Operations

Ecommerce changed over a decade, but the importance of data remains

Tadpull's cofounders discuss the journey to helping brands access and understand their data.

​A diagram shows how the Tadpull AI works.

How the Tadpull AI works. (Courtesy photo)

About a decade ago, Jake and Eulalie Cook started the ecommerce software and services firm Tadpull out of their basement. They were helping clients make sense of their data at a time when it felt like the “Wild West,” as Eulalie put it.

Ten years isn’t that much time in the history of the world, but it’s a long time in the history of the internet.

Around 2012, user experience was still a relatively new concept. But they saw how orienting design around users could have a huge impact in ecommerce: If a website or app was easy to use, it was more likely that they would complete a sale. This led to a whole new area of qualitative data, which was gleaned from interviews and observations in how people used a website. It was widely available, and accessible enough that it could easily be put to use, Eulalie said.

At the same time, they were finding ways to bring quantitative data into the equation. This inventory and margin data often gets overlooked, and exists in many different places. But when connected to campaigns, it could be harnessed to optimize a brand’s website, or improve performance.

Jake had been an adjunct marketing professor at the University of Montana College of Business since 2007, and noticed a change taking place.

“All of my marketing students were studying marketing, they didn't want to go into finance or accounting. Then they ran smack dab into having to use quantitative data,” he said.

2012 was the same year that Facebook held its initial public offering. There were questions floating around at the time about whether the business would work or not. But soon, they saw how the targeting capabilities propelled a new generation of businesses to become efficient acquisition machines.

Fast forward a decade, and that’s changed. Customer acquisition costs have gone up. Privacy-oriented changes like Apple’s App Tracking Transparency has made attribution, which powers performance, more difficult.

“The tide’s gone out,” Jake said. “It’s getting harder.”

At the same time, Amazon’s third-party marketplace became its own engine. A brand may seek to sell there. But that comes with its own series of tradeoffs, Eulalie said.

“There are so many eyeballs on Amazon, you can't ignore it. Also, if you're an existing brand, and people are searching for your stuff on Amazon, being present there is important. So I think a lot of brands really need to be thoughtful about how they approach the Amazon question,” she said.

It’s a place to land transactions, but it requires conforming to Amazon’s policies. Shipping times must be met and stock levels must be intact. Over the long haul, it could challenge margins. Rates get added, and the issue of private-label knockoffs has emerged. There’s also the relationship with the customer to consider.

“I think you can generate a lot of cash” on Amazon, Jake said. “But the fact is, there's a silent exchange of value, which is the customer data. You have no idea who your customers are, where they came from, what they're going to buy next.”

Consumers also started to become more skeptical about advertising in this realm, as well. People searched for an item, then saw it popping up in ads all the time. They had questions about how this was happening.

“The research shows that consumers are open to giving you data, if they understand how you're going to use it, and if you use it ethically,” Jake said.

As they worked with small and medium-sized brands who were having challenges with Amazon and wanted to have all of their data in one place, Jake and Eulalie set out to build a new way to serve them. They wanted to arm the Luke Skywalkers of the ecommerce world in the fight against the Death Star – with data.

The goal was to make data easy to access, actionable and they wanted to introduce automation for many processes, too. The result is Pond, a proprietary software platform that Tadpull applies alongside services to help ecommerce businesses grow.

The company “identifies the right product for the right customer, and then does that at the right time,” Jake said. When a customer has bought an item, it seeks to help brands sell others. It considers key questions: Is that next product a good margin? Is the customer likely to buy this product? Is it in stock?

A diagram of Tadpull's Pond Software. (Courtesy photo)

This requires upfront work to prepare, and that's where the services side comes in. Tadpull considers strategy, such as what goals a team wants to achieve (growth or profitability) and whether the team has the culture in place to execute the sprints that it uses to get there.

Jake likens the process of preparing a brand’s data to taking a sink full of dirty dishes, then cleaning and simplifying it by putting them in the dishwasher and organizing them. Tadpull’s work begins in earnest when it comes to setting the table. You have to know where the forks and spoons go, and over a decade, they’ve devised a predictable playbook on the order of operations. Then they’re ready for the sprint to put it into action.

Once the sprints are underway, the software guides them. It can detect anomalies, and help ecommerce managers orient around key metrics like revenue, conversion rate or website traffic.

Simplifying the data helps surface what matters for managers that have a lot on their plate, and find insights in places they may not typically look. After all, they have more systems to manage and partners to work with today. This is all producing more data, as well.

Jake and Eulalie have put all they’ve learned from witnessing the evolution of ecommerce firsthand as cofounders and developing coursework for college students into how they serve brands. As Jake puts it, Tadpull wants to make it so that “your job is to push the button at the end of the day. And then when you're not sure he should push the button, we've got a services team on the other side that you can have a weekly call with that'll help you understand which buttons to push if you're not quite sure.”

When it comes to size, the playbooks and frameworks tend to work best for businesses operating at scale. This is the time in a business’ lifecycle when a small change can bring big changes, and there’s a lot of data coming in.

“Based on the maturity, the company and their product selection, there's a lot you can do if you're able to gather that data and make sense of it, and help them really harness it,” Lee said. “Because if they have enough customers coming through, then if you know what they previously purchased, you have a lot of transaction data that you can analyze and surface insights to really help serve new customers better.”

The company tends to work with direct to consumer businesses and omnichannel retailers who have both in-person and digital operations. Jake also sees more potential to work with B2B businesses that are still in the process of going digital. As millennials take over generational trades like HVAC or plumbing, chances are that they’ll want to order online. But the processes aren’t in place. As was the case a decade ago, the conditions are lining up for new opportunities to emerge.

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