D2C Revenue Rocket Podcast — Episode 10

Zak  (00:07)
Welcome to the D2C Revenue Rocket Podcast, brought to you by Klaviyo and ECD Digital. Today I'm joined by Rob Domagala from Smile, the leading loyalty rewards platform. Rob, welcome to the show.
Rob
Thanks for having me, Zak. I appreciate it. Long-time listener, first-time caller, I suppose — so happy to be here.
Zak
Rob, I've known you for years, and at any D2C ecosystem event, I can always count on you being there and being right in the middle of the mix.
Rob
Gotta turn it into partnerships and deals though — that's the secret. But yeah, I definitely love the community we both work in. It's always fun to get out with the other partners and mix it up a bit. So you'll see more of me, that's for sure.
Zak
Love it. Before we jump in, could you give a little background on yourself?
Rob  (00:58)
Yeah, no problem. I started my professional career in the music industry — tried to be a rock star, that didn't happen. I ended up working for one of the major labels for a few years, and then realized that fun and games, though it was cool, wasn't going to elevate my business acumen. So eventually, through a bunch of roundabout ways, I got into software and then agency consulting in the technology sector, more from a pure business development perspective.
Rob
I worked for a handful of startups and a bunch of more established brands here in Toronto, and then I joined an agency called TWG back in 2012. This was right after Shopify raised their B round and was starting to really scale in the Canadian ecosystem.
Rob
We were building all sorts of web apps and mobile apps, and eventually got attracted by the gravity Shopify was creating in the Canadian marketplace. I helped the team spin up an e-commerce division of the business, and we were building a lot of Shopify Plus websites for brands like Ecobee and Audi Canada. Through that agency work is how I got exposed to e-commerce and the Shopify ecosystem, and the other operators in it — like yourself, Zak. It's been a journey in that direction ever since.
Rob
Before joining Smile, I was working on the reverse logistics side of the business, at a company called Return Bear, trying to solve merchant return problems. But I was really attracted by loyalty and retention and everything happening in those categories, so I was excited to jump on board with Smile last year, in 2025.
Zak
Smile is one of our favorite platforms that we use in general for our clients. But could you give — for anyone who doesn't know Smile, which I find hard to believe from our listeners, but if there is anybody out there who doesn't — the 30-second highlight of who Smile is and what you guys do?
Rob  (02:58)
Yeah, absolutely. Smile is the largest loyalty application in the Shopify ecosystem — arguably in any ecosystem in the world, though we're really focused on the Shopify ecosystem and platform. We've been around the longest, exclusively building a loyalty solution that a brand of any size, scale, or stage of business growth can leverage to bring to market.
Rob
A world-class points, VIP, referral-based loyalty program to really set their retention flywheels in motion. We work with more than 60,000 brands on Shopify — almost 5,000 of those on Shopify Plus. So we've got great distribution within that ecosystem, and an amazing data set of more than 10 years of e-commerce loyalty globally. We're fixated and hyper-focused on constantly building...
Rob
...the best loyalty product for merchants growing on Shopify — and for agency teams like ECD that are building toolkits for their clients on Shopify as well. So that's what we do. And if you haven't heard from us, or you're just hearing about us now, we'd love to chat loyalty with you.
Zak
You guys talk to a lot of brands at different stages in their loyalty journey — from brands just starting out to brands migrating over from a different platform. What would you say are some of the things a lot of brands get wrong when they first start thinking about a loyalty program?
Rob
Checking the loyalty box off their to-do list and then forgetting about it — that would be pitfall number one. Honestly, I've seen that with startup and SMB businesses, and with mid-market and more enterprise or upper-mid-market organizations. We've made it very easy to install the app and configure a custom loyalty program, and...
Rob  (04:55)
...honestly, to set it and forget it, to an extent — and it'll perform well, it'll do work behind the scenes. But the very best programs are the ones that are constantly being dialed in and nurtured. A brand, big or small, is actually paying attention to the analytics, thinking about how they can shift their win-back or marketing narrative away from discounts — away from how we've programmed customers to only shop during certain periods.
Rob
They're starting to introduce loyalty levers to get customers to take similar actions — whether it's opting into a mailing list, making a purchase, completing a survey, or offering some zero-party data. The brands that lean into the program after setting it up are the ones that really succeed, and we see huge multipliers in their customer lifetime value and retention.
Rob
But it's easy to get distracted in this ecosystem. I empathize with the SMB operator who has a really lean team, launches a loyalty program, and sometimes forgets to check in on it or use it as much as they can. That's where, to the extent possible, having agency partnerships — a team like ECD working on behalf of your brand — is great, because...
Rob
...you can basically give retention a focused, dedicated expert and see the programs really succeed. And it's not just loyalty — it's true for your email and SMS strategy, your customer agent strategies, and so on. There are so many nice things to try; it's easy to set them all up and then not do any of them great. That's definitely a pitfall we try to help our...
Rob
...agency and brand partners avoid — by proactively looking into the analytics for you, making suggestions, and building the tool so it pulls you back into checking on your program. You definitely don't want to set it and forget it.
Zak  (06:55)
That's a good point — it's not just set it and forget it. I think especially for smaller businesses getting started, trying to hit their first million or couple million, there are a lot of shiny objects. They're like, 'let's do this, let's do this, let's do this,' and by the sixth thing they've forgotten what they did on the first two, and those aren't being leveraged how they should be. Really, the more integrated your whole D2C ecosystem can be, the more it's like one-plus-one-equals-ten.
Rob
Absolutely. It makes sense that there's a lot of new tools to try, and those distractions are really easy when you've got small teams trying to manage a growing business. But at a minimum with loyalty, from our perspective — look at the numbers quarterly, think about the program at least quarterly...
Rob
...and devise strategies to actually leverage it as much as possible. And ask us for help too — reach out to our account managers, our support team, ask for help and suggestions. We're trying to make sure the product itself is offering those prompts.
Zak
Yeah, and you guys do a good job of that. I want to share something I did the other day that was kind of cool. A lot of brands think the biggest hurdle is getting their Smile program built out and integrated with their Klaviyo account, but it doesn't have to be as big a hurdle as they think anymore. I recently launched my own DTC brand — it's a plant horticulture marketplace, kind of a side project — and I wanted to test out...
Zak  (08:53)
...how easy it would be for me to launch my Smile program, how quickly I could do it. I think this is something anybody could do to get the bare minimum done, and then build on it from there. What I did: I went to Claude, and I had Claude connected to my Shopify store and connected to my Klaviyo account. I had Claude walk me through step by step — it asked me a series of questions about what I wanted the rewards program to do.
Zak
I answered those questions, it analyzed some of the data inside the Shopify store, and then it told me step by step what I needed to do in the Smile account to get it set up. It was also connected to the Klaviyo MCP, so it created all the email flows inside Klaviyo — or listed out how to create them and what triggers to set. Then I had Claude design the actual emails and push those into Klaviyo, and I just attached those templates to the email flows and set it live.
Zak
It was awesome. It took about thirty-five minutes to set it all up.
Rob
Things don't have to be that complicated. And again, that's just the bare-bones setup — the more integrated you get, the more powerful the program's going to be.
Rob
Absolutely — and you raise a good point too, you said MVP. To go back to your previous question... everybody loves to do things perfectly, of course, myself included. But I used to work with another team, and I think they'd swiped these two posters from the early Shopify days in the old Ottawa office. One said 'Real Artists Ship' — that's the design team, probably — and the other said 'Done Is Better Than Perfect.' Some days those are true, some days maybe they're false positives, but I think one of the things merchants can get paralyzed by is a desire to be absolutely perfect at launch on everything. And again, you want to check...
Rob  (10:36)
...the boxes off, you want to cover your bases, you want to put good experiences in front of your customers, because sometimes you only get that one shot. I acknowledge that — it's a fine line to tread. But we see folks struggling with decision paralysis and a fear of launching. They're envisioning a program and comparing their potential program to what Sephora has, or what Lego has — which are great archetypes to model off of.
Zak
Right, or Starbucks.
Rob
But these are programs that have existed in their own ecosystems for years, and have been built and iterated on over time. So I think you need to be willing to take an MVP approach sometimes, depending on your other business constraints or what else is in the pipeline — and that can be okay. One of the great things about a points-based loyalty architecture is that you can change it as a merchant. You can change the value of...
Rob
...points, relaunch the program, create a marketing moment, and change various perks, privileges, and strategies. So you can MVP it — you don't always have to have all the bells and whistles, every possible perk, benefit, and emotional loyalty hook dialed in from the get-go.
Rob
Think about core first principles: what are my points worth, what are my basic rewards, what do I want people to do at minimum that I'll use loyalty to incentivize? As you grow, the opportunities are endless. Twelve or eighteen months ago, the e-commerce market wasn't really thinking about direct mail, for example — but companies like PostPilot and Paper Run have taken that analog...
Rob
...format and breathed new life into it, delivering really powerful results to an audience that's digitally overstimulated and fatigued. Nobody would have imagined wanting to put loyalty on postcards, let alone sending postcards in the first place — and now here we are, and a lot of major brands are doing it. Your loyalty program suddenly has a whole new dimension you didn't have to know about when you launched it.
Rob  (12:46)
You're entitled to iteration and change. When a new opportunity like direct mail presents itself, you layer that loyalty identity of your customers into these very personalized direct mail outputs. So I think it's okay to launch an MVP, it's okay to build incrementally — like we all say, crawl, walk, run.
Rob
That's fine. But some folks get really tied up in the long-term vision, and sometimes it's a journey to get there — and that's okay. We're here to help, and I know you help your merchants accomplish those goals too. That's a healthy way to grow a business and iterate on the user experience.
Zak
I think if a brand has the money to hire an agency to build out the entire ecosystem correctly the first time, that's best — or if they have somebody internally who can dedicate all the hours needed to learn the platform and then do it, that's ideal too. But for a lot of brands, they don't have the capital or the time, so it doesn't need to be perfect — just get something up there and build on it.
Rob
Absolutely. A lot of brands don't actually know what the priority should be. So I'd encourage brands, when they have the capital, to collaborate with an agency partner to do research and discovery, some user testing, some planning — understand your customer journey. Once that's understood, figure out where loyalty could be layered in, and figure out from your actual audience what privileges or incentives would be compelling to them. You might be surprised what you find. And when you have that...
Rob
...insight up front, it builds a lot of confidence in the downstream work and investments you're going to make. A lot of folks rush to install an app and launch a program because they're keeping up with the Joneses, without asking all the questions of their audience that they could. That's the role of the head of customer experience, or the VP of digital, or the agency collaborator — and it's a great way to start any project, in my opinion.
Zak  (14:47)
I agree. Something else I want to circle back to that you hinted at — I want to double down on it: direct mail. It's super powerful. You guys have a new integration with PostPilot where you can put loyalty points on the postcards, in flows and in campaigns. What's super cool is that one of the best ways to use...
Zak  (15:13)
...points for us in email campaigns is always to show, hey, if somebody has over X amount of points, include that as a dynamic block in the email — 'Hey Rob, you have ten thousand points to use on your next purchase.' That's always really powerful. But now you can do that on postcards, too.
Zak
With email, people expect it to be somewhat personalized at this point. But when someone gets a postcard, they're not expecting it to be personalized — so if it's showing up with exactly how many points you have, that's awesome. You're going to keep that around, and you're more likely to take action on it.
Rob
Absolutely. I think there's still a huge opportunity because it's still an emerging surface — these direct mail pieces coming from digitally native brands. Even without personalization, I think they're still probably quite intriguing and compelling, because you just don't expect it. But if they stay generic...
Rob
...they'll get forgotten, shifted into the recycling bin — we'll have trained another consumer pattern that isn't optimized for success. That's one reason PostPilot is thinking about hyperpersonalizing these experiences. The PostPilot team was really proactive — they've engineered their direct mail opportunities for brands similarly to how you'd send emails through Klaviyo. Look at the same segments, the same customer attributes.
Rob
Let's look at the VIPs, for example, and truly understand Rob as a VIP customer, a loyal customer, and hyperpersonalize that output. They do it one-to-one, with great creative, and it's really compelling. I'm much more likely — and I think most customers would be — to respond to that surprise and delight.
Rob  (17:04)
...of the postcard, when you see your identity actually on it, an accurate representation of your status within the program, and ideally a compelling call to action to come back and purchase. There's a lot to be done there — it's definitely a category in e-commerce delivering outsized results right now: the reemergence of direct mail. It'll be cool to see how it continues over the next couple of years.
Zak
I feel like this podcast is often co-branded by PostPilot, because we're always talking about how much we love them. How is Smile building AI into the platform? What kinds of things are you building to help customers build better programs?
Rob
I'll address that, but let me flip it slightly first. I think one of the most powerful things that can and should be done by other, AI-focused platforms is actually ingesting our loyalty data for a customer into their AI. As AI has been exploding, we're seeing agentic support experiences and agentic creative experiences emerge, and...
Rob
...we've made sure a user's loyalty identity can be ingested into those tools. What we know about a brand's loyal customers — their repeat purchase rate, their VIP status, the perks and benefits they've earned — makes those other AI tools smarter. An agentic support experience is only as good as the data put into it — by all of us, or the brand itself. An agentic chatbot alone can only do so much...
Rob
...but as soon as you layer in previous purchase history, loyalty identity, and other dimensions, those AI tools work so much harder. They'll come up with better email creative, better promotional recommendations, handle a customer chat better, and prioritize me...
Rob  (19:23)
...in a support queue because I'm platinum VIP, perhaps — a customer that truly must be retained and has earned that white-glove service. And they'll take actions: the agentic experience, once it understands the customer's loyalty identity, will say, 'yes, this jacket is waterproof, it has a 60-day return window — and by the way, Zak, you've got fifty dollars worth of points from your loyalty program.'
Rob
'Do you want me to apply those to the cart right now and put the item in the basket for you?' I strongly believe those little nudges will close more carts and win the brands that adopt it more share of wallet. So in the realm of AI, we really want to make sure the best AI tooling is even better because it has loyalty identity fed into it. On our side...
Rob
...we're working on a number of innovations and iterations to Smile that will surface AI to our merchant customers and agency partners within the Smile admin. I think one of the most powerful things you'll see from us in the future is even richer...
Rob
...analytics and insights. We already have the best and biggest global data set for e-commerce loyalty benchmarks in the world, and we already surface proactive program improvements and suggestions. I think we can take that up a notch with more agentic tooling applied to it, so that if you're...
Rob
...working on behalf of one of your clients within Smile and need to solve a problem or need an insight, it can be at your fingertips even faster — maybe with more downstream content creation or output support as well. So expect to see us layering that into our tools too. But we really want to make sure our pipeline to other AI-first tools is as robust as possible — we think that's where there's a huge opportunity.
Zak  (21:24)
You're totally right, and I'm seeing that firsthand. We're building a lot of Klaviyo customer hubs and customer agents with custom skills, and whenever a client is also on Smile, we're always integrating it in. So when you open the Klaviyo customer hub, it shows you how many reward points you have and how many more you need to reach the next tier. That's nice. But then also, if someone chats in and asks, 'when's my order ship?'...
Zak
...we tell them when the order is going to ship, but we also say, 'hey, you also earned X amount of points with this purchase' — to make them feel really good while they're waiting.
Rob
Exactly. You want to identify, as we said about understanding the customer journey, all the different stages of it. Post-purchase is a huge one that has the opportunity to be elevated through loyalty — loyalty can be used as a delight moment there. Don't forget: once this arrives at your doorstep, the five thousand points you earn will be applied to your basket, or...
Rob
...don't forget you have a 30-day return window — assuming you keep the item, these 5,000 points give you better expectation management as a customer. Or as a remediation tool: if WISMO questions are coming in on the post-purchase experience — where's my order, it's been lost in the mail, FedEx has held it up — a human or agency support agent should be able to remediate some of that customer frustration...
Rob  (23:16)
...with the simple addition of some loyalty points — 'we're reshipping your order, we're sorry it was lost, and as a token of our appreciation for your patience, we've added another thousand points to your account.' Lower margin, but...
Rob
...still high gratitude, potentially. Again, understanding that customer journey and thinking about those loyalty levers can get really interesting. You'll see more agentic tools wanting to absorb that loyalty identity to create the best outcomes possible.
Zak
In e-commerce, it feels like brands are always talking about their ROAS and acquisition costs, which are all very important metrics — but brands don't talk about retention rates quite as much. Do you have any numbers, or a way to think about the importance of retention versus acquisition? And as a follow-up: with acquisition costs rising so much, are you seeing a bigger importance placed on retention?
Rob
Starting with that last question — absolutely. We've seen the cliché over the last 18 months or so on LinkedIn and elsewhere: 'retention is the new black.' Finally, brands are committed to it, I believe — but for the last 15 or 20 years, it's been acquisition at all costs. There have been cautionary tales, like when companies like...
Rob
...Casper and Allbirds IPO'd, and people looked under the hood and saw what it cost to acquire a customer for a $200 product. Necessary evils, and you learn as you go — but the rubber has really hit the road for retention now. Teams investing in it are going to do better. This doesn't mean there's no acquisition, it's just a recalibration of effort.
Rob  (25:03)
I'm seeing brands hiring for dedicated loyalty or retention roles in a way they didn't before. Brands like Hoka, Reebok, Canada Goose now have loyalty seats — those didn't exist half a dozen years ago, because you were investing in acquisition. So retention is understood to be necessary more than ever now.
Rob
The macroeconomic conditions — which we don't need to remind anybody about — really force your hand. You have to get more juice for the squeeze, and take that acquisition cost, which continues to rise despite best efforts, and amortize it over more purchases. That's where smarter retention strategies create healthier long-term businesses. To go back to the first part of your question, everybody was fixated on acquisition...
Rob
...how many people did I get, did I get them to first purchase — and honestly, nobody was fixated on the cost of it. That's why we had fallout: brand operators realized this didn't look like the best way to grow their business. When we think about loyalty, we want to see other metrics moving alongside it — loyalty isn't the only driver, but a well-optimized retention strategy or loyalty program is going to start pushing repeat...
Rob
...purchase rate up. If we're fixated on CAC and getting to that first purchase, and stop the conversation at basket size — 'I increased first basket size from $100 to $150, that's great' — but if that's where the journey stops and CAC continues to increase, can you make that first basket so outsized it doesn't matter? Probably not. We need to get to second or third purchases. We want to see repeat purchase rate...
Rob  (27:28)
...increasing, and that's a metric we look at closely on all our programs. We also expect to see a higher average order value, because loyalty subsidizes the upsell — it subsidizes that nudge to add a complementary product to your cart. 'Other people bought this' — loyalty helps manage some of the FOMO of maybe not initially planning to add that item to your cart.
Rob
Because you're going to earn points, and you're sitting on a handful of points that offset the cost a bit — the behavioral psychology of that give-and-take, the reciprocity from the brand, and the ongoing commitment to repurchase, creates a higher...
Rob
...average order value. When we look at our top-performing programs, they all have higher AOV on members versus non-members, and higher AOV on redeemers versus non-redeemers. Another important metric to think about, in the retention journey specifically, is the actual redemption rate. It's all well and good to have people in a program earning, and...
Rob
...the CFO might think, 'great, they're earning' — but if they're not redeeming, you actually want them to redeem too. It's almost always a lower-margin discount or give-back than the 25%-off, 30%-off fire-sale promo everyone's trying to avoid as an e-commerce shop. And so...
Rob
...you want a high redemption rate on your program. You want it structured so users only have to make a purchase or two before they can take that first redemption and get that feeling of satisfaction — and then they earn on every purchase, so as they redeem, they also accumulate. Ideally that cycle is nurtured with other compelling promotions. We want a high redemption rate that leads to higher purchase frequency.
Rob
This leads to a reduction in CAC over time, if you amortize what you get out of each customer, and it creates more successful brand experiences. At the same time, you get brand equity alongside it — you're giving something back, and if you're a well-designed brand with a thoughtfully designed program, you can lean into that story.
Rob  (29:29)
Let your members and your community know: 'we've got you covered, this isn't just happening ambivalently — you're lucky to be shopping with us, and we're grateful to have your commerce as well.' When all of that is tethered together, it really creates stickiness. For big global examples, look at the momentum Ulta Beauty or Sephora has in their programs, or the ferocity of Lego Insiders members...
Rob
...debating double-points or triple-points events, and strategizing how to optimize their purchases. Those brands are happy because what they've given the customer to subsidize the purchase is still much better than discounting the offering. When you get all this right, the results can be pretty powerful.
Zak — Ad Read  (30:27)
Want to see where your e-commerce brand is leaving money on the table? Book a free revenue audit with the team at ECD Digital Strategy and get a clear plan to increase revenue. Go to klaviyo.com/ECD to schedule yours today.
Zak  (30:43)
We recently did a case study with a mutual client of ours, and some of the numbers that stood out most to me — the most powerful — were exactly what you were mentioning: the difference in average order value between loyalty customers and non-customers. And because this client is on both Shopify POS and Shopify online, we also had metrics showing...
Zak
...the cross-channel average order value of loyalty customers, and the numbers were just significantly higher.
Rob
Absolutely, and it's not lightning in a bottle — it needs to be worked. With that merchant, I know ECD worked closely, at length, on a comprehensive strategy, and — going back to the beginning of our conversation — that's been iterated on over time. The right mechanics are in motion, and you folks and the brand have taken advantage of those opportunities to really great effect.
Rob
So yeah, that's the kind of story we definitely want to see.
Zak
That specific brand also has their loyalty rewards piped into PostPilot — we're sending out postcards, servicing it in emails all the time, so...
Rob  (32:04)
You built the full ecosystem. Yeah.
Zak
And the same customer — the loyalty points are shown in their customer agent, too.
Rob
Absolutely, yeah — it's got to be there. That's great. We'll refresh that case study in a year's time and watch the numbers go up some more.
Zak
Yeah, I like it.
Zak  (32:21)
What are some trends you're seeing emerging — you can talk about any trends, since there's a lot changing — maybe across the Shopify ecosystem, e-commerce in general, how agencies are operating, or even a forecast on where things are headed?
Rob
That's huge — there's so much territory to cover. I'll give you a loyalty trend first, then an agency trend, and you can remind me what I haven't addressed. From a loyalty and retention perspective, more and more brands I'm speaking to have found themselves selling in retail, maybe faster than they thought they would, because you need to go where the audience is. Everybody launches on e-commerce, and if they're successful, they end up in Walmart, Target, CVS. So...
Rob
...offline-to-online continuity — program continuity — is something we're seeing more brands invest in. I'm a member of a loyalty program, I buy products, I join the program through the brand's website, but I also shop from the brand sometimes at Sephora, sometimes on Amazon, sometimes at Target. Brands want to own that customer, or own that purchase, when it happens in these other, unowned channels.
Rob
Through receipt scanning or account linking — which is emerging, like retail account linking between a Shopify store and a major merchant like Target — loyalty points can be earned on offline purchases. So a brand can market their program: 'hey, if you're shopping from us on Amazon, send us your receipt; if you're shopping with us on Instacart, make sure you link your account so we can reward you.'
Rob
That's powerful, because customers who might be drawn to the convenience of going to Target and doing their groceries and everything at once are giving the brand their share of wallet — but doing it in a channel that's typically opaque to the brand — now, through that reward...
Rob  (34:36)
...and through that account linking or receipt scan, the brand can see their basket — what was purchased at the same time, at what location. They can award points, trigger a follow-up flow — 'thank you for shopping with us at Amazon, be sure to take the following actions on our D2C channel so we can give you more love,' or give exclusive access to a product. You can re-absorb customers who are starting to drift...
Rob
...into other ecosystems. I think in H2 this year and into 2027, you're going to see more digitally native brands who've expanded into traditional retail creating more unified loyalty experiences — that's one to keep an eye on. From an agency perspective, I'm noticing more firms that were originally focused exclusively on platform migrations, UX/UI design, and Shopify store development...
Rob
...starting to think about how to add managed loyalty — well, managed services in general — to their projects. That's complicated: you go from being an engineering or design firm to having to build a CRO function.
Rob
I think we'll see a lot of agencies broadening their services so they can attach themselves to their clients for longer — and generate more revenue that way, and win business at different stages, so they can come in on the retention play and ideally convert that customer back to a design refresh in the future, or custom app development. Agencies will still have specialists on both...
Rob
...dimensions — marketing and retention, design, build, migration — but there's a convergence happening as teams look to expand their book of business. And then e-commerce in general — holy cow.
Rob  (36:55)
So much stuff is happening. We talked about direct mail coming back. We're seeing more brand investment in accessibility and compliance — startups popping up trying to make ongoing AODA compliance and web accessibility more commonplace and automated within the Shopify ecosystem. I think a lot of brands will be thinking about that, trying to protect against lawsuits. I've had a lot of those conversations recently, and I'm also seeing...
Rob
...a lot more productized A/B testing. The willingness to test and learn is becoming more necessary, and brands are realizing that — using tools like Shoplift, for example, to try to do better, ongoing, consistent...
Rob
...testing for conversion optimization, merchandising, brand awareness — whatever it happens to be — because operating costs are going up across the board. There's a due-diligence theme manifesting in different ways.
Zak
I like that. You're talking about agencies expanding the services they offer — I'm seeing that too, and I think it's really important for agencies to be able to do that. But even more so, there are tools like Shoplift making it a lot easier for companies to do A/B testing, and a lot of tools building AI into their platforms that make them easier to manage. You still need the knowledge and expertise to know what you're managing and what decisions to make, but a lot of the execution is becoming easier. Where I really see agencies going is...
Zak  (38:42)
...less execution and more lifecycle AI orchestration — orchestrating all the different agents, all the different platforms. Kind of a theme you kept bringing up: the more integrated everything is, whether it's online and offline or all the different apps you're using, the more powerful it is. And the agencies with the expertise to know how all of that fits together — I think that's going to be the next big thing.
Rob
I think you're absolutely right, and that expertise becomes the unique value proposition, to an extent. You can't just duct-tape a bunch of disparate platforms together anymore — it's more powerful and more cost-effective if they truly work well together, like Smile and Klaviyo, for example. These ecosystems of technologies are getting increasingly diverse, and on top of it, there's this brave new world of...
Rob
...artificial intelligence and all that instrumentation. So I think expert firms on the agency side are going to help orchestrate these more powerful app ecosystems in service of the store. Your team may find themselves becoming experts in that kind of strategy, and in prompting — and that's going to be necessary, and I don't think it's going to be readily commoditized.
Rob
Because AI has already created a new floor for quality — things can happen quickly and relatively cheaply, so that expectation has been set for a brand. But the output you get is generic. Everybody has this unfair advantage on speed and cost now, and if agencies don't lean into taking the generic...
Rob
...and elevating it, then everybody's content, outputs, tools, services, and user journeys are all going to look exactly the same. I think a lot of the agencies that will win in this next generation of service will be the ones who can say to the brand, 'yes, I can do this faster — instead of 12 weeks, this ships in 6' — and 'yes, we'll ship it a bit cheaper, because we just shaved six weeks off the project.'
Rob  (41:01)
'But I'm going to charge you for four of those six weeks,' you say, 'because I'm going to make your output great.' There's going to be nuance to that — orchestration nuance, prompting nuance, quality control on the output — and someone will say, when it's done well, 'how did that happen? That quality output looked amazing.'
Rob
That's how an agency starts to win in an ecosystem that feels like it wants to compete with AI, to an extent. Otherwise, if nobody does it, all our stuff just looks the same — fast, cheap, generic — and we lose all differentiation. No brand is going to agree to that long-term, so they'll ask you to make them unique and successful. There's still a huge opportunity to be in the driver's seat.
Zak
The power is going to be — it takes a lot of work to come up with a really good loyalty plan, and then a lot of work to integrate that deeply into Klaviyo and make sure it's constantly being maintained, and a lot of work to integrate it into all these other places too. That's for your loyalty program — but it's the same thing for what you're doing on Shopify, for subscription, for Klaviyo. It just takes a lot of work to have everything really well built out and well managed.
Zak  (42:33)
But the agencies that are going to really win are the ones that can take the strategy and execute it a lot faster by leveraging all of these tools.
Rob
Absolutely, yeah — faster and at a higher quality, for sure. I think so, and we'll see — every week it's changing, so the target is shifting. But I don't think you're wrong.
Zak
Awesome. We're coming up on time, but I've got a few rapid-fire questions before we finish. You ready? One AI tool you use regularly, and your favorite e-commerce conference.
Rob
Man, I need a new one — I'm sort of tired of them all. Shoptalk is reliable, the community's great everywhere you go. I've heard great things about Pulse in London, so I'd like to check that one out. But if you're looking for reliable, Shoptalk's a safe bet in general.
Zak
Where's the next e-commerce conference you're going to?
Rob  (43:27)
It'll be Boston, I think, for Klaviyo:BOSS, at the beginning of September. I'll see you there.
Zak
Definitely see you there. One prediction for e-commerce in 2027?
Rob
Something different that we haven't discussed: I think you're going to continue to see a potential collapse — collapse is maybe a strong word, but I'll use it — of the overly consolidated apps, the ones that do tons of things: email and SMS and returns and loyalty, you name it. I think bigger brands, in their second or third go-around now, as they iterate...
Rob
...are looking for best-in-class. I think you'll see investment in best-in-class, interconnected ecosystems instead — I don't think anybody's going to need one SOW and one invoice a month. I don't think the convenience of that outweighs the concessions you make on expertise or quality. So I think we'll see less consolidation, more specialization.
Zak
I like that thought. And as all this software builds out its MCPs, it's making it that much easier to integrate the data as well.
Rob  (44:36)
Yeah, potentially — exactly. I think there are folks who consolidate well, with strong justification for the complementary or adjacent dimensions they've added to their products. There are others I feel are incongruous — I'm not going to name names — but where I'd be concerned, as a buyer, that I'm not getting the best of either. So I think we'll see some change there — maybe some folks rolling back some of the products they've extended into. We've already...
Rob
...seen it in a couple of places.
Zak
Couple places, yep, for sure.
Zak
Last question: best piece of career advice you've ever received.
Rob
This wasn't said to me in words — it was more through an experience my first boss out of university created for me. I was working for Universal Music in London, my first job, doing international A&R — talent scouting, working with artists on projects — but I was just a grunt, a gopher.
Rob  (45:42)
My boss, Eddie, took me to a meeting with the band a-ha — 'Take On Me' — I don't know if you remember them, they were pretty big; I'm dating myself here. This was the early 2000s, and they'd been huge in the '80s and '90s and were mounting a comeback. He took me into the studio with them as though I were a peer of his, not his assistant.
Rob
I was able to sit with the band and the producer, and my feedback was solicited as though I had seniority and experience. It went great. Then, going back to the office, Eddie praised me for taking advantage of the opportunity — for not just sitting there quiet. It was an implicit lesson in punching above your weight...
Rob
...in being confident and not boxing yourself in. I'll put my hand up and ask questions, but I'll also go out and do things. That motivation — to believe in your potential — stands out today. That was my first job, so it was impactful.
Zak
I love that — it's also a great managerial lesson: put the people who work for you in positions to really shine and punch above their weight.
Rob
Absolutely. And he'd also have been the first to say, 'look, we're not saving lives here, we're selling records — what's the worst that can happen, I give the band feedback they don't want to hear on a song? They've heard it before, from critics.' But that was really good, and something I'll continue to try to do and improve as a leader of teams myself.
Zak  (47:42)
Rob, as always, it was a great pleasure chatting with you. Thanks so much for making the time to come on.
Rob
Thank you, Zak. I always love hanging out — I'd love to do this again, and share some of these ECD case studies with the audience too. You folks always do great, thoughtful work. Thanks for giving me a platform.
Zak
Awesome, my pleasure — thank you for those kind words. Before we wrap up: if you're serious about growing your e-commerce brand, go grab a free revenue audit. We'll find the revenue you're leaving on the table — analyze your store, marketing, and retention channels to show you exactly where the biggest opportunities are. It's completely free, and you'll walk away with a clear growth plan. Just go to klaviyo.com/ECD and book your audit today.
Rob
Awesome, thanks Zak. Have a great one.