Brennan Loh of Shopify: The Future of Ecommerce is in Customer Engagement

With Black Friday and Cyber Monday quickly approaching, all eyes turn to eCommerce and the ability for consumers to buy things on whatever device they have, wherever they are. But how different will the eCommerce experience be this year compared to previous years, and are small businesses ready for it?

Brennan Loh, head of business development for Shopify, helps us understand the impact mobile and social is having on eCommerce from a small business perspective, and how focusing on customer engagement over individual transactions is the key to long-term success. (This transcript has been edited for publication. To hear audio of the full interview, click on the audio player at the end of this article.)

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future of ecommerceSmall Business Trends: Can you tell us a little bit about your personal background?

Brennan Loh: I joined Shopify about four years ago. In 2004/2005, if you wanted to set up an online store, you really had limited options. You could post a product on eBay or Yahoo Stores, for example, but they were very templated and didn’t give small businesses a lot of options in terms of flexibility, design and features.

At the other end of the spectrum, you had platforms like Cactus Commerce and enterprise platforms, which would do everything under the sun but cost you half a million dollars to get that up and running.

We looked at eCommerce through the lens of a small business: how do you simply launch an online store and get up and running and selling easily? So we started from a little coffee shop in Ottawa, and today it’s scaled into a leader in the space with over 120,000 stores in 150 countries.

Small Business Trends: How far have small businesses come in their abilities to transact business online compared to four years ago?

Brennan Loh: Four years ago, I think small businesses questioned whether they belonged online in a retail aspect. The evolution quickly came when a lot of the big competitors started disrupting the models of small businesses, and forced them to look at themselves in a different light and take ownership of their brand; not look at eCommerce as a feature but rather a necessity to grow and stay relevant as a business.

Today as a small business, you can start an online store for less than $30.00 a month, be up and running in a couple of hours, having no HTML, CSS or programming experience, with a beautiful online store that can do everything. So eCommerce has become such an accessible tool to every small business and entrepreneur.

Small Business Trends: What pieces to the puzzle are still more challenging than others when it comes to doing eCommerce from a small business perspective?

Brennan Loh: If they were to go to Shopify and try and go through this process, there’s a couple of friction points unique to the online experience, but are getting easier. If you’re going to sell online, you want your customers to be able to transact. Transacting means you’re going to have to interact with credit cards like Visa, MasterCard and American Express.

Now even four years ago, getting the ability and privilege to actually accept Visa and MasterCard on your store, meant you had to be underwritten by the banks. They’d have to do a personal ID check, have you fax in a birth certificate and do 7 to 20 vigorous investigations that you’re not a fraudster. Tools like Stripe and Braintree have done a remarkable job of lowering the barriers for a small business to accept credit cards without having to prove they’ve been in business for five years.

Small Business Trends: Can you talk a bit about the impact mobile devices are having on eCommerce?

Brennan Loh: About four, five months ago, we looked at all of the traffic on Shopify – over 100,000 small businesses and their online stores. For the first time ever, we found mobile traffic accounted for more than 50% of all of the eCommerce visits.

Across many online experiences, if you want to check out on your smartphone, you’re still restricted to having to pinch, zoom and enter a 16-digit credit card number and an expiry date on an experience that was designed for desktop. I think that’s a huge nut a lot of these existing businesses are trying to crack. If you look at Apple Pay, Visa, MasterCard Express and all these different wallets coming to play, you can use your fingerprint or voice activation to check out. So I think mobile is the future of browsing, but there’s still a huge opportunity to improve conversion in the mobile experience.

Small Business Trends: Where does customer engagement fit in when companies are going down the eCommerce road?

Brennan Loh: The key there is establishing and creating a truly robust brand. And one of the things easy for small businesses to do because it’s very cost-efficient and easy to use is social media.

To give you an example, when we looked at the traffic that was coming to our stores from a social side of things, Facebook actually accounted for two-thirds of all visits from social media sites to Shopify stores. And what that meant was as long as you have a strong Facebook presence, you were hitting the number one platform that had the largest impact on referral traffic to your site.

While Two-thirds of visits from social sites come from Facebook, an even higher percentage of orders (85%) do as well. So it shows you that anyone can create a Facebook page, and anyone can interact with their customers by creating great content and creating engagement throughout the buying process, as you eluded to, and that’s a very important thing to recognize. So it’s a great thing to think about and really a great equalizer if you’re looking at engagement.

One of the reasons why Shopify was actually created was because as we were trying to sell snowboards in 2004 and 2005, we realized we didn’t have a platform that we liked that could do it on top of just making a one or two transactions on eBay, which was a very transactional platform. One of the things that became apparent is that by owning the web store for our own brand, we have the ability post-transaction to communicate with that merchant on an ongoing basis.

And the notion of having a CRM software that allowed us to track and hold on to emails or phone numbers that would allow us to reach out to the person every winter and say, ‘Hey sir, it’s that that time of year. Do you have your boots? Did your feet grow? Do you need new boots? Do you have new binding requirements?’ That allowed us to continue the conversation throughout time, and not just at the end of the first transaction.

Small Business Trends: If you were to look out a year or two from now, what are going to be the hot areas from an eCommerce standpoint that small businesses should be aware of and really planning for?

Brennan Loh: Conquering the data challenge that will come from selling online in so many different places, is one I think a lot of merchants need to be aware of because it can be a nuisance. But it can also be your biggest asset if you interpret that data into action and information you could act on.

Small Business Trends: Where can people learn more?

Brennan Loh: Check out There’s a free trial – no commitments. You can just go through and see if running an online business or online store is right for you.

This is part of the One-on-One Interview series with thought leaders. The transcript has been edited for publication. If it's an audio or video interview, click on the embedded player above, or subscribe via iTunes or via Stitcher.

Brent Leary Brent Leary is the host of the Small Business Trends One-on-One interview series and co-founder of CRM Essentials LLC, an Atlanta-based CRM advisory firm covering tools and strategies for improving business relationships. Brent is a CRM industry analyst, advisor, author, speaker and award-winning blogger.