Episode 9: Musings on the future of Shopify with Mikko Rekola from Woolman

Podcast description:

In this insightful episode of the “Discovered” podcast, Rachel Tonner, our VP of Marketing welcomes Mikko Rekola, Chief Evangelist from Woolman, Europe’s largest Shopify Plus agency, to delve into the latest Shopify Winter Editions release. Mikko, with over 15 years of experience in direct-to-consumer e-commerce, shares his expert insights on the significant updates and how they reflect Shopify’s evolving vision for the future of e-commerce. The discussion covers a range of topics including the expansion of Shopify Markets, enhancements in B2B functionalities, and the rebranding of Shopify POS to Shopify Retail, highlighting how these updates are designed to cater to the diverse needs of Shopify’s global user base. Whether you’re a retailer, a Shopify partner, or just keen on e-commerce trends, this episode offers valuable perspectives on navigating the ever-changing digital commerce landscape.

This podcast is tailored for e-commerce retailers, B2B businesses, Shopify partners, D2C brands, retail and POS users, e-commerce strategists, and digital commerce innovators seeking insights into Shopify’s latest developments and future trends.

Guest BIO:

Mikko Rekola, Chief Evangelist at Woolman, Europe’s largest Shopify Plus agency

Mikko is not just an expert; he’s a visionary in the realm of enterprise-level commerce, with a fervent passion for the Direct-to-Consumer (D2C) model. His expertise lies in crafting compelling, dynamic communication strategies that not only captivate but also build enduring relationships between brands and their customers. With an impressive history of catalyzing growth within the digital commerce space, Mikko has been instrumental in propelling over 300 brands to new heights in the D2C domain. His approach is deeply rooted in a profound understanding of the intricate retail ecosystem, focusing intently on direct consumer engagement and fostering sustainable growth. At Woolman, Mikko’s the one leading the charge, making sure businesses stand out in the crowded online world. If you’re thinking about selling direct or just want to up your digital game, Mikko’s your man. He’s always up for a chat about how to make e-commerce work better for everyone.

References:

• Woolman: https://www.woolman.co/
• Shopify Editions – Winter 24: https://www.shopify.com/editions/winter2024

Podcast Transcript:

[00:00:00] Rachel Tonner: Hi, Mikko, welcome to the Discovered Podcast. Thank you so much for joining us today. Mikko is from Woolman, a Shopify strategic agency. Can you give a little intro about yourself, please?

[00:00:10] Mikko Rekola: Absolutely. Great to be here, Rachel. So, Woolman is Europe’s largest Shopify Plus agency. We’ve been in business for almost seven years, handling mainly large to enterprise-level accounts globally. Myself, I’ve been in the business for 15-plus years, enjoying especially direct-to-consumer e-commerce. I have a merchant past, so I’ve been doing stuff hands-on back in the day, and these days mainly consult our larger customers, I travel a lot.

[00:00:39] Rachel Tonner: Plus posting on LinkedIn and doing loads of videos. I think anyone in the e-commerce ecosystem knows who you are, Mikko. So, I’m really happy to have you on today. So, we’re going to be talking about the Shopify Winter Edition release and just giving your insight into it, what it is, and what retailers can look for. I know that the team is also doing some significant research with Shopify themselves to try and get dates attached to some of these things. So, a great resource that’s going to be coming to all of us very soon. But please, can you start to give us an overview of what the Shopify Winter Editions 2024 are? What are the key updates, and how do these updates reflect Shopify’s vision for the future of e-commerce?

[00:01:21] Mikko Rekola: Sure. So, Shopify Editions is about their big releases. Back in the day, they used to have Shopify Unite, but these days it’s more about the editions. There will be the Winter Edition and then the Summer Edition, and this year, expectations for Winter Editions were high. I love the fact that Shopify is going into new markets, meaning not only locations but also different areas such as more enterprise focus, more retail focus, and more B2B focus. And then typically, people ask me, “What was the top update?” Well, many nice things were announced, and from an agency perspective, the important part is that over 20 of the announced updates were such that we had been giving Shopify feedback that, “Hey, this would be a topic that would help our customers,” or “This is a topic where we feel strongly that this should be adjusted or developed further.” So, it feels that they have sort of listened to us, and we have this kind of really good relationship going on with Shopify, which we are super thankful for, Shopify is our most important partner. Then if you look at the whole thing, like, “Okay, what was being announced and what is important?” I will talk about the main areas. I would talk about, for example, Shopify Markets. It was mentioned many times there. So, for our customers, Shopify Markets is vital. Over 90% of our new cases are using Shopify Markets. So, all of the new functionalities and announcements around Shopify Markets are vital. Then the second one is B2B. I always surprise people with B2B because people don’t generally think that Shopify could do B2B. Well, it’s too fresh. There are always these things, but we do have big corporations using Shopify B2B already now, and they are happy. And now, especially like a few of the updates that are linked with the usability of the B2B, as well as setting up sort of like management rights for, for example, sales personnel, are vital. And those have been the ones that we have been looking for for a substantial time already by now. And then the third one, super important, is retail. So, back in the day, people knew about Shopify POS, but now Shopify sort of rebranded it as retail, and it seems that Shopify is heavily investing in the whole retail thing. We love it. We used to be Shopify POS launch partners back in the day, and many of our especially brand customers are leveraging Shopify POS in physical locations, in pop-ups, selling at events, and others. And they have been ultimately very happy with that. And then, sort of like the additional part is that I look at this as a whole. I don’t look at this as just like updates here and there, but the big picture, and we feel that the big picture is going in the right direction. And that makes us stronger. It’s easier for us and the whole ecosystem, meaning partners such as Klevu, to develop features that will support our customers’ success.

[00:04:27] Rachel Tonner: Yeah. And you can see the momentum of the Shopify platform over the past 18 months. It’s picked up hugely, and, you know, retailers are struggling to keep up with the meaning of these. But it’s great to have you here to kind of give that big picture. You mentioned enterprise, you mentioned B2B. I was curious, the retailers who are B2B now that you’re working with, who are using Shopify B2B well, are there any common themes within what their operation system looks like, what their processes look like? So, who could use Shopify B2B now and be happy with it?

[00:05:00] Mikko Rekola: Really good question. I love it. So, I think many of our B2B customers are such that they are not migrating from another platform. They might have been running the B2B operation without a platform per se. I’ve seen so many Excel sheets that it drives me mad, and I’ve seen many systems but not an actual e-commerce system. So now, when we are leveraging them as a B2B e-commerce system, it has been a giant relief for many. And again, a second category that we serve a lot is those who are already running Shopify in their B2C, and now they want to streamline the operation. They haven’t been happy with the B2B operation, especially in fashion. Certain platforms are aimed at B2B, which seem to be expensive, which seem to be clunky, which seem to be tough to maintain. And now, hey, you can use your existing Shopify Plus theme that you are using for B2C, or you can leverage that on B2B. Also, the feedback that we have received is Shopify’s B2B is substantially easy to use, which I do personally admit. I used to be back in the day a B2B merchant for a very big listed company, it was a struggle, and I had nightmares over some technical stuff. So, I’m very happy to see that this is a more smooth solution for B2B commerce. Of course, there are still main topics for the bigger B2B players that want to have even more customization and are still waiting to have some features where Shopify might not yet be the best option. But at least in those cases, I would strongly recommend checking it out, testing it out for some small use cases, and seeing if it can make sense in your business case.

[00:06:43] Rachel Tonner: Yeah. And we’re having this conversation a lot internally at Klevu as well, that the future of commerce is pushing the complexity underground. And I think with Shopify doing B2B now and even going into the enterprise space, they’re showing that you can hide the complexity. It doesn’t have to be your whole day job, you know, you as a B2B retailer before getting tech nightmares, having it all about technology all the time. But it should be about innovation. So, loving that.

[00:07:13] Mikko Rekola: Exactly, exactly. And I could add that I’ve also noticed that B2B commerce has evolved since I was there. So, back in the day, it seemed that it was very old-school B2B. But these days, when I look at B2B commerce, it’s pretty close to B2C in many cases. It’s so that people, all of the organizational people, have access. Everybody can see stuff. Pricing is becoming more transparent, meaning that there is a need for recommendations. That was something that our customers in B2B have requested, as well as a better search and all of that. So, it’s interesting to understand that B2B e-commerce isn’t what it used to be, I don’t know, five to ten years ago.

[00:07:58] Rachel Tonner: You just mentioned search. Shopify has just released its semantic search. You work closely with Klevu. What do you see as, like, when would you recommend for a retailer to use native Shopify search versus a specialist like Klevu?

[00:08:17] Mikko Rekola: Yeah, very good question. I think in overall cases, Shopify’s product is getting more robust. And there you see an example that the search is getting better, their recommendations are getting better. So, when the platform is growing and they are aiming at larger brands, they are in-house developing many nice functionalities. Where I see value with, for example, Klevu is that if you have a really large catalogue. So, back in the day, I was myself a merchant when we had millions of SKUs. In those cases, it’s worth having a more intelligent search. Also, in those cases where you need heavy filtering, it can be, for example, that you have so many colours, you might have so many flavours, you might have so many different sizes, or just that the amount of categories is high or higher than, I don’t know, ten or twenty, then in those cases, it actually might make a lot of sense to have your solution in place. And overall, just like trying to analyze what’s happening. Also, what I see a lot is that customers are not utilizing the tools as they should. And that’s again something that as an agency, we feel pride that we need to make sure that customers would understand that if they would, for example, have Klevu search in use, what are all the ways how they could use it? How should you do it even better? And so on. So, we need to support customers using it because still, if I look at the customers, they are in a situation where you should optimize small things, but then again, it’s happening a lot. There is uncertainty in the market, there might be issues with excess stock and others. So, how to make sure as an agency that we can support our customers? Well, one thing would be to make sure that if they are using our partner solutions, that as an agency, we can also support them. Besides, of course, your great support.

[00:10:11] Rachel Tonner: Yeah. And I think we’ll go into this in more detail when we speak on the webinar that’s coming up at the end of this month, but I think at the moment, it’s only available for English as well, the Shopify semantic search. But I’m sure that they will improve that over time. But, you know, with the growth of Shopify Markets and the significance of Shopify Markets, I think if someone’s probably using Shopify Markets, they’re probably going to need a better search solution to handle the multilingual requirements.

[00:10:43] Mikko Rekola: Totally. And for commercial providers like you guys, it’s also interesting because now Shopify is sort of challenging you. So, it pushes you to innovate and come up with ways to stay relevant. So, I think that’s interesting from my point of view.

[00:11:00] Rachel Tonner: Oh, for sure. It’s interesting for us as well. And we do feel the momentum and feel the push and keep going, which is exciting. So, let’s talk about Shopify Markets then. So, it’s received significant enhancements in this Winter Edition, support for order analytics, and order editing. How do these changes improve the functionality of businesses operating in multiple markets? What’s your view?

[00:11:23] Mikko Rekola: It’s getting even better. So, our basic recommendation for most of our customers, especially for brands, would be, “Hey, start to leverage Shopify Markets this year.” The issue that initially was there was that the app ecosystem wasn’t quite there, and that was a big surprise for most. I’ve heard that it will be soon compliant with Shopify Markets, which is great, as well as many of the key players on the market. And it’s been sort of our additional job as an agency to support providers to understand the magnitude of Shopify Markets and how important it is, and in some cases, even to clarify, what Europe mean, how our home soil, in a sense, is so fragmented, and how Shopify Markets can help there. Some of the things that they announced there are things that we were looking for. So, for example, if you look at analytics, definitely it should be easier to compare basic KPIs. And that has been a thing that has bothered especially smaller customers using Shopify Markets. However, as an agency, we do have our Alice, which is our DTC operating system or management software that we have co-created with our top-tier customers. And we do offer already very extensive Shopify Markets analytics. So, for these larger brands or retailers who want to do more advanced comparisons, then Shopify’s analytics isn’t enough. I love Shopify’s analytics, but it’s mainly aimed at smaller brands and retailers. But the fact that they have started to make sure that the Shopify Market effect would be visible throughout the product is the thing that we truly like there, and also the fact that it’s moving towards the direction that larger customers can utilize it more and more. So, one thing that people asked us last season was, “No, it’s not for enterprises.” And then we showed like the Daniel Wellington case, “Yeah, it is for the substance players as well.” And now we are building a new, similar style of executions. And sort of like if I look at the matter as a former merchant, I used to run, what was it, like 17 extension stores. And now when our customers can just run one or two market executions, it makes lots of sense in terms of cost efficiency, just like the merchants’ tasks or e-commerce team tasks and daily operations. But it’s been a challenge for the ecosystem. However, we see it as very positive, and in this kind of economic climate where you need to be efficient, then Shopify Market is very efficient.

[00:14:20] Rachel Tonner: Yeah, and Klevu is fully compatible now, but honestly, it has taken a little while to get there. You know, as a tech partner, Shopify does these releases, you have to keep up with it, you have to put it into your roadmap, and you have to prioritize it. And our relationship with the likes of Woolman has helped us understand where this fits into our priority map. But it must be confusing as a retailer because the tech stack, you know, you’ve got Shopify, you’ve got Klevu, you might have Klaviyo, Yotpo, Trustpilot, all of these other things in your stack. When Shopify releases editions, they must be like, “Oh, that’s available for me now.” So, it’s good to have you guys to be able to lean on and get the information and then put pressure on the tech partners as well to get all of this working because it doesn’t mean that it’s necessarily available for them if Shopify releases it.

[00:15:16] Mikko Rekola: Yeah, totally. And we are sort of happy to support there because we feel that this is sort of part of our job. As we only have a selected amount of really close partners, then we want to make sure that they have all the information and we can also share the knowledge and why we are so keen to do it because of our customers. Our customers are our main goal. We want to make sure that they have the best possible stack and that it would work in a way that supports their business. Because it’s not only about the tech, in the end, it’s all about the business. So, how well you are doing with the business, then you can invest more in development or partners or whatever.

[00:15:55] Rachel Tonner: Absolutely. The other thing that you mentioned that I haven’t come back to yet is about the POS. So, we have a few customers using Shopify who love the POS. We had a webinar with Astrid & Miu, where they were talking about the ship-from-store and ship-later options. It helps a business. Can you talk a bit about the changes to Shopify Retail or Shopify POS, which is now Shopify Retail? How do these changes complement Shopify’s existing commerce solutions, and what additional benefits do they offer to retailers?

[00:16:29] Mikko Rekola: For sure. I could talk about POS and retail the whole time. So, I love it. I think it’s genius. And why it’s so genius is that when you’re using that, and then you have, for example, a loyalty program together, you can follow the customer omnichannel. So, you have full visibility, which is something that hasn’t been possible with this price range back in the day. So, it’s major. And then again, if I look at the releases, they’re combining your online store and physical locations, it’s getting better. So, the changes they are doing in checkout, the changes that they are now doing where you can do more of this kind of like return in stores or pick up in stores or that, those have been the requests while some of the bigger brands have still not been too active with Shopify POS. And then a very practical thing is just like the POS devices that they are now making sure that the devices, the newer devices will be available in new markets and opening new markets, especially in Europe is vital. But then sort of like what is surprising to me is that I do spend a lot of time in the States and kind of many brands there are still unaware that Shopify is doing POS. I noticed the same thing maybe a year ago in the UK now. Seems that people already know about the offering. So, it’s also about the education part for Shopify and our agencies to explain why would you go with Shopify POS. What are the benefits? What are the creative ways where you can sort of like explore retail? So, I love some of our customers that are, for example, doing pop-ups or more retail tours or stuff like that, and then collecting all the data. So, I think that’s the direction where we want to go. And then just hoping that Shopify POS would be available in all European countries. I know it’s taking its time. It’s getting there. We are getting hopefully new markets this year. So, hoping that Europe will be such a focus for Shopify that it will be widely available here as well because it’s one way of avoiding churn for Shopify. So, if you are using Shopify online, if you are using Shopify offline, then you are in most cases very likely to continue Shopify in upcoming years.

[00:18:55] Rachel Tonner: Yeah, that’s a really good point. I don’t know if you know this, Niko, but I’m actually from a POS background myself. A POS project is something that businesses don’t want to redo over and over again. It’s not like a platform. They tend to be a lot slower moving. So, I think your point about the stickiness is really important. And once retailers go with Shopify POS, it will help them stick with the commerce platform too. So, I hope that as well, for Europe. So, you talked a bit about B2B enterprise. We’ve talked about Shopify Markets checkout customization. So, that was another one that was highlighted as a core focus. Can you elaborate a bit on these new features? And I know there’s a single-page checkout. How is this going to help retailers?

[00:19:43] Mikko Rekola: Sure. So, first of all, single-page checkout, even though it’s something that is already or has already taken place, seems that some people are not quite aware of it. And there are also some misunderstandings. What does it mean? There is maybe a small, but very upset group of people who are saying that the old checkout was better. No, the single checkout isn’t the way to go or whatever. But then if you look at just purely the data, I think the single checkout was a massive upgrade, and now how we have been leveraging it together with our customers, they have been ultimately very happy, and for the end consumer, it’s even a better experience. Again, I could talk about checkout for ages, maybe two matters to discuss. One is the visuals. How does it feel as an experience? So now, with some of the extensions and all of that stuff, we can leverage better experiences. And then the second part is that there are now more possibilities for apps to sort of like support the entire journey until the checkout and even to the thank you page. We are hoping to see more innovations there. So, we are first of all helping our customers to optimize their checkout experience for the end consumers. Secondly, we are supporting app developers to come up with ways they can leverage their offering in the checkout, and how they can bring value to the end consumer in terms of, for example, shipping times or some commerce thing. And then I would like to also point out that even though these new updates are coming, many of our partners have already done some things in checkout. There have been limitations, but as an example, when it comes to like cross-sells or upsells such as you guys, you have been there already by now, but just what is happening now, you will have more possibilities and more freedom. I think freedom is the exact word that merchants and partners have been looking for because it’s been rather restricted back in the day for a good reason, for the reason that it’s the best-converting checkout on the planet. So, always when Shopify is implementing some changes, they must proceed with extreme caution in checkout, which is from my perspective, very understandable.

[00:22:10] Rachel Tonner: Yeah, but it is also good to have the flexibility for the retailer to be able to optimize themselves. So, this is good stuff. What advice would you give to retailers then based on the latest updates and what future e-commerce trends do you anticipate to be propelled by these updates?

[00:22:31] Mikko Rekola: Sure. So, I think number one is not to rush. I’ve seen people who want to have everything right now. It’s not the way to go. So, for those who’ve been in the game for a longer time, we do know that some of these features are already available. Some will be available later, and we don’t quite yet know when and how. And in some of these updates, as they are more substantial, we don’t quite yet know the full impact. So, I would be patient, but I would do sort of like a shortlist. What are the features I’m into? What are the features that would help my business? What are the must-haves? What are the nice-to-haves? And so on. But if I just look at the whole set of features being announced, then I’m trying to understand what’s happening with this entire business. So, some of the features being announced are great for B2B businesses. Some of the features are great for those who are doing cross-border commerce. Great. Then again, there is a group doing re-commerce. So, selling in the same storefront, both new items and used items. So, some of the features are helping there. It’s superb and very important, sustainability is one of the core topics, especially in fashion and many other categories. And then the last one, which is super important from my perspective, if I look at this year, one thing that will grow a lot is selling non-physical items. So, you are selling some kind of service, or you’re combining in a hybrid setup, both digital items and physical items. So, as an example, what’s happening with the checkout, should help to sell these services or digital items. And that would be one core topic which I would focus on as a business. So, how to do, for example, subscriptions, how to make sure that I would have monthly recurring revenue and not just sell those physical items, and what type of innovations can I have there? Luckily, we do have some of our customers already exploring that. So, that was the reason why I brought it up here, but I feel as a consultant that it could be helpful for most businesses out there.

[00:24:43] Rachel Tonner: Are you talking about like subscribe and save stuff or like repeat orders? Or are you talking about more like selling care?

[00:24:52] Rachel Tonner: So, if you buy a really expensive bag, then you’d have like a service to get it.

[00:24:59] Mikko Rekola: All of the ones above. We are in a lucky situation that we used to have, or still have, a customer by H&M group. And they have been exploring this like membership that you are paying a monthly membership. And then with membership money, you get to purchase items. And that’s something that our fashion customers have been now exploring more about how to have different membership tiers. How to make that happen? And then in some cases, it might be savings, but in some cases, it might be experiences. It might be exclusivity. It might be, for example, access to certain physical events. It might be something else. So, you can create value with memberships and loyalty, and it doesn’t necessarily need to be discounted, although it could be discounted. And then in some cases, just like, “Hey, it’s tough to make physical business these days.” You notice what’s happening with logistics costs and others. So, it actually would be nice to sell some type of experience. And then in some verticals such as fashion, what we see a lot with our customers is that they are doing second-life items, but also that they are selling repair services or warranty services or others, which actually by the end of the day can be profitable for the brand as well. So, it’s good for the planet, it’s good for the brand, and it’s good for the consumer. So, everybody wins. So, that’s something where we are encouraging our customers to innovate and making sure that we can do the same together with Shopify and the platform and our selected ecosystem partners, such as you guys.

[00:26:35] Rachel Tonner: Yeah, it’s all very exciting, and I’m looking forward to diving into more detail on this. I know this is a podcast, so it’s evergreen, but we are doing the webinar on the 7th of March. It’s going to be called Unlocking New Horizons: Navigating Shopify Winter Editions 2024 with Woolman and Klevu, so feel free to search for that after it’s recorded. It’ll be available on demand as well. Thank you so much, Mikko, for joining me here today. Looking forward to diving into this again in a few weeks.

[00:27:03] Mikko Rekola: Always a pleasure. Thank you for having me. Thanks.