Retail Rundown: SMBs and the Democratization of Commerce – With Sara Hicks and Christine Russo

Julia Raymond Hare:
Hi everyone, today we are joined by my guest, Sara Hicks and Christine Russo. Sara is the Vice President of Retail at Mailchimp, the all-in-one email marketing solution provider used by just about everyone under the sun, including our team at RETHINK Retail. Christine is a retail consultant working in data analytics, inventory forecasting, wholesale sales, and brand growth. She also runs Connected Retail, which produces short-form video updates about the digitization of the retail industry. Sara, Christine, thank you for joining it’s great to have two women leaders on the show.

Sara Hicks:
Great to be here. Thank you.

Christine Russo:
Thanks, Julia. It absolutely is.

Julia Raymond Hare:
So today we’re going to talk a little bit about the small and medium businesses in retail. There’s some good news on that front, SMBs are starting to bounce back after last year’s lockdowns and tumultuous economic climate. What’s more, nearly 90% of small business owners say they are confident their shops will survive compared to just 68% who said no this time last year. The Business Times reported last week that PayPal is partnering with the Singapore Center for Social Enterprises, also known as raiSE to help SMBs transition to digital operations, which as we know is more important than ever now.

Julia Raymond Hare:
And many small businesses moved online last year, data collected by PYMNTS and numerous other studies indicate that the digital shift has become permanent. So, Christine, I’ll pass this to you first as an advisor, how has commerce evolved over the past year? And do you agree that the digital shift is permanent and it expected by consumers even for the smaller businesses?

Christine Russo:
Yes. And what I would say is I think pre-pandemic for SMBs, digital equaled e-com. And I think that there was a big learning curve where the definition of digital became more apparent to all types of retailers, so digital is basically non-store. So that can mean social commerce, that can mean through third party, that can mean live selling, et cetera. So the choices were vast, perhaps maybe a little overwhelming and that’s why there was that sort of negative sentiment a year ago. But digitization, truly it’s like our new way of saying omni, it sort of brings it more to roost on what that means exactly but then further to that is digitization is all forms of non-physical retail.

Julia Raymond Hare:
Yep. And you said digitization is a new way of saying omnichannel, we’re just changing the buzzword a little bit perhaps. Sara, what would you say about the evolution over the past year? And now that we’re seeing everything open back up to a great extent and small businesses coming back?

Sara Hicks:
Sure. Well, I completely agree with Christine about the digital, it’s beyond e-commerce. I like that digital is non-store and there’s no doubt that the pandemic has put e-commerce and outside the brick-and-mortar at the forefront of retail. Consumer spending, I think we’ve all seen the stats, it’s up over45% in the US just last year. Online spending as a percentage of total retail is also just surging. So we’re just seeing these huge shifts in consumer behavior, but we both know it’s still super early days for commerce, for e-commerce and for social commerce. So, I truly believe there’s just so much more opportunity ahead of us and the pandemic’s only just show showcasing that and I think we’re going to continue to see additional increases.

Julia Raymond Hare:
Mm-hmm (affirmative). And you both of you said it’s obviously beyond e-commerce. I did think it was interesting, the Goldman Sachs study is good, it seems optimistic, but I will say when they surveyed people a year ago in 68% said, “No, my business is not surviving.” And now almost 90% are saying, “Yes, it is.” I think that probably doesn’t include the sample who went out of business. So a little bit skewed.

Christine Russo:
Right, I was going to agree with you there, it’s a different subset.

Julia Raymond Hare:
Yeah. Yeah. And when we think about the different ways that smaller businesses can maybe be a little bit more agile and connect with consumers digitally without making insane investments, there are platforms that are becoming a very, what is the word? There are platforms that are becoming accessible to entrepreneurs, Twitter just announced they’re rolling out an option to tip other users. And then, of course, Patreon and OnlyFans have hit an absolute all-time high in popularity during the pandemic while some big box retailers have struggled in comparison. What do you think about these new forms of paid media or platforms to connect with consumers like Instagram Live and things like that?

Sara Hicks:
I can jump in, I think the moves that you’re talking about in the payment space, just in these last few weeks and months to me are super exciting, Twitter’s announcement, like you talked about, Patreon. Just this week Stripe announced a new product called Payment Links, which makes it possible to sell online without a website, no coding. I just truly believe that we’re seeing a surge towards this creator economy where anyone can be a publisher, anyone could be a marketer, anyone can launch a newsletter and even charge for it and make money for it. And I believe that we’re on our path towards anyone can become a merchant, and we’ll probably talk about that but I think these tools and these services and these payment solutions that are launching are perfect for small businesses who need to find new ways to attract customers.

Christine Russo:
I agree with you, Sara. I believe that the support systems, whether it’s FinTech aka payments or content creation platforms, Patreon, or even Twitter and their associations, they are recognizing the creative community and the creative community is relating to their tribes, and within their tribes, they’re able to monetize their content. And by the way, a lot of that doesn’t include Instagram. Instagram was sort of the leader, but now there are new forms that truly recognize the creator as the center, and they, the creator recognize their fans as their center. How that relates back to big retail is it just chips away at the overall dollars, right? Where you feel most comfortable is where you’re going to put your dollars.

Sara Hicks:
I agree. I think that’s very well said and I think Instagram is a really good point as well.

Julia Raymond Hare:
Mm-hmm (affirmative). It’s just really becoming more and more personal and the feeling that you can create these online relationships with brands is pretty cool. And it’s been around for a while now, but I think it’s really ramping up. And Sara, I want to ask you, you guys just launched some really cool things to help out SMBs. I was wondering if you could talk a little bit about Mailchimp’s new commerce features?

Sara Hicks:
Yeah, absolutely. So, Mailchimp just launched two new commerce offerings as part of our all-in-one marketing platform, and so this is Stores and Appointments. And if you think about Stores, we now allow merchants to create an e-commerce storefront for their business. We give merchants the ability to easily add products, configure their shipping, taxes and payments, and really just start selling online. And best of all, it’s absolutely free to get started. So going back to what we were talking about, making it accessible and easy for small businesses to establish an e-commerce storefront and kind of the rise of making it more available for merchants to compete, right? And our second product that we’ve launched is Appointments. So our Appointments features allow service-based businesses to create bookings online so they can manage their schedule, grow their business, and then their customers can go to their website to schedule an appointment and it all happens in one place.

Sara Hicks:
And of course, it’s all connected to our marketing platform. The storefront’s the first part, it’s how do you establish and nurture your customers and your audience? And I think that’s the power that we’re bringing to commerce, it’s commerce plus marketing. We’re already seeing some great examples of merchants using these new offerings, I’ll give you a couple of them. We have a woman, her name is Katie Aufenthie and she’s a pianist, a yoga instructor, an artist and she started selling macrame art during the pandemic. So this is her first e-commerce storefront, and it’s called Land of Luna and it just really gives her the ability to devote more time to making her art. We talked about that creative economy and she just was able to easily add her products, upload her photos and have an e-commerce storefront using our new Mailchimp Stores, so pretty exciting to see the adoption.

Sara Hicks:
We have another small businesswoman named Lindsey Smallidge, she’s a travel agent, and she’s now using our Appointments feature to help her customers to schedule consultations with her. And again, it’s these examples of small businesses using these features to talk to their customers and to build relationships with those customers and to grow their businesses online.

Julia Raymond Hare:
Very cool. And based on my experience with Mailchimp, I’m assuming it is amazingly easy. You came out with the drag and drop interface for building beautiful emails and that’s really what turned a lot of people onto Mailchimp, but you guys have grown and expanded how you define yourself over the years. I mean, now you’re almost considered an e-commerce platform, right? With the opening of stores?

Sara Hicks:
Yeah, absolutely. So you think of our origin, Mailchimp is an all-in-one marketing platform, we’re now really focused on being an all-in-one marketing and commerce platform. As you know, millions of folks use Mailchimp all the time for their marketing technology to start their businesses, to grow their businesses. Over 40% of our existing 14 million customers identify as a commerce businesses, so we’ve already been supporting commerce businesses and so this is basically us addressing what they wanted, they wanted to be able to use MailChimp to not only market their business, but to start transacting online, having e-commerce storefronts and setting up appointments.

Julia Raymond Hare:
Mm-hmm (affirmative). Christine, you have a lot of retail clients, and then you were a retail executive as well. What do you think is maybe the biggest hurdle for smaller businesses when it comes to opening these online storefronts? Is it choosing where to be? Like do you open an Etsy store, but you also have a Mailchimp store, do you need to be everywhere or choose one and do it well?

Christine Russo:
Both. So what we see happening is anyone who adopted and adapted early ended up in an ecosystem. So let’s say you early on saw how great MailChimp was and you’re in there and then you sort of had to stack out some of your other components, it’s a breath of fresh air to be able to stay in one place and have everything together so what we’re seeing is the rise of the leaders and consolidation. So the landscape is still very much, a lot of small great solutions that stack together to create the right digitization for a retailer of any type. And also at the same time, the early tech solutions, Mailchimp is one of them, is adding on and growing their reach to sort of provide that customer service like you don’t have to leave us to do these other things that have become absolutely apparent that you have to do them.

Christine Russo:
It’s good for the retailer when a single-source solution expands to other sources and does it well, and it’s good for the solution because it creates more stickiness. So there are multiple forces at work here, always the challenge with technology or solutions in general is what’s around the corner? What’s better? What’s the evolution? So sometimes you have a lot of resistance because it’s like, “Meh, let me wait I’ll just see what’s new coming.” But I would say that those 90% of small business owners that survived and then are more optimistic, did not sit around and wait for new things. There is constant adoption and awareness of new solutions and great solutions. This solution from Mailchimp is a great add to the marketplace.

Julia Raymond Hare:
Mm-hmm (affirmative). It definitely is. And Sara, you even mentioned another one that just recently got hype with Stripe, which I thought was good that you brought up because I saw that their valuation was, and I just double-checked online, but 95 billion. And it’s incredible the growth from 20 million in 2011 to 95 billion this year. So I’m sure we’ll be seeing a lot more services and features rolling out from Stripe for small businesses.

Sara Hicks:
Right. Absolutely. And I think we’ll see Stripe and many of the other payment infrastructure providers around payments or taxes or shipping or logistics and returns. It’s only going to get, in my mind, easier for small businesses that might not have developers or coding experience to really to like I said, to compete and to do so with the tools that are becoming accessible to the many, right?

Christine Russo:
There’s a lot of exponential growth in the solution provider side. Yes. We can expect to see a lot from Stripe, but Squarespace just went public so we can really pretty much expect to see new developments there. And to your points Sara, PayPal just bought Happy Returns. So this whole ecosystem that has emerged because so much of it has emerged from the, I’m not in a store. All these touchpoints are because I bought it through a mouse or my phone, and now infrastructure and service, flawless levels of frictionless service, frictionless returns, frictionless payments, just ease, frictionless selling. I mean, so much is the new Wild Wild West so you have a lot of funding and then also innovation coming.

Julia Raymond Hare:
Mm-hmm (affirmative). Wow, it’s moving so fast. The examples you just gave, it just blows my mind how fast things are moving, but we’ve come to expect it. And by the way, speaking of low code, Sara you were talking about maybe if a small retailer doesn’t have the staff to do coding and development, things like that. There’s a really interesting podcast, shout out to Jeff he’s one of our top 100 influencers, Jeff Roster and he has a really cool podcast that was all about what low code is, and it’s on his podcast this week Innovation so be sure to check that out if you’re listening. And I want to talk about the big breaking news from last week, we have to include it. But before we do, do you guys have any thoughts on, I don’t know if I want to call it silver lining of the pandemic, but the democratization of retail and how things are going to come back. Do you have any thoughts on that?

Sara Hicks:
Our motto at Mailchimp is to empower the underdog. We talked about this already, but we are seeing the rise of the creative economy and the rise of entrepreneurship. We’ve got these tools and platforms that we’ve been talking about that make it easier for merchants and businesses to thrive online, including what we’ve just launched with Stores and Appointments. I really do think we’re at the place where it’s going to be possible for anyone to be a merchant if they want. And that’s to me, is the first step in democratizing commerce is to make commerce more accessible to the many and not just the few and so we’re seeing these tools and these services.

Sara Hicks:
I know democratization of commerce is a big phrase, but I think we’re starting to see the shift towards that. We’re starting to see micro-businesses, small hobbyist sellers, Etsy sellers who are able to quit their day job and make a living online and by using digital tools and social tools and storefronts. So, I’m optimistic, I think there’s already a shift and a surge toward this and the pandemic helped that. And it will only, only continue in my mind.

Christine Russo:
I would agree. I think that under the guise of what the pandemic presented, it really is the technology that has evolved. I mean, the amount of evolution of solutions and tech providers that are available for creators is huge and growing. So had there been no pandemic I think we would’ve been here regardless, maybe what the pandemic brought was those creators to really have the time in house in lockdown to build their own personal brands, build their own personal hobbies, create. So there were dual factors happening, but yes, I would add that the democratization of retail on both sides, both from the seller and the buyer standpoint is here to stay.

Julia Raymond Hare:
Mm-hmm (affirmative). Both good points and Sara, you said the word underdog and the news that is the elephant in the room is Amazon finally was able to buy MGM Studios after a long time of trying. And it was 8.45 billion so almost eight and a half billion, you can’t even imagine how much money that is it’s insane. And I was talking with the team and I was like, “Yeah, it’s going to be time to cancel your Netflix and Hulu and Disney Plus, because they’re about to level up their streaming and production game.” But our producer Gabriella, she has some ties with the film production industry and she was noting, Netflix is also a top dog when it comes to production and they buy some of the best indie films that come out of the big shows like Sundance, and Hulu does that too. So it’s possible that there’ll be room for everyone, but it does feel more and more like Amazon just is always testing, there’s always big news. I mean, they gobble up so many companies. What do you guys think about it?

Sara Hicks:
I would agree, it has bananas. But I mean, Amazon’s got a lot of money, right? And they like to make bets. And so while it’s a lot of money, this is $8+ billion dollars, it’s a tiny amount for them to take a bet on something that might or might not pan out. And it’s also a defensive move, as you talked about, to keep MGM out of the hands of Hulu or Apple, they can spend to keep it within kind of their own umbrella and offer that to their Prime members. So I think it’s an interesting time for commerce and an interesting time for content and media. It’ll be fun to watch how it all plays out.

Christine Russo:
I agree. I think that you’re talking about major, major players in this space and what the pandemic revealed was just how much content can possibly be consumed plus more.

Julia Raymond Hare:
True.

Christine Russo:
You have an enormous TAM, total attainable market. You have people who have fractional shares of the existing market. And so what we’re seeing right on the heels of the pandemic, which meant these deals were going on during the pandemic, massive competition. I mean, these companies are not going to sit and watch another company take more and more share, massive competition and massive consolidation. So you have in a 10 day period AT&T on loading Discovery, and then you have Amazon picking up MGM. And then of course, they’re all chasing Netflix who makes no money, they not profitable. And then Disney kind of on the side as that little unsuspecting streaming service that took some of Netflix’s lunch while shifting a lot of consolidation and everyone’s getting in pole position so that we can see where they end up post-pandemic. And they’re all going after a combination of libraries and original content. And the one that has stayed out of it is Apple, Apple does not want to buy libraries. They only want to create their own content as their differentiation.

Julia Raymond Hare:
Very Apple of them. Yeah. Well, I totally forgot, I remember seeing the news about Netflix not doing well in terms of profitability a few years ago and they were making some changes to help crack down on people sharing their logins. But yeah, I didn’t realize Christine that they were still not profitable.

Christine Russo:
They’re not profitable, but they’re kind of not profitable like Amazon wasn’t profitable. They’re still seen as a major leading factor in the streaming world.

Julia Raymond Hare:
Mm-hmm (affirmative).

Sara Hicks:
Yeah. I would add that they’re not profitable by choice. I think they’re investing just so much in content and in people and in infrastructure because they have to right? They have to kind of to try to keep up with Amazon and Hulu and Disney and the others. So it’s definitely a race.

Christine Russo:
You’re absolutely right, it’s not profitable by investment. Which it’s funny some companies are given that card, Amazon was for a long time and Netflix is as well. And some companies just are not.

Julia Raymond Hare:
Yeah, absolutely. And did Disney acquire Hulu? I should know this, but I feel like it did.

Christine Russo:
Yes.

Julia Raymond Hare:
Yes. Okay. Okay. So a lot of movers and shakers, as you said, Christine, in this space. And yeah, you mentioned AT&T’s move as well recently so it’s going to be interesting, the streaming service. I think the point that was best is just about, as you said, the pandemic has showed how much media can be consumed. And just a personal story, the other week I was at lunch with some friends and we were comparing our screen time because I just asked, I was like, “Guys, I feel really pretty bad about my daily screen time on your iPhone.” And we were all comparing and I was not the worst, I was second to worst because the number one spot went to, I won’t name the person, but it was 11 hours a day average phone screen time.

Sara Hicks:
Wow.

Julia Raymond Hare:
And it’s crazy because I’m sure the numbers are just going to keep increasing over the years.

Christine Russo:
It’s funny, I was having an anecdotal conversation with a friend of mine and my point was, remember when screen time was a thing? Remember when Thrive came out and was like, “Don’t look at your phone.” It’s like all of that is absolutely out the window. I don’t even think it’s a thing anymore. It’s interesting that you guys were talking about it because it’s such a lens to the world it’s like, I almost would argue that if you’re not looking at your screen aka streaming news, reading the news, doing whatever plus entertainment, then you’re isolating yourself. So will that narrative shift? I’m not sure, maybe.

Sara Hicks:
Yeah. I think these are all really good points. I think our mobile devices have become productivity applications. It’s how we interact with the people. It’s how we consume content and how we manage our businesses. I do think we’ll start to see a shift towards people wanting more IRL connections as we start to open things up after the pandemic. But I agree, I think the time of screen time and kind of the worries around that are past us and we’re really using these devices to manage our lives and manage our businesses.

Julia Raymond Hare:
Mm-hmm (affirmative). And bringing it back to retail. I mean, hey, it’s so easy to use your phone while you’re in-store as your second little device to do a number of things, look up product comparisons. How much is it on Amazon versus in-store? Do the mobile checkout. So it’s really just, I mean, truly an extension of ourselves and I think you both are right that the conversation is kind of faded into the distance, people aren’t as worried anymore about screen time. It just is accepted that that’s how it is. So it was great speaking with you, both leaders in this space, Christine Russo and Sara Hicks, I appreciated having you on and I hope to have you on again in the future.

Sara Hicks:
Thank you so much.

Christine Russo:
Thank you, Julia. Thank you, Sara, it was really great to chat with you.

Sara Hicks:
Likewise. Thank you.