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Whale Informed #001: What’s Happening in ECommerce?

Whale Informed #001: What’s Happening in ECommerce?

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Last Updated:  
February 7, 2024

The ecommerce world is vast and many things are happening at once, just like the deep, dark ocean. It can be difficult to keep up with the steady stream of information, as well as make sense of what will impact your business as a brand owner.

Well, we’re here to keep you Whale Informed.

Each week, John Coyle and Ethan Shust discuss the most interesting news and trends to hit Twitter feeds, providing hot takes for what it means for you, I, or AI.

To be clear - this isn’t business advice. But it will definitely be a lot of fun!

In this article, we’re breaking down the content discussed in Whale Informed Episode #001, including authentic brand endorsements, the path to the first 1-person $1 billion dollar company, and a peek into some 2023 industry trends.

Ready to dive in?

Famous Girl Loves Her Bronco: Sydney Sweeney for Ford Motor Company

There have been many celebrity endorsements that didn’t make sense, and unsurprisingly, they didn’t perform well. One funny example I found during my research was when Kim Kardashian was the face of Charmin’s public restrooms in Times Square. Did it make sense? Absolutely not. Do we have this amazing photo to remember it by? Yes.

Image credit: Getty Images

Celebrity endorsements don’t hold the kind of weight they once did, because consumers can smell a fake from a mile away. When the consumer can tell the celebrity isn’t actually a fan of the product, and is just getting paid to say so, it doesn’t bode well for driving sales. At least in the case of Kim’s Charmin endorsement, people were still using those bathrooms…

Let’s turn our attention to a brand deal that actually works: Sydney Sweeney x Ford.

You may recognize Sydney Sweeney from the hit shows Euphoria and The White Lotus. More recently, she took over every social media timeline with a meme from her appearance on Hot Ones. Before she was a big name in showbiz, though, she learned to drive in her grandfather’s 1967 Ford F-100 pickup truck. This is where she first fell in love with the Ford brand. In 2021, she posted on TikTok that she bought herself an original 1969 Ford Bronco, and continued to post videos of her experience restoring it.

Sydney comes from a family of mechanics, and her true passion for cars and trucks is evident in the content she shares both now and before her endorsement deal with Ford. She was a bonafide car mechanic even before they threw her into a commercial, and this is an important distinction.

There’s a few reasons why this brand deal works so well:

1. It’s authentic: Ford created this new campaign in 2023 called “Built Ford Proud”, which is designed to spotlight Ford drivers and their passions. In addition to Sydney Sweeney, it features stunt driver Dee Bryant and surfer Kai Lenny, each connecting Ford to their interests and personalities. These are real people with true links to Ford, and the commercials are centered around storytelling.

2. It reaches a new demographic: Ford x Syd’s Garage empowers young women to foster their love of cars. It’s pretty typical for young girls to be pushed away from cars and toward dolls or other dainty things, rather than heavy machinery. It says girls are not only allowed to like cars, they can fix them, too.

3. It allows us to feel connected: When we learn more about an actor we only knew from her work on a hit TV show, we feel like we’re pulling the curtain back a bit. Like when an actor or athlete belts it out on The Masked Singer, there’s an excitement associated with discovering this secondary talent we didn’t know about. Knowing Sydney is a great actor and also can fix cars is just cool.

4. She’s doing the work: There’s just something pure-hearted about sliding under a car and getting covered in grime. We know she’s actually enjoying herself, and it’s endearing to watch. The love of the brand just means a lot more coming from Sydney Sweeney than when we see Matthew McConaughey delivering monologues from a fancy Lincoln MKZ. He could say nice things about any car, and therefore it doesn’t mean as much.

Besides the Built Ford Proud spots that feature Sydney, the Ford x Sydney Sweeney collaboration also includes a workwear collection that Sydney helped design in partnership with Dickies. The first limited edition drop sold out in 31 hours. Her fans are buying in, and with 1.7 million fans on TikTok, she’s got a captive audience that Ford can take advantage of. They’re now putting out co-branded videos that show her restoring her 1965 Mustang named Britney.

They’re also giving away a custom built Mustang to celebrate the 60 year anniversary of the model. It’s a pretty sweet prize to be won! We’re sure Ford’s collaboration with Sydney will continue to feature innovative ways to reach new customers and future Ford lovers simply by being based in authenticity.

The First 1 Person $1 Billion Dollar Company

Artificial Intelligence continues to learn from us, and eventually, it could take over a great deal of the work required to run a company. Sam Altman, CEO of OpenAI, seems to think we’re not very far off from 10-person $1 billion dollar companies. In fact, he’s got a betting pool in his little group chat with his tech CEO friends for the first year when there’s a 1-person $1 billion dollar company.

First, who do you think is in that group chat?

Second, how far off would you say we are from a 1-person $1 billion dollar company?

Besides it being a soft flex on the tech bro CEOs, we think Sam might have a point. If AI is continually improving, there’s a lot of work that can be taken by AI. Nearly half of 500 CEOs surveyed by edX said that not only could AI replace a lot of their work, but that it should. While it may be true that a lot of a CEOs duties could be offloaded to AI, we’re not predicting it would be easy to get to that stage. It could be possible, but it won’t be easy (at least not anytime soon).

There’s a few reasons why:

1. It’s damn lonely: If you’ve ever built a company solo before, you know it could be a little isolating not to have someone to bounce ideas off of. When the movie Her came out in 2014, the main character falling in love with his AI assistant seemed a bit outlandish. It’s not so crazy now, is it?

2. Companies need culture: Even with remote work, companies are pretty good at finding ways to keep humanity a part of building a company. Startups have fun offices to keep people engaged, and remote employees get perks and activities (and lots of meetings). Without culture, we lose a bit of what makes a company great, and AI would need to be very smart to account for this.

3. There’s a lot of moving parts: Depending on your business type, there’s a lot of checks and balances that may be required to keep a business operating smoothly. While computers are great, if you have a bunch of applications talking to each other and something breaks - there just might be errors that only a human could find and fix in a timely manner.

It’s not impossible, of course. John and Ethan agree that if a 1-person $1 billion dollar company were to exist, they’d probably be selling services versus physical products (as I mentioned with the several moving parts above). Selling software as a service, for example, would likely be far more successful than an apparel brand running with just one person (and reaching that valuation).

Another possibility is to create some sort of platform where you can launch a $10 million dollar company. Kind of like selling the software to create smaller (small is relative, here) several million dollar brands that pay you for that software. VCs would eat that up (and it’s probably a bloated valuation), but that’s one path to a $1 billion dollar 1 person unicorn company. Like if someone built the next (but better) Craigslist.  

The Dive: An Industry Breakdown for $1M Shopify Brands

We recently published The Dive, a breakdown of how 4500 brands doing over $1M in revenue across 13 different industries spent money on ads, and how those ads performed. It’s a great tool for benchmarking your own data to see how it stacks up against others, and a specific look at industry data allowed us to uncover a few interesting trends.

Oh, Baby, Baby

The biggest growth in revenue YoY went to the Baby industry, which grew by 66% from 2022. If you’re counting back a few years, you might understand why: the pandemic caused a bit of a baby boom and those toddlers are taking over with necessary expenditures to keep the tiny humans alive.

As John detailed as a #girldad in the podcast, babies just cost a lot of money. They go through a ton of clothes that need to be replaced, they grow really fast, and the new parents of 2020 and 2021 got accustomed to buying a lot of those products online. It’s easy, quick, and requires less packing children into car seats so they can have a meltdown in the local Target.

As such, the baby industry is one of the most lucrative ones for lifetime value (LTV). We all know what happens if you lose your baby’s favorite binky - you’re screwed. Parents are smart now, and they buy two of all favorites to avoid this problem. That’s an increased AOV without the company itself even trying!

All of the brands that are experiencing success from this baby boom are riding the wave, and we predict that brands focused on kindergarten-aged children will experience a surge of ecommerce success next, and then it will proceed to middle-school aged, and so on. This might just continue until the next baby boom (that could happen if Taylor Swift and Travis Kelce decide to have a baby - it might actually have a significant impact.

Food and Beverage Showed Explosive Growth

In second place, the 43% increase in revenue year-over-year in Food and Beverage is nothing to shake a stick at. It’s huge, and John theorized why things are on the upswing as of late.

First, beverages have always been a little behind in terms of market trends. Coca-Cola was invented in 1886 in a pharmacy in Atlanta by combining syrup and carbonated water into a “delicious and refreshing” beverage that’s been enjoyed ever since. Pepsi and Dr. Pepper were both created around the same time, and much of the beverage industry has remained the same since then. We’re talking nearly 140 years, here.

In 1987, Red Bull created a new category of caffeinated energy drinks, and smaller startups soon followed suit. But considering growth in other categories, the beverage industry remains relatively light on innovation.  

This category is changing now, however. Whatever happens in the market as a whole will drive innovation a little later in beverages, and lately it’s the better for you movement. The good news is, besides many people choosing to eat/drink things that are better for them, these foods and beverages are finally also tasting better, too.

Look at Liquid Death - they launched the company in 2017, and are apparently considering an IPO in 2024 based on an estimated $250 million in sales of canned water in 2023. They’ve since expanded to other water-adjacent beverages like iced tea, they still innovated the market for water in a way that hasn’t been done before.

For new businesses to be successful in this category, they need to follow the path of Liquid Death and just do things differently. The Coca-Cola formula won’t work anymore, since those brands are so established and hard to compete with.

Conclusion

So, the right kind of celebrity endorsements still work - so long as they’re authentic. AI is taking over the world, but not necessarily building a $1 billion dollar company just yet (slow your roll, Sam), and the Baby & Food and Beverage industries are growing fast and furious year-over-year. Got it.

That’s not all that John and Ethan discussed on this episode of Whale Informed, though! They also touched on whether it’s a rip off when an agency charges a percentage of revenue versus a flat fee, Ling’s Cars being the best website ever, some new trends for drink packaging in 2024, and some Super Bowl ad predictions. Will John or Ethan be right? Watch the episode here, then come back after the big game so we can make fun of them. See you next week!

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