Kunle Campbell is the author of the Bigeye Book Club selection for March, “E-commerce Growth Strategy,” and co-founder of Octillion Capital Partners, a digital-first house of “good-for-you” CPG brands. Kunle discusses first principles in e-commerce, the significance of customer-centric strategies, and integrating customer feedback for improved online experiences. We also examine how to build online communities and enhance customer retention. Save 25% with promo code BIGEYE25.
Episode Transcript
Adrian Tennant: Coming up in this episode of IN CLEAR FOCUS:
Kunle Campbell: It’s super important not to say, “We’re a DTC brand,” and leave your identity in DTC. Right now, in the United States, 50 percent of all e-commerce transactions in the consumer space occur on Amazon. So, not being stuck into one channel is very important.
Adrian Tennant: You’re listening to IN CLEAR FOCUS, fresh perspectives on marketing and advertising produced weekly by Bigeye, a strategy-led, full-service creative agency growing brands for clients globally. Hello, I’m your host, Adrian Tennant, Chief Strategy Officer. Thank you for joining us.
Last year, according to Digital Commerce 360’s analysis of US Department of Commerce data, e-commerce represented 22 percent of total retail sales here in the US. E-commerce has been growing slowly but consistently by 0.2 points year-over-year since 2000. Many traditional brick-and-mortar retailers, including Walmart and Target, have invested significantly in their e-commerce channels over the past several years. The Pandemic accelerated consumer adoption of conveniences like ‘Buy Online, Pick Up In Store.’ But if you’re a new brand just entering the market, it can be difficult to know how best to establish a digital direct-to-consumer platform. Today’s guest is an expert in this area, with a wealth of experience advising new and established brands on e-commerce-based growth strategies. Kunle Campbell is a co-founder at Octillion Capital Partners, a digital-first CPG house of “good-for-you” brands. Kunle is also the host of the top-rated 2X E-commerce podcast, where he’s interviewed over 400 commerce business leaders. He’s spoken at numerous conferences and to international news outlets like the BBC, New York Times, and the International Herald Tribune. Recognized as a top e-commerce influencer by the likes of LinkedIn Top Voices, Neil Patel and Klaviyo, Kunle is also the author of this month’s Bigeye Book Club selection, “E-commerce Growth Strategy: A Brand-Driven Approach To Attract Shoppers, Build Community, And Retain Customers.” To discuss some of the key ideas in his book, I’m delighted that Kunle is joining us today from Oxford in England. Kunle, welcome to IN CLEAR FOCUS!
Kunle Campbell: Thank you, Adrian. I am super excited to be on the IN CLEAR FOCUS podcast.
Adrian Tennant: Well, we’re excited to have you. Now, for some context, how did you first become involved in e-commerce?
Kunle Campbell: So in 2004, I came to the UK for a Master’s in E-commerce Business at Warwick University in Coventry. And I didn’t come with my full fees or, just, I didn’t come with enough money, basically. I just took a plunge and said, “Look, I have to change something. I need to quantum leap,” so to speak. And do you know what got me through the whole of, my MSc, without getting any side jobs? It was an eBay shop. So I used to bring in bags, dresses, go to One Pound shops, and I used to run an eBay store all through university. And my then girlfriend, who’s my wife now, would do the posting [mailing] for me. So I put on quite a lot of weight, just sat in my computer, you know, trying to get hold of suppliers in China, bringing products in. It was exciting because I’d learned about the power of eBay. At the time, in the Nineties, I used to work in a book stand and I just read about the dotcom, and I thought, “Okay, this might be a good route.” And it did take me through for the one year I started my MSs. But I took a hiatus off the back of that; I got a normal job. I was Digital Marketing Manager and I was involved in SEO marketing for many years. And, right up until about 2011, I started to get into affiliate marketing. I was promoting quite a number of e-commerce stores. And I liked the fact that when I drove traffic through to e-commerce stores, as an SEO, I could see conversions right away. I could just see them, but with a lead generation … So say you’re generating leads for a finance company. The challenge there is even if they get the leads, they need to validate the leads and it takes a longer feedback loop. So you’re not quite sure about the quality of leads. So I got into e-commerce then, and I started my podcast, the 2X E-commerce podcast in 2014, because I just wanted to double down on e-commerce. I started to realize that e-commerce is a lot more. There are the aspects of supply chain, you know, and there are also aspects of understanding the customer. There’s demand generation. There’s also a demand creation in there. I was in the demand capture space. So when I started my podcast in 2014, it was just to expand my knowledge of what does e-commerce entail. And that took me through a journey. I started to learn about conversion rate optimization. I learned quite a lot about it up to the point that I was hired by Meta to run a checkout optimization workshop. It ran for about four or five years and it was helping the local news industry across the world that had been replaced by social media to learn about subscription commerce. And, you know, a very important part of the subscription experience is the checkout experience. So, I think I worked with about 400 news organizations over that period to really optimize their business through Meta, their checkout processes. Over that period from 2014 to recently, I also learned about advertising performance marketing. So there’s a lot of psychology involved in that. So I had to sort of get back to learn about consumer psychology, as well as just how to buy, you know, ads in media. After all of that, I started to work as an outsourced interim CMO for small and medium-sized e-commerce businesses. And then I made a decision to essentially start to literally own assets in the final sort of lap in my career. And that’s how I joined forces with Ayo Diso, my partner at Octillion, who was building out a HoldCo, an e-commerce HoldCo. And that’s what Octillion is. It’s a “good for you” e-commerce HoldCo, and I’m now on the operator side, so I don’t advise or consult. I do very occasional coaching and, yeah, it’s been exciting just getting into the operator, you know, seat. it’s much more cross-functional, which sort of aligns with my book. So, so yeah, that’s my journey.
Adrian Tennant: Well, your book, “E-commerce Growth Strategy,” is, of course, Bigeye’s featured book this month. So, Kunle, what prompted you to write it?
Kunle Campbell: So this was the fourth attempt. I had three failed attempts. I speak about it in the book and I actually put folders for each of the attempts. So if I wrote this book in 2018, the first time I attempted to write it, you would have picked up more of a single aspect of growing an e-commerce business, which would have been largely search. If it were 2019, 2020, it would have been performance marketing and search. So, this has been a consolidated view of my experience and, my observations of what really makes an e-commerce brand tick.
Adrian Tennant: You emphasize starting with a first principles approach in e-commerce. Can you explain what you mean by that?
Kunle Campbell: So, in my book, I tell a story about Elon Musk in 2001. He had absolutely no experience in getting rockets into space. And it was prohibitively expensive, dominated by the likes of NASA and other national, you know, space agencies. And what he did was start to drill into the cost of building a rocket. He was like, “Okay, how much would it cost to build a rocket? Okay, I can’t, I simply can’t afford this.” And then he started to go deeper and deeper into the materials and it got into the basic materials. And he realized that it was only going to cost a fraction of the cost. So the cost of the materials for a rocket was less than 10%. And off the back of that, he was able to build it himself and break the rules. So with first principles, one of the reasons I actually wrote this book to get into the fundamentals, the immutable laws of growing an e-commerce business. What are laws, you know, what can’t you change? What are the basics of building an e-commerce business? Having spoken to numerous successful e-commerce entrepreneurs, and worked closely with e-commerce, you know, brands, I whittled it down to six key principles. One of the principles is brands that keep the customer front and center win at the end of the day. Principle two is optimizing the experience for habitual purchases or repeat purchases. So if you have a brand, and I remember the founder of Athletic Greens saying, you know, “We’re in the business of repeat customers.” Honing in on a culture of experimentation and continuous improvement. You need to challenge yourself. You need to continue to experiment. And then the next one is being channel agnostic. You know, it’s super important not to say “We’re a DTC brand,” and leave your identity in DTC. Right now, in the United States, 50 percent of all e-commerce transactions in the consumer space occur on Amazon. So excluding yourself from marketplaces and expansion, whether it’s multi-channel expansion digitally, or offline, or through wholesale – especially now with the economy being where it is – it’s critical to survival. Just not being stuck in one channel is very important. The same thing applies to Amazon retailers who cannot or do not want to transition to DTC just because they didn’t have the ability to infuse a soul or brand into what they sell on Amazon because they’ve commoditized, their offering on Amazon, which still works for them, by the way. And then, I talk about being brand-first, which connects to what I just said. So when you ask me, “What do you think? What do you feel?” You need to evoke certain positive feelings when you’re, you know, thinking about a brand. So if I say, “What do you think about Coca-Cola?” You do have your feelings, Adrian. And so we want to sort of get that feeling, you know, off the back of you and amplify a brand’s feelings, across the board. And then the sixth principle is just cross-functional growth. The way I see growing in e-commerce, it’s two sided. On the baseline is supply chains. So everything that happens in your fulfillment center or warehouse and product is one thing, and above it is the e-commerce we talk about, which is more the e-commerce infrastructure as well as, you know, the brand and the offering going to market, essentially. That part that faces the market and the part that actually fulfills the market that the two different parts are really looking at all aspects of e-commerce and saying, “Okay, if we want to bring this product to market have we done the work from a supply chain standpoint?” Whether it’s at, you know, product development or whether it’s at fulfillment. Whether it’s at the last mile or the first mile, what have we done, how is that synchronizing to what your promise to customers on the front end? So that cross-functional view is also quite important.
Adrian Tennant: Kunle, in what kinds of ways can DTC brands build community around their offerings?
Kunle Campbell: There are two layers to community in e-commerce. There’s the consumer layer, so people who eventually will purchase or have purchased from you, building that customer data, building the relationship with them, creating events, whether it’s online or offline with them and essentially engaging with them, so they feel that they’re part of something bigger than themselves. That’s layer one. We are very much aware of that layer. Layer two, which brands don’t recognize, but they might be implementing, is the influencers and creators who have their own communities, that you engage. So when you start to engage with these influencers, they not only bring portions of their community to become part of the overall community, but they also symbolize your values. So you have to be quite intentional with who is going to speak about your brand, who’s going to represent your brand. And when you bring that ecosystem of leaders and followers, you build a community that’s quite cohesive. Another point about community is really what you’re fighting for, what are the values, you know, when, again, it’s really connected to your brand, when you have something to fight for, or fight against? I’ll give you Gymshark as an example. They’ve managed to build a community of influencers. So Gymshark influencers, on the one hand, as well as just consumers – baseline customers – they select health-conscious, active influencers. It’s really that, and they have a certain age demographic, whether you like it or not. Obviously, they use these influencers to create community. So one hack is don’t just engage influencers from a point of view of we want to make money, you want to work with influencers from a point of view of how can they continue to spread our brand message so we bring more followers and you know, more engagement to us? It’s much more long-term. And what Gymshark has done also, is they’ve extended that experience, by creating events, you know, offline events where these specific influencers actually turn up and bring their followers. And everything is now under a Gymshark experience and that is, really strong and powerful.
Adrian Tennant: Well, a few weeks ago, I spoke with Gina Pirelli, the co-founder of Stay Ai, a subscription platform for direct-to-consumer brands on Shopify. Now, Gina views subscriptions as a performance channel. Kunle, what’s your advice for brands seeking to improve customer retention rates?
Kunle Campbell: It starts with the product. So do your products actually lend themselves to subscriptions, right? So if that is not the case, you need to engineer products that will fit that. So let me give you an example. Say you’re selling a beauty device, like a hair curler. There are only so many times, you know, your consumer is going to buy a hair curler from you. So you have two options. You either extend your portfolio of hair products – so you probably put a hairdryer, hair removal, device, what have you, or you add a recurring purchase element to that curler. So you might have a curling cream for different kinds of hair types that you attach to that hero product. So that when you do the math after doing the promotion, you know that for every 100 purchases of the curler, we’re going to activate about 40 percent of subscriptions. And that could be revenue you never really accounted for, but you have to have the operational capacity and know how to latch on to those products to deliver subscription. So I’d say always start out with the product. For CPG brands, it’s much easier. We sell coffee – one of our brands sells coffee – about 60 percent of purchases are repeat purchases. So within that 60, about 45 percent are subscriptions., everybody buys coffee. You know, the purchase frequency of CPG brands, because they’re consumables, obviously the frequency is there, the purchase frequency is there, and you’re able to tap into that. The caveat here that you to be very aware of is because you have very predictable revenue, because there’s a CPG and these are physical products, a lot of the time, the kind of net margins you get off the back of, say, a beauty device or an electronic device will not be present. You’d have to deal with much lower, I’m talking about, you know, single digits. Most of the time net profits just because there’s that predictability. So you’re, giving money away now for, you know, long-term growth, long-term adoption, people would keep purchasing from you. The second really is focused on experience. How easy is it not just to onboard subscribers? That’s the easy part, but also to manage their subscriptions, because consumers tend to change their consumption patterns. And then we’ll talk about recurring rates and purchase frequency and all of that, the more technical formulas you put into subscription-based businesses. But they’re great businesses. They attract better multiples if you want to sell your business, it’s more predictable, and if you get the experience, particularly for CPG brands and experiences, also test, you have some really good assets off the back of that. And this is why I say the customer is front and center. Once you understand the customer, you understand their needs. And you fulfill those needs through subscription or through a subscription solution. you’re really onto something, hence the reason why supplements are such a huge, sector in e-commerce.
Adrian Tennant: Let’s take a short break. We’ll be right back after this message.
 | Kunle Campbell: Hello, I’m Kunle Campbell, the author behind “E-Commerce Growth Strategy: A Brand-driven Approach to Attract Shoppers, Build Community and Retain Customers.” |
Adrian Tennant: Welcome back. I’m talking with Kunle Campbell, the author of this month’s Bigeye book club selection, “E-commerce Growth Strategy.” Well, you mentioned that one of your key principles is that the customer has to be front and center for e-commerce growth. So Kunle, how can brands better integrate customer feedback to enhance the online shopping experience?
Kunle Campbell: There are many layers to it. First of all, I’d say, data – customer data. So in the book, there’s an entire chapter about customer data. Zero-party data has got to do with customers actually giving you data. So say a form, post purchase survey. Which I think every listener of this podcast should do. What was your experience in my store? Would you buy again? What do you think we didn’t do well? How did you really find out about us? It’s so interesting in terms of, you know, all of that stuff. And with certain apps, you could customize it based on traffic segments, which is brilliant. When you get zero-party data, that’s great. You know, you, they tell you what they feel, they give you feedback. Another part of the entire experience is first-party data. So view first-party data like data you get from a CCTV [security camera]. So with tracking on websites and website tracking, you’re able to see what people do at a qualitative and a quantitative level. You’re able to understand, okay, 20 percent of customers have added to the cart as in sessions, total sessions, in this past 30 days or this past 24 hours after you have added to cart. And another 10 percent of this group have transitioned to checkout or 10 percent of total sessions have transitioned to checkout. And then you get out of the back of the 10%, another sort of 3 percent of total sessions have actually converted. And if you’re tracking these flows, these actions or behavior of customers, you’d better understand what is going on. Because you’d, first of all, be able to internally benchmark what your add-to carts are, you’d be able to benchmark where checkout and what your conversions are, and you’d be further able to optimize and know when things go wrong. So I’d say one is definitely creating zero-party data points from your customers and engaging with them in that, making sure for very open communication. A lot of brands don’t do that. You know, we’re open to get your feedback. Here’s our chat, you know, online chat, live chat facility. If you want to, here’s our phone number, if you want to ever, you know, chat with us. and we’re here for you. This is our email. And then you run those surveys on the side, but you need to also look at what they’re doing. A lot of people don’t, the analytics bits of e-commerce aren’t tapped into well enough by many e-commerce directors.So it’s really getting into customer data and understanding what exactly is going on, you know, from that point of view.
Adrian Tennant: You’re the co founder of Octillion Capital Partners, which, as you mentioned, is a CPG acquisition company that works primarily with “good for you” brands. Can you tell us a bit about how Octillion was founded and some of the brands in your portfolio?
Kunle Campbell: Yeah. So I actually joined Octillion Capital Partners about two and a half years ago. Ayo started Octillian Capital Partners. Initially, it was just an e-commerce HoldCo company. The intention was to be more like a search fund. So with a search fund, you look for a target, you raise funds to acquire [the] target company, and then you operate it over a time horizon. And you return the capital through an exit. When I started having conversations with Ayo, just figuring out what he was doing, realized that ” Oh, there’s this e-commerce aggregator thing going.” We didn’t ever want to be an e-commerce aggregator, but we thought, okay, we could do this multiple times by utilizing systems and people in this business. And they really depend on the types of businesses we acquire. So our thesis then changed from being a search fund to a HoldCo company that would have a portfolio of about 20 brands on maturity, and we could potentially exit it. And then we had a conversation with two people. One was Calvin Niles and another, a certain lady called Callie. And the feedback they gave us was we should niche – as in, we appeared a bit too broad in our thesis. At that time we had gone through about 200 plus deals, like every day we’ll turn up, we’ll go to brokers, we’ll go into Marketplaces for not selling businesses. So we’d go in there, we’d do deal flow, do our due diligence, and a brand that resonated with me the best in terms of, okay, this is a brand we want to acquire.” Because the feedback we’re getting in our deck was you need to show, demonstrate, a target. You know, in terms of like, what are you going to be buying with the money you’re going to raise? And it was Lean Caffeine. Lean Caffeine is a brand we now operate. And it checked all the boxes. The founder started the business off the back of the loss of his dad to dementia. And he had tenets, like core tenets that resonated with us. One of which was low-GI food, fasting, being good for you. It just made a lot of sense. So we looked at it and we were like, “Why don’t we focus solely on CPG first?” Because it’s very subscription-focused. So there’s a lot of long-term value. “And why don’t we also focus on businesses like Lean Caffeine, both in the beauty and in the food and beverage space? That way we have a clear focus and it aligns with our values.” Because when Calvin came into sort of value alignment with Ayo and myself, which I recommend any founding team to do. And off the back of that, we had better direction. So right now, with Lean Caffeine, we have two brands, under our portfolio: Lean Caffeine and Clean and Pure, and we’re in the middle of another deal right now in the beauty space. Once it comes to public, I’ll be announcing it, but, yeah, that’s Octillion.
Adrian Tennant: What criteria determine whether CPG brands represent a good fit for potential acquisition by Octillion?
Kunle Campbell: There are the financial bits. They must be profitable. We look at 15 to 20 percent net profits. That’s a given. Then we also look at their profile. So, we would not buy, you know, a sugary product. We look at the ingredients, at the ingredient profile. Is it really, truly good for you? Why did the founder actually start this? Was it to make money or to make a change? Very, very, very important facts there.
Adrian Tennant: Excellent. Do you have a preference for the social background of the founder? Are you particularly interested in supporting some communities, for example?
Kunle Campbell: We’re both ethnic minority, founders, we’re both Black founders. We’re agnostic. What we’re looking for is giving customers, all customers, better choices when it comes to food or when it comes to beauty and skincare. We just want to give consumers choices, and what the ethos here is where we’re looking for businesses that don’t have the scale, but have shown a proof of concept on a channel. So there could be an Etsy store for instance, or they could be an eBay store on Amazon store or DTC store that has seen traction, they have a decent base of customers. They’re doing revenues of one to 10 million Pounds or Dollars per annum. And we’re essentially taking that proof of concept, and we’re going to go multichannel with that thesis, double down on whatever is your originating channel. So we look at single channel businesses a lot, and then we also look at the fact that they’ve built sufficient traction on this particular channel that still has a runway for growth, not just in that channel, but in other, selling channels,
Adrian Tennant: Got it. “E-Commerce Growth Strategy” was published last year. Kunle, what kinds of reactions have you had to it?
Kunle Campbell: It’s been quite positive. You know, I’ve had people reach out to me just commenting on the book. I’ve spoken on a number of podcasts. I feel grateful for putting it out there. And, the interesting thing is that when I published it, generative AI started to take off. So I might give it an update further in the future around, the impact of AI, but the reason I did it this way – my favorite chapters are the first six chapters, because I guarantee you, if you pick up this book in five years or 10 years, most of what I’ve written there will still apply. And that goes back to the first principles. and hence the reason why I didn’t want to give a guide, “Hey, this is, you know, how to build out a Facebook, ad campaign,” because that will change fairly quickly before you put it to publish. It would change. like somebody reached out to me yesterday, actually on LinkedIn. And she was like, “I just got into e-commerce. I’ve read your book. and I just felt the need to connect.” You know, it was a LinkedIn message. So yeah, I think if you’re getting into e-commerce, or if you’re an executive at, an e-commerce SaaS company, particularly if you’re, you know, an executive at a brand that has an e-commerce department or an e-commerce first brand, then definitely give it a read. It should change your perspective of not just seeing things one way, you know, and it gives you a much broader view of what it takes to really change and grow an e-commerce business.
Adrian Tennant: Kunle, what would you like readers to take away from your book?
Kunle Campbell: There’s no overnight success in e-commerce, and it takes a cross-collaborative approach to solving and growing an e-commerce business. It pans very much to marketing, obviously, a brand-driven, community-first approach, but there are other aspects in the book I talk about that speak to experimentation, for instance, finance. Alternative and effective ways of growing an e-commerce business like M&A. Really short snippets, but it broadens your perspective so that when you’re operating an e-commerce business, you can double down and dig into aspects of, the growth cogs that could potentially grow your business. So, if you’re thinking … say search engine marketing, it gives you what you need to know. So if you’re ever in a conversation with an agency, you at least have those fundamentals, and you’re not starting off on the wrong foot. So we have about 18 chapters, I think. As an executive, if you’re stuck in any aspect of those topics I’ve discussed, you could just read that chapter and refresh your mind, and you know, you’d just be in a better position to deal with specific challenges you might be facing in that. So, then, look for further resources to help you, whether it’s with a person with help, like with the agency example or, online, for instance.
Adrian Tennant: Kunle, if IN CLEAR FOCUS listeners would like to learn more about you or Octillion, what’s the best way to connect with you?
Kunle Campbell: Okay, so Octillion is OctillionCapitalPartners.com, and I’m most active on LinkedIn. So, yeah, you can connect – just search for Kunle Campbell on LinkedIn – and you’ll find me.
Adrian Tennant: And listeners, a reminder that if you’d like a copy of Kunle’s book, “E-commerce Growth Strategy,” just follow the link in the transcript or description for this episode and enter the promo code BIGEYE25 at checkout to save 25%. Kunle, thank you very much for being our guest on IN CLEAR FOCUS.
Kunle Campbell: Adrian, thank you. It’s been a pleasure.
Adrian Tennant: Thanks again to my guest this week, Kunle Campbell, the author of “E-Commerce Growth Strategy.” As always, you’ll find a full transcript of our conversation and links to the resources we discussed on the Bigeye website at bigeyeagency.com. Just select ‘Insights’ from the menu. Thank you for listening to IN CLEAR FOCUS, produced by Bigeye. I’ve been your host, Adrian Tennant. Until next week, goodbye.
