Once hailed as DTC darlings, brands like Warby Parker, Casper, and Our Place relied heavily on paid advertising to drive growth. However, with rising customer acquisition costs (CACs) and changes in Apple's iOS updates, this growth-at-all-costs model is no longer sustainable.
As a result, brands are now exploring alternative marketing opportunities, such as using UGC and influencer content for paid media, influencer marketing, community-building tactics, and more, to attract new customers and improve attribution accuracy.
Recognizing this shift, Rishabh Jain and Shreyas Kumar founded Fermàt, a platform that enables content-native distributed commerce. By creating stores for every piece of content that simplify the buying process and provide analytics, Fermàt helps brands like alleyoop, nood, and Goodles maximize their paid marketing efforts.
Here, Jain shares his unique perspective on the content commerce opportunity and how brands can leverage it to supercharge growth and optimize paid marketing efforts.
The Evolution of Customer Acquisition
Thanks to Apple’s iOS 14.5 update in 2021, ecommerce brands could no longer track users from one website to another, rendering traditional customer acquisition methods less effective.
“At that time, the question was where consumers were spending their time,” explains Jain. “And, it was clear that they were engaging with content made by creators.”
Jain saw an opportunity for brands and creators to get more leverage out of their content beyond affiliate marketing. Plus, he realized that there were no proper tracking mechanisms for tracking and understanding the sales and larger results creators drive for brands. This prompted him to ask, “How do we make creator campaigns ones that are ongoing and active?”
This led him and his cofounder Shreyas Kumar to build Fèrmat, which allows brands to build unique, shoppable storefronts in seconds for every piece of content, enabling a closed loop for every point in the funnel.
How does it work? Influencers make content, the brand runs it in paid, then they drive consumers to a shopping experience powered by Fermàt that feels like they’re shopping with the content creator.
“We believe that you can leverage more out of that content. And, we can help you drive native shopping experiences that you can put organic and paid media against.”
The Intersection between Creators, Content, and Brands
According to Jain, brands face three main challenges when working with creators and influencers:
- Obtaining enough content to test and evaluate campaigns
- Maximizing ROI
- Measuring campaign effectiveness.
Tracking and measuring attribution is incredibly complex, especially when working with multiple creators and 50+ assets.
Without Fermàt, brands are forced to drive traffic to their site, losing the ability to track the effectiveness of their campaigns. Even with a UTM parameter, they are still unable to track what happens in between. Why? Apple’s updates have left brands with even less visibility, as consumers can choose whether or not their activity is tracked.
“Typically, you have no idea what happens in the middle of the funnel,” says Jain.
Instead, Fermàt's unique model takes consumers to a micro-site where every part of the funnel, including navigation, add-to-cart, and transaction, takes place. It’s the intersection of commerce, brands, and creators.
Full-funnel analytics are possible, on a content-by-content basis, providing insight into how behavior changes based on each creator. "Now, you can do full-funnel analytics," explains Jain. "You can see how behavior changes based on each creator you partner with, and answer the question: What is each creator doing from a content POV that's driving different behaviors in the purchasing cycle?"
“Fermàt fundamentally changes the structure of your purchasing flow and therefore how you think about and optimize marketing.”
Best Practices and Results
Fermàt is primarily used by ecommerce brands for their paid media campaigns. Some brands have even used Fermàt for in-article shopping, driving to a shoppable Fermàt experience instead of a PDP.
When it comes to best practices for brands using Fermàt, Jain has a few tips to offer.
First, content, where an individual appears to be talking about a product, tends to be the most effective. Second, products that are easily reconcilable work best, as customizable products may not be a good fit. Lastly, brands should be actively spending and investing in paid media, typically with at least half a million in monthly spend, to see significant results with Fermàt.
What are the results? Hero Bread, one of Fermàt’s clients, saw a 63% increase in ROAS, an 85% increase in AOV, and an 8% of DTC sales driven by Fermàt. Alleyoop turned to Fermàt to find new ways to increase conversion and maximize ROAS. They harnessed Fermàt to create an embedded, in-article shopping experience. They saw an 8% in-article conversion rate and a ROAS increase of +40% above the brand goal.
“Content directly drives commerce. It used to be that content was for awareness. Now, it leads to transaction.”
Musings on TikTok
According to Jain, TikTok is surprisingly less effective at driving sales on its platform compared to Facebook. While 10% of brands have succeeded on TikTok, the problem is that only a small percentage of brands can do exceptionally well.
Jain suggests that the remaining 90% of brands should not focus on trying to master TikTok, as it may not be a worthwhile investment. Instead, invest in the channels that work best for your brand.
If TikTok happens to be one of those channels, that's great, but it's not worth spending a lot of money and resources trying to crack the code.
“The better thing to do is invest in channels that very clearly show you ROI.”
The Future of Creators
Collaborating with creators and influencers is now a given, but brands are more focused on performance than ever before. In the past, brands would allocate more of their budget to awareness campaigns, but now everything is performance-driven.
What does the future hold for creators? The data shows that creators earn money through brand engagements and sponsorships. Rather than pretending that creators should explore other monetization methods, Jain suggests that we embrace the reality that advertising is an effective and valuable way to monetize.
He believes the next step is to rethink the monetization model. Large creators typically receive flat-fee-based deals, but with the latest technology, it's now possible to pay creators based on the incremental ROI that their content generates.
Jain explains, "Previously, this wasn't possible due to a lack of data feedback. But with Fermàt, creators can now have extreme clarity on the value and results they provide to a brand."
This allows creators to negotiate better and to do so based on performance. It benefits both the creator, who earns more money, and the brand, which gains greater certainty about ROI.
“The opportunities are endless.”
- What to pledge
- How to improve
- Which tools will set you up for success
I think the most important thing brands can do in 2023 is to better manage their customer data—both ethically and effectively. There’s an opportunity for brands to know their customers better than ever before—a clear benefit for both the customer and the brand. When you manage your data correctly, you’ll create stronger and more personalized ads, creative, site experiences, and so much more.
This is a classic: Let the data guide you. Go where the buyers for your products are and communicate with them on a personal level (i.e. by persona and funnel position) and nurture those relationships (past, present, and future customers). It’s possible—all through data.
We recommend that Shopify brands analyze and update their websites using data-driven decisions. Using analytics tools such as heatmaps and scrollmaps can help brands better understand how customers are interacting with their store.
Store owners tend to make assumptions about the way customers interact with their website. Most never go back and analyze their design choices to find pain points or areas of opportunity. By using heatmaps and scrollmaps, they can see where real customers are clicking and concentrating their attention. Leveraging this data, brands can start to iterate on design and make their online store experience streamlined and intuitive.
Hotjar provides a simple way to implement heatmaps, scrollmaps, and recorded user sessions on your site, helping you acquire incredibly informative user data. Additionally, it gives you the ability to create on-site surveys, which allows you to obtain direct and often critical feedback from users about their experience.
Test various attribution models and analyze the impact on your business. At Fifty Six, we are always here to help our clients identify and optimize their approach—a critical step in any successful marketing strategy.
If I’ve said it once, I’ve said it a million times–Customer Lifetime Value. And even more importantly, Future Lifetime Value (FLTV). With the ever-growing importance of first-party data, it is crucial that brands take a good look at their CRM and FLTV metrics.
OrderlyEmails is our go-to tool for transactional emails. It helps us level up our brands’ email aesthetics with customizable, quick-to-implement Shopify templates.
Lately, I’ve been really interested in Smile.io’s loyalty platform. Their UX is fantastic for teams with low bandwidth!
Stop allocating budgets to low-hanging fruit that doesn’t move the needle on conversion. Think about what’s really going to improve your CX and the return of undertaking different initiatives—not just on what’s top on your list of bugbears on the site!
One of the best ways to understand your customer behavior is by using HotJar. Their heat-mapping and screen recording tools shine a light on where customers are navigating to and from on your site, where they're rage clicking and experiencing frustration, and where conversion is dropping off within real life customer journeys and flows!
Understanding your customers’ pain points via data and analytics , will allow you to work with your CRO/CX Agency to solve customer frustrations and improve conversion.
Rewind backs up all product, customer, and order data for Shopify sites—essential since Shopify itself doesn’t provide this solution. It's saved so many of our clients time and money from administrative accidents.
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33% of customer service inquiries are pre-sale questions. What does this mean? If you’re not investing in customer service, you’re missing out on revenue-generating opportunities.
The benefits of elevating your customer experience:
- 10% to 25% increase in AOV for customers who engage with live chat pre-purchase
- 21x higher conversion rate for customers who reach out via Live Chat or SMS compared to other site visitors
- 87% of customers who have a great customer experience will make another purchase
- 72% of customers share positive experiences with 6 or more individuals
Gorgias is our favorite Helpdesk platform. They can reduce costs by 35%, primarily by decreasing the average ticket handle time. Their machine learning algorithms are trained on millions of ecommerce-related interactions across Gorgias’ customer base and provide accurate, automated replies for the most common ecommerce inquiries. This helps our agents resolve tickets faster, which provides the customer a seamless experience.
Trust your agency! Agencies do the same things across multiple brands and niches, so we see the trends and have the practice and experience!
Don't be afraid of data and insights. If customers aren't clicking on your emails, try a new CTA. If your ads are driving good metrics at a small spend, start scaling. If your customers are complaining about a product, look into QA! If the data tells you something isn't working, let it go and try something else!
I'm supposed to say Tydo, right? 😉
Double down on differentiation. There will be a lot of headwinds this year and standing out from the crowd will set you apart.
A picture is worth 1,000 words. A video? Probably millions. In ecommerce that value translates into engagement, acquisition, and retention—everything you need to impact your bottom line.
At soona, we've seen the we've seen the impact of creative and the continuous split testing of it yield results. Our resolution is to challenge ourselves and double down on innovation and creative optionality so that each brand we work with can distinguish themselves in a crowded sea of D2C ecomm. We'd love to see our brands share this resolution and keep pushing the creative limits.
Klaviyo. We're using it to power our email and newsletter at soona too!
Optimize your returns strategy! This can lead to valuable customer insights, enhanced user experiences, and increased revenue and customer loyalty.
Brands need to dive deeper into understanding their customers to set themselves up for success. Conduct research to gain insights into customer needs, preferences, and behaviors. By doing so, you can develop targeted strategies that will enhance customer experience and boost overall retention.
Right now I would say Gorgias. Having a good customer service tool is crucial to building strong customer relationships.
Start paying heavy attention to data, specifically around retention. We see a lot of effort put towards acquisition with the assumption that once someone buys, they are your customer forever. Instead, get to know your customer, understand their needs, and analyze their behaviors once they are on-site and judge their sentiment after they have visited. Work with a retention focused and data-driven agency to implement tools that contribute to repeat business and customer delight. It will pay dividends.
When surveyed, about 80% of ecommerce merchants think that they are delivering a great experience to their customers. However, when the same customers are surveyed, only 8% of those customers think that they are getting a great experience from the merchant. Now, more than ever, retaining loyal customers is an essential part of any online business and you should spend time with your customers to judge their experience with your website and products and offer improvements based on that feedback.
Tydo's report cards are an essential tool, along with Klaviyo for email and SMS, Recharge for subscriptions and memberships, Okendo for reviews and surveys, Rebuy for AI driven collections and upsells, Loop for self service returns... each tool is great on their own, but their strength as the ultimate tool comes from when they are used together!
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Report Cards is a customized glimpse into your business, delivered to your inbox for free.
Report Cards consolidates all your key metrics across platforms for an at-a-glance pulse of your business.
Discover metrics for every team member so they can stay updated with the right data on a daily, weekly and monthly basis.
It's free because we believe everyone should have access to the basics.
Portfolio is a hub for analytics across multiple Shopify stores. The perfect tool for agencies.
See an aggregate view of all your data for all your stores in one place.
Make real time assessments on marketing initiatives across every storefront you manage.
Analyze the performance of one store versus another in seconds.
More about the project
Here at Tydo, we try to highlight DTC founders who run their business in various ways. And, that's because there's no "right" way to run a DTC brand.
This project illustrates exactly that. Whether it's how a founder supports their team or how they talk about mental health in the workplace, every founder has a different approach. How do they discover these different approaches? One way: reading. Discover the greatest books that have changed the way 15+ founders think about or operate their business.
You can also listen to these book picks on Spotify or Anchor.fm.