Season 1 Episode 4
November 23, 2021

The Discount Drug

We keep it real here on Infinite Shelf. We don't paint a shiny varnish on a messy topic and gloss over the details. We put on our reality hats, face facts, and try to solve the problem as best we can. Today on the pod we'll do exactly that in my interview with Givz Founder and CEO, Andrew Forman. Listen now!

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This Episode Sponsored by:

Infinite Shelf - Opinew
Infinite Shelf - Chatdesk
Infinite Shelf - Givz

Ingrid: [00:00:01] Hello and welcome to Infinite Shelf, the human centric retail podcast. I'm your host, Ingrid Milman Cordy. We keep it real here on Infinite Shelf. We don't paint a shiny varnish on a messy topic and gloss over the details. We put on our reality hats, face facts, and try to solve the problem as best we can. One of the most pesky problems we are all dealing with has actually been eCommerce's longest hell dirty secrets. We are all retailers and consumers completely addicted to discounts. Here's a far too short and not nearly nuanced enough history on how we got to now. Direct consumer businesses originally were far more margin rich because they were able to skip the middleman in most cases, wholesaler or retailer and sell directly to consumers. Because of this improved margin, we were able to pass on some of those savings to our consumers in the form of discounts. More frequent discounts equals more sales equals more growth. Next year rolls around and you can imagine what happens. In comes a period of, I would say, like at least the past five years, probably more, where everyone is chasing massive growth over profitability. And let's just say we got a little bit carried away with the discounting. Imagine the internet is like Studio 54, and we're all up just partying all night, and we have this artificial energy produced by these discounts. Well, now for many businesses, the pendulum has swung in the total opposite direction, and there's a renewed focus on demonstrating profitability. The record scratches and stops playing The Bee Gees, and it's time to take off our glitter platforms or whatever. The party's over. Now, let's not forget the humans on the other side of that transaction that well, we've now trained to expect a discount when they shop online, and we risk losing them to the next Honey plug in on their Chrome browser. So what are brands to do? I actually found a solution in the most unlikely place. And that's what this show is about. Today, you'll meet Andrew Forman, Founder and CEO of Givz. Yes, Givz, our sponsor. I actually hand select all the sponsors for the show, and in reviewing some of the solutions that were excited to partner with us for this first season... Thank you. I was actually blown away by their business model, their statistics that they learned in their case studies, and the double impact that they're both making good for eCommerce businesses while also making the world a better place. You can definitely say I am a sucker for profit with a purpose, enablers like Givz. So, yeah, they're both a guest and a sponsor. It's my podcast, I can do that. Let's meet Andrew. Welcome to Infinite Shelf. I am here with the Founder and CEO of Givz, Andrew Forman. How are you?

Andrew: [00:03:39] Good, thanks. How are you?

Ingrid: [00:03:40] I'm so good. I'm so glad you're here.

Andrew: [00:03:42] Yeah, thanks so much for having me. I'm excited to chat today.

Ingrid: [00:03:45] Yeah, stoked to have you. So, ok, we've had some pretty fun discussions around like why you started Givz, and I'm just super stoked about Givz. I think it's brilliant. I kind of I'm mad that I didn't think of it, but tell me about your path. How'd you do it?

Andrew: [00:04:01] Yeah. So it's been a long road to get here. We can dive into that. Right now we see two huge trends happening in eCommerce right at this very moment. First, brands are trying to get away from discounts as much as humanly possible. They recognize it brings in the lowest lifetime value customers the first time. And then if you keep giving discounts, you're ultimately degrading the brand. So how do we get away from this, but still drive sales is question one/trend one. And then trend two, totally separately, is that consumers are demanding some sort of purpose driven activity from brands. Now, more than ever tomorrow, more than today. So how can we genuinely and authentically weave in social impact to the point where you tell your customer, we care about what you care about, full stop and put your money where your mouth is? And so Givz sits at the nexus of those two trends, allowing brands to convert discounts into donations and run donation based incentives as opposed to coupon based or in conjunction with coupon based incentives, which we can get to. How did we get here? Longer story than that. So we've been doing this, we pivoted into this model about a year and a half ago and started the business a year and a half before that, even as a direct to consumer app, Venmo for charity type of downloadable app for consumers to be able to donate and have all their tax receipts in one place, et cetera, et cetera. Built a lot of great technology on that front, but ultimately led us to this point, which is really what we should be doing now. We can talk more about the pivot later, if you'd like.

Ingrid: [00:05:31] Yeah, of course. I love a good pivot chat. Amazing, you've mentioned some pretty big trends in terms of like the discount drug, right? That's what we kind of call it. I've lived this reality and it's serious because what ends up happening is you have this idea, "Wow, we need to boost sales by X percent. Let's just put a discount in and here are the margins and it actually is ok." But then what happens is you find yourself in that exact day and week in the following fiscal year and you're like, "Huh, I have to anniversary the thing that I did last year or else my numbers are going to get all screwed up." And so it really is this like heroin of a drug that everyone gets addicted to on the retail side and on eCommerce and everything. And so it's not just like the one time that you do it, you do kind of like get into bed with the discount devil eventually. And so tell me a little bit about how you look at discounting a) as a consumer and then b) how you look at discounting as someone who's trying to come to the rescue of our addiction.

Andrew: [00:06:39] Yeah. So on the consumer side, who doesn't like a discount, right? It's something that as a consumer, I'm like, "Yeah, sure, this is almost expected behavior in some sense." I'm looking for coupon codes either via Honey or via something any time that I'm shopping. But ultimately, it's a nice to have cherry on top. If I'm going to buy something. I'm going to buy it, whether I can find the coupon code or not, I just look for the coupon code as an afterthought. And then once I buy something with a coupon code, it's pretty much guaranteed that I'm not going to buy from that brand again unless I have a coupon code in hand. And so I'm already trained on one now. I think maybe other consumers, it becomes a pattern and they get trained over time. But for me, if I bought something with a discount code, I'm always like, "Oh, you bought that full price? There's got to be a coupon code out there somewhere," right?

Ingrid: [00:07:37] {laughter} I know.

Andrew: [00:07:38] And I hear this a lot, and so that's part of what we found. Really, I wish I could say this was the impetus for the reason of starting Givz and trying to come to the rescue. But it was really just something that we found once we tried it. We had two brands come to us and say, "Hey, can we try this as an alternative to a discount? Give people credit on your then Venmo for Charity platform." And I said, "Yeah, let's try it. And it is super, super interesting. And I think as a consumer, I couldn't even really put myself in these shoes. But instead of getting a discount code, the consumer now gets something that says, "Hey, spend $100, get 20 dollars to give to the charity of your choice." As a business, we're thinking about that as a replacing a discount. As a consumer, I'm just thinking that's really cool, any charity I want? Really? Is that what's going to happen? I've been meaning to buy this. Maybe now I even forget about the discount code altogether, and I just say, "Hey, I'm going to spend a hundred bucks. I'm going to get 20 dollars to give to the charity that I sit on the board of," or "I'm on the social board of a charity. Can I give it there?" "My wife's cousin just started a charity. Can I give it there?" And that's just a whole different realm. Now I'm buying something from a place that I like, I'm paying full price, and I'm thinking about what charity I want to support alongside it.

Ingrid: [00:09:04] Totally, totally. This speaks so many volumes to me as a consumer because on things that I buy online, I don't buy like huge, huge ticket items. I buy like everyday items. I buy everything online, right? And so I am always looking for a value, but that value doesn't always need to come in the sense of an actual discount. I will take a discount, right? But it's not necessarily that I need that three dollars off or something like that. Like, it's going to make the difference between like pulling the trigger or not. And it's become, I would say, like a game for internet savvy people of just not being fooled. Or maybe that's the wrong word, but just not being taken advantage of. You're like, "Well, obviously, I know that there's something on the internet that's going to add value to what I'm buying." And so I feel foolish not doing it, not using the Honey extension or the Rakuten box, or even being part of a loyalty program. Like, I just want some exchange of values so that I get really just confirm that checkout button experience.

Andrew: [00:10:16] Totally or the worst one that I've been hearing a lot about lately, where people are like, "Oh, we'll just add it to your cart, and then leave for 20 minutes and you'll get the abandoned cart email that has a discount along with it." And so, yeah, that's becoming more and more commonplace. I've heard that from a couple of brands that this is happening, right? They're seeing abandoned cart emails and then people purchasing right away after that and super interesting how savvy these game players become. Right?

Ingrid: [00:11:43] There's a really like, very, very trendy teenage brand that I happen to... You know, there's like a necklace or something that I was like, Oh, that's cute. I want that. And so I sign up for the email, just of course, because I have to wait for the sale to happen. And so I get the 10 percent off for signing up for the email. And then I didn't pull the trigger. And I get an email like three days later of like, "Hey angel, you're 20 percent off coupon." And I'm like, "Huh, that's interesting." And I don't do anything. Like four or five days later it's now, "Today, only 30 percent off." And then it literally carried on that way until I got to 70 percent off.

Andrew: [00:12:32] Oh, my goodness.

Ingrid: [00:12:33] And I was just like, This brand is going to be around for a year. Like how in the world are they able to scale this? This is not sustainable. And so enter in another value proposition other than just like going into heavy, heavy, heavy discounting, but just adding some value. And hey, maybe also making the world a little bit of a better place, right?

Andrew: [00:12:54] I mean, yes, you'll have to introduce me to that brand shortly because they could definitely use some help. I mean, once you buy something at 70 percent off, your perception of that brand in terms of value that is creating, there's just no chance that you pay even 20 percent off ever again on something like that. But if they want to get you in, if they believe in their product that much, I would pitch something like a, you know, "Hey, buy this now and we'll give you all the proceeds, one hundred percent to give back to a charity of your choice." Half the people will do it. Half the people won't take advantage of it, so it'll actually be financially equivalent to a 50 percent off, but I would love to test something like that with them. That would be interesting.

Ingrid: [00:13:34] Oh, that's brilliant. I love that. So yeah, I love that there's a solution to this discount drug piece. And again, and just adding value, not necessarily... It's not the same. If you really need that 30 percent off that's not the game that we're in here. The game that we're in here is just this added value perception, and I totally get that.

Andrew: [00:13:53] Totally.

Ingrid: [00:13:54] The second thing that you mentioned was just like generational buying, and there are all of these perfectly created neat categories of the Gen Xers and the Millennials and the Gen Z and Boomers. And there's all these like very, very specific characteristics of all of these people. And I read an interesting article this weekend in The New Yorker about how generational behavior is actually not that predictive based on like the year that you're born, but it's predictive based on your political affiliation or your socioeconomic class. And then maybe like very specific Big Big, Big World events that happened around the time that you were growing up or when you were entering the workforce, or like much stronger indications of what your generation's going to be participating in and behaving like. Have you seen like on the numbers side, because I'd be so fascinated to just see what you learn about people's donation behaviors? What do you see generationally or non generationally? What does that look like?

Andrew: [00:14:58] Yeah, super, super interesting and good question. And by the way, with the generations there's like elder Millennials, younger Millennials. I think there's like 20 years of difference between millennials and...

Ingrid: [00:15:10] Exactly.

Andrew: [00:15:11] Yeah, it's crazy, right? So I'm not sure that you can really put it on, ok, Gen Z are exactly in these time frames or Millennial exactly in these time frames. I think what people are getting at is, you know, I don't know that Givz would have worked 10 years ago or even five years ago in terms of how effective we're seeing it now. And then now that it is as effective as it is and I think five years from now, it'll be even more effective people want to immediately jump on, well, this must really just resonate with Gen Z. And it does. It does resonate with Gen Z, but it really we're seeing it resonate across the board, which is the interesting piece, right? So I think Gen Z pioneered the really caring about things, but shouting about them on social media, and they grew up with social media. And so you wear your heart on your sleeve and you tell everybody what you care about and you virtue signal. It's not a bad thing. This is something that you're supposed to do. Whereas my parents generation or their parents' generation, they were very private about what they cared about and what they gave to. And so the world has shifted in that sense. And now there are a ton of, I don't know, elder Millennials or Boomers or whatever it may be on social media talking about what they care about and why they care about it. But at the end of the day, what we see in the data is that people want to feel good about their purchasing and they want to shout about it, and this is something that can get them over the hump in terms of buying something. You're thinking about buying... Maybe it is a luxury item that you're thinking about buying and now you get money to give to a charity of your choice if you buy it. That's just the icing on the cake. "Great, I'm going to buy it right now." Right? And that's something that speaks to the older generations. On the younger generation side, just making sure that the brands can tell you, can tell me, the brand cares about what I care about. And that's something that they are making sure that they have before they buy somewhere.

Ingrid: [00:18:23] It's interesting because another thing I've seen is the older generations, or the not necessarily digitally native generations, have always been generous and were donating to causes that they truly care about. But to your point, like sort of privately, but do you think that they have also started to connect their commercial world and their consumer decision making with charities and charitable donations, whereas the younger people maybe always thought that those things should be inextricably linked?

Andrew: [00:19:04] That is definitely true. I think, like we were saying, the younger generations grew up with this. "Yes, of course, the companies that I buy from should share the values." Whereas the value that you were talking about earlier in this chat, we were talking about people want something of value and the older generations didn't even fathom. It hadn't come about yet. Cause marketing wasn't a thing, and the only way to get value was a cheaper price. And then of course, there's higher quality products, right? So that was the two variable system, right? "How good is this quality? And what price can I get it for?" Whereas now there are just extra variables that people truly and honestly care about, and I think that is rubbing off on the older generations as well. They're seeing... Like the inquiries that we get are about, "Hey, what are other brands that we can shop from where we're going to get twenty dollars, thirty dollars, forty dollars to give to a charity of our choice? Where are other brands that I can shop for that?" Almost always those inquiries are coming from older generation. They're interested in this. They think it's so cool.

Ingrid: [00:20:08] That is so interesting. So are you going to build a direct...? I love this. Like getting that user feedback and you're like, "Man, why didn't I think of that?" So are you going to build a directory of the brands that are signed up to Givz?

Andrew: [00:20:18] We just popped up a little site that has that based on that feedback. But yeah, I don't want brands to listen to this or even to come on Givz and think that, "Ok Givz is bringing the audience." We will one day do that, but that is just a value add of this piece now. I think right now, what we're helping brands do is move away from discounts in an efficient and effective manner, still keeping sales growth up, so that you don't have those weird dips or anything like that from not using discounts. We can show that it's just as effective. And then we're helping you weave in social impact in a genuine and authentic way that leads to those high sales, but also at the end of the year, you get to see all of... And I mean, you can see this in real time, but at the end of the year, you can shout about it and talk about it when you know, "Hey, we've sent X thousand to X thousand different charities," all through looping your customer into this experience. So there's also an engagement piece here that's unlike anything else.

Ingrid: [00:21:23] Totally. Yeah, that's really smart. One of the companies that I really admire the way that they've come up and scaled as Afterpay.

Andrew: [00:21:32] Yes.

Ingrid: [00:21:33] They did a really similar thing where they started just having a directory of all of the brands that were signed up with Afterpay. And they really did become a marketing driver. Getting that affiliate with Afterpay was meaningful, and I would see people coming from it and they have their own email list. And hey, like, we're all looking for ways to diversify our channels away from The Zuck. And so anything outside the Facebook acquisition I'm here for it, especially when it comes to things that are good for the world and doing donation based activities. And so, yeah, what are some exciting... I'm curious about, you probably see the data, like what charities get the most love?

Andrew: [00:22:20] That's a good question, it's so funny because no matter what industry across anything, and this is probably not super surprising to anybody, but kids and pets are far and away the most sought after charities, or most donated to charities, I'd say. And then the environment is right there as number three. But we see a ton of, you know, it's nice to be able to see St. Jude's Children's Hospital, that gets a ton of love from from customers. And then on the pet side of things, there's all sorts of shelters, so there's not one in particular, but Happy Tails Happy Homes is one of the pet organizations that is featured by a couple of our pet brands here at Givz. And so we see them receiving donations a bunch of days in a row. It's a great feeling on our end. Some day we'll have to like publish the, you know, we see the donations coming through, you know, consistently throughout the day. At some point we'll open that up because I know it gives myself and my team a nice, warm, fuzzy feeling. I would love for that to extend to others.

Ingrid: [00:23:45] Yeah, no, that's so rad. And yeah, it's like people... They're just super relatable. Once you have children, you're like, "Oh, well, I can't even imagine a world where there are sick children. How can I help manage that or participate in the betterment of that?" And then pets like, who doesn't love their pet? So all very, very human things. I'm not really surprised by those two things. I think I'd probably donate to the... And the environment. Yeah, all three. No surprises there.

Andrew: [00:24:12] Yeah, no. And the crazy part is there's no lack of need, right? Every single one of these organizations that's getting money needs it in the worst way, even if it's not 20 or 30 dollars, even if it's two dollars and fifty cents. Because, you know, a brand has an always on thing of, you know, five percent of purchase goes to the charity of your choice. But like, people are really passionate about these things, about either a specific charity that they're involved with in some way shape or form or a family member's involved with, or they get to learn about what your brand cares about, probably for the first time because they actually have to make a decision as to where they're sending the money. If you're saying one percent of revenue or 10 percent of profits goes to this one specific charity, and maybe you've been doing that for a long time, I guarantee you 80 percent of your customers don't know that or don't know the cause or don't really, truly resonate with that cause. You could put that same cause and say, "Hey, you now have 10 bucks to give to a charity of your choice. This is the cause that we suggest, and we've actually been donating to it for the past 10 years." That will be the first time that somebody really thinks about it and says, "This is cool."

Ingrid: [00:25:26] Yeah, it's sort of this like intentional friction that you're adding to stop people from being just on autopilot through the checkout process, like the psychology of the checkout and being in the cart is just such a special, magical black box of like human emotion that we've always been like make it as simple and straightforward as humanly possible, which I think is like ninety five percent true. But then you put something else into it where you're actually like awakened to something and you're like, "Oh man, that's amazing." Do you notice that in the checkout world?

Andrew: [00:26:02] So yes, actually, we subscribe to make it as simple as possible to get through checkout. So that moment of them thinking and that friction moment, we've actually added after the checkout. So people check out as totally normal because that has been optimized for...

Ingrid: [00:26:21] Expediency. {laughter}

Andrew: [00:26:23] {laughter} Yes. You have to be able to check out as quickly as humanly possible, as good intentioned as putting the charity choice ahead of time is, if people are thinking about what charity to donate to great, and actually if they have one in their mind already perfect, they're going to check out all the more. And we see the increase in conversion just from people having received the email, seeing it through the website experience, on the product page, even on the checkout page. But it's just text that says, "Press order now, and you're getting 20 dollars to get to a charity of your choice." There is no decision to be made, no button to be clicked because we need that simplicity that you just mentioned. And then after they purchase, now they have the ability to learn a little bit more about what your company stands for. And they have the 20 dollars sitting there as the carrot to be able to say, you know, "This is why I'm going to stick around after I've purchased and to learn about what the company cares about and to ultimately make this choice that is totally mine."

Ingrid: [00:27:23] Brilliant. So smart. So zero friction, and really, then you get to play around. You have like a whole database that you can search, so like the companies get to pick the charities, right? So there's like, let's say, a few that you can just serve up to people to make it super easy. But then if you have a very niche specific charity that you're interested in doing, you're also able to do that, right?

Andrew: [00:27:47] Exactly right. So the companies get the best of both worlds. They get to show their customers what they stand for. "Hey, we care about St. Jude Children's Hospital." And so that's right there front and center for people. And "We also care about the environment, and we care about pets. And so here are the three charities that we know and love and care about." And then I can go on there and say, "Well, my wife's cousin just started a breast cancer charity research charity." And so I am going to go into the search bar and find that because that is particularly close to my heart, right? So this is a true sense of personalization. There's over two hundred and fifty thousand charities that you can choose from in the database. That's both for the eCommerce company or brand to surface those charities, but also at the end of the day for the consumer to ultimately choose what they want to give to. We do interestingly see, depending on what charities you bring to the top as the retailer or as the brand, if it's aligned with your brand and you've had a history of giving to that organization and you chat about that and you talk about it and resonates with your end consumer, we'll see 80-90 percent of the funds going to those highlighted charities. If you maybe we've had some Founders who have a personal cause that they really care about, but it's not really linked to their brand or something like that, they put that up there, and only 50 or 60 percent of people do that and then the rest use the search bar. There's still a win either way and the brand gets all the data back as well in terms of learning what resonates with their customers, what are their customers care about. And eventually we'll have Klaviyo segments and everything that you can ultimately target them better going forward.

Ingrid: [00:29:40] Love that. Love me at Klaviyo, too, by the way. {laughter} That's so interesting because, you know, there's a lot of companies that in their mission statements and values really do outline the charitable companies or the organizations that they want to be aligned with. And you're always like, "How much does my audience understand this? What's coming through?" So the fact that you're able to see the companies that have truly, and the brands that have aligned themselves with a particular cause are aligning their audiences with that cause as well, or their audience was already aligned with that cause, either direction. It's coming through.

Andrew: [00:30:23] Right, exactly. This is resonating in some way, shape, or form. It's clearly resonating because we have the benchmarks. Are the charities you're highlighting getting 90 percent of the funds or 50 percent of the funds? Again, either what you see the bottom of that is 50 percent, so there definitely is an ease of use component to this where people see it and they're like, "Ok yep, I want to donate there," and it's one click. But if you're ramping it up to that 90 percent resonating with you really, really strongly. I think that's where you want to be. We've had brands use this as a discovery tool in terms of, "Hey, here are three. We don't know if people like their pets, kids or environment, so let's put up three, one in each place, and we'll see which one gets the most donations."

Ingrid: [00:31:23] Very, very, very cool. I love that. Well, this has been such a blast. I'm so glad to have connected with you.

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