.

Mark:
Yeah, sure. Years ago, back in early mid-January days, we started building various Magenta stores and it took us down a path of building out Magenta extensions. We ended up getting asked to build UK Mail, now DHL, but UK Mail's Magenta extension, which then sort of set off a chain reaction of building out the UK carrier network as a set of extensions and publishing them in the Magenta marketplace, which then these things just suck you in. So then we got contracted into sort of third party order management systems, these kind of things. If it wasn't the carrier asking us to add them, it was the channel asking us to add their carriers to their channel. So we just got sucked straight into the whole world of e-commerce and particularly carriers. And yeah, it's ended up getting me to where I am now.

Richard:
Also, actual merchants asking you for that sort of function as a plugin, if you like, or a...

Mark:
Yeah?

Richard:
Or a Magenta.

Mark:
Yeah. Yeah. Originally we'd built a Magenta store for some people that we knew and then they said, "Oh, is there any way you can connect the store to UK Mail, so we can feed the orders through?" Looked into it, and there was a way to build apps or extensions, and then we realized we could publish it in the marketplace. We published it thinking, "No one's ever going to buy this." And then within a week we'd sold 20 copies of it and we're like, "Maybe there's something here." And then a couple of weeks later somebody said, "You've done a UK Mail one, could you do one for Royal Mail?" And then as soon as we did Royal Mail, then it blew up in Royal Mail. Back then, there was very little support there. They didn't really have APIs and any of that kind of thing, especially in the UK. And we just got really pulled into it from the carriers, from the platforms and from the retailers.

Richard:
That's a great story, isn't it? We hear similar stories from e-com stores, "Oh, we just thought we'd try this thing, this little... We just decided to start selling a couple of things and then we got asked to try and sell a couple of bits," from an e-commerce store perspective, but you were trying to make something, you got a request from a client, "Can you make this, do this?" And now that became, I guess, Shiptheory and what the business is completely focused on now.

Mark:
Yeah, a 100%.

Richard:
So give us a bit of an overview of Shiptheory then.

Mark:
Shiptheory is... Well, a shipping automation platform. Effectively what it means is we allow retailers to book in shipments automatically or based on a set of rules. Then we do all these sort of laborious bits that need to be automated out, so sending things to printers, producing export documentation, deciding which carriers they go with, all the sort of very minute decisions people have to make, but it's scale, obviously, those decisions really add up and stuff like errors over 10,000 shipments, you'll make a bunch of errors, or [inaudible 00:04:00]. Yeah, that's what we do. We've got well on off 2000 retailers globally, but primarily a big chunk of our stuff's still in the UK because of our relationships with the UK carriers.

Richard:
That's brilliant. I love to hear stories like that. Obviously, you're solving a lot of problems and offering a solution to a lot of things that inherently can be quite troublesome in an e-com store. What are some of probably the bigger or more consistent issues you see and mistakes that you see merchants making with their shipping? What are some of the things that our listeners should be avoiding or probably your tech and other tech can alleviate those problems? What are some of the biggest problems?

Mark:
One of the biggest ones would probably be underestimating the shipping provider. Whoever you are using for shipping, and boiling them down to really easy to mentally digest, but not necessarily the right way to think about it. For instance, I'm going to try and not use any carriers because I don't want to put them in any specific box, pardon the pun. But if you take a cheaper carrier and you say to yourself, "Well, this carriage is cheaper, so I use them because they're cheap." If you're selling glassware, obviously that shouldn't be a primary concern. There's certain carriers where if you're selling glassware you should use what they call a glove service where they never touch a belt. This will help. So people not understanding the value of a carrier would be a big one.

And then trying to save... Well, weighing up on price. Then they try and save money on carriage but then forget about all the money they spend on marketing. You'll see it a lot with online retailers, or I see it quite a lot, where they say, "Oh, we're getting a lot of bad reviews but it's not our product, it's because it's turning up late and it's not our fault." It's sort of your fault because you picked the wrong carrier, so go pick a better carrier. They'll be saving this little bit of money each month and then they amplify and act that issue by pouring more marketing spending. So for every 10 orders, there's one goes awry, then if you amplify that marketing spend.

That'd be sort of one section of it. The other section would be not having good systems. This is not some plug for us but good systems to be able to switch between carriers. It's a really good idea to have a backup carrier. Just got to look at it, and I will name some of them, like Royal Mail, obviously, in the news at the moment because they've got strikes and this kind of thing. And we've had a lot of people come to us say, "Oh, we're trying to move all our Royal Mail parcels to XYZ carrier either temporarily or permanently." But what will happen is every retailer in the UK will try and do that and then you end up with a backlog trying to get new carrier credentials, et cetera. So if you've got an app to hand already and then you've got a nice easy system where you can flick a couple of buttons and then it just all starts to filter over, it sort of adds in resilience.

Basically, being heavily reliant on a carrier and not understanding the true value of what a carrier does.

Richard:
Yeah, I think that's some great points. I think obviously the cheapest is not always the best, is it? That's very, very, very true. Obviously goes without saying, but trying to save 20 pence here. But then if, like you say in your example, 10% or even 1% of orders goes awry when you're doing thousands of orders a week, a month. If you're dealing with X amount, you've got so many bad reviews, et cetera. Obviously the end user consumer-buyer that courier is an extension of your brand.

Mark:
Yeah.

Richard:
They're representing you. Yeah, they might not understand that, okay, you did supply the product and the product is great, but if it's four days late it's the e-com store that's going to get the grief, not so much the courier really.

Mark:
Yes.

Richard:
If it's consistent issues then you want to have... Well price, it's important obviously, but it's not everything. And then-

Mark:
A lot of people buy for gifts so if you're buying a gift for somebody and it doesn't turn up on time, it's just the whole experience of it didn't turn up on time. It doesn't matter how good the gift was, they've been let down, I suppose.

Richard:
We had that example literally yesterday. I ordered something, I won't go into detail exactly, but I ordered something that I needed for last Saturday. It was for a car, it was a car item to go into a car. It is a bit of a weird one, but it was to go into a car to then take a car to a car show, to show this thing in the car. Well, I could have bought it from loads of other places cheaper if you like, but one particular firm said they could get it here at a certain day earlier than the rest. So I went with that firm because I needed it for this car show. It didn't arrive and I paid a premium for it. It actually arrived yesterday, 10 days after I ordered it.

Mark:
Oh, wow.

Richard:
Unbelievable.

Mark:
[inaudible 00:09:22].

Richard:
It's only a low-value item, it's only literally pounds. But it was quite a key item. Everyone would think, "What the hell could that be?" It's actually useless to me now so I will never buy off that company again.

Mark:
Yeah.

Richard:
I'm not going to make a big deal of it because it was a small item and whatnot but it was just like, "Oh, that's-"

Mark:
Yeah, the return business is just online. So all that money they used to capture you as a customer is entirely wasted because if they'd spent an extra five pound on shipping, they might even lost money but they would've kept you as a customer long term, which is what should be.

Richard:
Obviously, and then having those alternative carriers as an option in the wings and obviously with different tech like yourself, obviously there's other options out there that is available at a flick of a switch as you said. You can write, "We'll turn this one off, we'll put this one on." Or, "There's a strike on this one," or, "there's some issues in certain post codes with this one." Obviously, different tools, different systems can automate things like that and I guess that's what Shiptheory can do as well.

Mark:
And if you have an alternate carrier you can start playing around with offering additional services just for that carrier just to see how it goes and we can potentially upsell in that sort of area.

Richard:
That'd be a good point to jump in on then. Having various options with couriers. Carriers? You say carriers, I say couriers.

Mark:
I don't know. Yeah, carriers, couriers. Depend if I'm sort of in the American world or the British world I do think. So yeah, let's stay with couriers then.

Richard:
Couriers, carriers, deliveries.

Mark:
Yeah, delivery is [inaudible 00:11:02].

Richard:
So how can merchants increase sales through...

Mark:
Yeah, one of the best ways to think about it is that... I mean, there's been a lot of research over the years. The easiest way to put how this could be done in any clever way is to think about the most basic way. So you've probably seen stats like 10% growth by companies just by offering free shipping. So there's been lots of studies and they tend to always come out 10 to 20%. If somebody's not ordering free shipping and then they add free shipping as an option, they grow by 10 to 20% depending on who's done the study, usually backed by a courier.

But if you think about what that can also mean is that if you start gamifying, but if you start playing with what qualifies for free shipping, you can increase your average spend on an order. Like I said, there's been a bunch of studies but there's a big study by UPS a few years back and it's showed that 52% of Americans, over 52% Americans, have bought additional items just to get the free shipping. So depending on your pricing points and depending on what your price level of getting free shipping is... So if you're clever of everything, if you make everything sort of 9.99 and then you make your free shipping it, I don't know, 29 or 30, it means somebody needs to buy basically four items. Playing with these sorts of things is a really good way to increase the average spend.

So that would be how to increase the revenue side of things and increase sales somewhat. But if you think about... Years ago, back in the Magenta days, I remember when one-page checkout sort of thing and everyone "It's all about reducing friction." And, "Every page you show them decreases the chance that they're going to buy. And it's the same with shipping. The less options and the more expensive it is, the increase of them dropping off. So if they're at the level of £98 for the order and in their mind they were only wanting to spend £100 and they come to the shipping page and then they got to pay £7, now it says the total is £105, they're then thinking, "Oh do you know what? I didn't want it that much. This is the sign. Okay, I'll come back to another day." Sale's not going to happen. So it's somewhat about having a smart shipping strategy, you can limit the opportunities for people to make an excuse to bail out.

And then obviously you can start upselling. So one of the good things I've seen is people upselling insurances. Most couriers will offer an insured service but a lot of retailers don't tend to use it because it is more expensive. But why not just pass the choice onto the end consumer and let them, and then add an additional markup on it and it can increase volume. We've got people that do 10 to 20,000 shipments a day, you've only got to make an extra pound on each item in shipping terms of, say, maybe half those orders and you're making crazy money from it.

And then there's other things to bundle in. We've recently added in the ability to offset deliveries with carbon credits and some of our retailers will do that primarily for their green credentials and they tend to foot the bill for it, but some of them pass it on as an option a bit like how airlines used to do it: "Do you want to carbon offset your trip for an extra couple of quid?" And it's the same, you could use a service like ours to carbon offset any shipments in a certain set of conditions and then have the end consumer pay for it and potentially make markup if that's what you're trying to do. There's some quite...

Richard:
That's a great list, Mark. That's some cracking stuff there. As you were saying, there's quite a few things there I've not come... Well, some I've come across, definitely, and some of them I've not. The carbon credit side of things on shipping for e-com, yeah, that is brilliant. And I think that along the lines of encouraging people, they want that free delivery? They've got to spend a threshold based on spend. Obviously what you're doing there is increasing the customer value, customer lifetime value potentially, but that particular order value is obviously going up. That's the difference between make or break with a lot of merchants. If we can get the order value from... If the average order value is £30, we can shift that to 35, 40, £45. Put that over a year, put that over tens of thousands of orders, it's a huge impact. And then you layer that in with carbon offset, you can layer that in with different upgrades potentially where you're getting a pound here, a pound there sort of thing. All of a sudden, standard shipping the old fashioned way compared with layering in two or three of your ideas there, it becomes a profit center as I would say where you are getting a lot more average order value, which is absolutely key in this climate I think. So that's good. Yeah, there was a lot-

Mark:
I think also the more you increase the order spend, especially from international stuff, the less chance you'll get returns, which is really odd. So you'll end up seeing, if you can get somebody above a certain threshold, they just want to make the order work in their mind, they build it up in their head. Depends on the different verticals but especially in the tech stuff, you think about someone buying a laptop, of all the bits. They buy all the bits, they're a lot more committed because they bought the headphones, they bought the mouse, they bought all the bits so they've actually spent way more and there's much less chance they're going to send it back, that kind of thing because, "Oh, I really like the mouse and that makes up the fact that the keyboard's not great."

Richard:
I have to admit, with returns, I think quite a lot of the time personally I can't be bothered to send stuff back. And my wife's like, "What are you doing? Why have you not sent that back?" And half the time, I can't be bothered. It's just like a time-value exchange sort thing, "Oh I've got to pack it, I've got to take it." I know you haven't nowadays, a lot of the time obviously the couriers will come to you and get it.

Mark:
You've got [inaudible 00:18:00] coming out.

Richard:
I know, it's lazy really. It really is. But returns, while we're on returns I think that's a good place to go. Returns, obviously Christmas. When this episode is aired, Christmas will literally be around the corner. But regardless of when you're listening to this episode, obviously Christmas period, there's a huge spike for the majority of stores. Not all, but the vast majority I would suggest. I know in our agency we've got hundreds of projects we're working on and I would say 90% of our clients it's a huge, huge time of year for the majority. What would you suggest and what recommendations have you got to try and reduce returns at Christmas?

Mark:
Reduce returns? I think there's obviously two avenues. In the tax world it's like return avoidance. So return avoidance would be obviously avoiding people actually returning stuff by... For instance, if you're... Clothes is a really good one, depending on which country it's. I mean, think in Germany the average return is like 30, might be higher than that. It's crazy. So if you're doing clothing, publish your returns data in a very digestible way on your product. You've probably seen it, you'll see it on Amazon. Basically, go and copy whatever Amazon do. But you'll see where they say, "People that bought this jumper in medium actually wanted... Half of those returned, they got large and then they were happy with a large, so are you sure? Maybe give yourself a remeasure because everybody knows clothes tend to fit differently from different suppliers and different retailers."

Then use technology especially on clothing show that have a virtual mirror, you get with glasses and all this kind of stuff now where you can try them on. There's a million plugins, really accessible and easy to use. Then gather as much feedback as you can from consumers. Reviews, obviously, but if you can get people to send you a photo of them wearing say a t-shirt they bought and then you put that on the product. Other people, I might see a shirt, I'm thinking, "Maybe I should buy that but I'm not sure if it suits my hair color," or something. And then I see somebody with my hair color wearing and think, "Yeah, I'm going to buy that." Or, "No, it looks awful on that person."

It's like crowdsourcing a gallery of, "You probably look like one of these people, roughly. Is this what you want to look like?" Then that sort of thing also allows you, isn't necessarily returns, but that allows you to increase brand engagement. So you could say, "Send us a picture of you wearing it, and then we'll send you a free, one of our shop t-shirts." Tend to be cheap but people do send them free stuff.

And then for non-[inaudible 00:21:13] and returns, have a good support processes from your customer support to troubleshoot. Because a lot of times people return things just because they think it doesn't work. They actually wanted it. They bought it, so they obviously wanted it to work. But they think, "Oh I'm too stupid to get this working," or whatever the thing is, "I'm going to send it back and feel a bit defeated and a bit let down." And you speak to somebody on the phone and say, "I've got a little guide here. Have you tried holding down the button for three seconds and then say..." "Oh, no. Oh, it does work. Okay, thank you so much." And then they go from being really disappointed to... The value added by that retailer is they're not blaming the retailer for the, in their mind, faulty product. They're thinking, "I'm either too stupid to work the product or this product's junk and the manufacturer's junk." Then the retailer's value is like, "No, no. This is how it works."

A bit like in the old days when you went into a shop and then they show you how to work the telly you buy off them, now you do that and then you go on Amazon and buy it cheap. That sort of process would be... So we've got a little returns product that we use for retailers and that's the sort of thing that people tend to do, and so they have a bunch of avenues or rules to say, "You're returning this SKU, and you've ticked its faulty or you can't get it to work. Have you tried these troubleshooting tips?"

Richard:
Yeah, I think that's-

Mark:
Tend to get great number of reduction.

Richard:
A lot of great things there again, Mark. A lot of good stuff, I think. Yeah, stepping back a couple of bits that stood out for me. I think especially in the clothing game, I know certain sizes, I'm a big chap, six foot seven. And certain brands, the XXL that should fit me does not fit me. But other brands, obviously their XXL fits me perfectly. So having that sort of advice note on that particular product, it's not just a sizing guide as a guide as in you want XXL in everything because obviously certain brands the fit is small [inaudible 00:23:21] so having that advice that is then... But automatically, so that has come from the feedback from your customers. Obviously if you are getting 20% return rate on a particular product and 90% of those people are saying, "It was too small, it was too small, it was too small," then there's a bit of data there, isn't there suggesting that just a little note on that product that says, "30% of our customers suggest that the medium is a little bit on the small side, and I've gone with a large." Well, you're going to order a large, aren't you?

So I think that's a really good one. And then I think just having that odd certain products again that have got maybe a technical element to them, if you've got a little note with that item in the box, a little guide maybe. Obviously, it depends on the volume of product variation and things like that. But a tech product, if it's a laptop it could be average order of what, 5, 6, £800 type of thing. Then a simple little note might save a big, big value product gain on return. And obviously, that's typically electronics for example. There's quite small margins isn't there in anything tech wise. I used to be in that space prior to this, [inaudible 00:24:38] the agency game and margins are horrendously tight. If you are consistently getting things back that are hundreds and hundreds of pounds, but for the sake of a little note or a little note to say, "Hey, don't get frustrated. Ring and speak to..." Have an actual person there that can help talk on a chat, jump on a WhatsApp, whatever it may be and help that person figure stuff out. Because it is very much make or break, the returns game, I feel.

It always used to bug a hell out of me. We used to always have probably about one and a half million stock in my old business at any one time, which that was by the buyer really. But then I'd go into our returns department, I'd look at my balance sheet as well and it just, "We've got 80 grand sitting in flipping returns." It was 70, 80K. When you're working on 10% margin or whatever it may be, tight margins, maybe it's probably less than that now. And I was in the computer business, it's probably less than that now on a lot of component-based stuff. So obviously reducing that down, absolute bare minimum, is the difference between making profit or not potentially. So I think some great ideas there.

Mark:
Yeah, I mean chucking in guides or that sort of thing during the picking and the packing process, that kind of thing is a really, really smart move.

Richard:
Yeah. So you can use some tech I'm guessing to identify you are hitting a certain threshold in terms of returns on certain products. So you could say, if we're getting above 5% returns on a particular SKU, that link could trigger to a customer support or a returns team to do something about it, to investigate and then maybe adjust the product description on the website could then reduce that returns back down to an acceptable threshold rather than just accepting it. Quite an easy change really that potentially.

Mark:
Yeah.

Richard:
Okay, let's talk international shipping. Seems to be that some people are very successful shipping internationally and some people completely avoid it and are worried and scared and connotations around international shipping and a few concerns, I think it's probably a better word. What would you say to people that are thinking of shipping outside of their local territory and what are some recommendations you would give?

Mark:
Recommendations? Maybe slightly anecdotal, but I would say that don't be... If you were shipping internationally before Brexit, this is out of the UK I guess, if you're a UK merchant, you were shipping internationally previous to Brexit and then you stopped because it was all a headache, it's not as bad as it was. And the reason it was so bad was primarily a lot of the, especially European carriers and even some big ones, were just really under-prepared for it. Partly because I guess the government were not clear or it just wasn't clear. And what happened was we had it in January, we were really hot on Brexit, we'd worked with loads of carriers, we'd built specific tools to show you a readiness for Brexit, to show you this much of your catalog is ready to be exported, you'd need this data for these products, this bit there for these products, and we were ready.

And it all worked except when it got to ports, carriers had missed out odd bits of processes and everything just started piling up in certain places, which had a knock on to other carriers, that kind of stuff. And I sort of will subside it now, but it's got a bit of a hangover and a lot of people have stopped exporting.

I guess look... Assuming you want to [inaudible 00:28:51] out of UK, then you should, especially if you've got a unique product or that kind of thing because we see some really good opportunities there. Make sure you've got your data up together and it's not that hard. You need four bits of data to ship a product out. Make sure you've got these bits of data to hand. And if you haven't, like I said, it's really reasonable to get a hold of. Just download your catalog from wherever you've got it in some e-commerce tool or wherever, and then just look up the quantity codes, look up the manufacturer countries, all those kind of things. There's nothing to it. Paste them all in, re-upload them, your data's ready to go. Then use a carrier that supports electronic data transfers and you're pretty much there for sending abroad. The only thing you then need to consider is who's paying the duty.

Richard:
That was my next question, yeah.

Mark:
That will come down to what type of customers do you have. So if you've got luxurious customers that are not price sensitive, you would probably want to just pay the duty and swallow it up in the advertised price because they don't care about the price, they want ease. They don't want to have to pay some guy on the door or go to some office to pay some duty, go online and do a form. They just want their stuff, since pay extra.

The people that are more price sensitive or you're selling a price sensitive product, that's probably where you want to be advertising the minimum price that you can get away with. And then obviously they will get charged customs at some point during them receiving it. Usually you get a text or an email saying prior that you need to pay this and it will come via the delivery company. But yeah, there is real big benefits to international. Returns are way down on international because you saying the time trade off for you for returns in the UK is... Do that internationally and it's just not worth it. Oh my god, spend 10 quid, probably get lost. It's complicated, or the address is weird. There's a lot of barriers people put up in their mind. Also-

Richard:
The short version is there's a big opportunity for international for the UK businesses. Obviously then it's working with the right courier or partner to make sure they have the function facility there to deal with the different customs. Obviously different countries will have different custom rates, or not rate, processes, different paperwork, different countries, things like that. So it's working with a partner that can do that. But obviously if you can then take your products from one country to 10, and certain products obviously are going to no doubt perform better in different countries, obviously you can do your research on those countries by looking at the markets, just simply by doing some simple research I would suggest to see what the demand and what the competition's like in other territories, other countries, or other areas in other countries. And then testing a certain set of products.

Then obviously working with a courier that can facilitate the custom requirements. I guess depending on what you sell, have got the ability to, if it's a product that needs a little bit more care and attention, then you've got to obviously make sure that the products are getting looked after as well. But yeah, big opportunity. Great.

So, where should we go next? Let me think. A lot of talk about the economy and uncertainty at the moment, just seem to be, there's no escaping it. Unfortunately, in terms of the news and what's happening out there. It's a very real concern for many, many retailers, e-com stores. But what do you see, what opportunities do you see for store owners in the coming next six, 12 months, or next few months really. There's a lot of negativity out there at the moment around the economy, but do you see it as potential opportunities out there for store owners?

Mark:
Yeah, 100%. I think it is obviously worrying, but the smaller the retailer, the easier it's going to be and the bigger the opportunity. The bigger the retailer, the more stock they've got at hand, the more they tightly need to make a certain amount of sales, it's harder to turn. It's harder to turn the big ships quickly, right?

Richard:
Yeah.

Mark:
So for the smaller retailer, understanding how to beat a bigger retailer right now is probably very easy to test. Adding customization into what you're doing, you can start doing things that don't really scale because you're just trying to test things out. So said in a sort of "startupy" word, do things that don't scale and then worry about scaling it later.

We see a lot of retailers where they're starting to look at how to add value or perceived value, so adding in customized notes, that kind of thing into their orders. We've got a bunch of services for that. And those sorts of things tend to increase sales. So one thing I'm sort of referring to here is we've got this some sort of AI thing that draws or makes it look like it's a handwritten note. It's like, "Hey Richard, thanks for your order. My name is Mark, I packed this today. I saw you bought a custom steering wheel for your car. I saw this and I thought about this, and this product here, loads of people buy this." I don't know, it goes on the dashboard.

Richard:
Yep.

Mark:
Cleans your steering wheel or something. Then people really engage with it, because A, they'll read it because if you get a leaflet in a box, you think, "Well, it's just junk. I'm not going to read this, so I'm off it." But if it looks like somebody's actually gone to the effort of writing it, you take it to heart. And we found people sort of increasing their upsell to 20 to 30% with those sorts of things.

Now, if the market has got a downside of 20, 30% and then you add in something like that, you basically bring it even so you actually haven't shrunk. And that for some reason might be a goal.

Then the other thing is sort of a bunch of what we talked about. Look at how you can do upsell on shipping. Look at how you can increase... Play around with the numbers. The last couple of years for the average e-commerce retailer, and this is for the ones listening, I hate this, but we've had it pretty easy in some respects. A lot of it's been supply chain issues, but from sales and demand, there's never been greater demand. Like, lock everyone in their house and then give them some cash and stuff. Obviously, everybody goes and buys things. Now it's sort of a flip, so everybody now essentially overstocks this.

Yeah, the opportunity is not... I don't think it's that bleak. It is harder for the bigger ones. But you might start shipping internationally because you're going to look for it. When you're hungry is when you're the most dangerous.

Richard:
As a smaller merchant you can be a lot more nimble, you can sort of implement something quite quick. You think, you mentioned there about handwritten notes. Well, how quickly could you start putting handwritten notes into your packages as a smaller merchant? Probably tomorrow. Whereas if you're a bigger merchant, that's a bigger investment. Obviously there's different tool systems can do that or you could actually physically write them yourselves and get people to do them. You may be a little bit quieter in the warehouse at the moment or in January, February, put a bit more effort. We've done various other episodes on the customer service and that experience piece. Use that time potentially to be ringing customers, to get more feedback to then improve, improve, improve. Then you can use that feedback to then tweak some of the marketing that maybe isn't as successful as it was.

But yeah, I think opportunity, just how quick and nimble you can be as a merchant to implement things, try things, change things around you.

So next 12 months, what's on the roadmap for you guys at Shiptheory?

Mark:
We don't have much from a product standpoint of view. We are just focusing on helping our current merchants, basically what we're talking about here, which is helping them increase demand or account for any dips. Like I said, we've got a few marketing products we're rolling out to them and just really understanding what people can survive with and without as a retailer and what bits they really need to further automate.

So yeah, we don't have anything aside from... Because the last three months we've launched four different products. So one was the handwriting thing, one was our finalized returns platform. And those sorts of things are what we're focusing on with retailers now. And we've started doing a lot more in the US, so I'm back out in the US in January. So onboarding more US retailers, we've just onboarded a big household name there. That's been pretty good. But yeah, nothing groundbreaking.

Richard:
No groundbreaking.

Mark:
No fireworks.

Richard:
Yeah. Okay. Well, thanks for coming on the show. I think it's a timely episode, given a lot of people, a lot of merchants, have a lot to think about on the shipping side of things. I like to finish every episode with a book recommendation. Do you have a book you recommend to our listeners?

Mark:
A business book or?

Richard:
Anything. It doesn't matter. It can be... It's hard to probably find a book on shipping, in theory, I'm sure.

Mark:
No, that's cool. I can give you one of each, right? If that's okay.

Richard:
Yeah, I ask for anything.

Mark:
Good to Great by Jim Collins is like the standard business book, but-

Richard:
Think it's right there actually, somewhere there.

Mark:
Okay. But if you want a little bit more of a fun book, maybe Chaos Monkeys by Antonio Martinez. It's like the early Twitter... Well, it's got a Twitter theme to it. But then a fiction book. Neuromancer, by William Gibson is my favorite book.

Richard:
Say that one again, sorry.

Mark:
Neuromancer, it's by William Gibson, it's from the eighties, it's a sort of Matrix, the pre-Matrix book. Everybody's cyber-genetically enhanced, that kind of...

Richard:
Okay.

Mark:
Blade Runner-ish.

Richard:
I might wait for the film on that one. Thanks for calling on the show, Mark. For those that want to find out more about yourself, more about Shiptheory, what's the best way to do that?

Mark:
You can go to shiptheory.com or find me on LinkedIn. I've got a really unique surname, hopefully. So yeah, come find me.

Richard:
Brilliant. Thanks for coming on the show and I'll speak to you-

Mark:
Thanks for having me.

Richard:
Cheers, bye.

Mark:
Cheers. Bye-bye.

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