Artificial intelligence is driving global shopping experiences according to Capgemini Research Institute’s annual trends report.
“What matters to today’s consumer 2025,” published Jan. 9, recaps the firm’s survey in October and November 2024 of 12,000 consumers in Australia, Canada, France, Germany, India, Italy, Japan, the Netherlands, Spain, Sweden, the United Kingdom, and the United States.
The 100-page report focuses on how consumers discover products, how they shop, and why they switch brands.
Product Discovery
ChatGPT and other generative AI platforms have largely replaced traditional search engines for product recommendations, according to the survey. Nearly two-thirds of Gen Zs (ages 18-25), Millennials (26-41), and Gen Xs (42-47) prefer genAI for that purpose. Only Boomers (58 and over) still favor Google and other search engines for recommendations.
Moreover, genAI is transforming seemingly every touchpoint of the shopping journey. Consumers now ask genAI to curate images and aggregate product searches from multiple platforms. Some had even found virtual assistants more adept at making fashion, home décor, and travel recommendations than sales associates.
We addressed in December the power of influencers and social media for gift recommendations. An Adobe survey found that 20% of all U.S. Cyber Monday sales came from influencer endorsements. The Capgemini survey confirms those findings and more, reporting:
32% of consumers purchased products through social media,
68% of Gen Zs have discovered a product or brand through social.
Shopping
Consumers are responding to retail media, according to the survey.
67% of respondents notice ads on retailer sites.
35% found the ads helpful.
22% discovered products from those ads.
Despite the recent cost-of-living improvements, consumers still seek in-store and online discounts.
64% visit multiple physical stores seeking deals.
65% buy private-label or low-cost brands.
Consumers also value “quick commerce,” the hyper-fast delivery of online goods. Approximately two-thirds of respondents stated a 2-hour or a 10-minute delivery was important to their purchase decisions. Forty-two percent valued the order-online pick-up in-store option.
“Demand for quick commerce is on the rise, with consumers from some geographies increasingly willing to pay for speed and efficiency,” researchers wrote, adding that merchants continue to invest in AI and logistics to improve infrastructures.
Switching Brands
Brand loyalty is increasingly rare among consumers, according to the survey. Researchers advised brands to (i) augment genAI tools to become more consumer-centric, (ii) use technology to lower prices, and (iii) leverage social and retail media networks.
Employees worldwide are adopting generative AI faster than their leaders expect, according to McKinsey & Company’s January 2025 report, “Superagency in the workplace: Empowering people to unlock AI’s full potential.”
The report examines the survey results of companies’ preparedness for AI adoption. In October and November 2024, McKinsey queried 3,613 employees, managers, and independent contributors and 238 C-level executives.
Eighty-one percent of respondents were from the United States, while the rest represented Australia, India, New Zealand, Singapore, and the United Kingdom. Participants held various roles across business development, finance, marketing, product management, sales, and technology.
–
According to the report, 62% of millennials aged 35 to 44 reported strong expertise with AI.
–
Public sector, aerospace/defense, and semiconductor workers are less optimistic about AI’s near-term impact. Only 20% expect significant changes to their work in the next year, contrasting with the media/entertainment and telecom sectors, where about two-thirds anticipate significant AI-driven changes.
–
Most executives (87%) anticipate generative AI will boost revenue within three years, with half expecting gains above 5%.
Forty-four percent of global household respondents are willing to pay more for a single platform that aggregates all their TV and internet content, 35% are willing to pay to watch sports, and 32% would pay a premium to watch TV without ads.
That’s according to EY’s “Decoding the Digital Home” October 2024 report based on an online survey conducted in July and August.
The survey, carried out for EY’s global technology, media and entertainment, and telecommunications team, gathered responses from 20,000 households across Canada, France, Germany, Italy, South Korea, Spain, Sweden, Switzerland, the U.K., and the U.S.
–
According to the EY study, 38% of households in 2022 were concerned about encountering harmful content online. That grew to 44% of households in 2023 and 47% in 2024.
–
In addition, the proportion of households in all 10 countries that prefer services from a single provider increased from 2023 to 2024 — the global average rose from 40% to 44%.
–
Moreover, most households think connectivity and content providers should offer clearer explanations of how they use AI in customer interactions.
According to Will Nitze, founder and CEO of IQBAR, success in a competitive market requires finding its uncompetitive niches. He did that with his flagship protein bar, which is plant-based, low-sugar, and plainly labeled. That was seven years ago when he launched the company with a $75,000 Kickstarter campaign.
Fast forward to 2025, and IQBAR also makes IQMIX (hydration) and IQJOE (coffee). All promote brain health without competing against each other.
Will and I recently discussed his journey, from the initial capital raise to scaling revenue, adding products, and managing wholesale channels. The entire audio of our conversation is embedded below. The transcript is edited for clarity and length.
Eric Bandholz: Give us a quick rundown of who you are.
Will Nitze: I am the founder and CEO of IQBAR. Our hero product is nutritional bars, but we also make IQMIX for hydration and IQJOE for instant coffee. Roughly 55% of our revenue is wholesale; our direct-to-consumer ecommerce site and Amazon account for the balance. We’ve raised just under $10 million since our launch 7 years ago.
Bandholz: How do you stand out in such a competitive market?
Nitze: The key is breaking down the competition into subcategories. In the protein bar market, the saturated category is animal-based ingredients. But when you focus on plant protein, low sugar, and clean labels, you can carve out a space with much less competition but still substantial. It’s about finding the uncompetitive niches within the broader competitive landscape.
I got into this space as a personal passion. I was dissatisfied with my software job and began exploring low-carb diets, eventually landing on keto. I was especially interested in brain food and noticed that, at the time, no one was offering ready-to-eat options. Most brain nutrition comes in pill or powder form. I launched a Kickstarter campaign that raised $75,000, validating the concept. From there, we pivoted based on customer feedback, focusing on protein and clean labels.
The brain angle is useful and differentiated, but it’s the deal closer, not the deal opener. People shop our products based on the protein count — where it came from and how complete it is — and then sugar.
Our strategy has been to expand the product line without cannibalizing our core bar product. Many brands extend their product lines in ways that compete with their existing items, like moving from bars to peanut butter cups. We wanted our new products — hydration and coffee — to complement our bars, aligning with our brain and body nutrition mission but not competing. We also considered shelf stability and ease of production.
Bandholz: You have just nine employees. How do you maintain such a lean team while scaling?
Nitze: Recognizing my weaknesses is essential. I’m not great at hiring, so I rely on a trusted circle. My wife is our chief marketing officer and head of ecommerce. I keep a close connection with everyone on the team. We use external agencies for pay-per-click ads, search engine optimization, and Amazon management. We work closely with these partners and our manufacturer to keep things running smoothly with fewer full-time employees.
We never commit to long-term agency contracts without an exit clause. Most agencies operate on annual terms, but we ensure we can leave with 30- or 60-day notice. We’ve worked with our Amazon agency for over two years; they know our business inside out. We implemented a bonus structure for them to incentivize performance. This deal worked well for both sides, as it aligns their goals with ours.
Bandholz: How did you develop your wholesale strategy?
Nitze: Again, our business will be 55% wholesale this year. We believe in an omnichannel approach, especially brick-and-mortar retail. Digital-first is essential for building credibility in the retail world. We can show prospective retailers data from our ecommerce site, such as the number of customers in their trade area. Brokers play a key role in retail growth, especially those connected with large chains, such as Walmart and Costco.
The key is to work with retailers who pay quickly. Amazon, for example, pays every two weeks. Beyond that, raising money is crucial. Some people idolize bootstrapping, but raising funds allows you to scale quickly. In the early stages, you need capital to fund inventory, which becomes the backbone of your business. Another key is having a high gross margin, which allows you to reinvest into more inventory. Ultimately, scaling up helps maintain cash flow.
Nitze: It was a challenge. Our first co-packer — the company making the food and packaging and labeling it — was great for small volumes but couldn’t scale. Eventually, we switched to a co-packer that could handle higher volumes. This process was painful, as it meant quality control disruptions. But once we found the right partner, we could scale significantly. Now, we have a co-packer that can manage millions of units annually, and that’s been critical to our growth.
According to Will Nitze, founder and CEO of IQBAR, success in a competitive market requires finding its uncompetitive niches. He did that with his flagship protein bar, which is plant-based, low-sugar, and plainly labeled. That was seven years ago when he launched the company with a $75,000 Kickstarter campaign.
Fast forward to 2025, and IQBAR also makes IQMIX (hydration) and IQJOE (coffee). All promote brain health without competing against each other.
Will and I recently discussed his journey, from the initial capital raise to scaling revenue, adding products, and managing wholesale channels. The entire audio of our conversation is embedded below. The transcript is edited for clarity and length.
Eric Bandholz: Give us a quick rundown of who you are.
Will Nitze: I am the founder and CEO of IQBAR. Our hero product is nutritional bars, but we also make IQMIX for hydration and IQJOE for instant coffee. Roughly 55% of our revenue is wholesale; our direct-to-consumer ecommerce site and Amazon account for the balance. We’ve raised just under $10 million since our launch 7 years ago.
Bandholz: How do you stand out in such a competitive market?
Nitze: The key is breaking down the competition into subcategories. In the protein bar market, the saturated category is animal-based ingredients. But when you focus on plant protein, low sugar, and clean labels, you can carve out a space with much less competition but still substantial. It’s about finding the uncompetitive niches within the broader competitive landscape.
I got into this space as a personal passion. I was dissatisfied with my software job and began exploring low-carb diets, eventually landing on keto. I was especially interested in brain food and noticed that, at the time, no one was offering ready-to-eat options. Most brain nutrition comes in pill or powder form. I launched a Kickstarter campaign that raised $75,000, validating the concept. From there, we pivoted based on customer feedback, focusing on protein and clean labels.
The brain angle is useful and differentiated, but it’s the deal closer, not the deal opener. People shop our products based on the protein count — where it came from and how complete it is — and then sugar.
Our strategy has been to expand the product line without cannibalizing our core bar product. Many brands extend their product lines in ways that compete with their existing items, like moving from bars to peanut butter cups. We wanted our new products — hydration and coffee — to complement our bars, aligning with our brain and body nutrition mission but not competing. We also considered shelf stability and ease of production.
Bandholz: You have just nine employees. How do you maintain such a lean team while scaling?
Nitze: Recognizing my weaknesses is essential. I’m not great at hiring, so I rely on a trusted circle. My wife is our chief marketing officer and head of ecommerce. I keep a close connection with everyone on the team. We use external agencies for pay-per-click ads, search engine optimization, and Amazon management. We work closely with these partners and our manufacturer to keep things running smoothly with fewer full-time employees.
We never commit to long-term agency contracts without an exit clause. Most agencies operate on annual terms, but we ensure we can leave with 30- or 60-day notice. We’ve worked with our Amazon agency for over two years; they know our business inside out. We implemented a bonus structure for them to incentivize performance. This deal worked well for both sides, as it aligns their goals with ours.
Bandholz: How did you develop your wholesale strategy?
Nitze: Again, our business will be 55% wholesale this year. We believe in an omnichannel approach, especially brick-and-mortar retail. Digital-first is essential for building credibility in the retail world. We can show prospective retailers data from our ecommerce site, such as the number of customers in their trade area. Brokers play a key role in retail growth, especially those connected with large chains, such as Walmart and Costco.
The key is to work with retailers who pay quickly. Amazon, for example, pays every two weeks. Beyond that, raising money is crucial. Some people idolize bootstrapping, but raising funds allows you to scale quickly. In the early stages, you need capital to fund inventory, which becomes the backbone of your business. Another key is having a high gross margin, which allows you to reinvest into more inventory. Ultimately, scaling up helps maintain cash flow.
Nitze: It was a challenge. Our first co-packer — the company making the food and packaging and labeling it — was great for small volumes but couldn’t scale. Eventually, we switched to a co-packer that could handle higher volumes. This process was painful, as it meant quality control disruptions. But once we found the right partner, we could scale significantly. Now, we have a co-packer that can manage millions of units annually, and that’s been critical to our growth.
Small businesses are vital to the U.S. economy. Micro, small, and medium enterprises (up to 500 employees) generate 58% of jobs and 39% of the “value-added” economy, the portion beyond the cost of production. That’s according to an October 2024 report by McKinsey Global Institute titled “America’s small businesses: Time to think big.”
–
Micro, small, and medium enterprises (MSMEs) significantly influence certain U.S. industries. For instance, in the construction industry, MSMEs employ over 75% of the workforce and contribute more than 75% of the value added. Additionally, MSMEs represent more than half of the employment and value-added in professional services and accommodation and food services.
–
Per the McKinsey report, since 2000 a substantial share of publicly traded companies with a market capitalization of $10 billion or more began as MSMEs. Small technology firms have achieved some of the most notable successes, with nearly a quarter of large public tech companies having originated as MSMEs over the last 25 years. Likewise, many of today’s major manufacturing firms trace their roots to small factories.
–
McKinsey computed the opportunities for productivity improvements among U.S. businesses compared to other advanced economies and then allocated the opportunities by industry sector. Retail and wholesale trade, manufacturing, construction, and technology represented the top opportunities owing to their impact on the overall economy.
Eighty-two percent of global CEOs in retail sectors are confident in their company’s growth prospects, but only 59% are optimistic about the overall worldwide economy. That’s according to KPMG’s 2024 “Consumer and Retail CEO Outlook” (PDF) released in December 2024.
The report summarizes the results of a KPMG survey of 1,325 CEOs between July 25 and August 29, 2024, across 11 key global markets and industries. All participants represented organizations with annual revenue exceeding $500 million, with one-third reporting revenue over $10 billion.
–
According to the study, the leading challenges for retail CEOs in 2024 are economic uncertainty (58%), geopolitical complexities (53%), and generative AI integration (48%).
–
In addition, when asked about the trends that could hinder their organizations’ prosperity over the next three years, 81% of retail CEOs identified the cost of living, followed by cyber crime at 79% and trade regulation at 74%.
–
Moreover, 35% of surveyed CEOs ranked organic tactics as their top growth strategy. Twenty-seven percent identified mergers and acquisitions.
This article first appeared in The Debrief, MIT Technology Review’s weekly newsletter from our editor in chief Mat Honan. To receive it in your inbox every Friday, sign up here.
On Tuesday last week, Meta CEO Mark Zuckerberg released a blog post and video titled “More Speech and Fewer Mistakes.” Zuckerberg—whose previous self-acknowledged mistakes include the Cambridge Analytica data scandal, allowing a militia to put out a call to arms on Facebook that presaged two killings in Wisconsin, and helping to fuel a genocide in Myanmar—announced that Meta is done with fact checking in the US, that it will roll back “restrictions” on speech, and is going to start showing people more tailored political content in their feeds.
“I started building social media to give people a voice,” he said while wearing a $900,000 wristwatch.
While the end of fact checking has gotten most of the attention, the changes to its hateful speech policy are also notable. Among other things, the company will now allow people to call transgender people “it,” or to argue that women are property, or to claim homosexuality is a mental illness. (This went over predictably well with LGBTQ employees at Meta.) Meanwhile, thanks to that “more personalized approach to political content,” it looks like polarization is back on the menu, boys.
Zuckerberg’s announcement was one of the most cynical displays of revisionist history I hope I’ll ever see. As very many people have pointed out, it seems to be little more than an effort to curry favor with the incoming Trump administration—complete with a roll out on Fox and Friends.
I’ll leave it to others right now to parse the specific political implications here (and many people are certainly doing so). Rather, what struck me as so cynical was the way Zuckerberg presented Facebook’s history of fact-checking and content moderation as something he was pressured into doing by the government and media. The reality, of course, is that these were his decisions. He structured Meta so that he has near total control over it. He famously calls the shots, and always has.
Yet in Tuesday’s announcement, Zuckerberg tries to blame others for the policies he himself instituted and endorsed. “Governments and legacy media have pushed to censor more and more,” he said.
He went on: “After Trump first got elected in 2016, the legacy media wrote nonstop about how misinformation was a threat to democracy. We tried in good faith to address those concerns without becoming the arbiters of truth, but the fact-checkers have just been too politically biased and have destroyed more trust than they’ve created, especially in the US.”
While I’m not here to defend Meta’s fact checking system, I never thought it was particularly useful or effective, let’s get into the claims that it was done at the behest of the government and “legacy media.”
To start: The US government has never taken any meaningful enforcement actions against Meta whatsoever, and definitely nothing meaningful related to misinformation. Full stop. End of story. Call it a day. Sure, there have been fines and settlements, but for a company the size of Meta, these were mosquitos to be slapped away. Perhaps more significantly, there is an FTC antitrust case working its way through the court, but it again has nothing to do with censorship or fact-checking.
And when it comes to the media, consider the real power dynamics at play. Meta, with a current market cap of $1.54 trillion, is worth more than the combined value of the Walt Disney Company (which owns ABC news), Comcast (NBC), Paramount (CBS), Warner Bros (CNN), the New York Times Company, and Fox Corp (Fox News). In fact, Zuckerberg’s estimated personal net worth is greater than the market cap of any of those single companies.
Meanwhile, Meta’s audience completely dwarfs that of any “legacy media” company. According to the tech giant, it enjoys some 3.29 billion daily active users. Daily! And as the company has repeatedly shown, including in this week’s announcements, it is more than willing to twiddle its knobs to control what that audience sees from the legacy media.
As a result, publishers have long bent the knee to Meta to try and get even slivers of that audience. Remember the pivot to video? Or Instant Articles? Media has spent more than a decade now trying to respond or get ahead of what Facebook says it wants to feature, only for it to change its mind and throttle traffic. The notion that publishers have any leverage whatsoever over Meta is preposterous.
I think it’s useful to go back and look at how the company got here.
Once upon a time Twitter was an actual threat to Facebook’s business. After the 2012 election, for which Twitter was central and Facebook was an afterthought, Zuckerberg and company went hard after news. It created share buttons so people could easily drop content from around the Web into their feeds. By 2014, Zuckerberg was saying he wanted it to be the “perfect personalized newspaper” for everyone in the world. But there were consequences to this. By 2015, it had a fake news epidemic on its hands, which it was well aware of. By the time the election rolled around in 2016, Macedonian teens had famously turned fake news into an arbitrage play, creating bogus pro-Trump news stories expressly to take advantage of the combination of Facebook traffic and Google AdSense dollars. Following the 2016 election, this all blew up in Facebook’s face. And in December of that year, it announced it would begin partnering with fact checkers.
Zuckerberg elided all this inconvenient history. But let’s be real. No one forced him to hire fact checkers. No one was in a position to even truly pressure him to do so. If that were the case, he would not now be in a position to fire them from behind a desk wearing his $900,000 watch. He made the very choices which he now seeks to shirk responsibility for.
But here’s the thing, people already know Mark Zuckerberg too well for this transparent sucking up to be effective.
And while it may not be successful at winning MAGA over, at least the shamelessness and ignoring all past precedent is fully in character. After all, let’s remember what Mark Zuckerberg was busy doing in 2017:
Every week, I talk to one of MIT Technology Review’s journalists to go behind the scenes of a story they are working on. But this week, I turned the tables a bit and asked some of our editors to grill me about my recent story on the rise of generative search. Charlotte Jee: What makes you feel so sure that AI search is going to take off?
Mat: I just don’t think there’s any going back. There are definitely problems with it—it can be wild with inaccuracies when it cobbles those answers together. But I think, for the most part it is, to refer to my old colleague Rob Capps’ phenomenal essay, good enough. And I think that’s what usually wins the day. Easy answers that are good enough. Maybe that’s a sad statement, but I think it’s true.
Will Douglas Heaven: For years I’ve been asked if I think AI will take away my job and I always scoffed at the idea. Now I’m not so sure. I still don’t think AI is about to do my job exactly. But I think it might destroy the business model that makes my job exist. And that’s entirely down to this reinvention of search. As a journalist—and editor of the magazine that pays my bills—how worried are you? What can you—we—do about it?
Mat: Is this a trap? This feels like a trap, Will. I’m going to give you two answers here. I think we, as in MIT Technology Review, are relatively insulated here. We’re a subscription business. We’re less reliant on traffic than most. We’re also technology wonks, who tend to go deeper than what you might find in most tech pubs, which I think plays to our benefit.
But I am worried about it and I do think it will be a problem for us, and for others. One thing Rand Fishkin, who has long studied zero-click searches at SparkToro, said to me that wound up getting cut from my story was that brands needed to think more and more about how to build brand awareness. You can do that, for example, by being oft-cited in these models, by being seen as a reliable source. Hopefully, when people ask a question and see us as the expert the model is leaning on, that helps us build our brand and reputation. And maybe they become a readers. That’s a lot more leaps than a link out, obviously. But as he also said to me, if your business model is built on search referrals—and for a lot of publishers that is definitely the case—you’re in trouble.
Will: Is “Google” going to survive as a verb? If not, what are we going to call this new activity?
Mat: I kinda feel like it is already dying. This is anecdotal, but my kids and all their friends almost exclusively use the phrase “search up.” As in “search up George Washington” or “search up a pizza dough recipe.” Often it’s followed by a platform, search up “Charli XCX on Spotify.” We live in California. What floored me was when I heard kids in New Hampshire and Georgia using the exact same phrase.
But also I feel like we’re just going into a more conversational mode here. Maybe we don’t call it anything.
James O’Donnell: I found myself highlighting this line from your piece: “Who wants to have to learn when you can just know?” Part of me thinks the process of finding information with AI search is pretty nice—it can allow you to just follow your own curiosity a bit more than traditional search. But I also wonder how the meaning of research may change. Doesn’t the process of “digging” do something for us and our minds that AI search will eliminate?
Mat: Oh, this occurred to me too! I asked about it in one of my conversations with Google in fact. Blake Montgomery has a fantastic essay on this very thing. He talks about how he can’t navigate without Google Maps, can’t meet guys without Grindr, and wonders what effect ChatGPT will have on him. If you have not previously, you should read it.
Niall Firth: How much do you use AI search yourself? Do you feel conflicted about it?
Mat: I use it quite a bit. I find myself crafting queries for Google that I think will generate an AI Overview in fact. And I use ChatGPT a lot as well. I like being able to ask a long, complicated question, and I find that it often does a better job of getting at the heart of what I’m looking for — especially when I’m looking for something very specific—because it can suss out the intent along with the key words and phrases.
For example, for the story above I asked “What did Mark Zuckerberg say about misinformation and harmful content in 2016 and 2017? Ignore any news articles from the previous few days and focus only on his remarks in 2016 and 2017.” The top traditional Google result for that query was this story that I would have wanted specifically excluded. It also coughed up several others from the last few days in the top results. But ChatGPT was able to understand my intent and helped me find the older source material.
And yes, I feel conflicted. Both because I worry about its economic impact on publishers and I’m well aware that there’s a lot of junk in there. It’s also just sort of… an unpopular opinion. Sometimes it feels a bit like smoking, but I do it anyway.
The Recommendation
Most of the time, the recommendation is for something positive that I think people will enjoy. A song. A book. An app. Etc. This week though I’m going to suggest you take a look at something a little more unsettling. Nat Friedman, the former CEO of GitHub, set out to try and understand how much microplastic is in our food supply. He and a team tested hundreds of samples from foods drawn from the San Francisco Bay Area (but very many of which are nationally distributed). The results are pretty shocking. As a disclaimer on the site reads: “we have refrained from drawing high-confidence conclusions from these results, and we think that you should, too. Consider this a snapshot of our raw test results, suitable as a starting point and inspiration for further work, but not solid enough on its own to draw conclusions or make policy recommendations or even necessarily to alter your personal purchasing decisions.” With that said: check it out.
Jeff Sheldon is a designer turned entrepreneur. He started Ugmonk, a Pennsylvania-based direct-to-consumer brand, in 2008 as a seller of graphic-inspired t-shirts. His desktop organizers, which he added in 2020, are seemingly unrelated until realizing he designed both — the t-shirt graphics and the desk tools.
Jeff first appeared on the podcast in 2020. He had just moved t-shirt fulfillment in-house and launched a Kickstarter campaign for his first desktop tool.
In our recent conversation, he addressed phasing out the t-shirts, expanding the desktop line, and the dilemma of selling on Amazon. Our entire audio is embedded below. The transcript is edited for clarity and length.
Eric Bandholz: Tell our listeners who you are.
Jeff Sheldon: I’m the founder of Ugmonk, a 16-year-old direct-to-consumer brand. Initially, we sold t-shirts, but we’ve evolved into well-designed, functional desk and organization products. One of our standout items is Analog, our desktop note card system to stay organized and reduce digital distractions. Ugmonk is known for design — aesthetics and functionality.
Folks associated Ugmonk with graphic tees for our first 12 years. I designed the graphics, and we eventually moved to manufacturing the shirts for improved quality. Working with a manufacturer in Los Angeles, we created a better garment. Despite the manufacturing challenges, we found a good rhythm and built a customer base around those shirts.
However, about two years ago, we stopped making apparel. Our business saw its highest single revenue day when we announced that change. Customers bought 20 to 50 shirts, not wanting to miss out. While leaving that part of the business behind was tough, I knew it was the right decision.
Bandholz: Have your apparel customers transitioned to desk products?
Sheldon: I haven’t dug deeply into the analytics, but surprisingly, many customers who bought our t-shirts have also purchased our desk products. At first glance, this might seem odd — how do t-shirts and desk accessories relate? However, Ugmonk attracts customers who appreciate design and functionality. Many customers who have been with us since the t-shirt days have moved into careers where they need quality, well-designed tools for their workspaces.
When I started Ugmonk, graphic tees were huge. Platforms like Threadless were popular, and many of my customers were in their teens and twenties, buying shirts and posters. Fast forward to now, and many customers have desk jobs or work from home. So, while some of our old customers still miss the shirts, many have moved on to the Analog system, which is now more popular than our peak apparel days.
The online t-shirt market is incredibly saturated. Everyone sells t-shirts, and countless brands use drop shipping to offer generic products. In the early years of Ugmonk, we thrived on organic growth — email lists and social media before it became pay-to-play. However, it was tough when we tried, in 2017, to scale using ads. Selling t-shirts through a Facebook ad, especially when competing against a sea of similar products, is difficult. We didn’t see much success.
In contrast, we launched the Analog system on Kickstarter in 2020 with immediate success. We raised almost half a million dollars from over 5,500 backers. We decided to invest in paid acquisition for the product, and it worked. It’s a visual product that solves a real problem — people are distracted by their devices, and the Analog system offers a tangible way to stay organized. Compared to t-shirts, selling Analog through advertising has been more scalable. It’s an example of a good product-market fit.
Bandholz: Has your role in the company changed?
Sheldon: My role has evolved, but I still handle many of the tasks I did in the early days. For instance, I still shoot most photos because I’m passionate about capturing our products in a way that tells their story. I could outsource photography, but I enjoy the creative aspect. Plus it’s a core part of our brand’s identity.
Our team has grown. It used to be just me. Then, I added an employee. Now we have two full-time employees and a part-time staff of two to five people, depending on our needs.
We’ve scaled operations with our in-house warehouse and fulfillment. I outsource some aspects of the business, like advertising, yet I’m still hands-on with organic marketing and writing most emails and my monthly “Five Things I’m Digging” newsletter, which has become a fan favorite.
Managing the creative and operational sides of the business is stressful, but it’s all part of the journey.
Bandholz: Ugmonk’s products are not on Amazon.
Sheldon: Amazon is a love-hate relationship for me, similar to Meta. In 2017, we tested our Gather desk organizers there but didn’t see much traction. So we pulled back. Amazon is flooded with cheap, knockoff products, making it hard for customers to distinguish between quality and subpar items.
I’ve become more open-minded lately. The reality is folks are shopping on Amazon — it’s where a significant percentage of ecommerce searches start.
I buy consumable items, like coffee filters, on Amazon for convenience. We’re considering selling refill cards for the Analog system there for the same reason. It’s about meeting people where they are. I still value owning our customer experience directly on our site, but Amazon can be complementary for certain products.
Bandholz: So listeners should go to your site to buy products.
According to Deloitte’s “2024 Connected Consumer” study, most U.S. consumers — Gen Zs, Millennials, Gen Xs, older — spend more time interacting with people online than in person. Moreover, most feel that online interactions build meaningful connections, viewing digital relationships equal to face-to-face.
Deloitte’s study explores the digital habits of U.S. consumers. Conducted by the firm’s Center for Technology, Media & Telecommunications, the June 2024 survey gathered insights from nearly 4,000 U.S. consumers. It examined their use of tech devices and services.
–
According to the survey, 38% of respondents reported that they have either experimented with it or used generative AI for projects and tasks.
–
Respondents to the Deloitte study stated experimenting with gen AI increased their confidence in producing quality content and creativity.
–
Most generative AI users express interest in engaging with generative AI chatbots for various purposes.
