Gift-giving is an art, and when it comes to online shopping, the canvas can sometimes feel cluttered. For DTC brands, the opportunity to make this experience memorable is now more within reach than ever, especially as the global personalized gifts market—valued at USD 51.98 billion in 2024—is expected to grow to [USD 138.17 billion by 2030](https://www.marketresearchfuture.com/reports/personalized-gifts-market-10348). 

This demand for customization and gifting underscores the importance of adding thoughtful touches like personalized messages, gift wrapping, and unique packaging to create an exceptional and seamless gifting experience.

Many DTC brands with smaller catalogs rely on external platforms to offer ready-to-use gifting solutions, like sending e-cards instead of physical products or allowing recipients to provide their shipping information—creating a convenient, customizable experience similar to gift cards. 

However, this reliance on third-party platforms can result in a fragmented user experience, akin to a ping-pong match between the store and the gifting service, which can introduce friction into the process.

Even with custom gift options available, most stores fail to deliver an engaging gifting experience. It's easy to treat gifting as an afterthought, but in reality, a shopper's gift-giving journey begins long before they add an item to their cart—often even before landing on a product page.

## DTC Brands and the Power of Unique Gifting Experiences

Unlike B2C e-commerce or marketplaces, DTC brands often offer unique, special products that attract gift-givers seeking a personalized touch. A well-crafted gifting experience not only sets these brands apart from their competitors but also enhances brand sentiment and serves as a powerful customer acquisition tool, similar to referral programs.

By addressing specific aspects such as tailored filters, cart and checkout optimizations, and personalized experiences for email subscribers, businesses can elevate their gifting offerings and engage both gift-givers and recipients more effectively.

Let's explore these key points to uncover valuable insights, tips, and best practices that can enhance the overall gifting experience.

### Streamlining the Gift Discovery Process

Shopping for someone else can be challenging, especially if users aren’t familiar with the recipient's preferences. This is particularly true in categories like toys, fashion, or beauty products, where age and trends heavily influence choices.

To make the gift-giving process smoother and more enjoyable, e-commerce sites should offer "Recipient" filters, such as Age or Gender. Mori, a brand specializing in kids' and babies' apparel and accessories, provides common gifting categories like "Newborn Baby Gift" along with recipient filters, demonstrating how these features can help customers refine their search based on the recipient's demographics and interests.

E-Commerce stores selling products frequently bought as gifts can significantly improve the gift selection process by following these insights:

* **Age and gender filters:** Allow users to narrow their search by offering filters based on the recipient's age, gender, or relationship (e.g., "For Her" or "For Kids").
* **Interest-based filters**: Let customers filter products based on hobbies, interests, or lifestyle categories, such as "For Pet Lovers" or "For Fitness Enthusiasts."
* **Occasion filters:** Offer filters for specific occasions like "Birthday," "Anniversary," or "Holiday Gifts" to help users choose based on the event.
* **Personalized recommendations:** Use customer data or popular trends to highlight products that suit common gifting scenarios, offering a personalized touch.
* **Filter placement:** Ensure filters are prominently placed, ideally in the main navigation menu or homepage, for easy access and a streamlined browsing experience.

<figure>
  <img src="https://cdn.sanity.io/images/kqgmf0g2/production/7a2437b926981d7723352af400450ea947a6a5e1-1600x1052.jpg?fit=clip" alt="Mori Baby Mori recipient filters">
  <figcaption>Mori Baby Mori offers a thoughtful and personalized gifting experience on their site, allowing customers to add gift wrapping, personal messages, and curated bundles that cater to new parents and babies.</figcaption>
</figure>

<figure>
  <img src="https://cdn.sanity.io/images/kqgmf0g2/production/20910d0dd249e64b3fc92d7124dfe61a8065c6ce-1600x1052.jpg?fit=clip" alt="Maisonette recipient filters">
  <figcaption>Maisonette provides a curated gifting experience with options to select beautifully packaged gifts, customizable messages, and handpicked collections for children and parents, making it easy to find thoughtful presents.</figcaption>
</figure>

### Optimizing the Product Page for Gifting
Once users have found a potential gift, providing clear and accessible gifting options on the product page is crucial for a seamless purchasing experience. As the personalized gifts market is projected to grow at a compound annual growth rate [(CAGR) of 12.97%](https://www.marketresearchfuture.com/reports/personalized-gifts-market-10348), the demand for custom options like gift wrapping, messages, and unique packaging is increasing. By clearly displaying these options and offering transparency around costs, DTC brands can capture this growing segment and ensure a positive, memorable gifting experience for their customers.

Many e-commerce sites overlook this step, which can lead to frustration for gifter-givers who need to know early on what gift options are available without digging through the checkout process. Lake, for example, effectively advertises its branded gift box on the product page, offering an easy way to add it to the cart and providing detailed options, streamlining the gifting decision for users.

To optimize the product page for gifting, consider these strategies:

* **Display gifting options clearly**: Show available gifting options—such as gift wrapping, custom messages, or special packaging—on the product page to help users make informed decisions early.
* **Make gifting costs transparent**: Clearly state any additional costs associated with gift services like wrapping fees or packaging upgrades, preventing unpleasant surprises later in the process.
* **Link to more gifting information**: For complex gift services include a link to a dedicated gifting info page where users can explore options in detail, keeping the product page clean and focused.

<figure>
  <img src="https://cdn.sanity.io/images/kqgmf0g2/production/b114d6b08da9784a3ad53ef70a4235da221078ec-1600x1052.jpg?fit=clip" alt="Lake Pajamas offers Gift boxes in the buy section">
  <figcaption>Lake Pajamas offers a simple yet elegant gifting experience, allowing customers to add gift boxes, personalized messages, and luxurious packaging to their orders, perfect for presenting their high-quality sleepwear as thoughtful gifts.</figcaption>
</figure>

### Enabling Customers to Enter a Gift Message
A key feature for sites offering gifts is the ability to include a personalized message. While this seems straightforward, here are a few best practices:

* **Display Custom Message Option in the Cart:** Ensure the option to add a custom gift message is available and visible in the cart, so users can easily include it before completing their purchase.
* **Avoid prefilled gift messages:** Using preset messages like “I hope you enjoy this gift!” can confuse users, who might think the field is already filled in. Instead, only show a placeholder after users opt to include a message.
* **Use a "Save" button**: Rather than relying on autosave, provide a "Save" button so users feel confident their personalized message is securely stored.
* **Preview gift message in order summary:** Include a preview of the gift message in the order summary to reassure users that their message has been saved and will be sent with the order.


### Integrating Special Wrapping and Branded Gift Boxes into the Cart

Special wrapping or branded gift boxes can add a final, thoughtful touch to the gifting experience. Gifting features can vary widely across e-commerce sites, making it essential to provide clear information about these options. When incorporating special wrapping and branded gift boxes into the cart, consider the following insights:

* **Brief Descriptions:** Include short descriptions or icons representing gift wrapping and branded box options to help customers quickly understand the choices available.
* **Mark Free Options Clearly:** If gift wrapping or custom packaging is offered at no additional cost, clearly indicate that these options are free to prevent confusion.
* **Opt-Out Option:** Provide an easy way for customers to opt out of special gift wrapping or boxes if they prefer to skip these options.
* **Discounted Bundles:** Offer discounted bundles that include the product and gift wrapping or a branded box to increase the overall value of the purchase.
* **Delivery Times:** Especially during the holiday season, it's important to provide a delivery-date estimate or delivery-date range. Many stores that don't provide this information risk failing to deliver gift orders on time. By offering accurate delivery estimates, customers can plan their gift-giving effectively.

<figure>
  <img src="https://cdn.sanity.io/images/kqgmf0g2/production/75d41dc78e3e19448d4c7e313f9a31f966064129-1600x1052.jpg?fit=clip" alt="Lake Pajamas offers Gift boxes in the cart">
  <figcaption>The easy-to-spot "Select Gift Options" button ensures that customers can quickly personalize their gift, making the process of sending thoughtful, beautifully packaged sleepwear even smoother and more user-friendly.</figcaption>
</figure>


### Leveraging Personalization for Existing Customers
Offering personalized experiences for existing customers can elevate the gifting process and create a sense of connection between customers and your brand. Here are a few ways to achieve this:

* **Custom Profiles for Gift Recipients:** Allow customers to create profiles for their loved ones, where they can save important details such as birthdays, genders, sizes, and interests. This information can be used to prefill filters during the search process, making it easier and faster for customers to find the perfect gift.
* **Saved Items and Wishlists:** Enable customers to save their favorite items or create wishlists for each recipient profile. This not only simplifies the gift selection process but also encourages repeat visits and purchases.
* **Personalized Reminders and Recommendations:** Send your customers timely notifications before recipients' birthdays or special occasions, along with personalized gift recommendations based on the recipient's profile. This thoughtful gesture can increase customer satisfaction and foster brand loyalty.

![](https://cdn.sanity.io/images/kqgmf0g2/production/99b9208357c496fca7a3e2675aadfe4720de6174-1600x1052.jpg?fit=clip)

Maisonette offers a great example of effective personalization features. Users with an account can save multiple profiles with details like name, date of birth, and gender. Maisonette then provides selections based on these data, and users receive a notification one month before the recipient's birthday with a special promotional code. Such personalization can lead to higher conversion rates, increased customer retention, and greater overall success in the competitive DTC market.

## Wrapping Up the Perfect Gifting Flow

The gifting experience is a crucial aspect of e-commerce, particularly for DTC brands specializing in unique, high-quality products. As shoppers increasingly seek personalized and memorable gifts, e-commerce sites must meet these expectations by offering thoughtful and transparent gifting options.

Remember that a well-executed gifting experience can be a powerful differentiator in the competitive e-commerce landscape, providing both immediate benefits and long-term gains for your brand. As you refine your gifting strategy, keep in mind the importance of creating a seamless and enjoyable shopping journey that fosters customer engagement and loyalty.

Ready to enhance your gifting experience? Get in touch with the team at Nebulab to create a seamless, personalized, and memorable gifting process that delights your customers and drives results. Whether it's optimizing product pages, integrating custom messages, or adding unique packaging, we can help you turn your DTC e-commerce into a go-to destination for thoughtful gifts. 

Together, we can make your gifting strategy truly stand out! [Reach out today.](https://nebulab.com/contact-us)

How DTC Brands Can Elevate Their Gifting Experience

The Shopify POS suite is a key component of Shopify’s Unified Commerce approach, enabling merchants to create rich omnichannel experiences that bridge their offline and online shopping channels. Initially launched in 2013, Shopify has continued to improve its POS hardware over the years, making it more powerful and expanding availability to [more countries.](https://www.shopify.com/editions/summer2024#pos-in-more-countries)

What sets Shopify’s POS lineup apart from the competition is the flexibility merchants have in designing their POS setup, with various [card readers](https://www.shopify.com/pos/store/collections/card-readers) for different environments and the ability to connect a [cash register](https://www.shopify.com/pos/store/collections/cash-drawers), [barcode scanner](https://www.shopify.com/pos/store/collections/barcode-scanners), and [receipt printer](https://www.shopify.com/pos/store/collections/receipt-printers-and-paper) optionally.

In terms of functionality, while Shopify’s POS system comes with [a rich set of native features](https://www.shopify.com/pos/features), Shopify also offers the ability to customize the POS system using Apps. The Shopify App Store already features [200+ POS apps](https://apps.shopify.com/app-groups/extensions/point-of-sale), offering product bundles, loyalty programs, and retail staff management features.

Still, if these apps don’t cater to your needs, you can develop your own POS UI extension—a trend becoming increasingly popular as Shopify starts serving larger merchants with more sophisticated requirements.

In this article, we will show how to do exactly that: by taking inspiration from a real-world scenario, we will build an end-to-end Shopify extension that allows your customers to show a QR code while completing in-store purchases to connect the purchase to their customer account. This eliminates the need for a store associate to look up the customer by their name or email and creates a nice “wow” moment for the customers.

Let’s get started!

## Creating Our Shopify App

Before we can get started building our extension, we will need the following:

* A working Shopify partner account
* The Shopify CLI running on our machine
* A development store with the [Checkout and Customer Accounts Extensibility developer preview](https://shopify.dev/docs/api/release-notes/developer-previews#checkout-and-customer-accounts-extensibility-developer-preview)

Once we have everything, the first step is to create a new Shopify App that will expose our custom functionality:

```
$ shopify app init
```

The CLI will ask what type of app we want to build. We need a Custom App since we’re building functionality specific to our store and not an app for general distribution.

Once we have our custom app, we must understand what [app surfaces](https://shopify.dev/docs/apps/build/app-surfaces) we want to hook into. In our case, we’ll need:

* A [Customer account UI extension](https://shopify.dev/docs/apps/build/customer-accounts) to show a customer their QR code in our online storefront.
* A [POS UI extension](https://shopify.dev/docs/apps/build/pos) that will allow store associates to scan the QR code to identify the customer.

Let’s start with the first one!

## Displaying the QR Code in the Storefront

Run the following command to create our Customer Account extension:

```
$ shopify app generate extension --name loyalty-card
```

When asked what type of extension to generate, select Customer account UI extension. The CLI will also ask whether we want to use JavaScript or TypeScript--we’re going with plain JavaScript for our example, but feel free to use whatever works best for you!

By default, the generator will create a `FullPageExtension.jsx` and a `MenuActionExtension.jsx` file as examples. We’ll want to remove them, along with their corresponding configuration in `shopify.extension.toml`, and replace them with a new extension:

```
# ...

[[extensions.targeting]]
module = "./src/LoyaltyExtension.jsx"
target = "customer-account.profile.block.render"

# ...
```

In `LoyaltyExtension.jsx`, we’ll write the code to render our QR code on the customer profile page. In this example, we’re generating the QR code with a free API, but we could use our own server (also, Shopify will support a [QRCode component](https://shopify.dev/docs/api/checkout-ui-extensions/unstable/components/other/qrcode) soon):

```
import { Heading, Text, View, BlockStack, Link, Card, Image, reactExtension, useApi } from '@shopify/ui-extensions-react/customer-account'

function LoyaltyExtension() {
  const { authenticatedAccount } = useApi()
  const customerId = `gid://shopify/Customer/${authenticatedAccount.customer.current.id}`

  return (
    <Card padding="small">
      <BlockStack spacing="tight">
        <Heading>
          Your Loyalty Card
        </Heading>
        <Text>
          Scan it in the store to earn points!
        </Text>
        <View maxInlineSize={128}>
          <Image source={`https://api.qrserver.com/v1/create-qr-code/?size=300x300&data=${customerId}`} />
        </View>
      </BlockStack>
    </Card>
  )
}

export default reactExtension(
  "customer-account.profile.block.render",
  () => <LoyaltyExtension />
)
```

While this looks like an ordinary React component, we won’t be able to import assets like images or use regular HTML tags. This is because Shopify renders the UI using its native engine. As a result, the styling of our extension is limited to the Components API and the brand styling inherited from the store.

With everything set up, we can test our extension by running:

```
$ shopify app dev
```

As part of this command, we must select a partner account and development store to test the app.

With the command running, we can preview our customer account UI extension by pressing P on our keyboard. The Developer Console will open up in our browser with a link to preview the extension. Clicking the link should show our QR code:

![](https://cdn.sanity.io/images/kqgmf0g2/production/300b8ad677bf19e7245ab3bac52ab4a91ac96284-1214x1390.png?fit=clip)

With the customer account UI extension working, we are halfway there. Customers can view their loyalty cards, but there is no way our staff can scan them just yet. Let’s see how to do that!

## Reading the QR code in the POS

To create an extension capable of scanning QR codes, we need to set up a POS UI extension that interacts with the barcode scanner and sets the customer on the current order when a customer QR code is detected.

Since this extension is part of the same feature we were working on earlier, we will generate the extension under our existing app:

```
$ shopify app generate extension --name loyalty-card-scanner
```

Even though POS extensions are set up similarly to customer account extensions, we need to do a bit more work. In the case of our POS extension, we need two components: 

* A tile that can be added to the home screen of the POS system.
* A modal that is opened when the tile is pressed.

(If you’re curious, you can find all possible targets for POS extensions [here](https://shopify.dev/docs/api/pos-ui-extensions/unstable/targets)).

Let’s start by creating the modal since we’ll need to use it in the tile. Create a file called `Modal.jsx` with the following contents:

```
import { Screen, Navigator, reactExtension, useScannerDataSubscription, CameraScanner, useApi } from '@shopify/ui-extensions-react/point-of-sale'

function Modal() {
  const { cart, toast, navigation } = useApi()
  const { data, source } = useScannerDataSubscription()

  // This runs on every change to `data`.
  if (data?.startsWith('gid://shopify/Customer/')) {
    const id = parseInt(data.split("/").pop())
    cart.setCustomer({ id: id })
    toast.show(`Found Customer: ${id}`)
    navigation.pop()
  }

  return (
    <Navigator>
      <Screen title="Scan Customer Loyalty Card">
        <CameraScanner />
      </Screen>
    </Navigator>
  )
}

export default reactExtension(
  "pos.home.modal.render", 
  () => <Modal />
)
```

Hopefully, the code is pretty self-explanatory:

1. We render a screen with a single `CameraScanner` component.
2. We use `useScannerDataSubscription` to listen for scanner data.
3. When our QR code is detected, we set the customer on the cart, show a toast, and close the modal.

Now that the modal is in place, we must implement a tile component allowing store operators to access it. This is quite straightforward! Just create a `Tile.jsx` file with the following contents:

Now that the modal is in place, we need to set up a grid tile to open it when clicked.   

```
import { Tile, reactExtension, useApi } from '@shopify/ui-extensions-react/point-of-sale'

const TileComponent = () => {
  const { action } = useApi()
  return (
    <Tile
      title="Add Customer"
      subtitle="Scan customer loyalty card"
      onPress={() => {
        action.presentModal()
      }}
      enabled
    />
  )
}

export default reactExtension(
  "pos.home.tile.render", 
  () => <TileComponent />
)
```

Tiles are interesting and offer much functionality out of the box; for instance, their API allows them to be dynamically enabled and disabled. You can learn more about them in [Shopify’s documentation](https://shopify.dev/docs/api/pos-ui-extensions/unstable/components/tile).

Now that we have our components, we must ensure our app knows where to render them. Add the following to `shopify.extension.toml`:

```
# ...

[[extensions.targeting]]
module = "./src/Tile.jsx"
target = "pos.home.tile.render"

[[extensions.targeting]]
module = "./src/Modal.jsx"
target = "pos.home.modal.render"

# ...
```

Unlike with customer account UI extensions, we cannot test POS UI extensions in the browser. Instead, we’ll need to download the POS app to a supported device, like a smartphone or tablet, that can scan QR codes.

Once we have the Shopify POS app on our device, we can run `shopify app dev`, press P, open the Developer Console, click on the “View Mobile” button, and scan the QR code with our mobile device. This will enable the developer preview for our extension on the device:

![](https://cdn.sanity.io/images/kqgmf0g2/production/2cf428d978c9b39006009b01c7d47aa865c16389-1874x342.png?fit=clip)

That’s it! Now that our custom app is fully working, it’s time to deploy it.

## Deploying the Custom App

Now that both extensions are defined and we are happy with the solution, we can deploy our app. By deploying the app, we make it available to the production stores under the same Partner account.

Since the app with our extensions satisfies [the requirements to be hosted by Shopify](https://shopify.dev/docs/apps/build/app-surfaces#hosting), all we need to do is run the following command:

```
$ shopify app deploy
```

Once the app is deployed, we can install it in our store through the Partner portal.

After installing the app, we need to add our grid tile to the POS home screen to our POS home screen and the Loyalty Card app block to our Account Profile page. Once the changes are published, our customers can find their loyalty card on their account page, and our associates can scan the QR codes via the POS.

## The Sky’s the Limit!

With just a few lines of code, we’ve leveraged Shopify’s customer account UI and POS UI extensions to create a smooth loyalty program experience for our most engaged customers. However, there’s so much more we could have done:

* We could retrieve and display a customer’s loyalty status and other data in the POS UI, helping store associates personalize the shopping experience.
* We could allow customers to add their QR code as an item to their Apple Wallet for an even easier (and cooler!) experience.
* We could apply dynamic discounts to the customer’s cart when they scan their QR code based on their shopping history or other parameters.

The only caveat is that we must stick to Shopify’s [APIs](https://shopify.dev/docs/api/pos-ui-extensions/2024-04/apis) and [UI components](https://shopify.dev/docs/api/pos-ui-extensions/2024-04/components) to achieve our goals. While this seems a limitation at first, it has some very appealing advantages: our POS UI extension, for instance, will work smoothly on *all* POS setups, from a single iPhone running the Shopify POS app to a fully-fledged setup POS Terminal setup with a tablet and external barcode scanner.

As Shopify adds more and more extension targets and capabilities to their APIs and UI components, brands will be able to achieve even more with even less--a badly needed superpower in today’s competitive consumer landscape. 

If you have a POS UI or other kind of UI customization in mind for your Shopify store and need help launching it, feel free to [reach out!](https://nebulab.com/contact-us) We’d love to help.

How To Build Your First Shopify POS UI Extension

Product configurators are interactive UIs that allow a brand’s customers to personalize certain aspects of a product to fit their tastes and preferences. No matter whether they’re the only path to purchase or one of many possible options, configurators offer several advantages:

* Consumers often perceive customized products as more luxurious than their mass-produced alternatives, which can help reduce price sensitivity.
* Brands can use configurators to upsell customers on premium options they would not otherwise consider, potentially boosting average order value (AOV).
* Configurators are also the perfect place for cross-selling through accessories and other complementary products, increasing average basket size (ABS).

Over the years, product configurators have evolved dramatically, thanks in no small part to technologies such as 3D, AR, and VR. They are particularly popular in the fashion, furniture, electronics, and automotive industries, where total personalization and flexibility are key to an engaging customer experience.

However, total flexibility often leads to complexity, which creates a slew of UX challenges. To avoid alienating their customers, brands must manage this friction and ensure their configurator is intuitive, efficient, and enjoyable.

In this article, we’ll provide recommendations and guidelines for creating a product configurator that balances flexibility and usability, driving the results you’re looking for.

## 1. Create a Sense of Progression

Product configurators come in different shapes and sizes, but creating a sense of progression is vital for enhancing the user experience and ensuring consumers complete their purchase.

This can be accomplished by breaking down the configurator into manageable steps, giving users a sense of achievement as they complete each stage. The incremental progress keeps them motivated to continue through the entire flow and ensures you’re not overwhelming them with too much information.

<figure>
   <img src="https://cdn.sanity.io/images/kqgmf0g2/production/50b4ecf3d0b7d97a936816b3917c6bc10775eb89-1999x1130.png?fit=clip">
   <figcaption>To avoid confusion, the Framework Laptop configurator guides the user only shows the currently active step and clearly marks completed steps.</figcaption>
</figure>

## 2. Display an Accurate Product Preview

Each step of a configurator should provide users with instant feedback on their selections, ensuring that changes in options (such as color, material, or features) are immediately reflected in the product preview. This reassures customers about their decisions and creates a more engaging and enjoyable customization process.

Some brands display 3D models that users can rotate, zoom in on, and view from different angles, or they integrate AR to allow customers to visualize a product in a real-world environment.

<figure>
   <img src="https://cdn.sanity.io/images/kqgmf0g2/production/1b693df00472a9b77899af8bc7a6e26af036724e-1999x1223.png?fit=clip">
   <figcaption>For maximum engagement, Tylko allows customers to customize their product straight from the 3D rendering of their product.</figcaption>
</figure>

## 3. Calculate Up-to-Date Pricing and Shipping

In a product configurator, the price and shipping time estimate should be updated whenever the user changes their configuration.

This will help users make more informed decisions around which customizations fit their budget and delivery constraints, which in turn results in reduced friction and cart abandonment.

<figure>
   <img src="https://cdn.sanity.io/images/kqgmf0g2/production/167eaca2dcfac99b7d89cc97dc845fed77d83790-1999x1488.png?fit=clip">
   <figcaption>Cowboy clearly displays the impact of each addon on cost and shipping time, and shows alternative configurations with faster shipping.</figcaption>
</figure>

<figure>
   <img src="https://cdn.sanity.io/images/kqgmf0g2/production/1c8f23357fbb84311d4d8c93acaf0699ee7696f9-1999x1675.png?fit=clip">
   <figcaption>On mobile, a sticky header/footer can be used to keep pricing and delivery information front and center while the user interacts with the configurator.</figcaption>
</figure>

## 4. Offer Technical Explainers

Customers who are new to a brand may need additional information about specific features or options while customizing, especially in technical product categories where jargon abounds, or the functionality or benefits of particular options are not self-explanatory.

To avoid overwhelming the user with too much information at once, brands can use UI elements like tooltips or modals. These elements provide immediate, context-sensitive assistance right where the customer needs it through text, videos, and tutorials.

<figure>
   <img src="https://cdn.sanity.io/images/kqgmf0g2/production/12648a14f561a220330d221a7a71adf171751430-1999x1546.png?fit=clip">
   <figcaption>Herman Miller includes a help icon at almost every step of their configurator. When clicked, it opens a modal containing information about specific options.</figcaption>
</figure>

## 5. Provide Real-Time Validation

While clear instructions can dramatically reduce the likelihood of a user error, it’s still common for users to encounter issues while using a configurator, such as selecting incompatible options or trying to place their order without completing all the necessary steps. If not properly handled, these errors can lead to frustration and result in the user abandoning the configuration experience.

Providing visual, real-time validation as users make selections can help them easily navigate the customization process. Use clear indicators, such as red outlines and error messages, to highlight invalid choices and guide users toward valid options.

<figure>
   <img src="https://cdn.sanity.io/images/kqgmf0g2/production/75355ef1bf806c09c9be9c529067f5cdc62612d4-1999x1180.png?fit=clip">
   <figcaption>In Framework’s configurator, we highlight missed steps in red, guiding users to provide the necessary information to complete their configuration.</figcaption>
</figure>

## Product Configurators Are Never Really Done

While these best practices lay the foundation for a successful and engaging configurator, you should still periodically review and improve your configurator's UX by:

* Conducting regular surveys, questionnaires, and interviews to gather  feedback from your users about their experience with the configurator.
* Running usability testing sessions where users interact with the configurator and provide real-time feedback.
* Using analytics tools to monitor user behavior and identify patterns, such as frequently encountered issues or abandoned steps.
* Adopting an iterative design process where the configurator is continuously refined through cycles of feedback, prototyping, testing, and implementation.

At Nebulab, we’ve helped our clients build, launch, and optimize product configurators in industries where the ability to create a bespoke product is a significant competitive advantage. If you’re curious, you can learn more about our work for Framework in [our case study.](https://nebulab.com/case-studies/framework)

If you need help designing and building a new product configurator from scratch or improving your existing setup, [don’t hesitate to reach out!](https://nebulab.com/contact-us)

How To Design the Perfect E-Commerce Product Configurator

With the Ecodesign for Sustainable Products Regulation (ESPR) becoming effective on July 18, 2024, Digital Product Passports (DPPs) are now set to become a reality in the European Union within the next 2-3 years.

While it is still unclear which brands the regulation will affect exactly and what requirements it will entail, if you’re a merchant that manufactures or imports their products in the EU, you should keep up to speed with the state of the legislation so that you’re not unprepared by the time DPPs become mandatory (which is expected in 2026-2027).

[Luke Hodgson at Commerce Thinking](https://www.commercethinking.com/) has published a couple of deeply researched and incredibly thoughtful articles on the subject. You can find them here:

* [How New Luxury Brands Prepare for DPP](https://www.commercethinking.com/p/how-new-luxury-brands-prepare-for)
* [Should I care about Digital Product Passports?](https://www.commercethinking.com/p/should-i-care-about-digital-product)

Because Luke has already done an outstanding job of talking about DPPs from a regulatory standpoint, we think it’s worth approaching the topic from a slightly different angle. 

More specifically, we’ll outline three ways in which brands can ride the regulatory wave the EU put in motion with the ESPR, augmenting the customer experience around their Digital Product Passports to drive growth and engagement among their audience.


## 1. Promoting Product Transparency and Circularity

We’d be remiss if we did not mention the very goal the ESPR set out to achieve, which is to promote transparency and circularity in the manufacturing and retail industry. Far from simply being a bureaucratic concern, we think the regulation both reflects and accelerates a broader shift in consumer sentiment.

The signs are strong that [consumers are getting tired](https://www.voguebusiness.com/story/consumers/why-consumers-are-questioning-luxurys-markups) of the luxury industry’s empty promises and insane markups. As a result, the consumer landscape is getting polarized: on one end, consumers look for value; on the other, they look for artisanality and sustainability. For the latter segment, DPPs are invaluable: pre-purchase, consumers can use them to evaluate a brand’s supply chain and ESG posture; post-purchase, they can learn more on the product and access end-of-life options.

Brands can lead the way here by going above and beyond what the ESPR mandates by investing in a delightful, on-brand consumption experience; by enriching the mandatory data with editorial elements that more deeply connect the consumer to the brand; and by offering easy access to resell, repair, and recycle options.

**Example:** Many Scandinavian brands [do this incredibly well.](https://www.commercethinking.com/p/scandinavia-is-years-ahead-on-sustainability) Among them, [Nudie Jeans](https://www.nudiejeans.com/) stands out for the excruciating level of detail available about the supply chain behind each one of their products and their commitment to offering clear, easily accessible end-of-life options to customers.


## 2. Collecting (and Activating) Zero-Party and First-Party Data

For all the woes suffered by the direct-to-consumer (DTC) channel in recent years, it’s still undeniable that DTC offers brands an unparalleled amount of qualitative and quantitative data. In fact, as brands move to an omnichannel-by-default strategy, they are getting more comfortable with seeing DTC as a channel dedicated almost exclusively to data acquisition , while wholesale and marketplaces are being used to pursue sustainable growth.

In the long term, we believe there’s an opportunity for DPPs to close this gap. By effectively bypassing the sales channel and giving brands a standardized way to re-connect with their end customer, no matter how the product has been purchased, brands will be able to acquire invaluable zero-party and first-party data.

As always, how brands activate this data will ultimately make or break the experience. The most obvious use cases are customer profiling and marketing (e.g., by acquiring their email address and demographics, the brand can create a direct relationship with a previously anonymous customer).

Further down the road, there’s a tangible opportunity to graduate beyond one-way data acquisition, allowing customers to also leverage their DPPs as “proof of ownership” in a centralized or decentralized digital identity system (NFTs are the usual suspect here, but by no means the only possible technology). This would enable even richer marketing activations, more accurate insights into secondary market transactions for a brand’s products, and even peer-to-peer between the brand’s customers.

**Example:** Armani partners with [Certilogo](https://certilogo.com/) to power their DPPs. When scanning a Certilogo QR code, the consumer is prompted for their email, which is shared with the brand for marketing purposes.

## 3. Creating Phygital Brand Activations

Finally, DPPs are the perfect conduit for brands looking to create phygital experiences, blending the best of the physical and digital world and allowing customers to experience the brand’s products in novel and engaging ways.

These experiences can show up in a myriad of different shapes and forms: brands can link a customer’s information to the DPP and use it for expedited in-store access; they can grant owners of certain products exclusive perks at select venues and events; or they can allow customers to redeem digital product twins and transfer them to compatible gaming or metaverse platforms.

Phygital activations makes the most sense when the brand’s products can be seamlessly integrated into the customer’s existing day-to-day, which means that collabs are key. The ESPR and broader adoption of DPPs are likely to play an important role here, normalizing the concept of phygital experiences and pushing more brands into the space.

**Example:** During the latest Hahnenkamm Races in Austria, Hugo Boss partnered with MasterCard [to bring their BOSS x Perfect Moment ski jackets to life.](https://group.hugoboss.com/en/newsroom/news/news-detail/boss-returns-to-hahnenkamm-races-as-official-presenting-partner-and-unveils-magic-moment-wearable-technology-experience) An NFC tag embedded in the jacket’s sleeve allowed the wearer to access the races, ski lifts, and an exclusive pop-up store, as well as to execute contactless credit card payments.


## Approach Digital Product Passport Investments as R&D Projects

In this article, we have only scratched the surface of the kind of activations that DPPs might enable for consumer brands. The sky’s the limit, and the nature of DPPs means that brands will be able to evolve their implementations long after a product has been sold, continuing to release new interactions that keep the customer engaged with the brand and its products.

With that said, it’s also important to be realistic about the time horizon of the ESPR’s implementation.

DPPs will not become mandatory in the EU until 2026 or 2027–even then, it’s likely that they will only be required for publicly traded organizations initially. Rolling out DPPs in compliance with the EU’s specifications will require significant investments in supply chain transparency and digital capabilities, which are not feasible to expect of smaller operators.

As such, most brands should approach DPP investments as R&D projects at this stage. Now is the time to map out your roadmap to compliance, evaluate vendors, and think about activations that go beyond the regulatory requirements and enrich your brand’s customer experience.

Above all, we urge brands to find the right balance between being ahead of their game and containing their investment. The good news about DPPs is that they are, well, digital–there will always be time to experiment and add more functionality later on. Tests can be run in small, incremental batches on select SKUs before a broader rollout is needed.

As the ESPR is rolled out and consumers start waking up to the new opportunities afforded by DPPs, we expect their usage to become more widespread among the general population. At that point, brands that had already been experimenting will have the data, capabilities, and confidence they need to finalize their implementations and translate their experiments into a tangible competitive advantage.

Digital Product Passports and Retail’s New Growth Opportunity

With customer acquisition costs increasing by 222% between 2013 and 2022, modern brands must maximize retention and customer lifetime value. Over the last years, several brands have looked at subscriptions to help mitigate this challenge: by putting future purchases on autopilot, subscriptions can boost purchase frequency and drive more sustainable growth.

As more brands adopt subscriptions, however, many consumers have also begun experiencing [subscription fatigue](https://hbswk.hbs.edu/item/with-subscription-fatigue-setting-in-companies-need-to-think-hard-about-fees), which has led to a slew of cancellations. This trend can only get worse with the recent challenges in the macroeconomic environment, as consumers look to acquire greater control over their spending and cut back on unnecessary purchases.

In other words, subscriptions are a great business model, but they’re becoming increasingly challenging for e-commerce businesses to execute.

This is a complex, multi-faceted challenge that would take several blog posts to unpack. Today, we’d like to start by offering some tactical advice on how you can improve the pre-checkout UX of your subscription offering and incentivize more customers to subscribe based on our experience with brands such as [Cometeer](https://cometeer.com/), [MeUndies](https://meundies.com/), and [Blue Apron](https://www.blueapron.com/).

## #1: Create a “How It Works” Section

Every online store that offers subscriptions should have a “How It Works”section. This section can be a standalone page or embedded in the home page, landing page, pricing page, or any other prominent touchpoint on your e-commerce site.

A good How It Works section equips consumers with all they need to know about your product, pricing, and delivery options. It can be a significant make-or-break moment in the consumer’s decision-making process.

In our experience, a good How It Works page design covers:

* **Benefits, not features:** It goes without saying, but you should tell customers not just what you sell but also why it’s relevant to them. It’s good to know your meal delivery service only ships organic ingredients–but why should they care?
* **Subscription options:** Do you let customers pause, skip, and cancel deliveries at any time? (Hint: You should.) Say so! Let your customers know they will still have complete control and flexibility in managing their subscriptions.
* **Social proof:** UGC is always a critical component, but it becomes even more important with a subscription model, where there’s a significant trust barrier to overcome. Show your best reviews–even better if you include images/videos!

<figure>
   <img src="https://cdn.sanity.io/images/kqgmf0g2/production/0d6024043b61b8db3d4e760aab3ed3fa78b17283-1600x1052.jpg?fit=clip">
   <figcaption>Purple Carrot provides detailed information on its Plans page, which leads to customers to sign-up and eventually checkout.</figcaption>
</figure>

For example, Purple Carrot uses its Pricing page to guide aspiring home chefs through its plant-based meal delivery service. This page helps customers complete the purchase by clearly outlining the high-quality nature of their product, per-meal pricing, and delivery and subscription management options. (But it could still be improved by adding some social proof!)

## #2: Put Your Pricing Front and Center

While new customers may be willing to splurge on a one-time purchase, they will often want reassurance they’re getting the best value for their money when committing to a recurring subscription.

The first step is to make your pricing clearly visible. It seems simple, but you’d be surprised how many brands hide their pricing information in the product details or hard-to-spot sections of the page–see Lovevery or Summer Fridays, highlighted below, as an example.

<figure>
   <img src="https://cdn.sanity.io/images/kqgmf0g2/production/68294e038d95e6f577cc162a5c5035f34b0a6a04-1600x1052.jpg?fit=clip">
   <figcaption></figcaption>
</figure>

To improve the visibility and clarity of pricing, consider playing with:

* **Text size:** Adjust text size so it stands out from surrounding content.
* **Contrast:** Use contrast effectively to make text pop against its background and nearby items, enhancing readability.
* **Whitespace:** Incorporate white space to declutter the page, making important information easier to locate and the layout more appealing.

Whenever possible, you should also try to break down your pricing in clever ways that highlight the value of your product. For example, meal delivery services typically use “cost per meal” as the north-star metric, as it helps customers clearly understand how much they’re spending to feed themselves and their families.

<figure>
   <img src="https://cdn.sanity.io/images/kqgmf0g2/production/157481bf311a40b75dcec56a1bc087d57019ba1a-1600x1052.jpg?fit=clip">
   <figcaption>Both Athletic Greens and Graza do a great job of clearly showing pricing information and plans on their websites.</figcaption>
</figure>

Finally, featuring pricing on other key touchpoints, such as the homepage page, as done by Athletic Greens, can significantly enhance user experience. Graza also does a great job by detailing pricing information for first and recurring orders directly in the Buy section.

Refining these elements can dramatically improve navigation and satisfaction, steering users from curiosity to commitment.

## #3: Don’t Rush Customers to Checkout

When brands use calls to action (CTAs) like "Get Started," they often rush the customer straight into the checkout process. Yet many users interpret such CTAs as an invitation to start exploring the brand, not to immediately commit.

While it might sound counterintuitive, we often advocate for brands not to disorient or frustrate users by teleporting them to the PDP or–worse–the checkout funnel if they haven’t had a chance to learn about the brand yet.

<figure>
   <img src="https://cdn.sanity.io/images/kqgmf0g2/production/9091d6b62146d8ace325963e55f94ece32d64475-1600x1052.jpg?fit=clip">
   <figcaption>MeUndies provides clear subscription service information after clicking the primary CTA and asks users to sign up at the end of the process.</figcaption>
</figure>

MeUndies, a Nebulab client, knows this very well. They link the “Get Started” CTA on their home page to the “How It Works” page. They don’t ask for the customer’s personal information until much later in the customer journey.

By earning the customer’s trust with content and data before moving into the actual checkout funnel, brands can create a smoother experience, reducing friction and increasing conversion rates.

## Bonus: Optimize Your Quiz Experience

While quizzes are not exclusive to subscriptions, subscription brands often use them to help prospective customers find the ideal product variant, subscription plan, and delivery frequency.

As a bonus, here are some tips on how to nail your quiz’s customer experience:

* **Offer an ETA**: By clearly stating the number of steps and completion time of your quiz, you can proactively manage customer expectations and increase engagement. Of course, this only works if your quiz is _actually_ quick!
* **Allow moving back and forth:** Customers should be able to move between different steps of your quiz and revisit previous questions without starting from scratch. You should also ensure that navigation is consistent with your site’s design.
* **Store user progress:** Ideally, you should store a user’s progress as they go through the quiz so they can resume it later. Pro tip: Just like you send cart abandonment emails, ask for the customer’s email upfront so that you can enroll them in a “quiz abandonment” flow if needed!

These tips will help create a smooth and pleasant quiz experience, which can dramatically impact your add-to-cart and conversion rates.

## Ready To Master Your Subscription UX?

Here's a brief refresher on the best practices that can elevate your subscription service:

1. Craft a compelling "How It Works" section that focuses on benefits rather than features, clearly outlines delivery and subscription options, and establishes credibility through social proof.
2. Put pricing front and center, not just on the PDP but also at other touchpoints in the customer journey. If possible, break down your pricing to demonstrate the value you deliver.
3. Rather than sending customers from your homepage straight to the PDP or checkout, focus on educating them on the value of your offering and only then closing the sale.

And our bonus tip: if you have a quiz functionality, allow your customers to navigate back and forth between steps and store their progress for later.

If you need UX design for your subscription offering, we can help! Since 2011, we’ve been helping brands anywhere from pre-revenue to $500M/year with the design, launch, and optimization of their subscription experience. [Feel free to reach out!](https://nebulab.com/contact-us)

3 (+1!) E-Commerce Subscription Tactics You Might Be Missing

In the DTC landscape, where every pixel of your e-commerce site holds the potential to captivate customers and drive sales, the significance of a robust design system cannot be overstated. It's not just a luxury anymore—it's a necessity.

A design system comprises patterns and methodologies that assist not only designers and developers but also product managers and marketers in creating cohesive and user-friendly digital products. While various models exist, most encompass a pattern library, design tokens, brand and style guidelines, along with documentation detailing the system's usage.

At its core, a design system is the backbone of your brand's digital identity, ensuring that as your e-commerce business scales, every page, button, and interaction maintains a consistent brand image and delivers an optimized user experience.

But diving into the world of design systems can often leave brands navigating a maze of challenges, especially under the relentless pressure to rapidly deliver fresh, compelling landing pages and new features. That's where the magic of design systems truly shines—by providing a reservoir of pre-built components and guidelines, they turbocharge the creation process, allowing your team to keep pace with demand without sacrificing quality.

Explore the power of design systems to transform your digital journey and drive success in the competitive e-commerce landscape.

## How Design Systems Accelerate Time to Market

In a traditional scenario, the journey of redesigning product pages begins with designers crafting prototypes. These prototypes then undergo a series of checks: stakeholders review, QA stages with engineers, validation by UX researchers, and eventual exposure to a segment of the site’s visitors for performance evaluation through A/B testing. Multiple design iterations are crafted and assessed, with many discarded in pursuit of the optimal solution. This iterative process is vital to ensure only the highest quality updates reach the entire customer base. Yet, the involvement of various teams and multiple revisions makes it inherently time-intensive.

However, with the aid of a design system, the approach is streamlined to fewer phases, significantly accelerating the design-to-production timeline. Tools like [Figma](https://www.figma.com/) provide a collaborative environment where designers can rapidly prototype by pulling pre-defined components and patterns into their workspace, cutting down prototype creation from days to hours.

But the efficiency doesn't end there. Developers can swiftly compile new features by accessing the same pool of components, bypassing the need for detailed visual direction for every interface. Tools like [Storybook](https://storybook.js.org/) become invaluable in this context, enabling the isolation and coding of UI elements for seamless integration. This streamlined workflow ensures that projects progress swiftly from ideation to implementation, allowing teams to deliver high-quality updates in a fraction of the time.

## Implementing a Design System: First Steps for E-Commerce Brands

> A style guide is an artifact of design process. A design system is a living, funded product with a roadmap & backlog, serving an ecosystem. — Nathan Curtis

The journey towards a comprehensive system that aligns with [Nathan Curtis](https://medium.com/@nathanacurtis)'s vision—a "*living, funded product with a roadmap & backlog, serving an ecosystem*"—might feel overwhelming. Yet, the truth is, embarking on this path doesn't require an army. It's about smartly leveraging what you have and starting somewhere meaningful. Let's explore practical steps to initiate and nurture a design system with your current resources.

- **Conduct a Design Audit**: Begin by taking stock of your current design elements across all digital assets. This includes colors, fonts, button styles, and any reusable components. The goal here is to identify inconsistencies and opportunities for standardization. A comprehensive audit paves the way for a more cohesive digital presence. [FigJam](https://www.figma.com/figjam/) is a great tool to kickstart this first step and to keep all the screenshots accessible to everyone on the team.


- **Assemble a Cross-Functional Team**: This doesn't mean hiring new roles but individuating people across existing departments who will be responsible for creating and maintaining the design system. Even a small team, comprising a designer, a developer, and a product manager, can kickstart the process. Their diverse perspectives will shape the design system to be both usable and technically feasible.


- **Create Design Tokens and Components**: Start by standardizing the most frequently used elements. Design tokens are the building blocks (like colors, typography, and spacing) while components are reusable UI elements (such as buttons, and input fields). Focusing on these foundational elements is essential to pave the way for creating patterns (components that come in a specific combination).

- **Set Up Documentation**: Initially, your documentation could be as straightforward as a shared online document or a simple internal wiki. Maintaining the same structure (tokens, components, patterns) and vocabulary of your design system is the key to fostering accessibility and clarity.

<figure>
  <img src="https://cdn.sanity.io/images/kqgmf0g2/production/0202c0d7fe5620978d813c8a6d989a41ec7084e5-1600x1052.jpg?fit=clip" alt="Cometeer design system by Nebulab">
</figure>

Remember, the essence of a design system is to foster efficiency, consistency, and innovation across your online store. Starting small and scaling thoughtfully can lead to significant long-term benefits, setting a strong foundation for growth and adaptation.

## Overcoming Obstacles to Adoption

Introducing a design system might initially meet with skepticism from your teams. Overcoming this involves embracing a culture of collaboration and shared ownership. As discussed in [Boost Your eCommerce Team’s Productivity with Open Design](https://nebulab.com/blog/the-open-design-process), developing an open design process is essential for fostering broader adoption of the design system throughout the organization.

Demonstrating the design system's value through small, visible projects that improve the e-commerce experience—such as improving the navigation bar or updating product grids for holiday sales—showcases the practical benefits. These successes not only build confidence in the system but also serve to highlight its effectiveness in real-world applications.

Organize hands-on sessions where stakeholders from different teams—be it design, development, or even marketing—redesign an e-commerce product page or streamline the checkout flow using the design system components. This is a great opportunity to turn skeptics into advocates (and they can have fun doing it, too!).

> A design system’s value is realized when products ship features using parts from the system.
> 
> — Nathan Curtis

## Tips on Scaling Design Systems

As your e-commerce brand navigates through various stages of growth, the need for your design system to adapt and scale becomes increasingly apparent. A scalable design system not only ensures consistency across your digital presence but also facilitates a more collaborative and efficient workflow as your team expands and your product offerings diversify.

Here are some practical tips on achieving just that, ensuring your design system remains a thriving, integral part of your brand's evolution:

- **Foster Shared Language**: In a design system, a "primary button" component is defined with specific attributes such as size, color, and behavior. This terminology is consistently used by both designers (on Figma) and developers (on the code), ensuring seamless communication and alignment throughout the project.

- **Prioritize Regular Reviews**: Schedule frequent review sessions dedicated to assessing and updating the design system. These reviews are opportunities to adapt to new brand needs, incorporate feedback, and integrate emerging design and tech trends.

- **Encourage Contribution**: Organize workshops to make the design system a collaborative project where team members can contribute ideas, feedback, and improvements. This not only keeps the system dynamic but also fosters a sense of ownership among the team.

- **Document Religiously**: Keep comprehensive and up-to-date documentation of the design system. The documentation can be on Figma, a separate document, or a tool. It can even be a website, it depends on project dimensions. With [Shopify Polaris](https://polaris.shopify.com/), Shopify provides clear and accessible documentation to streamline the design and development process for Shopify merchants and partners.

Implementing these strategies can help your design system remain a vital, evolving asset that supports your brand's growth and adapts to its changing needs.

## Design Systems: The Blueprint for E-Commerce Excellence

In wrapping up our journey through the landscape of design systems, e-commerce brands must grasp just how vital these frameworks are. At the heart of it, design systems foster higher quality products and markedly enhance the user experience. One of the standout benefits is scalability. As your brand grows and your digital footprint expands, a design system ensures that scaling up doesn't mean starting from scratch every time. This seamless scalability goes hand in hand with maintaining brand consistency—vital for cultivating brand recognition and trust among your audience.

Moreover, design systems contribute to better website performance. By eliminating repetitive components and streamlining the design-to-development process, websites become leaner and more efficient. With a design system in place, accessibility is not the only built-in standard; for brands eyeing the global market, having a design system is a strategic step for embedding localization best practices right into each pattern, ensuring that your brand resonates with diverse cultural sensibilities —as we explained in [Expanding Your Brand Globally With Cross-Cultural Design](https://nebulab.com/blog/cross-cultural-ecommerce-design).

Embracing a design system isn't merely an operational upgrade; it's a commitment to elevating your brand's digital presence, ensuring that every interaction your customer has with your brand online is as intuitive, engaging, and memorable as possible. As you consider the next steps for your online store, remember that a design system offers more than just a collection of components. It's a pathway to crafting experiences that truly resonate, setting your brand apart in the competitive digital marketplace.

Why E-Commerce Brands Should Have a Design System

In the last few years, customer acquisition has become more challenging and expensive for direct-to-consumer (DTC) brands due to App Tracking Transparency, increased competition, and inflationary pressure. With Chrome deprecating third-party cookies in late 2024/early 2025 and the resulting “signal loss,” marketers expect campaign performance to take another hit, driving Customer Acquisition Cost (CAC) further up.

As a result, e-commerce executives have been paying increased attention to customer retention strategies. Existing customers are cheaper to re-engage, have a higher average order value, and can drive organic acquisition through referrals, UGC and word of mouth.

In our conversations with clients, Customer Relationship Management (CRM) strategies have been top-of-mind, and new or revamped loyalty programs are among the main projects that brands are putting on the roadmap for the next year–often coupled with more intentional zero-party/first-party data strategy and better personalization capabilities.

However, not all loyalty programs are created equal: different growth stages, categories, and business models call for different program designs. The loyalty ecosystem has become increasingly complex to navigate, with a deluge of tools and tactics that brands can tap into. While this leads to more flexibility and healthier competition, even expert practitioners are often at a loss when they want to launch a new program or when they need to understand the performance and pitfalls of their existing one.

In this article, we’d like to cover the e-commerce loyalty programs through a first-principles approach. We’ll look at how to pick a program structure, how to design the “earn” side and the “burn” side of your program to maximize ROI–based on factors such as your geography, target demographic, product category, and business model–and how to measure the effectiveness of your program.

Let’s dive right in!

## How to Structure Your Loyalty Program

The number one mistake we see brands making when rolling out their loyalty program is not being intentional enough when it comes to program structure. Instead, they just do the first thing that comes to mind, copy popular competitors or other brands they admire, or mindlessly adopt the functionality of whatever loyalty app they have decided to install (which, in turn, is often dictated by the app’s popularity).

Unfortunately, loyalty programs are extremely nuanced. The ideal program depends on factors such as geography, target demographic, product category, business model, internal capabilities, and several other elements that, taken together, make certain structures and rewards more effective than others.

If you don’t account for all these elements, you will end up with a program that’s underperforming at best and detrimental at worst. Think about a luxury fashion brand that releases a discount-based loyalty program: customers wouldn’t simply be uninterested, but some might actively resent the brand for putting forward a cheap, transactional program that is not consistent with your brand’s image.

In fact, we find that _consistency_, rather than _uniqueness_, is the primary trait of successful loyalty programs. **Good programs are consistent with the needs of both the brand and its consumers–at all times and across all touchpoints.** You don’t need to be cleverer than everyone else; you just need to consistently make your customers happy in ways that will ultimately benefit the brand. If you can align these two needs, you’re halfway there.

As you can imagine, that’s easier said than done. In reality, most brands are pulled in a million different directions, and a compromise is often needed to find the ideal structure.

In the following paragraphs, we’ll outline a streamlined, repeatable process that you can follow to design the foundational aspects of your loyalty program.

### 1. Pick a Loyalty Program Type

The very first step is to pick the structure of your loyalty program.

You’ll find a lot of conflicting and confusing information on the web about the different possible types of loyalty programs–most resources are trying to one-up each other by adding one more variation to a never-ending list of program structures.

Let’s simplify this. In our experience, all loyalty programs fall into one of two categories:

* **Balance-based programs.** In a balance-based program, customers are awarded points when they perform specific actions (e.g., spending with the brand) or at key moments (e.g., on their birthday). They can then spend those points to redeem rewards such as discounts or free products. This is similar to having a bank account where you accumulate money and then spend it.
* **Tier-based programs.** Tier-based programs are similar to transactional programs in that you design a way to “quantify” how loyal customers are. However, rather than the customer “spending” their loyalty, the customer is assigned a loyalty tier (which can be permanent or not). Based on the customer’s tier, they are then granted different perks, such as free shipping or early product access.

Everything else (gamified programs, [paid memberships](https://nebulab.com/blog/ecommerce-memberships), value-based programs, etc.) is a variation of the above. For instance, a paid membership is just a tiered loyalty program where your tier is determined by a digital subscription plan: you pay the brand every month just to have access to the perks of that specific tier.

Neither type of program is superior to the other. Whether to go with a balance-based program or a tier-based program is primarily a function of your brand’s positioning, price point, and consumer demographic:

* **Balance-based programs are better for brands selling to a price-sensitive audience** that worries about value for money and responds better to more tangible rewards. These customers are likely already subscribed to similar programs, e.g., at their grocery store, making the model more familiar.
* **Tier-based programs, on the other hand, are a better fit for a more affluent type of consumer** who worries about status more than about convenience. The aura of exclusivity associated with being on the upper tiers of a brand’s loyalty program is a perfect match for such a demographic.

Another factor to take into account has to do with the nature of the rewards you expect to give your customers: some rewards (such as freebies) are supposed to be one-offs, which makes them a better fit for a balance-based program, while others (such as free shipping) are better modeled as “permanent” rewards, which makes them a better fit for a tier-based program.

If you can’t decide, you should know that it’s not uncommon to see hybrid programs: Most airlines, for instance, have loyalty programs where consumers accumulate rewards as they travel with the airline. Certain perks (e.g., priority boarding) are unlocked through a tier-based mechanism, while others (e.g., free trips) are unlocked through a balanced-based mechanism.

**However, as we’ll see later, simplicity and ease of use are key elements that determine the success of a loyalty program**, so you should only take this approach as a last resort, _especially_ if you’re launching a brand-new program.

### 2. Model the “Earn” Side of Your Program

Once you’ve chosen the foundational structure of your loyalty program, it’s time to determine how your customers will earn their rewards. At Nebulab, we typically refer to these as _triggers_ because they trigger your customers to carry out certain behaviors.

When designing a trigger, there are only two elements you need to think about:

* What is the action you want customers to take?
* How are you going to reward customers for that action?

They might seem like trivial questions, but they’re really not. Think about it this way: a loyalty program is an investment. You’re giving away value (in the form of discounts, freebies, services, etc.) in exchange for a specific return. If you get your triggers wrong, you might fail to drive action or drive the wrong action, which means you’re giving away your loyalty program perks in exchange for nothing.

While most brands start by rewarding customers for spending more, you don’t have to stop there. Here are a few additional ideas that might be relevant:

* **Acquire zero-party data.** If you need more information about your customers, how about _asking_ them? You can use your loyalty program to collect data about a customer’s preferences, habits, and attitudes and then activate it as part of your personalization strategy or product manufacturing process.
* **Encourage event attendance.** If you host virtual or IRL events, you can encourage attendance by rewarding attendees through your loyalty program. (Note: Exclusive event access also makes for a very appealing loyalty perk, so this goes both ways!)
* **Collect user-generated content (UGC).** Are you struggling to collect UGC for your brand, or do you need some organic content for a new product launch? You can reward customers for posting content on social media and allowing you to reuse it across your digital properties.
* **Promote referrals.** For obvious reasons, referrals and loyalty go hand-in-hand. If you want to drive more referrals, you can use your loyalty program to encourage customers to tell their friends about your brand. Bonus: Make it an even better deal by also rewarding the _referee_, not just the referrer!

These are very generic examples that will apply to most brands. However, as we’ve already said, the sky’s the limit: find ways to activate your loyalty program that make sense for your brand, and keep in mind that the “right” triggers will change over time.

When working with brands, we encourage them to treat their loyalty program as a blank canvas that they’re constantly drawing on. At any given time, you should be able to draw a straight line from your current goals and challenges to your loyalty program’s structure: How does your program drive behavior that helps your business reach the next level?

### 3. Model the “Burn” Side of Your Program

Once you’ve established how customers will advance in your loyalty program, you need to determine what perks you’ll offer.

A common mistake at this stage is copying what everyone else does and offering discounts without thinking about what your customers really want.

Typically, we bucket loyalty program perks into four categories:

* **Exclusivity.** These perks include exclusive/early access to products, content, or events. They are typically a good fit for premium brands with an established “brand universe” (i.e., digital and physical IP) that they can expand, remix, and leverage as part of their loyalty program.
* **Cash.** These are more tangible monetary perks such as discounts, cashback, freebies, free shipping, and other forms of value add. They are typically a good fit for value-driven brands, where consumers are more price-sensitive and want to know they’re getting the most bang for their buck.
* **Services.** Think personal shoppers, pet grooming, and other services you can bundle with your product to create a holistic brand experience. They are a good fit for product categories that are service-adjacent (such as pets), require constant education (such as apparel/beauty), or both.
* **Community.** Exclusive communities are becoming increasingly popular, allowing customers to retreat from the open web into a “safe space.” These communities can double down as invaluable sources of UGC and customer feedback, creating a powerful loop.

It’s worth spending a few words on discounts, which are extremely common in loyalty programs. While discounts are easy to implement and seem like a safe bet, they are not necessarily the right choice for all brands. Discounting has several problems:

* **It’s expensive.** While this ultimately depends on your profit and operating model, discounting products year-round can severely impact your bottom line.
* **It scales poorly.** With most of the perks we have described, you can access economies of scale. That’s not the case with discounting: no matter your size, a 10% discount will always mean giving away 10% of revenue.
* **It hurts your brand.** Discounting lowers the perceived value of your product and can easily backfire, especially if your brand has a premium positioning.

So, how do you decide which perks to offer? It’s pretty simple, actually: you just ask!

Talk to 10-20 of your most loyal customers, i.e., those who will realistically reach the upper echelons of your loyalty program. You’ll want to ask them about their lifestyle, how your brand fits into their day-to-day, what other brands they shop with, and what they would value in your loyalty program. This should give you a comprehensive overview of what perks will resonate the most.

A final note: if your brand sells in different channels (e.g., online and in your physical stores), design your perks to appeal to customers no matter their shopping channel. For instance, a free shipping perk doesn’t make sense to someone who typically shops in-store, but having access to a personal stylist once a year is much more enticing.

## Optimizing Your Loyalty Program CX

When we talk about Customer Experience (CX), we refer to _how_ customers will interact with your loyalty program. Making your program as simple as possible to understand and consume is one of the main factors determining its success.

On that note, here are a few suggestions for creating an amazing loyalty program CX:

* **Unify the experience.** By funneling as many of your CRM operations as possible through your loyalty program, you will streamline the customer experience, maximize enrollment rates, and reduce operational overhead for your team. This can go as far as enrolling any customer with a registered account into your loyalty program.
* **Keep it simple.** At the same time, you want to avoid overcomplicating things: if customers get confused, they might stop engaging with the program. Provide clear instructions for earning and consuming rewards, and keep reminding customers of the existence and structure of your program across different touchpoints (e.g., via email, SMS, at checkout, etc.).
* **Leverage personalization.** Loyalty program personalization is a somewhat sophisticated but compelling technique. Some perks resonate more than others: if you can identify which customers are most likely to appreciate them, you can effectively maximize customer engagement.

Remember that if you’re using a third-party app to power your loyalty program, your ability to customize the CX might be somewhat limited. This isn’t a bad thing per se, but it is something you’ll want to account for when picking your ideal partner. You also shouldn’t be scared of deploying a little bit of custom technology, if it helps you stand out from the crowd and create a loyalty program that your customers will love you for.


## Measuring Loyalty Program Effectiveness

Launching your program is only half the battle. As we’ve mentioned, a good loyalty program is like a blank canvas: you should constantly adjust it to drive the behavior you want at that moment in time. To do that effectively, you need to measure the success of your program.

What KPIs to measure ultimately depends on your program's structure, perks, and rewards. At a minimum, you’ll want to look at the following:

* **Enrollment Rate:** % of unique customers who enrolled in your program
* **Engagement Rate:** % of unique customers that engaged with your program in any capacity (e.g., looking at their balance)
* **Redemption Rate:** % of unique customers that used a perk from your program
* **AOV, LTV, and Time-Bound Retention:** you’re already measuring these for your regular customers. For your loyalty members, you want to measure the program’s incrementality with respect to these KPIs–more on that below.
* **Program Costs:** you should have a clear picture of both variable costs (discounts, freebies, events, etc.) and fixed costs (IT, training, etc.).

Finally, don’t forget about customer feedback! Ideally, you should constantly seek qualitative and quantitative feedback from your customers in the form of NPS surveys and moderated/unmoderated interviews to improve the program.

### A Note on Self-Selection and Program Incrementality

Unfortunately, the literature on measuring loyalty program effectiveness can be extremely poor, when not misleading. Most resources will point you to metrics such as Customer Lifetime Value (CLTV) and leave it at that. Some will tell you to compare metrics between members and non-members, which is awfully incorrect.

**When it comes to loyalty programs, what you want to measure is their _incrementality,_ i.e., to what extent the loyalty program _actually_ affects your KPIs.** If you do that, you’ll find that the incrementality of any loyalty program is much lower than what you’d see if you just computed the performance delta between members and non-members.

For example, let’s assume you want to measure how much your loyalty program contributes to increasing Average Order Value (AOV). You look at the AOV of customers enrolled in your program and find that it is, on average, $25 higher than for non-members. You might be tempted to conclude that your loyalty program leads to a $25 increase in AOV, but you would be wrong–_very much_ wrong.

Think about it this way: many of your loyalty program’s members would have spent the exact same amount (or perhaps just a little less) with your brand, _even if the loyalty program was not there to begin with._ These customers are _not_ spending more because they’re subscribed to your loyalty program; instead, they have subscribed to your loyalty program _because_ they were spending more in the first place. This statistical mistake is called self-selection bias, and it’s unfortunately very common among inexperienced practitioners.

To properly compute program incrementality, you need to rely on techniques such as difference-in-differences analysis, where you measure a metric before and after customers join your program, and Propensity Score Matching (PSM), where you “cluster” customers by affinity and compare their behavior. Unfortunately, it would take an entire article to unpack these techniques, so we encourage you to do additional research.

## Loyalty Programs Are Powerful, but They Require Attention

As you’ve seen, launching a loyalty program for your brand is not an initiative you can treat as an afterthought. It requires careful planning, spotless execution, and continuous, data-informed iteration to maximize your ROI. Otherwise, you might end up with a loyalty program that’s more expensive than the incremental revenue it generates.

In this article, we’ve only scratched the surface, but there’s so much more: depending on the structure of your program, you’ll need to think about tier pricing or point expiration; interviewing customers is an art in and of itself, as is measuring program incrementality. All of these topics would warrant separate articles.

If you need help launching your program or overhauling your existing one, feel free to reach out! Together, we can create a program that will grow your business while delighting your customers.


The Ultimate Guide to E-Commerce Loyalty Programs

The web is full of e-commerce websites that boast over-the-top designs, top-notch storytelling, and incredible lifestyle imagery. However, some of these stores still fail to effectively acquire new customers, or to give previous customers a reason to come back.

Faced with this conundrum, brand owners often fall into the trap of adding more products, more content, and more apps to their store in hopes of solving the problem. Unfortunately, more often than not, this approach only makes the situation worse, leading to a more bloated, slower store that drives even more customers away.

When your store is not generating the results you’re looking for, it can help to see things from a fresh perspective, and design audits are structured to accomplish precisely that goal.

A design audit is a systematic review of specific areas of your store. The goal is to identify bottlenecks that are artificially driving down KPIs such as conversion rate (CVR), average order value (AOV), or repeat purchase rate (RPR). The audit benchmarks the store's visual design and user experience against industry best practices, considering factors such as customer feedback and satisfaction, accessibility, information architecture, and page speed across different device categories.

At Nebulab, we’ve been running design audits for our clients to help them identify what touchpoints (or absence thereof) create the most friction, what opportunities hold the most growth potential, and where to focus next. In this article, we’ll examine what benefits an audit can deliver to your brand, when it makes sense to run a one, and how the ideal audit is structured.

### The Benefits of E-Commerce Design Audits

A good design audit will not only provide you with a list of usability issues and opportunities for improvement: it will also help you understand why these are the right things to be focusing on.

For example, fashion brands often struggle with their product discovery flow. With an extensive product catalog, it can be challenging to implement proper search and filtering functionality and strike the right balance between what the consumer is looking for and what products the brand wants to prioritize. The business impact is enormous: [according to Baymard,](https://baymard.com/research/ecommerce-product-lists) cart abandonment rates on e-commerce sites with poor product listing pages are in the 67-90% range, dropping to a mere 17-33% when the usability issues are corrected.

By arming brands not just with insights about the status of their customer experience, but also with data about the business relevance of those insights, design audits allow brands to move faster and with more confidence as they work to improve your top line and bottom line.

Here are a few other benefits of e-commerce design audits:

* **Conversion Rate Optimization:** many brands approach CRO through the lens of A/B testing, running experiments for every change they have in mind. While A/B testing has its role, it comes with non-negligible [complexity](https://nebulab.com/blog/ecommerce-ab-testing-mistakes) and is not always warranted. A design audit can highlight the “fundamental” improvements you can make to increase conversions immediately, while also identifying areas where more data is needed to make a decision.
* **Brand Consistency:** early-stage brands need to move fast. As designers work frantically to keep up with the pace of the business, brand consistency often takes a hit. A design audit can provide the opportunity for a “brand reset,” taking stock of the brand’s digital touchpoints and ensuring they’re all working in harmony to provide a coherent image of your brand.
* **Stakeholder Alignment:** while the human element can never be completely removed from decision-making, design audits help harmonize the opinions of different teams and stakeholders by bringing trusted qualitative and quantitative insights into the discussion. In turn, better stakeholder alignment leads to improved team satisfaction and higher productivity.
* **Overhead Reduction:** sometimes, brands create human-driven processes to make up for existing inefficiencies. Design audits can shed light on situations where a better website design choice or a greater amount of automation can help you reduce operational overhead, freeing up your resources to focus on more strategic, higher-leverage projects.
* **Search Engine Optimization:** while design audits are typically not directly aimed at SEO, many design improvements can boost SEO as a secondary benefit. Some examples of this include improvements such as adding breadcrumbs to your navigation and improving website performance on desktop and mobile.

At this point, the advantages of conducting a design audit should be sufficiently clear. But how do you know when to perform one?

### When To Conduct a Design Audit

For brands that iterate on their online store very often, it’s helpful to perform design audits at a fixed cadence, e.g., every six months. With that said, there are a few additional key moments and indicators you want to watch out for:

* **After a major feature release:** it is often a good idea to follow up on large feature releases with a design audit. This can help guarantee brand consistency and ensure that no guidelines have been overlooked while implementing the new functionality. In this case, the audit can be scoped to the portions of your digital experience that have been changed significantly.
* **When you see a drop in KPIs:** if you see a drop in performance and can’t pinpoint the root cause, a design audit might help you clarify the problem. You can look at which metrics were impacted to understand where to focus your investigation or run a site-wide audit if you’re unsure where the friction is. Examples here are an increase in bounce rate, a drop in conversion rate or a decrease in average order value.
* **When you need to drive efficiency:** if you’re looking for ways to increase business efficiency, a design audit can help you uncover cumbersome user journeys that can be streamlined or automated. In this case, you should also evaluate an audit of your back office, as it has the potential to to highlight ways that you can make your team’s lives easier.

If you fit one of these scenarios, a design audit might be in order. More broadly, if you are facing a CX-related issue that could benefit from a fresh pair of eyes, a design audit can provide the clarity you need.

<figure>
  <img src="https://cdn.sanity.io/images/kqgmf0g2/production/5e46eafbb3763455a579d32443bc1d9ee2bf24fd-1600x1052.jpg?fit=clip" alt="How we conduct a design audit at Nebulab">
</figure>

## How We Conduct Design Audits

When our design team conducts an audit, the content is typically customized based on factors such as the brand’s stage, target audience, product category, e-commerce business model, and current challenges and priorities, as reported by key stakeholders.

That said, there are certain steps in our audit process that we always follow, and they can serve as a good template if you want to run a design audit in-house.

### 1. Define the Audit Scope

The first step is always to determine which areas of your website the audit should cover. 

For example, if the majority of your traffic comes from mobile, it makes sense to prioritize the mobile experience over desktop. If you’re seeing a drop in AOV, you’ll want to look deeper into your product discovery and cross-selling/upselling flows.

At this stage, we typically examine topline traffic and talk to stakeholders to understand the key issues and opportunities. We want to ensure the audit is as objective as possible while also reflecting the business's real challenges and goals.

### 2. Analyze Customers and Competitors

When conducting an audit, we often find that brands have a treasure trove of data they’re not exploiting fully. Tools like Google Analytics, heatmaps, product reviews, customer support tickets, and loyalty programs can all offer valuable insights into user behavior, help uncover patterns, and identify points of friction in the customer experience.

In addition to looking at the brand’s zero-party and first-party data, we also look at competitors to evaluate them against the brand’s experience. While you don’t want to be the same as everyone else, understanding how your competition stacks up to you can help you prioritize areas for improvement, brainstorm new customer touchpoints, and double down on your competitive advantages.


### 3. Evaluate Your UX and UI

This is where things get interesting! Based on the context we have collected, we evaluate the store's digital design against industry best practices and foundational design principles, blending them with our expertise to pinpoint the areas of highest impact.

This assessment is completed by carrying out specific tasks from the customer’s perspective. It can be a site-wide analysis or it can focus on select areas of your store, such as:

* Homepage
* Main navigation
* Categories
* Website search
* Product Detail Page (PDP)
* Product Listing Page (PLP)
* Filtering and sorting
* Cart and checkout
* Account pages

With each insight, we include references to the guidelines and best practices that informed our analysis, one or more actionable recommendations on how to create a better user experience, and an explanation of the expected business impact.

Sometimes, we also provide sketches and mockups of the design enhancements we suggest so you can better envision the result.


### 4. Prioritize the Results

It is not uncommon for a design audit to run 40-50 pages in length. If left in its raw form, such a vast amount of information can be challenging for brands to ingest and make sense of, leading teams to endless debates about what suggestions to implement and, ultimately, analysis paralysis.

To avoid this problem and aid brands with prioritization, we score the audit’s results according to their **impact** on customer experience, **desirability** to the end user, and **feasibility** for the brand’s design/development team.

This scale, coupled with a scoring mechanism and full executive summary, allows for a more strategic allocation of resources that accounts for the brand’s current goals and their broader business context.


## Design Audits Foster a User-Centric Mindset

Besides their immediate benefits, what we appreciate most about e-commerce website audit is their ability to **foster a customer-centric mindset.**

A good design audit taps into multiple sources of quantitative and qualitative insights and industry best practices, and presents all the data in a digestible and actionable way. In doing so, it helps brand executives elevate the customer experience to perfectly fit into the customer’s daily context, needs, and aspirations. This inevitably leads to happier customers and stronger business outcomes.

If you have any questions about conducting design audits or would like our team to help with your very own audit, [feel free to reach out!](https://nebulab.com/contact-us)

Does Your E-Commerce Store Need a Design Audit?

In our [previous article about cross-cultural design](https://nebulab.com/blog/cross-cultural-ecommerce-design), we delved into the intricacies of crafting online shopping experiences that resonate with diverse cultural backgrounds. We explored how Cross-Cultural Design can be the beacon that guides brands through the complexities of global expansion, emphasizing that a one-size-fits-all approach is rarely practical.

This time, we'd like to focus on a particular design trend that originated in the East and is gaining traction worldwide in specific market segments.

Characterized by busy interfaces and seemingly chaotic information taxonomies, this model stands in stark contrast to the more streamlined, search-centric user experiences we’re used to. Browsing for products is an adventure in and of itself: the shopping journey is akin to a digital bazaar, buzzing with energy, and each click leads to unexpected finds.

This trend has a name—it’s called *shoppertainment*—and it’s being popularized in the West by Chinese e-commerce marketplaces such as Shein and Temu.

Today, we’ll look at what shoppertainment is exactly, why it works so well, and what lessons we can learn from its most prominent adopters.

## How Shein and Temu Drive Customer Engagement through Shoppertainment
Temu, pronounced “tee-moo,” is an online superstore for virtually everything—from home goods to apparel to electronics—that made its Super Bowl debut in 2023.

Temu encourages consumers to “shop like a billionaire” and offers products at surprisingly low prices. It has quickly become [the most downloaded app](https://www.statista.com/statistics/1417955/most-downloaded-marketplace-apps-worldwide/), surpassing rivals Amazon and Walmart, not just in the United States but in the entire world.

With low prices and cluttered design, the personalized and gamified shopping experience Temu offers has drawn comparisons to Shein, [the Chinese fast fashion upstart](http://www.cnn.com/2021/08/14/business/shein-china-fast-fashion-intl-hnk/index.html) that also offers a wide selection of inexpensive clothing and home goods and has made significant inroads into several markets, including Europe and the United States.

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  <img src="https://cdn.sanity.io/images/kqgmf0g2/production/05fe639fe020903aa95fffd22a520ba6aaa28a06-1600x1052.jpg?fit=clip" alt="Shein Influencer on Youtube">
</figure>

Shein and Temu have both burst onto the scene in an online-first, fast-moving world. Through social media, influencer partnerships, live-streaming events, and a hefty reliance on performance marketing, they've created a strong brand presence that resonates with their target audience, often overshadowing the more sober, utilitarian approach of marketplaces like Amazon and Walmart.

When exploring the user experience design of platforms like Shein and Temu, it becomes evident that they foster an overwhelming sensory experience.

<figure>
  <img src="https://cdn.sanity.io/images/kqgmf0g2/production/77d823a005f01064ebcf0d5aadc49f0a4ea92f62-1600x1052.jpg?fit=clip" alt="Temu user experience">
</figure>

The interfaces of these platforms are a collage of vibrant colors, animated elements, and interactive features that aim to captivate and retain user attention. It's a digital landscape that's always in motion, with pop-ups, limited-time offers, and an endless stream of personalized recommendations designed to evoke the same excitement and urgency one might feel in a bustling street market.

Compare this with Amazon's more conservative approach, where functionality and efficiency are the cornerstones. Amazon's clean and practical design focuses on the ease of finding products through a logical and orderly user interface.

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  <img src="https://cdn.sanity.io/images/kqgmf0g2/production/3130810a416d7ba2c3239d26b5bdf116d0b43d4c-1600x1052.jpg?fit=clip" alt="Amazon browsing experience">
</figure>

These differences mirror broader cultural preferences that Temu and Shein lean heavily into and have managed to “export” outside their original cultural context.

## High-Context vs. Low-Context Cultures and their Impact on Design
In [high-context](https://en.wikipedia.org/wiki/High-context_and_low-context_cultures) Eastern cultures, where communication is often layered and nuanced, the sensory-rich UX design of Shein and Temu does not overwhelm but rather speaks a familiar language.

Furthermore, the digital journey took a mobile-first trajectory in the East, with the majority of the population experiencing the internet for the first time through the screens of their phones rather than desktop computers. This has profoundly influenced how online services, including e-commerce, have evolved in these regions.

Let’s think about Alipay and WeChat, platforms offering a comprehensive range of services from bill payments and banking management to taxi bookings and shopping. For super app users, the process of purchasing a luxury handbag within the same platform used for everyday tasks like paying utility bills is seamlessly integrated, reducing cognitive dissonance.

Conversely, in the more conservative and [low-context](https://en.wikipedia.org/wiki/High-context_and_low-context_cultures) West, Amazon's streamlined approach aligns more closely with communication preferences. The marketplace's structure and navigation are built for efficiency, offering a controlled space that prioritizes the straightforward discovery and purchase of products. Amazon's interface is a testament to the low-context communication prevalent in Western culture, where explicit messages win the day.

And yet, despite the cultural nuances, shoppertainment-centric platforms like Temu and Shein continue to gain traction in the West. What gives?

## The Appeal of Shoppertainment Across Cultures and Generations
As mentioned earlier, Temu and Shein embrace the delight of discovering treasures in a bustling marketplace. The success of these platforms lies in their mastery of discovery-based commerce. They blend AI with an understanding of user behavior to create a personalized and gamified shopping environment. Influencers, social proof, and live-streaming events further enrich this landscape, transforming the act of purchasing into an engaging and social event that feeds on the innate human love for exploration and deals.

Interestingly, this “shoppertainment" model resonates particularly well with Western Gen Z consumers, who are more adaptable to innovative, if less polished, user interfaces. Their shopping habits are motivated by value and the excitement of discovery rather than the aesthetics of the shopping platform. The loud and lively [Y2K stylings](https://www.pcmag.com/encyclopedia/term/y2k-fashion#:~:text=The%20technology%2C%20styles%2C%20dress%20and,Y2K%20problem%20and%20Y2K%20anxiety), playful interactions, and immersive content that dominate these sites speak the language of a generation that craves authenticity and spontaneity over polish and predictability.

<figure>
  <img src="https://cdn.sanity.io/images/kqgmf0g2/production/e1c699b758b05bdb646829f956b0ea868f307157-1600x1052.jpg?fit=clip" alt="Shoppertainment and Gen Z">
</figure>

Temu and Shein continue to rise in popularity, and not just with Gen Z. There’s another significant factor contributing to this phenomenon.

While Gen Z may be at the forefront of embracing energetic and interactive digital storefronts, the economic draw of these platforms speaks to the universal appeal of consumerism. Older generations, too, find the cost savings compelling enough to venture into these more animated shopping environments, suggesting that the desire for value can sometimes supersede preferences for a more traditional and subdued browsing experience.

As such, Shein and Temu have tapped into a powerful vein within the consumer market, demonstrating that while the 'shoppertainment' model might be vital to capturing the hearts of younger users, the fundamental drive to consume at the best possible price is a widespread motivator that crosses generational and cultural boundaries.

## Is Global E-Commerce Moving Toward Shoppertainment?
Temu and Shein have not just pioneered the 'shoppertainment' model; they've excelled in it, capturing the hearts of a broad audience with their gamified, discovery-driven approach to commerce. Their success lies beyond competitive pricing or extensive inventories, and it’s rooted in a shopping experience that equally prioritizes entertainment and acquisition. 

Looking ahead, the trajectory of e-commerce design might be steering towards a hybrid model. Incorporating personalized and interactive elements typical of Eastern consumer experiences without compromising the organized simplicity that users appreciate in the West will be critical to the continued success of our domestic marketplaces.

As such, the next challenge in e-commerce design will be to create experiences that resonate not just with a medley of cultural preferences but also with the varied tastes of an international, multi-generational audience.

If you have any questions about shoppertainment or want to understand which principles you can apply to your brand, [feel free to reach out](https://nebulab.com/contact-us)–we’d love to chat!

East, Meet West: The Rise of Shoppertainment in E-Commerce

Picture this: You run an eCommerce store, and business is booming in your home country. Feeling confident, you decide to expand into new markets. You translate your website into a few languages, but something's amiss. Your sales aren't hitting the expected numbers, and customers seem less engaged. What went wrong?

This is where Cross-Cultural Design comes to the rescue. Cross-Cultural Design (CCD) recognizes that every culture is unique and influenced by its values, traditions, and preferences. Ignoring these cultural nuances can lead to missteps, missed opportunities, and the alienation of potential customers.

In this article, we'll take you on a laid-back journey through the exciting world of CCD, explaining why it's a game-changer and how to navigate it effortlessly.

## The Principles of Cross-Cultural Design

Thinking about how cultural differences can influence users' needs and expectations isn’t an easy task, and we at Nebulab know it very well: we’re not only fully distributed, but we also work with brands from all over the world. Local preferences, navigation, and information hierarchy are just some of the aspects that can be influenced by cultural, behavioral, and economic elements.

In theory, User Research should help designers understand what their audience expects from digital interactions. Unfortunately, most behavioral research studies–which User Research practitioners take a lot of inspiration from–[are based on Western subjects](https://www.youtube.com/watch?v=Ho6OlPrD7sA)). This leads to the majority of design and user experience benchmarks being Western-centric, which creates obvious problems for teams that are designing for a non-Western audience.

In light of these challenges, broadening our perspectives becomes even more difficult: without reliable data and benchmarks, how can designers operate effectively without sacrificing speed?

That’s where Cross-Cultural Design comes to the rescue: rather than providing a set of steps to follow, it offers a set of principles that designers should keep in mind when operating outside their zone of “cultural comfort.” These principles will guide you to approach your work differently, which, in turn, will help you make better choices for your design, content, and technical strategy:

* **Embrace Cultural Immersion**: Dive into the culture you're designing for, immerse yourself in its nuances, and understand its values, traditions, and aesthetics. This deep understanding will help you create designs that resonate with the local audience.
* **Research Creative Communities**: Explore the creative communities within the culture. This involves understanding how artists, designers, and local creators express cultural identity. Drawing inspiration from these communities can enrich your design.
* **Work with Experts**: Collaborate with experts or individuals with in-depth knowledge of the culture. Their insights can provide invaluable guidance and ensure your design is culturally sensitive and authentic.
* **Question Assumptions**: Challenge assumptions and preconceptions about the culture. Be open to reevaluating your design choices based on real-world insights and user feedback rather than relying on stereotypes or biases.
* **Prioritize Flexibility**: Design with flexibility in mind. Recognize that cultures evolve, and your design should adapt to changing norms and preferences. A flexible design can better withstand the test of time and evolving cultural trends.

Now that we've explored these guiding principles, let's dive into two crucial concepts closely related to cross-cultural design: internationalization and localization.

## Internationalization and Localization: You Need Both!

The most fundamental challenge teams face when working on a cross-cultural project is ensuring the content, branding, and design are flexible enough to accommodate multiple languages, nationalities, and cultures. This process is called _internationalization_ (often abbreviated as _i18n_). **Internationalization involves creating digital experiences that work across cultures.**

On the other hand, **localization (_l10n_) involves tailoring a product to a specific culture.** Localization encompasses modifying UIs, adjusting layouts and styles, revising content and language, and tailoring and enhancing the user experience to suit the needs of the particular audience you’re designing for.

In other words, while internationalization is more about having a framework in place to adapt your product to a global audience, localization is about doing the actual work of adapting your product for each audience you want to serve.

Because internationalization mainly falls on the shoulders of your engineering team, we won’t focus on it in this article. Different eCommerce platforms and software libraries have different internationalization capabilities–make sure your engineering team is aware of any cross-cultural requirements and uses that information to inform their technical choices.

Instead, let’s explore the most common aspects that you need to consider when _localizing_ your design systems and digital experiences, particularly when it comes to eCommerce.

### Names and Addresses

It's essential to understand that cultural differences extend to the most basic elements of your user experience, such as how names or addresses should be collected and formatted.

For example, when we designed the checkout form for a Pakistani marketplace, we learned that Pakistani individuals will often have a first name, a middle name (which is typically their father's name), and a last name (family name or surname). With that requirement in mind, we decided to scrap the “First name” and “Last name” fields, typical of Western cultures, in favor of a single “Your name” field instead.

<figure>
  <img src="https://cdn.sanity.io/images/kqgmf0g2/production/3cc7341fef23a9a7996314c04bb0f694078be97b-1600x1052.jpg?fit=clip" alt="Unified field for first, middle and last names">
</figure> 

The same applies to addresses: in the form below, you might have noticed that there is no ZIP Code field–that’s because there are no ZIP codes in Pakistan. For our client [Framework](https://frame.work/), on the other hand, we’ve had to adapt the ZIP code field to allow both 3+2 and 3+3 codes in Taiwan.

<figure>
  <img src="https://cdn.sanity.io/images/kqgmf0g2/production/9ba2719bc3b73d7a9af55685588fbde123c4fbf8-1600x1052.jpg?fit=clip" alt="Framework's shipping address form for Taiwan">
  <figcaption>Taiwan’s introduced 3+3 ZIP codes in 2020 to improve mail sorting efficiency.</figcaption>
</figure>


### Text Direction

One of the most significant layout challenges encountered while localizing a South Eastern client’s eCommerce experience was supporting right-to-left (RTL) text in Lebanon.

That kind of change doesn’t just involve the actual text but also requires shifting the overall content and “mirroring” certain UI elements:

* **Headers, labels, and text should be oriented from right to left**. In eCommerce, that means displaying the brand’s logo on the right and the cart icon on the left.
* **Navigation buttons** must be mirrored, but icons that do not convey direction should remain unchanged.
* **Checkboxes** should be positioned to the right of their corresponding label.
* **Progress bars** should fill in a right-to-left direction.

Later in this article, we will explore tools to assist designers in this process.

### Linguistic Nuances

Very often, translating your UI and content is just the first step. It’s crucial to remember that each language has its quirks and nuances.

A common problem is that UI elements that look good in English might not be suitable for other languages. As an example, the German language allows stringing together multiple nouns to express complex concepts, which leads to some very long words that cannot be readily displayed in a mobile button.

<figure>
  <img src="https://cdn.sanity.io/images/kqgmf0g2/production/0e17cec623f050d16c9a7d4dc23019effd576e6c-1600x1052.jpg?fit=clip" alt="German vs. English UI in Framework">
</figure>

Another consideration is that the formatting of numbers, phone numbers, and currencies varies in each language. Using the same phone number or currency format across different languages is bound to cause confusion and friction for the user.

<figure>
  <img src="https://cdn.sanity.io/images/kqgmf0g2/production/b949ccdab489f172ff0e28a913d61c54d49da452-1600x1052.jpg?fit=clip" alt="Framework's checkout flow">
</figure>

### Payment Methods

Credit card usage is widespread in Western countries, while digital wallets and cash-on-delivery are preferred in many Asian markets. Adapting payment options to local preferences can dramatically enhance the customer experience and your conversion rates!

<figure>
  <img src="https://cdn.sanity.io/images/kqgmf0g2/production/b8e24cd97481e4b71bb924ac1b5019328afb9c57-1600x1052.jpg?fit=clip" alt="OLX Mall's payment method selector">
  <figcaption>In some countries, cultural, historical, and socio-economic factors led to a deep-rooted preference for cash payments, even in online transactions.</figcaption>
</figure>

### Sign-In Preferences

Even something as familiar as the sign-in process can vary across cultures. In Western markets, users typically register for websites or online services using their email addresses. However, in Eastern countries, most users prefer to use their phone number.

<figure>
  <img src="https://cdn.sanity.io/images/kqgmf0g2/production/2a7306fd9abf204f991c15a7cdfab56224db629c-1600x1052.jpg?fit=clip" alt="Sign-in modal that supports phone numbers">
  <figcaption>In many Eastern countries, phone numbers, not emails, are the preferred method identification for creating online accounts.</figcaption>
</figure>

### Social Proof

In the world of eCommerce, trust is the cornerstone of successful transactions. Yet, how trust is built and perceived can vary significantly across cultures: some cultures prioritize the prominent display of security badges for reassurance, while others emphasize customer reviews and testimonials to instill trust in a website.

Understanding these cultural nuances is pivotal in crafting an effective eCommerce strategy that resonates with diverse audiences worldwide.

<figure>
  <img src="https://cdn.sanity.io/images/kqgmf0g2/production/ae4f65150f404d46b77a0fd1f3f6f6ea2d4ef6db-1600x1052.jpg?fit=clip" alt="Shop Safely badge in OLX Mall's checkout flow">
  <figcaption>In OLX Mall, we displayed a “Shop Safely” badge through the entire checkout flow.</figcaption>
</figure>

### We’re Not Even Done

If that wasn’t enough, here are a few more aspects you should consider when designing eCommerce experiences for a global audience:

* **Information Density:** Cultural differences can affect how users expect information to be organized. In some cultures, users may love maximalism and appreciate detailed product descriptions, rich user interfaces, and bright colors, while in others, a more minimalist approach might be preferable.
* **Taxation:** How you apply taxes is dictated by regulatory requirements, but different cultures also have different norms for where and when taxes should be displayed. For specific audiences, showing tax amounts in the wrong place or at the wrong time can increase friction and cart abandonment rates.
* **Imagery:** When picking and displaying images, it’s essential to be mindful of each culture’s sensitivities. You also want to be aware of home and mobile internet speeds in the countries you’re serving: serving a 5MB product image to someone on a 3G connection might not be the best idea!

It would be hard–if not impossible–to provide a comprehensive list of all the elements you should pay attention to. Instead, we recommend constantly referring to the principles of Cross-Cultural Design and using them to inform your day-to-day decisions.

## Sharpening Your Toolkit for Global Design

With localization becoming increasingly important, all the most popular design tools support non-Latin languages and offer features that help in designing for cross-cultural projects.

### Use the Right Figma Plugins

Figma's support for RTL languages is relatively new, having been available for about two years. To change the default [text direction](https://help.figma.com/hc/en-us/articles/4972283635863), select the main menu and go to **Text > Text direction**. Then, when you use the Text tool, the text direction will be set automatically.

There are also several plugins available that let you add your translations quickly and easily. Our favorite ones are:

* [Translator](https://www.figma.com/community/plugin/743218037112142643/translator), which boasts support for 130 languages and translates entire pages very quickly, making it an excellent choice for a quick preview of your layouts in various languages.
* [Cube Translation](https://www.figma.com/community/plugin/1205127328344023071/cube-translator), which uses AI to enhance translation accuracy and provides more robust tooling for real-time collaboration and content synchronization.

As always, your mileage may vary, so we encourage you to experiment with a few different plugins and pick the one most suited for your use case!

### Choose Multilingual Fonts

Selecting the appropriate font for an international project can be a challenging task. It's important to note that not all web fonts support multiple languages, and in some cases, you might encounter unreadable rectangular symbols (referred to as "Tofu").

Multilingual fonts are specifically crafted to solve this problem and accommodate various languages. The most comprehensive open-source, multilingual font family is [Noto](https://fonts.google.com/noto) (its name stands for “no tofu”), and it offers support for more than 1,000 languages.

If you want something more unique, [Google Fonts](https://fonts.google.com) provides a variety of fonts that are either multilingual or designed for specific languages–you can easily find them by applying the language filter to your search.

![Hello is written in different languages with Noto font](https://cdn.sanity.io/images/kqgmf0g2/production/f885f7fee73faf86874c394e4ff0d91df07f1849-1600x1052.jpg?fit=clip)

### Adapt Your Images

As we’ve mentioned, a critical aspect of images is cultural inclusivity. Culturally inclusive images are significant as they portray diversity and support representation. If you have a dedicated creative production team, work with them to develop assets that are suitable for your audience. If you don’t, websites like [Unsplash](https://unsplash.com/) have handy search tools to help you find what you need.

Once you have your images, you also want to ensure they’re optimized for your audience’s internet speeds. [TinyPNG](https://tinypng.com/) is often the go-to choice and, despite the name, also works with JPG and WebP files. We recommend pairing it with a robust CDN for optimizing images on the fly.


## Ready To Take On the World?

As explored in this article, culture plays an immense role in shaping how people interact with and perceive the digital shopping experiences we create for them. As you expand internationally, recognizing these influences is not just a consideration but the key to thriving in an increasingly diverse eCommerce ecosystem. Cross-Cultural Design can help you do just that.

If you have questions on how to make these principles work for your team, or need help designing for a global audience, [feel free to reach out](https://nebulab.com/contact-us)–we’d love to chat!

Expanding Your Brand Globally With Cross-Cultural Design

When it comes to customer loyalty in DTC, two strategies dominate the industry: subscription business models, where a consumer commits to a recurring payment, typically in exchange for a discount, and loyalty programs, where a consumer receives rewards–most often in the form of cashback–in exchange for performing specific actions, such as completing an order, referring a friend, or talking about a brand on social media.

These models, which both have excellent reasons to exist, are often implemented by brand executives desperately looking for a quick win: CPG brand looking for more predictable revenue? Launch a couple of subscription plans and profit. Diverse catalog that can support more frequent or larger purchases? Roll out a cashback scheme and live happily ever after.

And while it all makes sense in theory, the unfortunate news is that it doesn’t quite work like that–not anymore, at least, and most certainly not for everyone. **Both subscriptions and loyalty programs come with two significant drawbacks**, which have gradually reduced their effectiveness over the last few years:

* **Transactionality.** A customer signing up for a subscription service or your loyalty program tells you very little about that customer’s affinity with your brand–it simply means that they saw an opportunity to save some money and took it. You are–almost literally–paying customers to shop with you. There’s little preventing customers from switching brands as soon as they find a better deal–**short-term incentives drive short-term behavior.**
* **Saturation.** If you’ve heard anything about “subscription fatigue,” you’ll know what we’re talking about. Consumers are tired of juggling multiple subscription boxes, and they are instead looking for ways to streamline and consolidate. And while loyalty programs are less susceptible to this–since they’re free to use most of the time–**the fact that every single brand has some form of loyalty program has essentially leveled the playing field.**

So, does that mean that customer loyalty is dead? Not quite–it’s just that you can’t stand out by doing the same things as everyone else. **In the DTC sea of sameness, there’s a massive opportunity for brands to break through the noise and generate organic stickiness,** but the strategies look a bit different than before and require much more intentionality.

Today, we want to tell you about one of these strategies: membership programs.

## What Exactly Is a Membership Program?

Membership programs are an established concept for large brands but are still relatively unexplored in the DTC world. In fact, many brands confuse membership programs with traditional loyalty programs because of their similarities, which contributes to the confusion.

**At its core, a membership program is a loyalty program on steroids.** It is usually sold as a digital subscription rather than being offered for free, and program members get access to various benefits. Some might be monetary rewards (e.g., discounts and cashback), but you’ll also find perks such as early access to new products, exclusive communities, members-only content, and free or discounted services.

If you go back to the two problems we’ve identified with subscription models and loyalty programs, you’ll see how memberships address both:

* **They eschew transactionality and pursue identity.** By going beyond monetary rewards, **memberships provide brands with an escape from transactionality.** A well-rounded membership program elevates brands, enabling them to become a customer’s reference point for running a given aspect of their lives.
* **They eschew saturation and pursue exclusivity.** I can sign up for a thousand free loyalty programs and continue to shop from a thousand different brands, but I can only sign up for so many paid membership programs. No matter how insignificant, **the membership fee forces customers to make a choice and stick to it.**

The mix of identity and exclusivity makes for a robust customer loyalty flywheel: the initial cost of becoming a member motivates me to use my membership. As I use my membership–and barring any breaches of consumer trust–I identify myself more and more with the brand, which increases the perceived value of the brand.

All of this might sound like theoretical mumbo-jumbo, so let’s look at an example.

### How Petco Makes $120M/Year from Memberships

Petco offers a membership program called Petco Vital Care comprised of two tiers: a free tier which is a run-of-the-mill loyalty program, and a paid tier called Vital Care Premier. For $19.99/month, members can benefit from extra discounts and services such as pet sitting, grooming, and vet visits for their dogs.

The results are astonishing: **in Q4 2022, Petco Vital Care counted 500,000 paid members–about $120M/year in incremental revenue for Petco.** That number, by the way, is just the membership fee and doesn’t account for the fact that members have a lifetime value 3.6X higher than casual shoppers.

![](https://cdn.sanity.io/images/kqgmf0g2/production/efd6ac6c17c1fca084bac9df95a87b9a477b4eda-2560x2488.png?fit=clip)

Through Vital Care, Petco is not only diversifying their revenue streams but also creating a compelling unifying force for their products and services. If you’re an Amazon Prime customer, this concept shouldn’t be a surprise. **Just like Amazon wants to be your end-all solution for shopping, Petco wants to be your end-all solution for pet care.**

Of course, Petco is a publicly traded $6B/year retailer that operates thousands of stores across the US, and they have the economies of scale to offer their members an incredible level of convenience. Even for a relatively established DTC contender in their category, replicating Vital Care would be virtually impossible.

However, that doesn’t mean membership programs are inaccessible for small brands–they just need to be structured thoughtfully.

## How to Structure Your Membership Program

If we managed to convince you that rolling out a membership program is the right thing for your online store, awesome! But where do you start? In the following paragraphs, we’ll outline a five-step process you can follow to design, validate and roll out a membership program to your customer base.

### 1. Talk to Your Customers

Seriously, _do_ talk to them.

If you aren’t conducting regular interviews–[which you should](https://nebulab.com/blog/ecommerce-product-management), but just in case–f**ind 30-50 customers from different cohorts to understand whether they would have any use for a brand membership and what it might look like.** Ideally, you’re looking to answer as many as possible of the following questions:

* What problems are your customers solving with your product(s)?
* How do they currently perceive your brand? What do they love about it?
* What adjacent brands do they shop with regularly?
* What adjacent services do they consume regularly?
* Do they already have any memberships? What do they like/dislike about them?

![](https://cdn.sanity.io/images/kqgmf0g2/production/1a2947fe9354c18325c2bc8b9f25cb2d9d41d78c-1200x869.jpg?fit=clip)

Of course, you’ll want to adjust and enrich these based on which category you operate in. For example, if you sell workout apparel, where do your customers work out? If it’s at home, do they subscribe to a separate workout app to track their workouts? Do they also care about nutrition? If yes, where are they getting their educational content from?

**In addition to the interviews, you should look at analytics, primary and secondary competitors, and key market trends.** Your goal should be understanding how your brand fits into your customer’s day-to-day and whether there’s an opportunity to move into adjacent problem spaces.

As a final note, remember that **your membership will not appeal to all your customers–and it shouldn’t.** Memberships require customers to invest a significant amount of financial and social capital into your brand–as a result, they will only work for customers willing to take that leap of faith. Use this initial phase to understand what that ICP looks like, and double down on it when you do additional research about your membership program.

### 2. Design Your Member Benefits

Once you understand the opportunity space, you must decide what to offer as part of your membership. Generally, membership benefits can be put in one of five buckets:

* **Money:** this includes discounts, cashback, free shipping, birthday gifts, and any other monetary reward. These are things your customers could easily purchase themselves or find elsewhere, which makes them more immediate to understand but less likely to generate long-term loyalty.
* **Access:** very often, members have early access to new product releases, or exclusive access to certain pieces of merchandise. Even if you don’t have a large product catalog, you can get creative with partnerships, digital products, and other goodies.
* **Content:** given how valuable good content is, it might seem ridiculous to gate it. But making certain content only available to your members is a fantastic way to foster a sense of exclusivity and identity, as long as you have a unique or particularly valuable perspective to offer.
* **Services:** when you look at Petco Vital Care, the non-monetary part of their paid membership tier is comprised almost exclusively of services. Petco delivers most of their member services in-house, but you can always partner with a third-party service provider.
* **Community:** network effects make communities incredibly sticky. In addition to being an incredible perk, brand communities can become a solid sounding board for your new product ideas and a formidable source of organic marketing.

When it comes to your member benefits, you must balance putting together a package compelling enough that customers will want to sign up, and keeping it small enough for your team to launch and sustain over the long run.

**If you’re just starting out, we recommend starting with monetary benefits (which can be implemented almost for free) and an additional category your members deeply care about.** Once you launch your program, you’ll have plenty of time to adjust and expand it.

### 3. Determine Your Pricing

At this point, you’re ready to start thinking about your membership’s pricing structure.

Our recommendation for most brands is to start with two tiers: a free tier, which is essentially just a traditional loyalty program, and a paid tier, which gives customers access to member perks. **You shouldn’t separate your loyalty and membership programs, as that would most likely confuse customers.**

![](https://cdn.sanity.io/images/kqgmf0g2/production/e90b647471606b469b4141a39710bec2d252defb-2880x2149.png?fit=clip)

As for the exact price point, this will vary greatly depending on your target market, product category, and member benefits. A helpful tool for determining a range of acceptable prices is the [Van Westendorp Price Sensitivity Meter](https://www.forbes.com/sites/rebeccasadwick/2020/06/22/how-to-price-products/) (PSM). With this model, you ask your potential member for questions:

* What price would be so low that you start to question the membership’s quality?
* At what price would the membership begin to seem a bargain?
* At what price would the membership begin to seem expensive?
* At what price would the membership be too expensive?

By plotting your answers, you can determine the range of prices your customers would be willing to pay for your membership.

Obviously, you should still validate whatever numbers you get to ensure they work for your business. This is also where it pays off to offer a membership that is more heavy on non-monetary rewards, as they will typically be less burdensome on your margins at scale.

### 4. Define a Go-to-Market Strategy

You know who you’re selling to, what you’re selling, and for how much. All that’s left to figure out at this point is _how_ you’re going to sell it–that is, your go-to-market strategy.

The first thing to keep in mind here is that **when it comes to memberships, paid social–and other paid channels in general– should be approached with caution:** unless you have an incredibly compelling offering, it is extremely unlikely you will be able to achieve a reasonable CAC. As we’ve mentioned before, selling a membership requires a degree of trust much higher than your typical eCommerce conversion.

As long as you collect the right zero-party and first-party data, you can easily use email and SMS marketing automation platforms to identify and reach potential members. Ideally, **you want to reach out as soon as a customer is identified as a potential fit for your membership program**–what this means exactly will depend on the ICP you’ve outlined in phase #1 and will vary over time.

As for your website, you should design thoughtful touchpoints that remind customers of the value of your membership and provide easy paths to conversion. For instance, if you’re offering free shipping as part of your membership, your checkout flow should clearly indicate that and allow customers to opt into the membership and benefit from the free shipping perk in one smooth click.

Finally, **referrals and gift memberships can be very powerful in driving organic customer acquisition, so you should at least experiment with them.** These channels allow you to bypass the consumer’s initial “trust gate,” leading to higher conversion rates.

### 5. Launch, Track, and Iterate

You’re all set! Now you just need to launch your membership.

Depending on your tech stack and how you’re structuring your program, you will likely need to use a few different tools. On Shopify, our favorite membership apps are [Conjured Memberships](https://apps.shopify.com/membership-program?locale=it)–a solid solution with very accessible pricing–and [Inveterate](https://www.inveterate.com/)–a more modern and flexible platform, well-suited for brands that need custom functionality or use a [headless architecture.](https://nebulab.com/blog/headless-commerce)

If you’re looking to break beyond the walls of your eCommerce site, [Circle](https://circle.so/) is a standalone platform for brands to launch their private communities. It’s an incredibly powerful option if you want to create a dedicated space for members-only content, discussions, and events, and it can easily drive the entire Community aspect of your membership program.

![](https://cdn.sanity.io/images/kqgmf0g2/production/6ef9d98a89f6a19f6faa7cc1bf1ae597a94b263b-2560x2488.png?fit=clip)

**Whatever tools you use, take the time to truly understand their potential and make them yours!** Memberships are only valuable when they deeply resonate with the brands that drive them and the consumers they serve. If you’re just going through the motions, your membership program will be short-lived.

After the launch, use member interviews and exploratory analytics to gauge the effectiveness of your program and adjust course accordingly. Most brands will want to track at least some of the following:

* How many customers are you converting into paid members?
* Are members using all the benefits in their membership? How much?
* What is the customer lifetime value and LTV:CAC ratio of members vs. non-members?
* What are your margins for members vs. non-members?
* What does retention look like for your membership program? Why do members cancel?

Feel free to enrich these as needed to drive your brand’s goals, **but never lose track of the basics:** maintaining a healthy foundation will give you the peace of mind you need to grow your membership program.

## Is It Time to Switch to Memberships?

Many brands have already started to roll out membership programs as part of their offering, and we’re excited to see this trend unfold over the following years: while subscription-based models and loyalty programs will never lose their place, they can rarely foster true customer loyalty.

As you’ve seen, the caveat is that a membership program requires more maintenance than other models, so you should ensure your team has the bandwidth to support it before venturing down this path.

If you’re wondering what a membership program can do for your brand or looking for help rolling out your program, don’t hesitate to reach out!


Why Memberships Are The Future of Customer Loyalty

If you operate a retail brand today, you should pursue an omnichannel marketing and distribution strategy. And if you’re pursuing an omnichannel strategy, you should at least consider launching a mobile application for your online business. The benefits of eCommerce mobile apps are very alluring:

* **They make it easier to identify return customers,** providing richer, deeper opportunities for personalizing the customer experience.
* **They allow you to send push notifications to your users.** That’s a real-time, high-engagement, fully-owned marketing channel–and it’s free, too.
* **They offer your customers a faster, more convenient online shopping experience,** making for higher conversion rates, better retention, and larger baskets.

However, mobile apps are not for all brands: depending on what type of app you want to build, the financial investment can be significant. T**he more you want your app to act as a customer acquisition driver, the more expensive it will be to build and operate.** And ironically, brands that need acquisition-focused apps are usually the ones with the least money to spend on them, which makes this a complex juggling act.

The goal of this guide is two-fold: we want to provide you with all the context you need to make this decision in the most informed and balanced way possible, and if you decide to move forward, we want to offer practical tips to design and build an eCommerce app that will delight your customers while pursuing your business goals.

## Transactional Apps Drive Lifetime Value

If we asked the average user to picture a mobile app for an eCommerce brand they like, they would probably copy-paste the brand’s online store into a native UI, ending up with a shopping app that simply serves as an additional sales channel. We typically refer to these as “transactional apps” because their only purpose is to facilitate transactions between a brand and their customers.

While there’s nothing wrong with transactional apps per se, you should know that this is not the only type of app you can build–although it’s the easiest. **Transactional apps are incredibly useful if you already have significant brand equity or a high repeat purchase rate and want to get more value from your existing customers.** By providing a better, more user-friendly shopping experience than your other channels and potentially your competitors, you can improve your conversion rate, average order value, and repeat purchase rate.

![](https://cdn.sanity.io/images/kqgmf0g2/production/635f4d681b5cbf832e452b6f69380fc936f3600d-2400x1500.png?fit=clip)

**What a transactional app can’t help you with is customer acquisition.** Anyone who shops through a transactional app should be considered a high-intent customer and would have likely shopped with you anyway, although their orders might have been a bit smaller or less frequent in other channels.

One of the most popular transactional apps is Nespresso’s mobile app: it allows you to place orders, manage your Nespresso subscription, and manage your Nespresso coffee machine, all without opening their website. The app does a great job of eliminating any friction in the shopping experience, increasing repeat purchase rate and average order value for all existing Nespresso customers.

## Experiential Apps Drive Customer Acquisition

We’ve seen that transactional apps boost your customer lifetime value, not your acquisition rates. Does that mean you shouldn’t build a mobile eCommerce app if you’re focused on customer acquisition? Not quite–it just means your goal should be to build an app that’s experiential rather than transactional.

Experiential apps take the concept of an eCommerce app a step further. Rather than simply facilitating a transaction your customers can already complete on your website, **experiential apps provide value in and of themselves.** This can come in the form of exclusive content, a community, or a tool/service that is relevant to your physical product(s). These apps effectively become part of your brand identity rather than being another sales channel.

**The idea behind experiential apps is to build brand awareness and capture low-intent customers** by providing them with free, immediate value, only nurturing and converting them at a later stage. It’s a much longer-term bet than launching a transactional app but it can also pay off huge dividends over time. Experiential mobile apps are one of many ways you can pursue a [Product-Led Growth strategy.](https://nebulab.com/blog/product-led-ecommerce-growth)

![](https://cdn.sanity.io/images/kqgmf0g2/production/68db8d648a056e09c99d04923a473428bdf01c76-2400x1500.png?fit=clip)

Note that **most experiential apps also offer transactional capabilities,** allowing you to kill two birds with one stone: high-intent customers can use your mobile shopping cart to buy from you, while low-intent shoppers can use the experiential features to explore your brand at their own pace–and eventually convert into paying customers.

Personalized vitamin brand [Care/of](https://www.takecareof.com/) recently released an app that is equal parts transactional and experiential: the app sends you reminders and allows you to track your vitamin intake, as well as keep track of your daily habits. By performing these actions, you earn points, which you can redeem for free rewards–the perfect entry point into Care/of’s world. At the same time, existing customers can use the app to manage their Care/of subscription.

## Greenfield Builds vs. App Builders

Once you have a clear idea of what kind of app you want to build, you need to decide how you want to build it. While your tech team or mobile app development agency might have strong opinions over which tech stack they want to use, it’s essential to be aware of the implications of your choices.

**Traditionally, mobile apps have been built from scratch,** using technologies such as Swift (which is specific to iOS) or React Native (which allows you to power cross-platform native apps with a single codebase).

**Building your app from scratch is basically the equivalent of writing your own checkout code,** and it has many of the same advantages and limitations. It gives you tremendous flexibility to build whatever app you have in mind–which is fantastic if you’re launching an experiential app–but it also requires a significant investment and technical know-how.

**A greenfield app will take anywhere between 8 and 12 weeks and cost you $50-100K,** depending on your agency/tech team composition. These apps also tend to be more expensive to operate and maintain over time.

![](https://cdn.sanity.io/images/kqgmf0g2/production/a796fd0d1992c28ec77d4059b627ec951d39201d-2560x1850.png?fit=clip)

**The alternative to a greenfield build is to use an app builder.** Over the last years, several startups have emerged that offer a much cheaper and quicker way to launch a mobile app than building it from scratch: you simply connect them to your Shopify store or other eCommerce platform, customize your app by using a drag-and-drop interface that allows you to reuse predefined templates, and click a button to have your app published in the Apple and Android app stores.

App builders are especially popular in the eCommerce domain, because the user experience of purchasing a product online tends to be very repeatable. **Launching an app with one of these tools can take as little as two weeks, and pricing is usually fairly accessible.** [Tapcart](https://www.tapcart.com/), for example, is the most popular app builder for Shopify and starts from $300/month.

However, these tools have a downside: because you need to operate within the constraints of your app builder, you are much more limited in terms of the functionality you can implement. **This makes app builders a terrible choice for experiential apps, where you want the app to stand out and capture your customers’ attention.**

## What Type of App Should You Build?

Ultimately, there’s no one-size-fits-all answer: whether to build a transactional or experiential app depends on your eCommerce store’s stage, customer profile, business model, tech savviness, and a thousand other factors that are pretty complex to account for.

In general, **if you want to drive customer acquisition and have the resources, you should go with an experiential app.** It’s your best shot at capturing customers that are interested in what you have to offer but might not be ready to shop with you just yet.

However, **if your primary goal is to create a low-friction sales channel for your mobile users, you should likely build a transactional app instead.** It will give you the best bang for your buck, increasing customer satisfaction, repeat purchase rate, and basket size.

## Tracking Your Mobile App’s Performance

What KPIs to track for your mobile app depends on the type of app you’re building: tracking the performance of an experiential app will look very different from monitoring the performance of a transactional app, since the goals are fundamentally different (acquiring customers vs. increasing LTV).

However, you should always track both product metrics and business metrics:

* **Product metrics** measure how well the app itself is performing. How many users are downloading your app? How often are they opening it? What’s the average session length? What are the biggest points of friction?
* **Business metrics** measure how well your app is moving the business forward. How many paying customers is your app generating? What’s the AOV of an app order vs. a mobile/desktop website order?

To answer these questions, you need to make sure your app is instrumented correctly to capture this data. While this will come for free with app builders, you’ll need to be much more intentional about analytics when building an app from scratch.

![](https://cdn.sanity.io/images/kqgmf0g2/production/58a36d4bfc3bc7ff9e4358948a51e89862292ef9-2970x1980.jpg?fit=clip)

Finally, a note of caution: especially when building a transactional app, **you should be mindful that mobile app customers are a unique segment,** and you can’t draw one-to-one comparisons with your general customer population.

For example, you might be tempted to compare your average in-app conversion rate to your average on-site conversion rate, but that’s a pretty useless insight: almost by definition, your mobile app users are much higher-intent than your website users since they went through the pain of finding and downloading your app. The fact that your app’s conversion rate is 2X your website’s conversion rate doesn’t really mean anything.

Ideally, **you want to compare metrics across customer segments that are as similar as possible** (e.g., highly-engaged customers that regularly shop online vs. in-app) to ensure you’re assessing your app’s performance fairly.


## Ready to Launch Your App?

We’ve just provided a high-level overview of what it takes to design and build a mobile app for your eCommerce business. As you’ve seen, it’s a project that can have incredible benefits but also requires a clear, upfront understanding of your motivations.

If you’re unsure whether a mobile app–or what kind of app–is right for you, we’re here for you! Feel free to reach out for a free consultation with our brand strategists, and we’ll help you make the best choice for your brand.

The Honest Guide to Mobile eCommerce Apps

The modern direct-to-consumer brand has potential access to a plethora of information about their customers: post-purchase surveys, CSAT scores, site analytics, [A/B testing](https://nebulab.com/blog/ecommerce-ab-testing), market research… Often, it can all be a bit too much, with brands not being sure how to use this information in a structured and strategic way to scale their business.

Luckily, that is precisely the problem product management was born to solve. Product management is the job of defining _what_ you should build, _how_ you should build it, and _when_ you should build it. It is a proven problem-solving methodology that allows you to collect and deploy information to work toward your business objectives.

Even though you might not have direct product management experience, you may already be doing some product management. For example, if you are looking at your conversion funnel analytics to understand where users are dropping from your checkout flow and then [running A/B tests](https://nebulab.com/blog/ecommerce-ab-testing) to determine how to improve your conversion rates, you’re doing product management.

In this article, we’ll try to provide you with a more structured approach that will allow you to elevate your product management skills, turning them into a repeatable workflow for identifying, prioritizing, and pursuing the most impactful goals for your brand. These are the same techniques used by behemoths such as [Zappos](https://www.zappos.com/) and [Warby Parker](https://www.warbyparker.com/) to achieve the impressive scale they’ve experienced over the last decade, so you’ll be in good company!

## Understanding and Applying Research Methodologies

At the core of product management lies product research, the practice of collecting data and insights that can inform which problems you should solve and how to solve them best.

Over their career, experienced product managers learn to master various research techniques. You might have heard about some of them–such as A/B testing, customer interviews, and surveys–while others might be more obscure–such as tree sorting, fake door tests, and contextual inquiry. You’re encouraged to do your own research (no pun intended!) and learn more about each technique.

For now, you should know that every research technique exists on two spectrums: quantitative or qualitative and generative or evaluative. Let’s see what that means!

### Quantitative vs. Qualitative Research

Quantitative research is used to collect numerical data, generally through automated techniques such as closed-ended surveys or product analytics. The data is then consolidated and interpreted to identify a problem or opportunity in front of your business.

For instance, if your checkout conversion rate is well below the average for your industry, that might be something you want to work on with your team.

However, the numbers alone might not always tell you exactly _why_ something is happening: your conversion rate might be low because your prices are too high or the user experience of your checkout flow is confusing. That’s where qualitative research comes in.

Qualitative research, on the other hand, is used to collect in-depth information, generally through techniques such as customer interviews or open-ended surveys. The information is then collected, parsed, and distilled by a human being into insights–tiny nuggets of information that have some practical implication for your business.

For instance, if you interview ten customers who dropped out of checkout, and seven of them mention that they weren’t sure when they would receive their order, you might conclude that customers find your order tracking process challenging to understand. You can then use this information when prioritizing your work to improve the conversion rate (more on this below).

Note that quantitative research doesn’t always have to come before qualitative research: you will find yourself going back and forth between the two depending on the problem you’re currently focusing on and how you’re approaching it.

### Generative vs. Evaluative Research

The examples we have made in the above paragraph are all about _generative_ research, which is done to identify a problem to solve or an opportunity to tackle. In generative research, your goal is to gain an intimate understanding of your market, customers, and product to understand _what_ you should build and _when_ you should build it.

The research doesn’t stop when you have identified a problem or an opportunity. In fact, that’s just half of the equation. The other half is about using product research to evaluate potential solutions to the situation in front of you. That’s where evaluative research comes in.

In evaluative research, you aim to understand _how_ to solve the problem or tackle the opportunity. This can be done with various techniques, some of which can be generative or evaluative depending on the context: for instance, usability testing can be performed to identify problems with your existing checkout flow, or it can be performed to validate the UX of your proposed redesign.

Mastering some generative and evaluative research techniques will help ensure your work is product-driven end-to-end. Many retailers let the data and insights guide their product roadmap but fail to validate their design solutions. This can lead to doing work that doesn’t move the needle or even moves it in the wrong direction.

### Establishing a Continuous Discovery Practice

While it’s tempting to do product research only when you run out of things to do, the best teams are running research systematically–a practice referred to as “continuous discovery.” Continuous discovery combines automated and manual work to ensure a stream of qualitative and quantitative insights flows into your brand.

There’s no one-size-fits-all approach to continuous discovery, but there are some techniques that we’ve seen work for the majority of eCommerce and direct-to-consumer brands:

* **Post-purchase surveys.** Every eCommerce business should be running post-purchase surveys. At a minimum, you want to ask customers how they found out about you, which will help enrich your attribution data, but you can also use these to collect feedback about other aspects of the customer experience.
* **On-site analytics.** Solid on-site analytics will help you collect valuable first-party data, which you can use to spot challenges and opportunities and validate the effectiveness of new features, products, or UX improvements. The trick is not to overdo it: otherwise, you risk drowning in a sea of metrics.
* **Business reports.** Your eCommerce platform should offer some out-of-the-box reporting that you can use to quickly answer critical business questions, such as where your customers are coming from or what products are driving the most sales. However, you shouldn’t be afraid of implementing custom reports as needed.
* **Continuous interviews.** We’ve left this for last, but it’s arguably the most crucial research technique in your tool belt. You should try interviewing at least two customers a week, asking a mix of generative and evaluative questions about whatever you’re currently working on.

As you’ve seen, the key is embedding little product research opportunities at critical moments of the customer journey so that you don’t have to think about them consciously. If you need more in-depth information about a specific aspect, you can still go out and execute a full-blown research project, but continuous discovery will provide you with a solid foundation to start.

## The 6-Step Process to Accomplish Anything

Now that you understand what product management is and how to conduct product research, you might wonder how to tie these techniques to your business goals in a structured, systematic way. That’s precisely where the Opportunity Solution Tree (OST) comes in.

The Opportunity Solution Tree is a visual framework that helps your team stay focused on the current business goal while also ensuring they’re exploring the entire problem space. Depending on what you’re doing, you can either see the whole picture at a glance or drill down into the nitty-gritty of each project. Furthermore, an OST is designed for continuous optimization and evolution, which makes it the perfect tool in environments where you want to move fast but with intentionality.

![](https://cdn.sanity.io/images/kqgmf0g2/production/f4efe697bad7b33a7525c24f001cf2936087db01-2056x3272.png?fit=clip)

Here’s how you build an OST:

1. **Start from the desired outcome.** This is usually informed by your overarching business strategy. For instance, an outcome might be “Lower the return rate for our online store to 20%.”
2. **Identify opportunities to achieve the outcome.** You will typically do this through generative research. For instance, you might interview ten customers who have returned a product in the last month and find that they got the wrong size. You would then create an opportunity labeled “Customers purchase the wrong product size.”
3. **Brainstorm solutions.** In this phase, involve as many relevant stakeholders as possible: your marketing team, your development team, etc. Use research insights and your team members’ intuition to develop ideas for tackling each opportunity. Ideally, you refine the solutions to 1-3 per opportunity to keep the process manageable.
4. **Design experiments.** Each solution should come with an experiment, which ensures the solution is actually going to tackle the opportunity. This is a crucial step: by adopting a data-informed approach, you’ll eliminate your biases, assumption, and emotional attachment to specific ideas. In some cases, you might want to run multiple experiments to evaluate different aspects of a solution.
5. **Evaluate your solutions.** The next step is to run the experiments you’ve designed to test the validity of your solutions: are they creating the impact you expected? Can you see any side effects to address before moving forward?
6. **Implement the winners.** At this point, you should have a list of solutions your team can implement to achieve the desired outcome!

Here’s a bonus tip: in the OST included above, you might notice that we have broken down the main “Customers get the wrong size” opportunity into two sub-opportunities: “Customers get the wrong size when buying for themselves” and “Customers get the wrong size when buying for others.” This is a common and encouraged practice when designing an OST: you should split your opportunities into the smallest possible size while ensuring that your opportunities are Mutually Exclusive, Collectively Exhaustive (MECE). This will help you work in small chunks, which makes the process faster and more efficient.

The OST is a dead-simple yet incredibly powerful tool that can help you pursue virtually any business goal when appropriately followed. It might not be obvious, but OSTs aren’t limited to your eCommerce site: you can apply this process to improve other areas of your brand, such as fulfillment or customer service. The value of this technique lies in the fact that it forces you to structure your work and follow facts, not intuitions.

## Good Product Management Takes Practice

Most eCommerce companies are skeptical of product management at first. When you’re a small startup, every bit of process you add to your day-to-day seems like a luxury you cannot afford.

And yet, we’ve seen time and again that the brands with a clear vision and strong product management fundamentals to execute it are the ones who thrive: they exhibit lower customer acquisition costs, higher retention rates, and higher average order values. Most importantly, they move more quickly and intentionally than their competition.

You might be very excited to go out and try the new techniques you’ve just learned, and we very much encourage you to do so. However, remember that we’ve barely scratched the surface of product management in this article: while the fundamental principles are relatively simple, product management remains a vast discipline.

We have not said anything about when to use which research technique, how to develop an overarching product strategy rather than simply tackling one outcome at a time, what systems and tools are best to collect the outcomes of your research, and many other aspects that take years of practice to master fully.

If you’re curious to try product management or already have a product-driven approach and want to take it to the next level, we’re happy to help!

Supercharge Your DTC Growth with Product Management

With the rising cost of advertising and inflationary pressures making it hard to acquire, activate, and retain customers profitably, direct-to-consumer (DTC) brands are increasingly looking for ways to lower operating costs and scale more efficiently. This often takes the form of wholesale partnerships or marketplace expansions, which allow brands to tap into existing audiences and offload last-mile distribution.

We strongly believe a wholesale motion should be a crucial part of any modern brand’s go-to-market strategy. However, the DTC channel offers several opportunities that would allow brands to disengage from performance marketing as their only methodology of customer acquisition. At the same time, DTC brands can benefit from unique advantages, such as end-to-end control over the customer experience and direct access to zero- and first-party data.

This article will explore product-led growth, a methodology adopted by startups such as Dropbox, Slack, and Zoom to achieve low-cost, exponential growth. We’ll unpack the fundamentals and benefits of product-led growth, how it can be applied to eCommerce and DTC, and how you can take your first steps toward establishing a product-led growth strategy for your DTC presence.

## What Is Product-Led Growth?

Product-led growth (PLG) is a business methodology originally popularized by [OpenView](https://openviewpartners.com/) in 2016. It consists of techniques that allow you to shift away from spending marketing dollars to capture and retain customers, letting your product do the selling instead.

In contrast to more traditional approaches, such as market-led and sales-led growth models, companies that adopt product-led growth put their product experience at the center of the brand journey and take a product-first approach to scale their revenue and customer base.

They also automate secondary functions such as customer success and invest heavily in self-serve onboarding experiences, which allows potential customers to experience and play with the product before committing to the purchase.

For SaaS startups, this can take different forms, such as: offering customers a free trial, taking them through a self-guided onboarding tour, automating customer support, or facilitating word-of-mouth by rewarding customer referrals.

A well-executed product-led growth strategy has numerous benefits:

* **Lower Customer Acquisition Cost (CAC):** by letting your product and existing customer base do the selling and relying less on marketing campaigns, brands can reduce their CAC.
* **Higher Lifetime Value (LTV):** product-led growth leads to more engaged customers, which exhibit a higher Average Order Value (AOV) and Repeat Purchase Rate (RPR), making for a higher customer lifetime value.
* **Higher Revenue per Employee (RPE):** by automating as much as possible of the customer journey, you can lower your operating costs and free up resources to focus on more strategic initiatives.
* **Deeper customer understanding:** to adopt a PLG strategy, you’ll need an intimate knowledge of your customer base. This positively impacts all areas of the business, such as your fulfillment, customer service, and marketing teams.
* **Improved team alignment:** since product-led growth encompasses the entire organization, team members in a PLG company are more aligned and focused than marketing-led or sales-led teams, which makes them happier and more efficient.

As you can see, product-led growth allows you to create a flywheel that positively impacts key metrics across all areas of your organization. As you become more experienced at practicing product-led growth, you’ll start seeing the world through a different lens: rather than relying exclusively on paid acquisition channels, you will begin experimenting with ways your product can generate traction and create efficiencies.

## Does Product-Led Growth Apply to eCommerce?

The answer is: it depends. While product-led growth has been initially designed for traditional software companies, you can–with some creativity–adapt many of its elements to work for the business model and customer journey of an eCommerce/DTC brand.

For an eCommerce brand to become a product-led company, you must broaden your perspective of what constitutes your “product.” Many brands identify this directly with their physical product and consider the rest of the shopping experience an implementation detail. This mindset severely limits your ability to benefit from a product-led growth strategy.

![](https://cdn.sanity.io/images/kqgmf0g2/production/16f5b011c01d62e0d9a223638a5fc607bf5a84df-2560x2402.png?fit=clip)

Instead, product-led brands consider every customer touchpoint part of their product, and they’re constantly thinking about how to create new touchpoints to engage, activate and retain the customer. Here are a few examples of brands that are using techniques borrowed from product-led growth:

* Vitamin brand [Care/of](https://careof.org/) has a [mobile app](https://apps.apple.com/us/app/care-of/id1273387955) that allows to personalize their subscription plan, track their vitamin and health routines, and get rewarded for consistency. The app allows potential buyers to experience Care/of’s product’s value while building further engagement with established/active users.
* Swiss sportswear brand [On](https://www.on-running.com/) recently released [Cyclon](https://www.on-running.com/en-us/collection/cyclon), a program that allows customers to “subscribe” to specific products, such as running shoes and tees. They have taken a sporadic event, such as buying a new pair of shoes, and turned it into a SaaS-ified experience that boosts customer retention.
* Rather than asking customers to pay for their orders upfront, apparel brand [Stitch Fix](https://www.stitchfix.com/) allows subscribers to try outfits and only pay for what they keep. This allows customers to experience the value of the brand before committing.

Subscription-based and membership-based brands have an inherent advantage over brands that favor a one-time purchase journey. This is because they start with a much larger “surface area” to engage their customers. However, brands that don’t have a subscription or membership program–and have no intention of establishing one–can still see success by borrowing and implementing individual elements from product-led growth.

## Embracing Product-Led Growth for Your Brand

Brands looking to start with product-led growth often get discouraged by the number of initiatives they could experiment with. If you’re coming from a traditional marketing-led approach, it can be hard to adopt the right mindset. 

If you don’t know where to start, an excellent first step is to map customer touchpoints across different stages of your shopping funnel and user experience, from brand awareness to order fulfillment. There are a few ways to do this:

* Involve stakeholders from different departments to understand how they interact with the end-user, directly and indirectly.
* Talk to your most loyal (and least loyal!) customers to collect feedback on how your brand fits into their day-to-day, their current pain points, and any ideas they might have.
* Look at quantitative analytics to uncover usage and engagement patterns.

The more feedback and data you can collect, the more holistic your understanding of your brand-customer relationship will be, and the more opportunities you’ll uncover for a product-led growth transition!

Once you have your customer touchpoints mapped out, look at each critically and ask yourself the following questions:

* **How can you command a greater share of customer attention?** Many DTC brands have a transactional relationship with their customers and fail to invest in a longer-term relationship. In reality, zero-party and first-party data allow most brands to create deeper connections: what are some “aha” moments you can generate?
* **How can you deliver value before capturing value?** For a DTC brand, this often takes the form of content-driven education or offering a tool that helps customers enter your brand’s world and experience its value _before_ a traditional activation. Sneaker marketplace [The Edit](https://www.theeditldn.com/), for example, provides a free [personal shopping service.](https://www.theeditldn.com/en-eu/pages/personal-shopping-service)
* **Can you create efficiency by investing in automation?** This is often more nuanced than a simple yes-or-no answer. Any investment in automated/self-service workflows must offer a justifiable return on team efficiency or customer engagement (or both!). Generative AI, in combination with low-code/no-code platforms, creates some fantastic opportunities to automate customer service, product quizzes and similar while mainaining a human touch.
* **How can you spark virality?** Product-led companies are masters at making their products viral. eCommerce brands have many opportunities in front of them: packaging, transactional notifications, and even customer service interactions can become ways to generate positive word-of-mouth.

If you come up with an endless list of initiatives, don’t panic! Start with smaller experiments that allow you to build momentum and train your product muscle, and see how your customers respond. A strong product management foundation can help identify the biggest point of leverage.


## 5 Examples of Product-Led Initiatives for eCommerce Growth

For inspiration, here are the five most common product-led initiatives that we see eCommerce and DTC brands apply:

* **Membership programs.** While traditional loyalty programs primarily reward spending through cashback or similar models, well-designed membership programs take the brand-customer relationship one step further by leading customers to identify with the brand. This can take the form of early access to new products, in-person or virtual get-togethers, direct access to company founders, and any other perks relevant to a brand’s unique customer base.
* **Referral programs.** Happy customers love to spread the word, and referral programs allow them to do just that. It’s common for brands to reward referrals with discounts and promo codes, but we encourage brands to design a bespoke strategy that will resonate more with their customer base. If you’re a luxury brand, offering swag/products in partnership with other brands might be better than offering $20 off.
* **Try before you buy.** Allowing your customers to experience your physical product before committing to a purchase is the epitome of delivering value before capturing value and can be a great way to engage undecided customers (especially when paired with some of the other initiatives in this list!).
* **Educational content.** Content is one of the most common organic marketing efforts pursued by DTC brands, and with good reason. Producing valuable, educational content for your audience is a straightforward way to generate brand awareness by solving a genuine problem. If you go down this path, nvesting in a solid [content infrastructure](https://nebulab.com/blog/ecommerce-content-management) will pay dividends.
* **Web-based/mobile apps.** Often, brands design mobile apps that are purely transactional, making them useless to customers that have not already decided to shop with the brand. In doing so, they miss invaluable opportunities to nurture their audience through content and interactions that don't aim for a direct sale.

While these are all good starting points that will apply to many brands, you should have the courage to explore unique ideas that will make you stand out. Rolling out a successful product-led strategy requires a deep understanding of your customers, how they experience your brand, and what opportunities you can capitalize on to become an indispensable part of their daily routine.

If you need help rolling out your product-led approach, [reach out!](https://nebulab.com/contact-us) Since 2012, we’ve helped tens of DTC brands scale their presence by developing unique experiences. We’re happy to help you figure out if product-led growth is right for you and how you can get started on your product-led journey.

Scaling DTC Brands Through Product-Led Growth

With 9 out of 10 online shoppers stating that they want retailers to offer recommendations based on their interests, and
considering the vast amount of data and technology brands now have, there are few excuses not to have a personalization
strategy in place. eCommerce personalization is proven to increase conversion rates, customer retention, and lifetime
value, creating a virtuous cycle that can turn your visitors into loyal customers.

And yet, we often see brands struggle with rolling out an effective eCommerce personalization strategy: founders aren’t
sure how to segment their customers, evaluate the effectiveness of their personalization program, or what technologies
to adopt.

This article will demystify eCommerce personalization, providing you with a straightforward, data-informed approach for
designing, implementing, and validating your personalization program.

## What Is eCommerce Personalization?

Much confusion stems from the vagueness of the term “personalization.” If you Google it, you’ll find books, articles,
and SaaS products that all give it a different meaning: they talk about A/B testing, machine learning algorithms,
retargeting, user-generated content… It can be hard to understand where to start.

At its core, eCommerce personalization is the technique of using the information you have about your customers to
display content that is tailored to them. You can personalize across different dimensions (e.g., personalize by country,
browsing history, demographics), at different touchpoints (e.g., your website, your email campaigns, your ads), and with
different techniques (e.g., machine learning, user-generated content, human curation). No matter *how* you personalize,
the goal is to create a customer experience that feels unique.

## Designing Experiments with GTDT

When we coach founders that want to start experimenting with personalized eCommerce, we encourage them to think of
personalization as the means, not the end. Like all initiatives, personalized shopping experiences must be designed
thoughtfully and intentionally for maximum effectiveness. Adopting a tool or installing a plugin will only take you so
far if you don’t have a clear understanding of what you want to achieve with your personalization program.

Unfortunately, most resources offer an endless list of personalization examples from famous online retailers but no
indication of *why* or *how* those brands designed their personalization programs. This leaves operators scratching
their heads as they try to replicate the success of these brands. As a result, they tend to go for “blanket solutions”
that are easy to implement but ultimately leave the most exciting opportunities on the table.

Over time, we have developed a model that helps brands roll out thoughtful personalization experiments that get them
closer to their goals. **We call it GTDT, which stands for Goal, Technique, Dimension, and Touchpoint.** In the
following paragraphs, we will explain this process, providing you with all the tools you need to design your
personalization program.

### Goal

This might seem obvious, but surprisingly often, online stores will launch personalization capabilities to tick off a
checkbox with no clear goal in mind. Unfortunately, this not only means they will roll out an ineffective
personalization program, but it also means they will not be able to validate the effectiveness of their program: if you
don’t know what metric you’re optimizing for, you will not know what metric to look at.

The first step for any good personalization experiment is to understand what goal you’re aiming for—everything else
follows. Depending on your brand’s SKU catalog and business model, a personalization experiment for increasing your
average order value will likely look much different from an experiment to improve your add-to-cart or repeat purchase
rates.

If you’re unsure what goals you should be prioritizing, talk to your team and pick the one that feels most urgent right
now. Where are you falling behind compared to the industry benchmarks and your (or your board’s) expectations? What are
your customers telling you in your interviews? (You ***are*** doing customer interviews, right?) What are your plans for
the next 12-18 months?

Don’t make the mistake of falling into analysis paralysis: the beauty of running experiments is that you can quickly
pivot if you find that you’re optimizing for the wrong things. Make a data-informed decision, launch your experiment and
move on!

### Technique

With eCommerce personalization rising in popularity, several tools have emerged that promise to offer the definitive
solution to all your personalization problems. A/B testing tools, content management systems, eCommerce platforms, UGC
aggregators… almost every tool provides some level of personalization nowadays.

Unfortunately, without a clear personalization plan, it’s easy to get carried away by shiny object syndrome and try
every tool in hopes that it will solve all your problems. Do this enough times, and you’ll end up with a Frankenstein
monster of solutions that don’t integrate and annoy your customers with endless popups and broken UIs.

Before picking a tool or technology, decide **how** you want to personalize. You should do this, first and foremost, by
continuously referring back to your experiment goal and dimensions, but you should also lean on your brand’s strengths
and values. If you’re a fitness brand that’s all about community, you might want to leverage the power of user-generated
content, at least in *some* of your experiments. If you’re a luxury brand selling elevated essentials, perhaps you can
offer human-curated recommendations to your customers.

This last example brings us to the next point: don’t be afraid to do things that don’t scale, especially in the early
stages of your company. Many brands go from zero to a hundred by integrating deep learning models that are complex to
tweak and customize, and they don’t realize that they’re missing out on many lower-hanging opportunities. You’d be
surprised by how much you can accomplish with some basic customer segmentation and a human touch.

### Dimension

Once you know what you’re aiming for and how you want to get there, it should be easier to understand which dimensions
you want to personalize across. For example, you might want to personalize content based on geography, customer lifetime
value, previous purchases, demographics, or other factors.

It might help to group personalization dimensions into three big buckets:

- **Historical.** These are actions your customer has taken before. For instance, you might segment customers based on
  their AOV or purchase history.
- **Demographical.** These are traits that will always be true about your customer. For instance, you might segment
  customers based on geography, gender, or age.
- **Contextual.** These are actions your customer is taking now. For instance, you might segment customers based on
  their cart contents or session length.

When thinking about dimensions, don’t get limited by data availability: just because you don’t know your customers’ age,
it doesn’t mean you shouldn’t use it in a personalization experiment. Part of your personalization program should be
designing ways to collect or infer the information you need to carry out your experiments, which has the added benefit
of enriching your understanding of your customers over time.

You also don’t want to limit yourself to generic customer data: we find that the most successful personalization
programs use proprietary brand data to create win-win outcomes. If you sell pet food subscriptions, you might want to
curate your product catalog based on the customer’s pet type or age. If you sell sports equipment, you could send your
customers content specific to their favorite sports. Think about the different ways customers engage with your brand,
and try to design your experiments to optimize and improve those interactions.

### Touchpoint

With your goal, dimension and technique nailed down, it’s time to pick a personalization touchpoint. With this term,
we’re referring to the specific customer interaction you want to personalize. This will likely depend on your goal and
dimension: for example, if you want to increase AOV (goal) by looking at cart contents (dimension) to suggest upsells
(technique), you can only do this after the customer has added something to their cart or completed their purchase.

When deciding which touchpoint to personalize, we encourage brands to look beyond their product pages or on-site user
experience. Even with the average brand, there are so many ways your customers might interact with you and so many
opportunities to personalize those interactions. The most effective personalization programs are omnichannel and focus
on often-neglected interactions, such as transactional notifications, or create entirely new touchpoints, such as
sending customers a personalized card for their birthday.

Again, don’t get limited by your current touchpoints: if you want to send personalized email campaigns but are currently
not doing any email marketing, don’t be afraid to start now. If you think push notifications might resonate with your
customer base, why not give them a try?

The goal is to catch your customers when they need personalization even though they don’t know it, and leverage the
power of data to turn a mundane interaction into an intimate, personalized experience.

## Measuring Experiment Effectiveness

Designing and launching your experiment is only the first step. For an effective personalization program, you want to
validate the effectiveness of your experiment, double down on the ones that work, and kill the ones that don’t.

To do this, you must go into every experiment with a clear definition of success. This means answering the following
questions:

- What metric(s) do you expect the experiment to move, and in what ways?
- Are you already measuring the metrics you need? If not, how can you measure them? Do you need time to get a baseline
  for comparison?
- For how long will you let the experiment run after measuring the results?

### A/B Testing vs. Attribution Models

A special mention here goes to A/B testing: like with AI/ML, inexperienced founders often jump into A/B testing without
a clear understanding of the technique. While it’s tempting to run all personalization experiments as A/B tests,
sometimes this can be overkill or even detrimental: A/B tests require specific expertise, dedicated infrastructure, and
relatively high traffic volumes to reach statistical significance.

Typically, we only recommend A/B testing for large brands, running experiments where the results are highly uncertain,
and a clear control group can be established (e.g., customers that see the regular homepage vs. customers that see the
personalized homepage). In all other scenarios, a robust attribution model is a more reliable way to measure the
effectiveness of your experiment—even better when it’s paired with qualitative customer insights.

### Following Through on Experiment Validation

However you decide to validate your experiment, make sure it’s easy to roll back if needed and remember to look at the
data and take action accordingly! A recurring “experiment review” meeting with your team, where you review all
experiments that need to be validated and decide how to move forward, can do wonders to keep you accountable.

Finally, don’t be too rigid: if you expected a cross-selling experiment to drive $100K in revenue, but it only drove
$80K, it might still be worth keeping, depending on the effort you need to turn it into a permanent, first-class
capability. For some experiments, it might be helpful to establish different thresholds of success. Going back to our
example:

- Anything below $50K might be a clear failure.
- Anything between $50K and $100K might be up for discussion.
- Anything above $100K in incremental revenue might be a clear success.

Generally speaking, whenever you make decisions about your digital experience, you want to be data-informed, not
data-driven.

## Ready to Start Personalizing?

eCommerce personalization can create remarkable outcomes: when leveraged intentionally, personalization programs
increase revenue, customer loyalty, conversion rates, and lifetime value. It’s a tool that should be part of every
eCommerce store’s marketing strategy.

With the GDTD model, you have a streamlined process to design, launch and validate your personalization experiments.
It’s a high-impact tool that evolves with your brand as you scale, better understand your customers, and develop more
sophisticated ways to engage them.

If you have questions or need help with your brand’s personalization program,
[we’d love to hear from you.](https://nebulab.com/contact-us) Let’s start personalizing!

The GTDT Model for Intentional eCommerce Personalization

One of the most important decisions you will make when launching your digital brand is which eCommerce platform you build your store with. Typically, there are three categories to choose from:

* **SaaS platforms** are online software solutions that handle all the complexity of building and running a store. In exchange for a recurring license fee, these tools provide a storefront your customers can access as well as a backend to to manage your store. They are by far the quickest and easiest solution to get started. Popular examples in this category are [Shopify](https://www.shopify.com/) and [BigCommerce](https://www.bigcommerce.com/).

* **Open-source platforms** are ready-made software packages that provide similar functionality to what you could get with a SaaS platform. Because they are open-source, these platforms can be customized, although many of them are not built for that. Furthermore, you have to host them in your own infrastructure. Popular examples are [WooCommerce](http://woocommerce.com/) and [Prestashop](https://www.prestashop.com/).

* **Open-source frameworks** are software solutions that provide the basic functionality you need to build your store. They vary in functionality and underlying technology, but most of them are built to create extremely custom experiences and provide a very high degree of flexibility, at the cost of a steeper learning curve and a larger upfront investment. Popular examples are [Solidus](https://solidus.io/) and [Saleor](https://saleor.io/).
The main difference between SaaS platforms and open-source platforms is the pricing model: SaaS platforms require paying a recurring license fees, while most open-source platforms are free. In terms of functionality, however, they are pretty similar, so we will instead focus on the differences between SaaS platforms and open-source frameworks.

## Cost of ownership

SaaS platforms have two main pricing models: you either pay a fixed fee every month/year, or a percentage of your store’s sales volume. This results in a pricing model that scales with your store, but **it also means you are paying money just to keep your store online instead of investing in its continuous evolution.**

Most open-source frameworks, on the other hand, are entirely free to use, but you need to hire a development team that will build, launch and maintain your store. While this model requires a larger upfront investment, **it’s also a better fit for those entrepreneurs who are serious about investing in the technology that powers their business.**

If you can afford a larger upfront investment and you expect your brand to scale seriously, going with an open-source framework will reduce your total cost of ownership while creating more opportunities than you could get with an off-the-shelf solution.

## Customization possibilities

SaaS platforms offer a great starting experience with no customization work needed. This is really helpful for people who are just getting their feet wet in the eCommerce industry: **if you don’t know how to create a good UX and just want to start selling, a SaaS solution will help you.** This kind of simplicity doesn’t come for free, though: **SaaS platforms are not always easy to customize, and in certain cases you are stuck with the default experience they provide.**

Going with an open-source framework means you’ll have to figure out more stuff by yourself, but **it also affords you the flexibility to customize each and every aspect of your store however you see fit,** allowing you to truly innovate the buying experience rather than being one more droplet in a sea of digital brands.

The most prominent online brands became memorable not just because of their products, but because of the experience they created around all brand interactions. **If eCommerce is an important channel for you, you need to start seeing yourself as an experience company,** and treat technology as a first-class citizen.

## Data ownership

**SaaS platforms, unfortunately, act by their very nature as middlemen between you and your customers.** Because you are not hosting your infrastructure when you adopt a SaaS solution, you lose direct access to a lot of potentially useful information. These platforms try to make up for the lack of data ownership by providing out-of-the-box reporting tools, but they often fall short of brand expectations.

**With an open-source framework, you will always have complete access to all the data generated by your store.** This data can be used in any way you see fit: you can either customize your platform to generate advanced reports internally, or connect an external business intelligence tool that will help you take full advantage of all the information at your disposal.

Being a digital brands allows you to use data to your advantage: by accessing information that is not always available to traditional brick-and-mortar retailers, you can make smarter decisions, which reduces your costs and helps you stay competitive. The paradox here is that **data ownership is even more important for smaller brands, which don’t have access to economies of scale and can afford fewer mistakes.**

## Time to market

Because most SaaS solutions provide all the tools you need to start an online business out of the box, it will always be quicker to get your brand started with a SaaS platform than with an open-source framework, at least for a basic store. **If you’re in a hurry to get started and cannot afford to wait, you should definitely look into SaaS.**

With that said, one aspect to keep in consideration is the velocity of your team when evolving your store in response to market conditions. **In the hands of a skilled engineering team, an eCommerce framework will be not only quicker to adapt, but because it’s built to be customized, it will also allow you to make optimizations that stand the test of time.** SaaS platforms, on the other hand, often require ugly hacks that cost you more time in ongoing maintenance than for their initial development.

For most brands, time to market for the initial launch is not a relevant factor. On the other hand, time to market in capitalizing new opportunities and evolving your eCommerce experience can make or break a digital brand.

## So… which one is it?

As you have seen, there are different factors to take into consideration when choosing the best eCommerce platform for your needs. Most of them boil down to two key aspects: experience and vision.

**If you are only getting started in eCommerce, or think of your brand mainly as a product company, you should probably consider SaaS options.** They will make selling online a no-brainer, at the cost of technical limitations and a higher total cost of ownership.

**If you are an eCommerce veteran, or consider customer experience to be paramount in building your brand, you should instead going with an open-source framework**, making a larger upfront investment in order to have a flexible platform that will allow you to deliver a completely custom experience.

The Nebulab