Most e-Commerce brands pour everything into getting customers to checkout — and then hand them a generic, one-size-fits-all experience that quietly kills the sale. Avi Moskowitz, co-founder of PDQ, has processed millions of checkouts across top Shopify brands (including Jones Road Beauty), and his diagnosis is blunt: cart abandonment isn't a technical problem. It's an emotional one. And it's leaving $270 billion on the table every year.

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Inside the episode:

• Why your checkout is the one place segmentation goes to die — and how personalizing it by customer type (first-time, returning, high-value) can drive an 18% AOV lift or double-digit conversion jumps
• The "WISMO problem": why more than 50% of order-related support tickets arrive the same day the order was placed — and what it tells you about the trust gap you're creating at checkout
• The free shipping threshold mistake almost every brand is making (hint: they copied a competitor who also just guessed)
• Surprising checkout wins from PDQ's testing: why moving the economy shipping option down one slot meaningfully increased revenue per session — without a single new ad or product
• How to think about every order as its own P&L — factoring in CAC, COGS, fulfillment, and shipping to decide exactly what to offer each customer at checkout

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Sponsored by OMG Commerce - go to https://www.omgcommerce.com/contact and request your FREE strategy session today!

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Chapters: 

[00:00] Intro — The $270B checkout abandonment problem

[00:22] Welcome & Guest Introduction: Avi Moskowitz, Co-Founder of PDQ

[01:52] Avi's Background: From Craft Beer to SaaS Founder

[03:23] COVID Timing & The eCommerce Wake-Up Call

[05:09] The Root Cause of Cart Abandonment: Trust, Not Technology

[07:27] How PDQ Solves the Checkout Confidence Gap

[14:30] Reducing Friction: Shipping, Delivery Dates & Upsells

[23:00] Free Shipping Thresholds & AOV Optimization

[34:00] Building a Checkout That Converts Like Amazon

[43:24] Thinking in Mini P&Ls: Per-Order Profit Optimization

[46:26] Personalized Checkout Logic at the Customer Level

[48:24] Where to Find PDQ & Get Your Free Checkout Audit

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Connect With Brett: 

LinkedIn: https://www.linkedin.com/in/thebrettcurry/ 
YouTube: https://www.youtube.com/channel/UCQmbMwBW8LYDfFAqNqlgTGw
Website: https://www.omgcommerce.com/
Request a Free Strategy Session: https://www.omgcommerce.com/contact

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Relevant Links: 

• Avi's LinkedIn: https://www.linkedin.com/in/moskowitzavi

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Past guests on eCommerce Evolution include Ezra Firestone, Steve Chou, Drew Sanocki, Jacques Spitzer, Jeremy Horowitz, Ryan Moran, Sean Frank, Andrew Youderian, Ryan McKenzie, Joseph Wilkins, Cody Wittick, Miki Agrawal, Justin Brooke, Nish Samantray, Kurt Elster, John Parkes, Chris Mercer, Rabah Rahil, Bear Handlon, JC Hite, Frederick Vallaeys, Preston Rutherford, Anthony Mink, Bill D'Allessandro, Stephane Colleu, Jeff Oxford, Bryan Porter and more

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Transcript: 

Avi Moskowitz (00:00):

You ran your ads, you used all the tools and everything at your disposal to get them to check out, but you're losing them literally at the finish line, which is crazy.

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Brett Curry (00:22):

Well, hello and welcome to another edition of the eCommerce Evolution Podcast. I'm your host, Brett Curry, CEO of OMG Commerce. And today we are talking about cart optimization and so much more. I'm confident we're going to look at this topic and look for ways to you increasing your profits and your AOV and your conversion rate in a way that we've never done before in a way that you've maybe never done before either. I am delighted to welcome to the show the co-founder of PDQ, Avi Moskowitz. And with that, Avi, welcome to the show, man. And how's it going?

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Avi Moskowitz (00:59):

Great. Thanks for having me, Brett. It's PDQ for short, Pretty Damn Quick for long, but-

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Brett Curry (01:05):

We're going quick, exactly. PDQ is definitely faster and easier to say. But yeah, I was first introduced to you through a mutual friend, Tom Shipley, brilliant operator, mentor of mine. And so that's how I first met you. But then we have a few mutual clients, one of them, Jones Road Beauty and Cody Plofker, awesome guy, friend of the pod, personal friend, all that. And I always know I can get the fair and real honest scoop from Cody like, "Hey, what do you think about these guys?" And so I asked him, I was like, "Hey, what do you think about PDQ?" I was like, "I like those guys." And Cody has very high standards, which is awesome and he thinks highly of you. So that was enough to get me interested in chatting with you guys more.

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Avi Moskowitz (01:50):

That means a lot. 

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Brett Curry (01:52):

I want to dive into several topics here related to card optimization, CRO, AOV, Lift, how do we deal with car abandonment, all those things. But Avi, before we do, I want to hear just the brief background, 90 seconds, you were into craft beer. I believe you had a craft beer business that somehow led you to being a SaaS founder. And so walk through that story and what was that journey like?

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Avi Moskowitz (02:15):

Yeah. So I'm a repeat offender. I've started up multiple companies and brewing actually was a detour. Up until that point, mostly technology companies. But Craft Beer, I had this midlife itch and built a craft beer company, launched it very successful, still own it today actively involved mostly on the board side, but company's grown and continues to thrive. But what was interesting is as happens sometimes in life, if you work hard enough, sometimes you get lucky. So we had this idea in 2019 of building out a website. No one was buying alcohol online back then, but it was really more about brand recognition, expanding our market, trying to get more folks in more markets aware of our products. So we built it on Shopify, not really expecting to sell anything, but we went through the trouble of building it out properly on Shopify and give folks online a similar experience to what they would normally have in the store, which is make your own eight pack all kinds of different bottles.

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(03:23):

And of course in a store, it's easy because if you run out of an inventory item, you know it's not their customer's not going to come to you. They may ask for it, but they're not going to walk over to the register with something you don't have. So digital world presents different challenges than the real world. And we thought we anticipated a lot of these things, but as luck would have it, we launched the site just a couple of weeks before COVID hit and suddenly who knew-

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Brett Curry (03:49):

Brilliant

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Avi Moskowitz (03:50):

Timing. ... of all the things during COVID. If you're home and it was B2C folks ordering for themselves, but a lot of companies, the Googles, the Microsofts, they're all doing happy hours at home looking for any way to get there, their teams together and find ways to connect the team even though they weren't physically in the office anymore. So the business exploded and we went from selling a handful of products online a day, which is very manageable into dozens and days with hundreds and we had some thousand order days. It was insane. Now I hadn't really looked at e-Commerce from a brand perspective up until that point and suddenly here I was as an operator and literally waking up every morning at six o'clock printing shipping labels, laying them out on the floor in this puzzle of where the order's going, what kind of inventory is in it, what do we have in stock, what do we not have in stock, marking the shipping labels to cross out the items because those folks needed a personal note with a beer that we decided to replace it with.

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(04:56):

And the logistics were insane. And we realized really quickly that we had to build something for ourselves to keep up with this because nothing in the market was supporting that kind of solution.

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(05:09):

But as we started double clicking on the problem, what was most stark to me, like the realization that jumped out the most as an e-Commerce operator is we all shopped on Amazon and Amazon makes it look easy. And not only do they make it look easy, but virtually every time I go there, I buy something. And yet on our store at Beer Bazaar, folks were like 50% of the people coming in were abandoning at checkout and like, what's going on? What am I doing wrong and what's missing in that equation? And when we zoomed out a bit and we looked at e-Commerce broadly, we were astounded to find that $270 billion is abandoned in checkout every year and that's like an insane number. Imagine any retail store, any business with that kind of abandonment, you're not going to be in business for long. And then taking a closer look at it, it wasn't a technical problem.

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(06:12):

It actually is an emotional, psychological problem. And if you think about it, we've all shopped at retail at Amazon and online. In retail, there isn't a whole lot of trust or confidence issues because the person that's serving you, the clerk or the person at the cashier, there's someone there, there's a human. And most importantly, when you buy the product, it's a fair transaction. There's no leap of faith. You're giving them money or a credit card or cash or whatever it is and you're getting the product in kind. There's no trust back. And the immediate

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Brett Curry (06:45):

Exchange. Yeah.

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Avi Moskowitz (06:48):

We grew up in kindergarten, right? You want jello pudding? I can do an exchange, but I'm not going to negotiate. I'm not going to give you this thing and tomorrow you'll give me your pudding. It's a fair exchange. It makes sense to me. There's no promissory note. And in e-Commerce though, you get to the checkout, you've said all the right things and you got me through the funnel and you upsold me and my cards spilling overloaded with stuff. I'm here at checkout and you just haven't earned my trust or confidence yet because there's no clear communication about the product, when it's going to get delivered, how much it's going to cost me.

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(07:27):

If I really dig hard, I can look at your shipping policies and click on your FAQs and your terms and conditions. No one's going to do this of course. But if I was interested, I can probably decipher that it's a Wednesday and it's five o'clock that you're not fulfilling today, you'll fulfill tomorrow. But even with that knowledge, when you say five to seven days, are those business days, calendar days, does that mean when I'll get it? Does that mean when you fulfill it? And of course it means different things in different stores. I mean, the most astounding statistic to me is that more than 50% of support tickets that come in related to order related tickets like WISMO, where is my order is a whole class of tickets that lives in the e-Commerce ecosystem. More than 50% of them arrive on the same day that the order was placed.

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(08:23):

So these folks don't imagine that somehow the product is going to get zapped into their home. The reason they're calling is because what they're saying, and you can read this in the tickets, is, "You got me to buy the product, but can you tell me when I'm going to get it now that I bought it? " So even those people you got over the finish line, you still don't have the complete trust and confidence. So we doubled down on that problem and realized that you need to look at a lot of data Amazon's able to do what they do because they own the entire chain. When you pick up that book or pen in Amazon, they already know Sally in Kansas City is going to be putting in this size box, picking and packing on this day, putting it on this loading dock. It's going to be picked up by this carrier and get delivered.

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(09:14):

All of that information's available the moment that Brett steps into the store. I have that information already. So instead of upselling you when you first come in and saying, "Hey, Brett, I saw you pick up a pen. Do you want paper? How about a table? How about a desk plan? Hang on a second,

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(09:34):

When am I going to get this pen?" And Amazon does an amazing job at communicating that to you in the clearest way possible. This is when you'll get it, how you'll get it, the options to get it. Do you want to deliver? Do you want to pick it up? Is speed more important? Is cost more important? If you're willing to wait a day, this is the benefit. It's such a detailed interaction that's focused on you getting that product delivered that by the time you get to checkout, you really feel like you have the product and that's the magic. That's the magic. The trust and confidence is not necessary because I'm no longer apprehensive. I really feel like someone's packing that product while I'm at checkout and they've invested a huge amount to get there. It's not an easy feat to accomplish because the Shopify ecosystem and all ecosystems are fragmented.

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(10:30):

Sure, you have, I don't know, upwards of 15,000 apps available on the Shopify store. There's an app for that. Pick something and there's an app for that, but what there isn't today is the connectivity between those different apps. It's not 15,000 features in one platform, it's 15,000 different platforms. So if you're going to buy something that gives you the upsellability and then you have a tracking page and an order editing page and a page that's giving you different functionality and checkout, each of those live in their own walled gardens and not communicating. So I don't have that Sally information when you get to the product page. And what we've managed to do is build a platform that connects the entire customer journey in a way that injects that trust and confidence from the moment that you come in and provides that personalized

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Brett Curry (11:26):

Journey. Yeah, it's so good. And there's so much I want to unpack here and get to some top mistakes and top tips and things like that. But just thinking about a related offline journey that I think is a good comparison here, speaking to the confidence piece, there's some places and I've got a big family we eat out on occasion, but if I go to Chick-fil-A as an example, fast, easy way to get chicken when we're on the go, I've got a lot of confidence things are going to happen like they should, just a well-oiled machine. You make the order, you get your food very quickly, you're out, it's fine. Went to another fast food place recently between soccer games and went inside to get the food. It was pure chaos in there. And I was like, "You know what? After about 30 seconds, maybe it was a few minutes after making my order, I was like, I better go to the counter and just make sure they got my order and then everything is going to, because we've got to get to another game." And it was one of those things where, yeah, I think that's the story.

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(12:22):

When someone is putting in that Wismo ticket, it's because you haven't given them confidence and they feel like if they don't kind of push or pry or ask, maybe they're not going to get their stuff or not going to get it when they need it. And so really good stuff here. It's a $270 billion problem across the industry, people abandoning at checkout. You know what's interesting, Avi, I talked to a lot of merchants. Obviously we help merchants get more customers and grow and scale growth,

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(12:50):

But a lot of them think abandoned carts, it's just what people do. When people shop, they add to cart because they want to see shipping fees and they want to see some details, but they were never planning on purchasing. So some checkout abandonment is fine. And while that is true, you're never going to get checkout abandonment to zero, I'm still confident there is a massive missed opportunity really across all merchants. So can you help us understand what are the biggest drivers of cart abandonment or another way to say it, what are the biggest mistakes that merchants are making that are causing people to abandon cart?

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Avi Moskowitz (13:28):

Yeah. So first of all, I think what you said, Brett, in terms of this idea that abandoned carts is just like a built-in tax in and it's there. Part of that is because there is this concept that checkout's a black box. What can I really do? What can I change? What can I impact? And I would say the biggest challenge facing e-Commerce brands is abandoned cart. That's the decision moment. You could have gotten everything else right, but you've already spent the money on CAC, right? You ran your ads, you used all the tools and everything at your disposal to get them to check out, but you're losing them literally at the finish line, which is crazy because all the money is spent at that up until that point. So the biggest challenge that we see is people not understanding that abandoned cart or abandoned checkout is something that actually we can shine the light.

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(14:26):

We can open up all kinds of possibilities in checkout. A lot of that comes because we have the ability to segment. Now, segmentation is not a foreign concept to any operator. It certainly wasn't to me. When I ran ads, I ran segmented. I didn't say, "Hello, buy beer." I said, "Hey, you like Paleo Beer. You bought it before. You're probably going to love this new beer we just came out with. " You communicate to the customer in as personalized a way as possible, that's how you attract them to your store. Segmentation lives throughout the entire personal journey except for checkout. Klaviyo, no one would send an email say, "Hey guys, would you like to buy something?" You say, "No, you just bought this pair of shoes. I got a sweater that just came out. Great match to it. Discount, would you like to buy it?

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(15:16):

" Checkout, everybody gets the exact same generic checkout, doesn't change. There's nothing about it that changes. If you were a first-time customer, returning customer, subscribing customer, if you're a customer that just had a bad support experience, all those things we have dozens of segments of customers and every customer's treated differently. So the problem and the solution, the problem is that you think about segmentation everywhere in your store, but you don't think about it in the most important part of your store, which is checkout. And yes, we're uniquely positioned to do that because of the years that we've invested in identifying these segments, but that's one of the bigger issues. I mean, things along the way that kind of fall into a similar bucket are free shipping threshold. This is like one of my pet peeves. Most people with start brands, and I'll be honest, I did the same thing when we launched our brand, is you look at competitors and you say, "What do they charge?

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(16:18):

Where's their free shipping threshold?" If they figured it out, then I probably benchmarking, that's

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Brett Curry (16:22):

What we do. Yeah,

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Avi Moskowitz (16:24):

They're smart. I mean, I'm not smarter than they are, let me just use their free shipping threshold and then you realize over time that everybody's done that. No one actually tested free shipping threshold. So one of the first things we did was build a tool that allows us to identify free shipping thresholds but then connect that to the segments. So obviously a first time customer never experienced the product before, you may benefit and get them over the finish line just by telling them you'll get free shipping or discounted shipping. Or low lowering that threshold

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Brett Curry (16:58):

Or just giving them free shipping.

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Avi Moskowitz (16:59):

Yeah. Or even discounted expedited shipping. We can dial down pretty specifically with this personalization that we do, but not leaving that out there. And some brands actually before they started partnering with us, we're offering free shipping on the entire site to every customer. Now free shipping can be as much as 20 to 30% of your cost. It's insane. That's your margin for most of us. And only once you realize that you don't have to think of it in binary terms, it's not either yes or no, but certain situations, certain segments of your customers, certain opportunities should be presented either free or discounted. But when you take all those things into consideration and you add up all those little places that customers are falling off and for the reasons they're falling off, for example, shipping options. If you took five random sites after this call and just look at their shipping options, you'll see probably four out of five of them showing conflicting options.

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(18:08):

Like one option is get this in five to seven days for X amount of dollars, get it from four to six days, or get it even faster two to four days. So you're thinking, which of those overlapping days am I going to get it?

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Brett Curry (18:23):

I could choose option two or three. I pay a different amount and I could still get it at the same time. Yeah. Wow.

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Avi Moskowitz (18:29):

And the pricing is even more confusing. Suddenly it jumps to $30 for an extra day, but it's still five days out. So there's so much confusion and trust and confidence is really built with every pixel and so much energy is put into literally every pixel getting you to check out and then it's gone. So those are just some of the examples of where people fall off and on why it's such a big contributor to the amount of money that we recover is just doing that right makes a massive difference.

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Brett Curry (19:11):

Yeah. And it really underscores what you said in the very beginning, Avi, that the really cart issues and cart abandonment, it comes back to an emotional and a psychological issue where it's like, "Eh, I'm just unsure now. Now that you did this, I'm uncertain. I'm confused or I'm lacking confidence or I've got less confidence when I first hit checkout or you didn't answer my questions." There's some kind of emotional, psychological reason that's kind of throwing a wrench there. So I guess the flip side is what are some of the fixes that we need to put into place? I know obviously the real solution is talk to PDQ and get that installed, but for those that don't have that, what are some of the fixes? What are some things we can do to give confidence and to stop the bleed that's happening at Checkout? This episode is brought to you by Pretty Damn Quick.

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(20:06):

Here's a number that should keep you up at night. $270 billion is lost to checkout every year. CAC is up, margins are thin and yet most brands have personalized everything ads, emails, PDPs and they've left checkout as a static form. It's a black box, finish line where revenue quietly bleeds out. PDQ changes that using over 1,600 real-time signals, PDQ dynamically segments every shopper, first time versus returning, high value versus low intent, geo urgency fulfillment context and personalizes shipping prices, delivering promises, upsells and incentives in real time. Every element is continuously AB tested and optimized for profit at checkout for each checkout, not just conversion rate. The result, 20 to 30% uplift in revenue per checkout, five to 15% conversion improvements, 10 to 25% AOV lift across over a billion checkouts served and they back it up with an RO guy guarantee. If they don't deliver, you get a refund.

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(21:17):

And listen, some of our top clients love PDQ, Jones Road Beauty being one of them and they are the real deal. These guys are super, super smart. Best thing to do, get a deep dive audit on your checkout, see what PDQ can do for you. Again, that's Pretty Damn Quick. Go check out what Avi and the gang over there have to offer.

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Avi Moskowitz (21:37):

Yeah. So I would say it's always going to be some kind of trade-off. I'm not suggesting you don't upsell on the site, but let's give the customer a bit of confidence first. So if they just got to your site, don't start presenting them with a bunch of different options. Try and give them an idea of when they're going to get the order. Imagine you get to the site and says, "This product, if you order in the next two hours, I know you're ... Hi, you're from New York. We're going to be able to get this thing out to you in the next two days. If you want in the next few hours already, it feels like you're making a promise to me. And once you're making that kind of promise, that's where trust starts getting earned. Obviously, you need to promise what you'll deliver and then deliver on that promise.

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(22:27):

It's a two-sided equation and you don't want to make promises obviously that you can't. But surprisingly, one of the first things that we uncover when we do an audit, we have a free, we call it a checkout forensics audit. Typically, we cost $10,000 from a McKinsey or some kind of high-end advisory. We give this to you at no cost. One of the first things that we see when we run those audits, which is kind of crazy, is that you're under promising. You are actually delivering a lot faster than you could. And if you cut it down by a day, we have this whole algorithm that shows how just one day can significantly increase conversion, especially if you started as early as the product paid. But then imagine if you continue that all the way through checkout. So whatever promise you saw on the product page continues in checking, you go, " These guys, they really know what they're talking about.

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(23:26):

"Sometimes, and we've seen this too, you make a promise on the product page and then you get the checkout and there's no connection. You don't pick up on that promise. Suddenly you're given the same generic options and that obviously kills it. But being able to deliver small promises along the customer journey is going to solidify that transaction for you. And we see that just time and time

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Brett Curry (23:49):

Again. And it's something that we've seen with Amazon. It's why Amazon continues to invest billions into new fulfillment centers and why they invested into last mile delivery and why they started competing with USPS and stuff is they just knew if they shortened the window between order and you getting the product, consumption goes way up. But even just seeing on the PDP, and this happens to me all the time when I go to Amazon and I order something, I'm like, " Oh, I could get that tomorrow if I order in the next 10 minutes or whatever, two hours or whatever, and I usually just go ahead and order. " And so what that also does, because I don't see that as much on a Shopify store, but if I do see it, what it tells me is this store has their stuff together. If they can predict that or show me when I'm going to get it, it increases my confidence and it just makes me say," This is a well-oiled machine and I'm ready to give my money to this brand.

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Avi Moskowitz (24:48):

"Yeah. I mean, there are so many layers to it. We touched on some of the easier ones like putting a promise in, removing terms and conditions, removing all the noise and just trying to be as clear as you possibly can. But fundamentally, if you just looked at your site and said," I'm a customer shopping on the site and I'm a customer shopping at Amazon, what are the kinds of things that I can do to change to buy some of that customer's trust and confidence, earn that along the way? "And what you're going to find is there's so much optimization that you can be doing along the way when you understand it. You mentioned Cody before Cody actually in so many ways, he's responsible for a lot of the things that we've done because he's been with us for a while and early on- Comes from Joe Joe

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Brett Curry (25:39):

Beauty, for those that don't

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Avi Moskowitz (25:40):

Know. Yeah, Cody Jones Road Beauty, he looks at the business holistically, even though he is very much marketing focused, he doesn't stop there. And that's really where the magic is. And so many people would invest in a Klaviyo and say," There's no way that I would send emails out that aren't segmented and personalized because that makes no sense. "But then the customer gets to check out, you've done all the things right and then it's generic. Coding looks at things like lifetime value. What's this customer? Maybe I won't make as much on this first order, but I know that a first time customer that converts is going to give me repeat value and over time that's real math. And if you start looking at your checkout as a P&L like unit economics and say," How much did I actually pay for this customer? What was the CAC?

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(26:33):

What's the cost of goods for this item? What's the shipping and fulfillment costs? "And then you can actually make a decision at checkout with that kind of data, that's transformational and kind of getting ahead of myself, but this is the opportunity of the AI era when it comes to commerce is really this ability to run the checkout as a completely optimized profit machine that's giving the customer exactly what they want and giving the business the results they're looking for on a session by session basis. That's what we're super excited about. We call it autonomous checkout. We believe it's the future of commerce, but that's just the culmination of a collection of optimizations that are then happening in real time, kind of like driving. The first cars weren't autonomous. It would tell you, BP, veering to the left, veering to the right, maybe even do a parking assist.

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(27:35):

It takes time, but those rules existed and kept you safe as a driver. In checkout, there are 1600 different variables that we see in checkout. Each of those are opportunities to get optimized. Over time, once you achieve this rules and you say," Hey, I know this customer's coming from New York. I know I have inventory in New York. I know it's Friday. I know I can pick pack for another two hours. I know what the weather is. I know that this customer has ordered before. I have all the variables available to me to influence this purchase with the best possible outcome both for the customer and for the brand. "That's the magic here. So it's steps along the way, everybody can do some of these things today, but the good news is that tools are coming out that are really going to drive significant profits to the bottom line of brands.

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(28:35):

And I think that's the future of e-Commerce and we're getting there.

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Brett Curry (28:41):

Yeah. And I love that idea of looking at every transaction as its own mini P&L. So we'll get there in a minute. I want to unpack that a little bit. But before we do, I know you guys have been, you've tested thousands of different carts and millions of checkouts and things like that. What are some of the surprising wins, some of the surprising tests of either changes to remove roadblocks or changes that have optimized conversion? What are some surprising wins that you could share with the audience?

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Avi Moskowitz (29:13):

Yeah. So there's a number of things that once you hear them sound very logical to you, but for example, if you present too many options to someone who's focused on speed and if you show the slowest option first versus the fastest option first to someone who you've already identified as focused on speed, that conversion's going to go down. So even the order, the number of shipping blocks, meaning how many options you offer, the pricing obviously matters, but also which order you put them in matters. So these are all things we have to test. Now what's so much fun about this business is obviously if we can have one ideal Checkout. Shopify says they have the best checkout on the planet and as a generic checkout, if you do no personalization, they deliver a fast checkout because processing time is fast. Everything it does behaves quickly, but it's not optimizing for each customer.

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(30:17):

So when you look at or evaluate the overall checkout, each component of it has an opportunity to get optimized. So the way we look at the process and whether it's us or somebody else is first you want to segment your customers. Understand a first time returning, subscribing, high value, all those factors, that's the first part. Second is personalize based on that segment. So reflect what you know about this custom to make it personalized. The third is AB test. So don't work with any assumptions actually see what happens. So maybe for this fastest customer, fastest works best, but maybe not. So it's all AB tested and then optimized. So when we think about how we look at the biggest impact, we also look at a lot of very specific factors like seasonality. For BFCM or let's say Mother's Day, I've got a gift. You need to know on a gift site definitively that that gift will arrive in time.

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(31:29):

Now, many businesses do what they can to start that sale as early as they can, but what they don't realize is you can probably get somebody in even just before the holiday, either by offering the right shipping options and you'd be surprised by how much people are willing to pay because they realize, I just woke up this morning, tomorrow's Mother's Day, there's a tax. I got to pay for expedited shipping. But what's shocking is no one's offering that. I would pay. Think about how much to pay and test. Maybe it's $20, maybe it's 30. Maybe as the day progresses, it costs more. Maybe there's an extra click they can make to move to the front of the line because it's really important for them to get out first. There's so much that you can do when you realize that you're speaking to an individual and you're not just one collective class of customer.

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(32:23):

So there are big needle movers and some of those are just taking the confusion out. Those are going to be the biggest movers. Free shipping thresholds, making sure you're shipping options the way you price for shipping. And by the way, shipping across the country. There shouldn't be one price for everywhere in the country. We know where the inventory is. Should be

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Brett Curry (32:48):

Dynamic, for sure.

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Avi Moskowitz (32:49):

It's dynamic. Understand how far you are from the actual customer that you're going to be delivering to. When you factor all those things in, it's a very meaningful impact that you're able to have on your business, let alone the overall customer experience. So I'd say pre-journey at the pre-checkout phase, the early parts of the journey, communicate as much as you can, as best as you can about delivery in checkout, make the options of what you're presenting relevant. But Brett, you asked me surprising things. We add trust badges. In checkout next to the item makes a big impact. We add dynamic reviews. So a review of this particular product product by product next to it.

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Brett Curry (33:38):

And

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Avi Moskowitz (33:38):

That review in the

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Brett Curry (33:39):

Checkout.

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Avi Moskowitz (33:40):

In the checkout. Massive impact. Big, big list.

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Brett Curry (33:44):

The last little nudge of, "Hey, people love this. You need to say yes. Yeah.

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Avi Moskowitz (33:51):

" And then the upsell, doing the upsell based on the cart value. So not just related items, but understanding what this customer is. So we have an upsell that could be a free digital gift. If you're a cosmetics company and you want to have a little guide that says, "Here's how to apply this makeup. Here's how some celebrities do it. " It's free if you click here now as part of the upsell to get you over the finish line. So it could be a digital upsell, it could be a physical upsell. If it's a physical upsell, you want to make sure it fits into that box. That's another challenge by the way. We had a lot of folks that celebrated BFCM and said, "We had 15, 20% of our customers that actually bought additional products in checkout. That was awesome." And then they come back at the end of the year, they look at the P&L and speak to their logistics team and go, "What happened here?

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(34:46):

Why are we losing money on all these products?" Well, no one really looked at the box size and now I had to ship two boxes. They only paid shipping once. So that upsell took a profitable product and actually made it a losing product. We lost money. There's so many examples of that where the tools are there, the capabilities are there and there's so much money that's being left on the table that brands are able to recover today. So the bad news is there's a lot of checkout out there that's not getting optimized. The good news is the tools are here and more and more are becoming available.

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Brett Curry (35:27):

Yeah, it's so true. And I want to unpack several things there, but I kind of liken this too. If I walk into a store to buy something, I'm buying a Mother's Day gift and it's not in the store, but they're going to ship it or whatever. And I'm conversing with that store associate. They're going to understand my preferences and when we go to check out, they're going to understand like, "Hey, I know you need to get this for your mother-in-law or whatever. And so I went ahead and upgraded you to expedited shipping and you qualify for a discount. So I'm going to go and do that for you and I'm going to add these things to it because we're having a conversation and they know me at least a little bit and they know what I want. It's kind of hard to do digitally. And when I think about my business as an agency, as we're working with customers, we know what they're trying to accomplish.

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(36:09):

We kind of know our unit economics. We know how we can tweak or tailor the offering to really fit them. But in e-Commerce, it's hard to do that without some specialized tools, but that's where AI and tools like yours are really kind of making this

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Avi Moskowitz (36:24):

Possible. That's a bit of the irony though. Yeah. A bit of the irony is in retail, you actually have no signals. You walk into the store and maybe they can identify sex, basic age, right? How you address- Yeah,

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Brett Curry (36:38):

You only signal if I give them up. Yeah.

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Avi Moskowitz (36:40):

That's it. But in e-Commerce, you're broadcasting signals. Totally, totally. That's what's crazy. It's e-Commerce as opposed to retail. Retail, I told you all the advantages, trust, confidence, transaction. There's a fair exchange here, no leap of faith, but what you're missing in retail is you can only handle one customer at a time. Think about it. BFCM can't really exist. That's why there are lines all around the store and you may get it, you may not. But in e-Commerce, you can potentially process a million orders. So if you've got all the other parts of your business right, this unit economics piece of your business, the checkout, can be that money machine. It's actually printing money for you once you get that right in a way that you couldn't do in retail.

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Brett Curry (37:31):

Right. Totally. Yeah. It's like the optimal perfect salesperson, customer willing to give up information, like that perfect scenario, but it's multiplied really to Infinity if you have everything set up properly. One thing I'm really curious about because I know every brand is trying to increase AOVs. I work a lot on the growth side, the marketing side. And so CACs are rising just because ad costs are rising and things. And so everybody wants to raise AOV. Raise OV, that kind of changes the economics of how you can acquire new customers, but that comes at a cost. Sometimes you're raising EOV, but potentially harming conversion rates. So what have you seen? What are some ways we can lift AOVs without negatively impacting conversion rate?

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Avi Moskowitz (38:16):

Yeah. So it's a great question. I think that's a big factor. When we think about the world that we live in, it's getting more people to convert, getting shipping optimized so that you're not losing money and also converting. And we think about AOV. AOV can come in a variety of different ways. Packaging is important, meaning there's an opportunity to bundle. You can mix bundles. Today there's a lot more that you can do in bundling, intelligent bundling, upselling, but offering upselling in many different ways so that the customer understands how close they are. So for example, we have this bar that sits above the checkout and we give you different incentives for adding things to your cart. It might affect your shipping price, might affect your overall price, but it's a whole strategy playbook of things just in upselling that speaks to you individually that does smart upselling based on where exactly you are.

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(39:16):

So for example, that digital book is an opportunity for you to buy. If you get this product, you get the free digital book. And a great salesperson in a store is a great example of how you increase AOV because you're having a conversation. You aren't really considering all the things in the store, but when you have someone interacting with you, suddenly you go, "Hey, yeah, I didn't think of that. " And that goes with that. And if I get that, I save even more. And all that whole dialogue is happening within checkout within those milliseconds. But if you're presenting it intelligently, you can actually significantly increase your overall average order value. Plus there are tools like order editing and tracking pages that give you another bite at the app. So now you get to the order editing page and you say, "Hey, I thought of something.

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(40:13):

I want to make a change. We're smart enough to know where it is in the process, so we won't offer you the option if it's already beyond that. " But you have at least half hour to an hour to two hours. That's a big window that people can come back to and you can continue making offers to those customers and say, "Hey, didn't close your box yet. How about this thing with no additional shipping costs? I can still get it out with this order." Even on the tracking page, I'm able to say this product, again, multiple bytes at the Apple to say, "I still have an opportunity to get more into the box before it gets closed until that very last minute." And then of course the faster that you deliver the item, and this is a nuance, but not surprising to anybody, the faster you get the product, the faster you are to order again.

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(41:02):

So if you're going to deliver in two weeks, there's no way that you're going to get an order before I receive another order before I receive my first order. So all these things are what drives it. And I wish there was the on thing, but it's not. It's literally hundreds and thousands of things, not so dissimilar from how you influence people in retail, but in so much with so many other data elements and factors and criteria that let you influence that buying decision.

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Brett Curry (41:38):

Yeah. Avi, what are some of your favorite case studies? So you mentioned Jones Road Beauty. What are some other examples of we were able to make these changes and do this segmentation, this personalization, this ongoing testing and we saw this result.

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Avi Moskowitz (41:52):

Yeah. So brands don't always love us calling them out, but you can see who the brands are that we serve on our site. Typically, the ideal customer's doing about $10 million or more in annual revenues. And when you're doing that, the reason that number is meaningful is you need statistical significance. When we talk about AB testing, we need to be able to run enough tests to make enough of an impact. But one example is a fashion brand running one free shipping threshold. The example I mentioned earlier, once we segmented by cart value and buyer type and we AB tested three of the threshold variants, we're able to increase their average order value by 18%. So free shipping can be a meaningful lift on AOV. Another brand that was showing the same checkout to every customer, new customers returning, we split the experience returning buyers through a faster strip down checkout flow, conversion jump by double digits, shipping method display just by changing the order and moving the economy option down one slot surfaced a faster, slightly pricier option first, revenue per session went up significantly, that's without adding new products, any new ads, just driving more dollars to the bottom line.

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(43:14):

All those are just small examples of things that make a really big impact in brands.

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Brett Curry (43:24):

Yeah, I love that. Let's kind of last topic here before we wrap up this idea of a mini P&L, thinking about every order as having its own profit and loss statement. This is important because you mentioned the free shipping threshold, that's such a great lever to increase AOV, to push someone over the edge to actually get them to purchase, but it can also be a way that you lose money. You could optimize that to the point where now you're losing money on shipping or example you gave earlier where it's like, "Hey, I'm upselling. I'm trying to get them to add a product on, but you didn't think about what would fit in the box and now you upsold something that kills the economics of that order." So how are you looking at each order as a P&L and explain that to us a little bit.

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Avi Moskowitz (44:10):

Yeah. So because we're integrated with the folks that the ads are themselves and the triple whales of the world and really all the external packages, we're also connected to support systems. We're connected to Klaviyo and the email platforms all of them and you need all that data to make an informed decision we start with CAC. We're able to look at this particular customer coming into the store, how much we paid up until this point for them to make this acquisition, for us to actually get them to check out. Now once I know that, if I'm also able to understand cost of goods and every brand today, any meaningful brand is going to know what their cost of goods are, we also know what their fulfillment costs are and we also know what their shipping costs are. Those are the key elements to understand to evaluate whether or not I can make money on this customer or not.

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(45:08):

Now,

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Brett Curry (45:09):

Once you have- Quick question, just to clarify, because I think this is a question that's probably going on in the mind of some listeners. So when you're plugging into Triple Whale or to add platforms or whatever, does that mean you've got the estimated CPC that someone that we paid to get that individual visitor there? Or you're looking at our average CAC because we also paid for a bunch of other visitors that didn't come. What kind of ad costs are you bringing in there for these estimates?

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Avi Moskowitz (45:32):

So it's a pretty accurate ... Well, by the time you get the checkout, we have a pretty accurate picture of who you are as your cost to us in terms of the money that we spend to pay to get you to come to checkout. We have a very accurate picture, give or take 10, 20%, which is not much of a swing. So I have a pretty good sense of what the cost was to get you to this point and that's getting tighter and tighter because all these platforms are getting tighter and tighter and the information that they're passing to us is more and more relevant. And by the way, as a side point, because we're connected to them, we also are able to push more personalized information to you and say, "If you order this, we can get it to you. " Already on the ad, you can start building the trust and confidence there.

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(46:26):

So that's a whole other component to this. But on the costing side, you have all the key elements that give you an understanding of what a P&L is. I know what I paid to get you in. I know what it's going to cost me for the product itself. I know what fulfillment will cost. I know what delivery will cost. Once I have all of that, as you can imagine, I'm able to control a lot of things. I can determine the shipping costs, I can determine the shipping options. I can take all the things that I need you to do. If it's a low product item, maybe I'll only upsell you higher margin items. I can think about your checkout strategically and not on a broad basis. I'm not making any decision on a broad basis. I'm bringing it down to a customer by customer level and that's a superpower.

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(47:23):

Now just to take that and bend our brains a bit, you ultimately, if you're doing that, you ultimately will get to a place whereas a business owner, you're no longer sitting there with levers and saying, "How do I move this guy from here to there and from here to there and push them through the funnel?" You can actually simply say, "I want my New York first time customers to generate a net margin of 8%." Boom, right?

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(47:55):

Now you're a businessman, now you're running a business and all the elements are there for us to be able to do that. That's real transformation. It's revolutionary and it's here.

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Brett Curry (48:10):

Yeah. I love it. I love it. Super powerful. Avi, where can people learn more about PDQ and then how can they get that cart audit, that checkout audit you talked about before? If there's anything else you want to explain about that, please do.

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Avi Moskowitz (48:24):

Sure. No, thanks. So first off, we just released a free portal at checkoutindex.ai. So you can actually go in. It's a pretty cool site. Put in any brand, put in your brand, put in your competitor's brand, but it'll give you a first quick review of what that website is, of what the overall brand looks like, the Shopify store, show you some of the opportunities for optimization. It's a great follow-up to this conversation because it'll dig a bit into the specifics of where those optimizations are. It doesn't even have to be your brand. Just take a look at any brand. It'll give you some idea of where the opportunities are and how those brands are stacking up. And the second is, thanks to OMG, we are offering this audit at no charge. So simply by reaching out, I'm on LinkedIn and in general, we share a whole lot in the world of checkout.

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(49:30):

We like to think of our organization as checkout savants. So if you've got anything in it at all relevant to checkout or questions, feel free to reach out. We're publishing a lot of data, a lot of interesting things now about Agentic Commerce. We're doing a lot there. That's a whole other podcast. It's a world to itself, but it's growing in a meaningful way and we're seeing it and the best agents out there behave like humans. So the good news is if you've built your site well for humans, you'll do really well with Agentik, by the way. Agreed. Checkout Index.ai is a great place to start an audit. Reach out to me on LinkedIn, just message me. I'll be happy to get our team to do an audit. And I promise you, it'll knock your socks off. There are things there that I'm sure that you're not aware of that are just sitting right in front of you.

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Brett Curry (50:24):

There are things you're missing. Yeah, without a doubt. Without a doubt. Well, Avi, really appreciate this. Love this topic. Love what you guys are doing. Keep up the good work and appreciate the time.

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Avi Moskowitz (50:37):

Brett, thanks so much for everything you do. And as an agency, as a friend, and it's one of these things where you got to us through Tom, it's a paid forward world. So we really do what we do because we experience the pain ourselves and any way that we can help merchants, and I know you feel the same way. So regardless, if we can be helpful, just feel free to reach out in any way we can help you be successful. And if there's anything we can do, please let us know.

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Brett Curry (51:08):

Awesome. Love it. Thanks, Avi. And thank you for tuning in. We'd love to hear from you. Leave us at review on iTunes, wherever you consume podcasts. And if you found this episode helpful, please share it with someone else who you think will feel the same way. And with that, until next time, thank you for listening. That'll do it for this week's episode. Hey, if you're serious about profitable scale for your brand, we would love to chat. Over the last 15 years, we'll work with some amazing brands like Native, Boom Beauty, Arctic, Organify, Crumble Cookie, True Earth, and many, many more. We want to help you unlock new channels, find profitable scale, have better creative, better campaign, better measurement strategies and ultimately hope you have more fun and grow in all of your relevant channels. So take a look at omgcommerce.com and we can't wait to help you scale profitably.

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