As we're all getting prepared for Black Friday/Cyber Monday, now's a great time to dig a little deeper into CRO, or Conversion Rate Optimization.
This week on the podcast we're introducing the concept of CRO, how to calculate your conversion rate, and how A/B testing works.
Let's dig in!
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- [07:29] What is CRO
- [09:24] How to calculate CR
- [23:22] What is A/B testing
- [27:28] Tools for A/B testing
- Rhian's shoutout: Print Fresh
- Kelly's shoutout: Zevia
We're all getting prepared for Black Friday Cyber Monday, now's a great time to dig a little deeper into SEO or conversion rate optimization. This week on the podcast we're introducing the concept of CRL. How to calculate your conversion rate and how AV testing works. Let's dig in.
Welcome to Commerce Tea, a podcast to help you succeed on Shopify.
I'm Ryan. And I'm Kelly. Grab a mug and join us as we talk about all things commerce.
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every aspect of your website is a variable that could be impacting your business's revenue. We all want to grow our business and we make changes the hopes of seeing our business grow. Maybe you add a new graphic here new social proof on your product page there, maybe change your pricing. But do you know if this new thing is helping or hurting you? Today, testing is a requirement understanding what is and isn't working for your business. You don't need to be a rocket scientist to test. In fact, I set up my first test in less than 10 minutes on a client store using neat A B testing. After the test was live. We saw a confidence level on each of our tests to know which is actually best for the business, how they sort of see additional revenue per view for each variants. Give her friends that need a B testing twice a day and start testing for your business. Head over to try a dot neat AB comm slash commerce dash t to start your 14 day free trial. Again, that's try dot n email@example.com slash commerce dash t Hello Kelly. Hello Ryan. How are you?
I am doing pretty well in the last week of sprint for our new app companies. A little bit tired, a little bit nervous, but overall really, really pumped and I guess that's it. That's where I'm at. That's that's how I am. I'm like looking around. I'm like what? How else am I there's one over here. I'm like I haven't touched it today. I swear. So anyways, how are you?
Um, I'm tired.
I know. I can see it on your face. Thank
you. I walked into the bathroom this morning as Daniel's getting ready for the day. And he was like Kelly, are you okay? You don't look good. And I'm like, thank you. So apparently, I'm just like wearing my exhaustion on my face today.
You look beautiful. I can just tell by your energy level like this is Yeah, like Randy Flint in Southern California for too many years. I'm like I can tell through the screen that you have tired energy.
Thank you. And I propose I have been coding a lot. So we can have a wonderful MVP for I'm so proud. I'm
so proud of I'm so proud of that of you of what's being built. Yeah, I'm just I'm just so pumped in it. It actually has something to do with what we're talking
about today. But we're not going to tell you what we're building. No, we're not. No. We're going to tease it out a little bit longer for that.
I do have an important announcement. Yes. I have a puppy. Yes. She is a rescue. her full name is Ron Lin. But she goes by Winnie like Winnie the pup and she has a theme song and it goes we need up up. We need up up, etc. No. Yeah, no, no, no. So I sing that song and I run around in my backyard and she runs around with me.
She's very cute. And she ensures that I keep on East Coast hours with Kelly while we built so yeah, cuz she wakes up at four and five. And then we'll keep crying. So I just wake up to and I'm like, whatever.
I don't do it for me. You do everyone he got it.
It's a combination. have resigned myself to this fate. So yes, adopt don't shop. I rescued her and she is a cute little rescue and I'll use something that lewd. I pick Share of winning in the shownotes. She was 100%. Like her, her CRM was 100%
conversion rate optimisation. I think her like her conversion rate conversion rate, you have not you're still working on the conversion rate optimization of her being useful. So it's like 2.5%
Yeah, she has two buttons she can use for words. She can ask for cookies and water.
Those cookies and like coffee, maybe some
cookies. And then we make her press a button that says adventure before we put her in a car. So we're hoping she learns through word adventure. Well, I'll let you I'll let you all know how my fluent pet is the company super cute. I think they're on Shopify. And it's all about teaching your dog how to ask for things so they don't get distressed. That's cute. Clearly, I'm in my whatever day of
of quarantine locked down. Yeah. locked down. Because I'm damn number 590 to
teach my dog to talk. By granny buys a puppy and teaches it to duck.
Yeah, you know, it's, it's cool.
So okay, let's talk about your favorite topic or this is one of your favorite topics. And Yarrow. We've done so many masterclasses about crmo
we have and it's a very important topic to understand because at the end of the day, your conversion rate is what makes you money. If you have a conversion rate of zero, you are not making any money and we do not want a conversion rate of zero.
Now we love making money. You love making money. Yeah. Oh my gosh. Yes. Are we filming this? filming? recording this past when we should? Yes, it's fine. Everything is fine, everybody. Also to our Jewish listeners, Shana tovah. Happy New Year. And for those of you who are wondering I'm talking about to Monday night was a read Rosh Hashanah, which is Jewish, New Year's and Tuesday, it was Rosh Hashanah. So it's holiday season for us over here.
And for everyone else in America and Canada. Happy Labor Day. Week. Week. Happy short work week. Happy sure workweek. I got nothing.
Okay, so Kelly, you you told us a little bit about where we were gonna be speaking about in the introduction. Let's start this off. What is CRM?
Zero is conversion rate optimization. Basically, that is a technique that's used for increasing the percentage of your website traffic that makes the purchase, purchase being the conversion. Zero is all about the psychology of persuasion. What can you do to make people take a certain action? That's the TLDR psychology of persuasion. super interesting topic. If you ever feel like going down a rabbit hole of studying the psychology behind all of the things that do
a whole pot, that's a good one,
that would actually be a really fun one. I can pull out the psychology degree and the social work degree that I got too long ago.
I got to do my gender studies degrees at that time for the first time. Hey,
look, my made it. So it's worth noting that while we're talking, we're usually talking especially in the e commerce space, zero, the conversion being a purchase. Because, again, purchasing things means you're making money. However, conversion rate optimization goes beyond just purchases, it's really any action that's taken, you can measure any of these things. For example, how many people are signing up for your newsletter, how many people are opening links on your newsletter? How many people are watching a video or watching to the end of the video, how many people are adding an item to their wish list how many people are moving an item from their wish list to their cart? There are all kinds of things that you could be measuring in any of these, you can run a B tests, which we'll get to eventually on increasing the conversions of these particular actions. So we're talking generally about your conversion rate on your site, on your Shopify store in this particular episode, but you can apply this logic to anything.
Okay, Love it. Love it. Love it. Next up. How do you calculate this thing?
Okay, this thing, conversion rate,
conversion rate, so you optimize your car.
How do you owe your car? How do you calculate your car? The base calculation is the total number of conversions divided by the number of visitors multiplied by 100. So we can get a percentage.
Let's say that one more time, it's slower. To calculate you're no not that slow, like slow enough that I can hear it properly.
All right, you're calculating the total number of conversions. So the total number of purchases on your store, divided by the number of visitors to your store, and then you multiply that number by 100. Or if you're just in like my brain, you don't multiply by 100, you just move the decimal. Yeah, please call it a day. On Shopify in the dashboard, they give you your conversion rate. But they also give you a couple of numbers that you can work with as well. So your online store conversion rate the the top number, so when you're viewing your dashboard on your Shopify admin, the store conversion rate is that last one, the sessions converted, these are the people who are actually placing an order. But you're given two additional numbers to work with. These are part of what's called your conversion funnel. So these are the steps that our user must take to complete an action to the final conversion point in the case of Shopify is going to be added to cart in reach checkout. Now, you can go even deeper on this through like Google Analytics events, for example, by setting up entered in your shipping information, entering your billing information checked, or like entering your credit card information, and then you reach the order confirmation page. So you can get deeper into this funnel if you wanted to. Same thing if you're using like a like the legacy version of recharge, you can set up a conversion funnel for recharges Checkout, as well as Shopify checkout. So these are really useful numbers to keep track of. And while we we've generally talked about your your baseline conversion rate, your overall conversion rate of obsessions converted, you can learn a lot from the other two numbers that Shopify surfaces added to cart and reach checkout. For example, if your reach checkout is, let's say 7%. And your sessions converted is maybe like 1.5%. That would indicate that there's a gap. Something's happening between those two steps. That's deterring people from actually placing an order most commonly in the space of Shopify or e commerce, it's your shipping rates because if you're not so this is why we always talk about surface so your your shipping rates before you reach Checkout, because your shipping rates should never be a surprise to the customer.
I cannot comment you have a comment here. So my daughter is in AP Biology this year. And so we have to order her because she goes to her online school we had to order her this AP bio kit. So we're like okay, we go in order for this AP bio kit. By the way, we have no choice like we have to order this kit. It is $159.25 palatable. Here are your three shipping Hawks. Ups worldwide expedited $262.80 ups saver $337.14 or UPS worldwide Express $343.88 with an Asterix that says please note ups has suspended their service guarantee. So I ended up spending $422 on an AP bio kit that should have cost me I don't I would have like 20 $30 I would have expected for shipping. You know no $262.80 everybody when we say ship ship again is coming again. We are not sorry for the tangent but I wanted to just say like that was a situation we couldn't get out of and we had to buy there's no way we would have bought that. Absolutely no way.
I during last, it was last year was 2020. Last year. During the election runoffs in particular in Georgia, I wanted to buy a yard sign and the sign was $5 the shipping was $10 for a sign I'm like I'm not paying twice as much for the item as I yeah, I'm just not doing it and so I did not know how much shipping would cost until I hit checkout and so I abandoned my cart 100% Who wouldn't? Exactly so we really want it Oh yeah. determining your shipping rates as a whole thing But back to the conversion rate piece. Yes he did. There we go. There's your your your key takeaway just eat it ran. What can I do to help my support team be more efficient?
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s back to the conversion rate peace, you. So we talked about the conversion funnels. It's also important to note that you have different conversion rates for each well for everything really. But what's most importantly is you have different conversion rates for each of the devices that are accessed on your site. So you have a desktop conversion rate, a mobile conversion rate and a tablet conversion rate, which, you know, some people like mainly my husband, who's the one who uses his iPad, sitting on the couch browsing the web is the one who actually appears on the iPad conversion rate.
I don't know my mom does that too.
Yeah. Like I, your husband and my mom, there you go. Sample size two, we found them. Um, so you're 8%. If you're on the Shopify plan to $79 a month plan or higher, you can actually get these numbers directly from Shopify in the dashboard. There's a link that says on the right side, online store sessions by device type View Report, if you click View Report, and then click on the Edit columns button, you can add conversion rate on there. And now you're going to see mobile desktop tablet. Other usually in that order, you might see some other things like Samsung TV, or like the weird devices that are tiny, tiny number of visitors, but somehow they slipped through and you're not usually optimizing for them, but you'll see them on there. A few things you're going to notice, usually your mobile is visited or is listed first, because it has the most number of visitors. Pretty straightforward. However, your desktop conversion rate is usually higher than your mobile conversion rate. Yes, especially if you have some kind of complex order flow that requires more forms, or more fields to be filled out, for example, like a monogramming thing, or any kind of customization to where you're adding those additional settings. Those are going to usually be done on a desktop or if it's a very expensive item, people tend to purchase those more on desktop and mobile.
That is very true.
I don't know what it is like, I have no problem buying like a Mac on my phone. But for some reason I still go and do it on you know all the Macs that I buy. I'll still do it on my on my computer instead.
As you know, I buy 10 Macintosh
Macintosh computers per month.
I think oh, there's something I mean, talk about price psychology, right? are buying psychology. There is something like when I custom ordered a couch a few years ago from joy bird. And I started on my phone and then I was like I can't spend this much money without looking at this on a wide screen. That was yesterday. My logic was I cannot do this. It's too much money. This is a first of all, and I think we've talked about this before. If not, couches are so expensive. And nobody tells you that until you're an adult and you just find out
there are so many things that are so expensive that you don't realize blinds wire blinds so expensive
mattresses, even in cheap quote cheap mattresses are expensive.
You know, this weird thing happens when you you buy a house from 2000 which is not that old all things considered. But it also has all the original appliances that came with the house when it was built. And they all magically start dying at the same time. Yeah, you know how expensive appliances are especially at a time when you can't get the appliances anyway.
Yeah, you just got to right now you just got to sit and take like so I have to microwave
one works I'm just not
I'm not that I'm trying to one up you Kelly but I have an older house as well. It's from a virtual appliance system as well. And I will say this about these original appliances. They do still work. You don't know what temperature anything's going to be you're just guessing you were literally just you're like whether it's the stove is the stove the thing on top or the oven Yeah, you don't know exactly. But you just don't know you're like I have no idea but we were going to replace it and then we thought much that was and we're like well are we gonna
move in a few years
worth it also right now nothing is available. So Exactly.
Nevermind. Um, so back to these conversion rates. If you are
I will pull a 0% conversion rate.
No, that is my broken my broke in microwave if you're on the basic Shopify plan, like the $29 a month plan, and you still want to get access to these conversion rates, because of course here, you want to have as much data as you can to make these decisions. You can access them through Google Analytics. I mean, you have connected Google Analytics to your website, right?
Oh my gosh, please. And if not, upgrade to the $79 version of Shopify. And you'll have this data. But you
should just go ahead and connect Google Analytics instead, please, I mean, you both do whatever you need to do. But if you can access it through Google Analytics, if you go to the audience tab, and then click on mobile, and then click on overview, you will see mobile desktop tablet. You can also click on devices, if you want to, like really drill down to see how many people are using an iPhone 11. To check out it doesn't matter. The desktop and mobile are the two most important conversion rates. But yeah, I can see Oh, a lot of people. It's weird. For some reason, Google Analytics combines all iPhones under Apple iPhone. But any pixel is listed separately like Google. So I see like Google Pixel 533 a. Also some can't
imagine why they would do that. We are in the era of the Google Apple Facebook wars.
Yeah, a whole thing. Okay, so let's let's give an example here, just so you can you can calculate this out yourself if you want to say your store has 50 sales, and you had 1000 visitors last month. So you would take 50 divided by 1000. And then multiply by 150 divided by 1000 is point 05 times 100 is 5%. Your conversion rate would be 5%. In this case, what is a good conversion rate? Great question. berries.
That's like you know, the influences who are like a lot of you have been asking me for skincare tips. So glad you asked.
I know I've been gone for a while. last post four days ago.
Okay, so yes, Kelly, what is the conversion rate? So glad you posited yourself
that question I needed to because it always comes up. So your conversion rate? What is it good conversion rate? It depends. It depends what you're selling. It depends on the price point of your store. It depends on how people are generally purchase or like buying how they're shopping on your store. It depends on the complexity of your items. It depends. I said price I think already. Yeah, it depends on a lot of things. Depends on the vertical you're in. I don't know if I had said that one yet. As I said, depends on what you sell, whatever. Anyway, it depends. I love to see conversion rates at least 2% 3%. Sounds great. my ebook store that I have for my bookstore freelancing today, I believe my conversion rate is four point and it's something it's still loading. I think it's like 4.89 4.23. There we go. Okay, terribly wrong. It's cool. It's going to vary from store to store, it's going to change as you run sales. And it's just going to change as you run ads in your your foot, you know, funneling more people to your store. But obviously, the end goal here is to increase your conversion rate.
Unknown Speaker 23:21
So how do you do that? I'm just, I'm just gonna posit all the questions to myself. It's cool. I'm here for it, I'm here. This is where AV testing comes in. So AV testing is a way of comparing two versions of the same web page to see which produces better results. So you're going to have two different versions of a page. And they're going to be shown to two very similar sets of customers or visitors. And you're going to measure which one performs more effectively, when you're running a B tests, you're usually testing one change at a time. If you're testing multiple changes, you get into multivariate testing, and we don't want to go down that path right now. Because that gets it basically, if you're like, if you're a be testing your products description, the positioning of where the Add to Cart button is on the store, or on the on the product page, and whether or not setting the first image to be a video versus a static image. You if you test them all the same time, you're not going to know which one's actually making the difference, or some certain combination is making the difference. Or if it's some third factor that's just kind of
throwing things off. Think about high school science, you can only have basically a single variable at a time. It's
basic. Yeah, it's basic hypothesis testing we're talking about here. Now you can technically do all three if you're if you are doing multivariate testing and measuring every single comment possible combination, but also requires a much larger audience size, which is the next piece of this the sample size. If you don't have enough traffic to your site, a B testing is not going to be useful for you. You need a large enough sample size to determine or to split your audience in To see you can actually find a measurable difference, or else, you might not have a statistically significant result, or it's going to be skewed due to minimal data. Optimizely has a really great calculator for determining the sample size you need. It's it's three, three pieces, you just pop the numbers in there, and you're going to go, the first one is your your baseline conversion rate. So where you're starting out, so let's say your conversion rate is 3%, you would just write 3% there. The next, the next line is that the minimum detectable effect. Now this is the range at which, if you see, if you go beyond this range, that's where you're going to actually see some kind of significant effect in here on the MDP. So if you have an MTU of 20%, that means you want to see a range of between 2.4 and 3.6%. On your conversion rate. Does that make sense?
It does make sense. Okay. But I will say this about Optimizely. Much box. Like it's very Oh,
yeah, I'm getting to that I'm getting Sorry, I have a calculator, that's I'm just using the numbers. Like,
they're very expensive.
And we link to the calculator in the show notes as well. So you can you can use that. The third piece is the statistical significance. And this is traditionally set to 95%. What this means is that the opposite of this point, oh five, you want your P value or the value of that you're actually calculating for the statistical significance to be less than point 05. If it's less than point 05, it's significant. If you want to learn more about p values and statistical significance, take a statistics class. I am not here to educate you on I love statistics. I I've always loved like biostat was one of my absolute favorite classes that I took in my public health program and I did not obviously go into it at all. That
sounds like so much fun. I'm so I really wish that I had taken biostats
I know I bet. Okay, I had enough fun to the both of us. Rena and I are starting an executive MBA program next month, and we are going to be taking more stats classes is next month. It's next month, it is September, we started in October. Oh, cool. Everywhere is fine. We're taking it together, though, is going to be really fun because you get to be in the same cohort.
Yeah, we start with my most favorite class accounting accounting.
You use this to determine the sample size you need. And this is what you're basically going to be working towards. Once you have it. Once you have a sample size this large, you can actually find out if your test is statistically significant. It is not necessarily a bad thing, if you run an AB test, and you don't get the answer you're hoping for. Right? Because you've just if it if it has a detrimental effect, or if it has no effect, you know, you're not going to waste any more time on this one particular thing. And sometimes I will say sometimes I run an A B test and the results like so absurdly high, early on that I'm not going to waste more time just waiting for the results to stay absurdly high. When something's clearly working. I'll just go ahead and the test and push the changes live. Fair efficiency, efficiency. So tools that you can use for AV testing, especially with Shopify. The first one, which we we tend to use as like a whole website. AB test is Google Optimize. Why? Because it's free. Love free. We love free. You can connect Google Optimize to Google Tag Manager, which can connect to your store. And then you can run all the AV tests you want through great. There's also neat AV testing.
Yes. Sponsors of our podcast, also a great product. Yes. so
neat. AV starts it starts at $29 a month. And they're really focused around testing your pricing, copy images, product, page layouts, homepage layout, really great tool to use, if you're looking for kind of get started with something a little bit more integrated into Shopify. If you're brand new to AV testing these like the tool like need a B testing would be really, really useful for you. Ship scout is another one of my favorites. Shift scout tests your shipping rates, so you can test different like ship free shipping threshold pricing. This is a $49 a month. I was so excited to see ship scout up here in the app store because nothing had been done before. Using the shipping. Yes. So really, really great opportunity to test those shipping rates, which as we know is the most common source of abandoning your cart between reach Checkout, and converted. So hey, look things back around. And then I was going to mention Optimizely. Again, since I mentioned them before, there are some other tools as well. They're expensive. If you're on Shopify plus if you're like an enterprise brand, it might be more within your budget to use something like Optimizely. Because you can get super, like hyper specific with these things. But there are tools out there that are accessible to smaller merchants as well. And that's really kind of the point I want to drive home. Yeah, absolutely. One more point to make. And then I'm done. If you're on Shopify Plus, you can add the A B testing script into your checkout that liquid file. If you're not on Shopify, plus, you can't do this. It's just the files locked down, don't have access to it. I'm wondering actually, with, I wonder if this changes, the checkout extensions, if you're able to embed, I'm thinking out loud here. I don't know if this is actually a thing. Um, if you're curious what I'm talking about Google shop, buy checkout extensions, they're brand new, they're actually still in beta. But I'm really excited for them, because those are customizations you can make to your checkout without having to be on Shopify plus.
Okay, one thing I do want to say if if y'all were listening in, you're like, Okay, the AP is 29. And you want to use that in conjunction with ship Scout, right? Because that would be a great kind of combo. And that's why approximately 80 bucks a month, and you're like, that's a lot of money. Think, look at your conversion rate right now. See what it is. And if you're like, oh, whoa, it should really be higher. Use these for at least a month or two and see if they help, right and do this a B testing. Because I can guarantee that if you haven't done a B testing properly, which most folks don't, don't worry about it, like that's just the reality. Like when I started building Shopify stores, you literally couldn't A B tests, you just
you just had to change everything and change it around again. And like just figure it out. So I just you know, if you can increase your conversion rate by half a percent than $80 it's nothing because it's just cuz I know that apps can get expensive like, I get it.
I have one final thing to say that totally unrelated
probably love unrelated
I'm very animated, but I'm talking about conversion and optimization like reans watching me as I talk I'm like really moving my hands around. My my Apple Watch just said good job standing up for a minute. Oh, wow. I've been sitting this entire time but that's cool. Anyway, that's all I wanted to share. I like 00 is fun. Let's do some store shadows. Low. Yeah. Last one.
Print fresh print. fresh.com. They are. So for those of you who know me. I really like to wear only black. However, it amas are different and why these are the most like oh all over print really bright, really happy pajamas. I think that's all they sell. I think all they sell our jammies. And I'm like obsessed with this site. It makes me feel happy when I look at them. They're they have a diverse models with diverse bodies. I was into it. I'm into it, and I want to buy it. And right now there's a sale and you can get 20% off with the code. So I may be doing that later.
You could option.
Look, it goes up to 6x. It goes from extra small up to success.
I love that.
I love size inclusivity. Like I will choose I would go out of my way to choose a size inclusive brand any day of the week.
So I love it. They have afterpay which makes sense with their price. Their price point like these these PJ's aren't inexpensive. But they are very cute. They do a lot of the right stuff. And they have an FAQ page Kelly.
know. I know. I said that just for you. And they also have a blog and they have a sustainability missions too. It's all the stuff that we love. It's really look at their website, or their store. I've got to say oh and Sara mouth built their website. Okay, she's rad. She's a local. She's a local to LA this designer, builder, design designer, designer builder by Shopify agency. She's She's really rad. So that's who built the site. Well, so over to you Kelly, what is your store shout out all
the way so my store shout out this week is z via ZV is a we contact husband and I constantly keep zevia in stock at home. We love their teas. Danny loves the black tea. I love all the flavors. He's cool thing about zevia. The store is built on Shopify. And they actually as of about two ish months ago, a month and a half ago, they started publicly trading on the New York Stock Exchange. And I say this because there's this common misconception that Shopify is great for smaller brands. But this is a publicly traded brand running their store on Shopify, and also there subscription goes through recharge. Big fan of that as well. Um, you can be a very large brand and skill on Shopify. With Shopify, it's it's wonderful also, there's their websites so like colorful and the drinks are great. I like them. If you don't like stevia, you're not going to be into it. But I'm a fan. But cool. See? Oh,
yeah, we did it.
We did it. Thank you for tuning in. And thanks to our sponsors for supporting this episode. We have a YouTube channel. We'll eventually get around to publishing more content but you have been very busy working on this beautiful app that you are going to love. But you can visit the YouTube channel and see what we currently have up there which might include a CFO masterclass, I don't know if it does. Yeah, I don't know. We definitely have an SEO masterclass on there though, so that's another great one anyway. youtube.com slash Commerce Tea. If you like our podcast, please leave us a review on Apple podcasts reviews make us very happy. And you can subscribe to Commerce Tea. On your favorite podcasting service. We post new episodes every Wednesday. So grab your mug and join us then we'll see you next week. Bye.
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