Are Guest Checkouts Secretly Killing Your Shopify Growth?

27:07Go now and get it. Shopify 1 % dot com slash Rewind. you'll get an exclusive 30 days free on me. The link is also in the show notes.

27:20So you can use as a customer node, like if I have it installed on my phone, it doesn't matter if a merchant has it, if a store supports it, I could still use it to shop there. And does it populate my checkout as I go through? or does the brand need to have it installed on their end as well too so it can communicate? So the first part, you can actually use Node anywhere and it will populate all the information that it has on, that you have on yourself, right, into the merchant site. The advantage for what it doesn't do unless the brand actually has deployed us is we can't get the SKU information relative to that brand is what's needed, right?

28:11In order to make sure you have a, I can pre-populate the product categories that they've purchased from the brand because that information is only available at the brand. So our deployment is really telling the brand, look, our technology does everything else, but the data that the customer needs is really the SKU information. And that's what this deployment really does is just gets the SKU information of the purchase that they made and transfers it to the customer's device. Right. And that's what I need. Yeah, it makes sense. So do you have any data on what the potential losses of guest checkout in terms of it not like customers not reordering, customers like not taking advantage of loyalty or customers?

29:04Do you know the impact of a customer who shops as a logged in customer? Because you're basically giving a logged in experience to a not logged in customer. So what is the delta there? Does the average logged in customer buy X more times, have higher AOV, have X higher LTV? What is the difference? It varies. Yeah, I can give you directionally where it's at. But of course, it varies by industry and by brand and et cetera. But typically, if on certain industries, you'll see that account holders, especially for repeat transactions, right? And you'll see account holders maybe doing four to five transactions or six transactions, say, a year on certain kinds of products.

29:47And the corresponding guest user may do one or two, right? Because their switching costs are very easy. They can go and buy anywhere else. Or it's become too difficult to go back, put in five things in the cart. and I'm just going to go to my target nearby and I'll just go buy it from there, for example, right, if it's available. And so the delta, I would say, is, I mean, it's also reflected in any merchant. They just need to calculate, hey, what's my LTV on my account holder and what's my LTV on my guest users, right? And I think that discrimpancy is about two to three, at least two to three X, right?

30:22Over difference. Right. And of course, it varies by industry, right? Yeah. I was just looking it up as we speak. Logged in users on average have a 30 to 40 % higher AOV, average order value, than guest shoppers. Reason, this is from a Salesforce study. Store preferences make personalized upsells, personalized offers. they logged in users convert two to three times higher than guest shoppers i was from a baymard study all the data lower higher cart about lower abandoned carts so higher abandoned cart recoveries yeah yeah so i mean so the benefit here is do you know what the industry what percentage of checkouts are guests versus logged in yeah so if you well again it varies by industry and by merchant And some merchants force, some merchants will say, hey, I've got 100 % account holders.

31:22But the question is, okay, what's the conversion? What's the overall website conversion, right? And that's really a question over there. In a lot of the merchants we've been talking to, it's about, you know, some people say it's a 90 % our guests. They just want to, because they're coming in either through a social, through their social media advertising. Nobody wants to, everybody wants speed. Everybody wants speed. And customers want speed, they want safety, and they want convenience, right? That's kind of it. And especially in this day and age where everything is instant. So the ability to go and create something new and sign up for something is, and even, you know, one of the things I get, I see a lot of is the minute you go to any website, they say 20 % off, give me your email.

32:05and customers have created multiple junk emails to kind of make sure that they value that and it doesn't really go anywhere with it so it is pretty significant and you know i i yeah it's pretty shopify i just would there's 70 of all orders are from guest checkouts on shopify yes globally the average is closer to 80 but so i mean it's a huge that's a huge portion of customers that get out, check out as guests and they have, well, I just went over all the data on how that affects their buying behavior. So we like, you're solving a large problem here. This is not inconsequential. I think so. And I guess that's why you're doing it.

32:53I definitely think so. And no, one of the things, you know, you're looking online and if you even do a Google search and say, Hey, what are the benefits and the pitfalls of guest checkout, you'll see, they'll see pros, faster checkout, no speed, higher conversion, et cetera, et cetera, et cetera. Challenges, engagement low, can't give off our loyalty, et cetera, et cetera. And what we're saying is those cons don't exist anymore. With Commerce 3.0, those cons don't exist. You only get benefits. And I remember the time when, you know, when this was when PayPal was part of eBay, eBay had a philosophy at the time was everybody requires logged in transactions for various reasons.

33:37And then, of course, they opened up Guest as a way to allow customers. And they immediately saw a huge increase in new sales, right? Because Guest is great. It's fast. But then they saw a challenge with engagement on that group of users. And so What we're saying is there doesn't need to be a challenge in engagement anymore. Because the tech is different. So you say Node claims to deliver all the benefits of a logged in experience, such as loyalty, reorders, personalized offers, without signing up. Is there anything it doesn't do? Is there like, okay, we can do almost all of this, but not this one thing?

34:23I'll answer that question. Well, the short answer is I think anything that a merchant wants to do with the customer, they can do directly with the customer using this technology, right? And the reason is because the fundamental infrastructure that we're building in this Commerce 3.0, which is serverless AI commerce, is serverless, right? So we don't own any customer data, okay? I think that's a really important point. We don't own any customer data. The merchant still owns whatever data they have. I'm not taking anything away from the merchant. They still own their data, their transaction, the customer.

35:03All of that is, all the merchant's doing is, hey, I'm just going to keep a copy of it on the customer's device so it becomes easier for them to interact with me. Right. Right. And so there is really no downside on how they email on the backend, what the backend processes are. We actually increased their opt-in file. And so, you know, it may sound too good to be true, but that's because the infrastructure has changed. And if you don't mind me going down a little bit of a parable based on my astrophysics background. I was hoping you would. I can give you the analogy I like to use when I talk to investors and other people as well.

35:39Look, I view this change, this technology shift that we're going through and we're seeing it right now. And we can talk about agentic commerce and the impact of that on Guest as well second. But if you think about all risk management, I mean, all the things that e-commerce providers, the e-commerce industry has today, right? You have risk management that makes sure people don't hack into your servers. You put CAPTCHAs in front to make sure it's not a bot. You go through passive recovery flows. You do OTPs. There's a lot of stuff that's going on. And every merchant needs to think about this, right?

36:19And that's all because they're storing data on everybody's individual server. So there's a lot of different solutions to try to solve a common problem, right? And the analogy I like to use based on my astrophysics background is, is these were the same kinds of different solutions that we tried to explain planetary orbits when we all believed that everything revolved around the Earth. When we did that, we could explain the orbits of Jupiter and Saturn or one of them. And then we'd come to another planet and we're like, hey, it doesn't work. Need to have another solution to try to explain those perturbations, blah, blah, blah.

37:02And then when Galileo came in and said, hey, maybe our baseline is wrong. Maybe actually the sun is the center, right? And if the sun is the center and everything is elliptical and it simplifies everything. Because what we're coming in and saying is, hey, look, it's actually, if you actually let the customer store their data, and they have access to all their data, then when they come to any merchant site, they can actually share whatever they want to, and you don't have to, and it's uniquely determined because it's their device. And so you don't have to worry about, you know, all these other complications about two FAs, about logins, about, you know, going through what my order history was.

37:44All of that is just there. Right. So when you ask the question, is it anything it doesn't do? I just think that when you change on what everything is built, then because at the end of the day, if the customer is the king, the customer is the king. Right. Right. Or the queen. Is there any, I imagine it's as secure as your wallet pay, right? Is it, there's a, even if someone took my phone, it's still going to use my facial identification or something else to, yeah. Okay. So it's as secure as having my credit card in my wallet pay in my phone. In your wallet. And that's the beautiful thing about, and one thing to think about also to mention, Jay, is it's like the security is on the phones.

38:28if you look at any device, right? Even the laptop fingerprinting on every single laptop today, which didn't exist 10 years ago, five years ago. I mean, the speed, the security, and everything on devices are only going to get bigger because of Murphy's laws, right? They're only going to get better. So this is, yeah, this is completely, you know, protected by, you know, face ID, this, that, et cetera. If you want to turn it on, if you don't want to turn it on, you don't have to it's not like i'm storing your bank information right in it but yeah it's as safe as anything else that's on your device right now so what about other email flows that merchants will sometimes have like automations you buy something there's welcome series there's educational content it could be klaviyo flows shopify flows different things that normally happen when someone purchases something.

39:23So if they buy with Node, how does Node integrate with those other tools or loyalty programs, all of that? So let's do the email first and I can talk about loyalty programs. And I want to be very clear what we are and what we are not. Okay. And it's super important to do that. But on the email flows, look, what we end up doing is our system, think of it as whether you're using AI or using a really nice piece of code where we're telling merchants, hey, when a customer buys from you and they want to use their Node Connects token, if they want to, or they can use Gmail, we can automatically add that just like an admin, right?

40:01You can automatically add that into your file as a line item. Next to your customer, they'll have two emails now. One will be rohan at nodeconnects.com and one will be my Gmail. And you just now do whatever you usually do. And every time any new message or new onboard flow takes place that you usually do with your customers, it just comes into my Node app. And you as a customer can say, hey, notify me every time I get an offer, every time I get an account update, or every time I get a newsletter. So we have notification preferences as well. But the beautiful thing is, what we're telling merchants and consumers is, when you send me something today and if I'm not ready to consume it, it's going down below the fold.

40:51Whereas with this, I'm like, what did I get from Ilia Beauty? Or what did I get from Lime Lush? And okay, I'm going to go and check it out on my time and I can have access to everything that they sent me when I'm ready. I just brought something from Brightland and got some great olive oil from them and I want to do a repeat purchase, right? It's really helping the customer engage with you on their terms, on their timeline, when they're ready, when they have the intent. So that doesn't change. So coming to your loyalty, I want to, so this is kind of where I want to say what we are, what we're not.

41:27We are basically an information company. Okay. I don't provide loyalty programs at all. So what we do is we would go to companies who have a loyalty program and say, look, if you want to, you can offer that loyalty program, whether you have, to your guest users. Because all we're doing is just like we store card information on the customer's phone, we're storing your loyalty points or your loyalty program. And every time the customer comes back to your site, we'll just pass that information so that you can automatically log them in and you go through their existing flows. So we're an information company that stores everything to do with commerce on the customer's devices.

42:12Gotcha. I know it's early and you just like launched this recently, but any case studies of big wins or examples of success that some merchants have seen with it? So we, you're right. We are early. We are talking. We still haven't gone live with some of the merchants that we're having discussions with right now. Okay. But you know, this is one of the reasons I'm excited to be on this because I'd like for sure merchants to also come in. There is really no downside. It takes less than two minutes to deploy. And you know, we'd love to kind of work with merchants that are, you know, watching this show and with yourself.

42:49And it doesn't interfere with shop app actually. Now I think like orders will still flow into, if someone's using shop app, they're still in there. It's just, if someone prefers a more secure way, faster way, guest checkout, like two don't conflict, right? Absolutely, they don't. They absolutely do not conflict. And it doesn't conflict with ShopApp. It doesn't conflict with ShopPay, with PayPal. It doesn't conflict with anything. And I'll just give you an example. So I use ShopApp as well, right? Because it gives me my tracking instantly and it tells me a bunch of things on that. But I've gone into ShopApp, into ShopPay, or even into PayPal, and I've updated my contact information to my Node Connects token.

43:30So now everything comes into Shop app because that's how Shop identifies me or PayPal. But I also get a copy of everything in my Node. So I can actually, all of these things can really coexist with each other. I'm not trying to pull anybody away from anything. I think it's just a much easier way to engage directly between a consumer and a entrepreneur. At the top of the show, I mentioned OmniSend can now talk to ChatGPT and Claude. And I want to tell you why that's even bigger than it sounds. So if you missed it, quick catch up. OmniSend is what I use for email and SMS on every Shopify store I work with, plus for this show as well.

44:10And you can now connect your AI, Claude, ChatGPT straight to your OmniSend account. Your data, your campaigns, your flows, everything. You open a chat and you ask, what should I focus on this week to make more money? And it will come back with real answers about your store, which flow is underperforming, which automation needs improvement, which customers are going quiet, what's missing, everything. My favorite part though is AI segments. I used to build these by hand, clicking through filters forever. Now I just type something like customers who bought twice, but ignored my last campaign and it just builds it.

44:46and anything it writes already sounds exactly like your brand because it pulls from all your previous emails, from your website, your logo, your color, your voice, everything. I've been doing this for 15 years and this is the closest I've ever felt to having a full-time marketer sitting right beside me. I have a link for you in the show notes that will give you 30 % off for your first three months or you can just use code J30 when you sign up, J-A-Y-3-0. If you're ready to migrate from Klaviyo to OmniSend like thousands of others, they will do everything for you. You just show up and all your campaigns and automations from Klaviyo will be set up and running in OmniSend, ready to go.

45:21And usually at 35 % less what you were paying Klaviyo. What do you think, where's this all heading? Like, what do you think the commerce looks like in three to five years? It was interesting. I was speaking to somebody and they asked the question, hey, where do you think AI is heading in 18 months? And the guy's like, I can't tell you anything over six months. I think it's moving so far, right? So look, I think the one thing that we're starting to see right now is a lot of agentic commerce coming in and people, you know, the whole perplexity PayPal deal, you know, you mentioned Amazon doing some stuff and Google and where Shopify and just have a partnership now.

46:06And yeah. Yeah. So everybody is doing this and I think it's great, right? Because it simplifies consumer cognitive load, right? They can just do things that, hey, I want to buy that thing again, just go find it for me and buy it. And they go, right? It's a great, as I mentioned before, it's a great discovery for the consumer so that they can go and execute on their purchases. But I find it's going to have a lot of harm on the engagement between a consumer and a merchant. Because if you thought that you mentioned guest checkout on some of these, Shopify is 70, 80 % and sometimes even more, and the LTVs are much lower, this is only going to exacerbate that.

46:50Because the switching costs are going to become so low. So unless you can actually figure out a way to engage with your customer on their terms, I don't think anybody is going to be creating accounts or signing up for anything anymore. You have to figure out a way in which you can engage your customer directly when they want to. Otherwise, everything is going to go to higher customer acquisition costs as a first-time user. And so I think Commerce 3.0 is going to be even more important. right and we're going to be you know in the near future we can what i'm telling merchants as well is not only is this a storefront for you to engage your customers on their terms but it's also you can have personalized ai that's running on the customer's device that just engages with you like tells you hey when you're next we talked a little bit about this with respect to bold on subscriptions a lot of people i mean i don't always buy from my merchant again and again, but I don't subscribe because I never finish my stuff before the next usually comes.

48:03So I want to just put on my terms, right? And so setting that up locally and making sure, you know, you can do it on your terms, I think is going to be really important to have this capability as the additive solution for engagement, right? The key word here is additive. Yeah. So if a merchant wants to, if it doesn't conflict with shop app, there's no real downside. It's only potential upside. What does the merchant have to do to turn this on their Shopify store? So, so we have a plugin, for example, on Shopify store, we have a plugin and they literally, you know, download that plugin. And, you know, it's, I have a video that we're just prettying up a little bit, but it takes about a minute, 30 seconds.

48:52And they're just enabling the access of SKU information from their confirmation page to the customer's node directly. And as long as that gets transferred, they're done and they're ready to roll. The system automatically will take the brand images that the merchants use on Shopify and we'll put it onto their device so that we make it look as much as the merchant's brand as we can, because it's an engagement tool, right? It's you want to make sure that there's continuous trust and the merchant doesn't have to worry about being below, above the fold. They're always above. I like to say they're always above the fold because when a customer thinks of you, you're there.

49:37And there's no actual change to the website. It's just a backend process that connects it, right? That doesn't change the checkout or the cart page or like essentially if you weren't using Node, you wouldn't even know it's running. Yeah, I think that's a great point. And we say three things to merchants. We say it doesn't change anything of your buying flow. Yeah, okay. So we're not trying to distract you or trying to get you to download Node before you make the purchase. That doesn't work at all. It doesn't change your buying flow. It doesn't change your email backend processes. And it doesn't change your data ownership, right?

50:14So those are the three basic things that we're saying that does. So yeah, it's on the thank you page, if you want customers to download Node and engage with them, they can do it. Information is transferred directly, and it's a very nice, seamless interaction. And then the customer has their links on their phone, and they're literally in one click. They're at your website, on your checkout page. Amazing. Yeah. And are you live now? Can someone install it? We're absolutely live. You can download it as a consumer. you can deploy it as a merchant you know please give me a email can people go to to learn more or to try it does it have a free trial is it what's the cost as a merchant yeah so the you can go to node connects.com okay i'll make sure that link is in the show notes as well yeah so connects.com there is a merchant site telling you all the benefits of you know using it as a merchant We obviously have a merchant calculator there as well, which says, hey, if this is your volume, if this is your guest checkout amount, here's what you could expect in increase in revenue in terms of increase in engagement.

51:25There's a calculator there in the merchant calculator side. And of course, there's a consumer section telling consumers. The nice thing I like about it is it's really speaking the same language to both because it's changing that. And, you know, the pricing model right now is, you know, it's free for merchants when if a customer makes a purchase, initiates a purchase from their node, then we basically ask for an affiliate marketing fee from that. Oh, okay. That's super reasonable. So only if node generates it from versus. Only if it's coming from the node do we ask for an affiliate marketing fee in that.

52:01Okay. And yeah, and that's kind of, I mean, some merchants do want a subscription, a monthly fees, and we can always talk about that. But that's, and it's completely free for the consumer. Amazing. Amazing. One thing I'd like to say, if you don't mind, also wanted to just, this is again, a little bit of philosophy is, you know, the technology is fantastic, right? In general, all technologies. And when the internet started, everything was great. Everybody was buying stuff online. everything was going on. But I feel that there's, over the last 15 years, there's been technology that we're using that was built during dial-ups.

52:39Yes. Created a tension, right? Like, I don't want to give you my data. I don't want to do this. I don't want to do this. And there's a tension between, hey, privacy, look at anybody's privacy policy. It's like, I'm going to share your data with all my partners, right? Because I want to give you better services. And so there's this tension. And I don't think there needs to be tension using technology. And that's the reason I said, if you look at our website on nodeconnects.com, you'll see that the merchant and consumer pages are saying the same thing. Not saying something to the consumer and something to the merchant, because there doesn't need to be tension.

53:14You can actually have commerce happen and delight both parties and not take anything away from them. amazing yeah no if you people never read those privacy policies policies but if you did it would i know and the cookie policies exactly yes i know we just we have we just accept everything now it used to be that we were scared but now we're just we're numb we're numb as a accept everything yeah yeah well this is this has been very eye-opening is there anything you would like to leave our listeners with? Any last thought, advice, or anything that you'd like to end on? First of all, thank you again, Jay.

53:55I think it's been fantastic to share what we're doing at Node. And this is Commerce 3.0. It is going to be the new way people are going to interact with people, especially merchants and consumers. And for people who are innovative and have thought leadership. I'd love to kind of work with them to implement this and, and, you know, show them that it can drive, it will make your guest users, I think even more engaged than account holders. Okay. Cause you don't have any of the friction. So. I like it. Rohan, if someone wants to follow you personally, where are you active? What social platforms? I'm on LinkedIn.

54:31Maybe you can follow me over there. I'm mainly on LinkedIn. I'll make sure I add that in the show notes as well too. So this has been a ton of fun. I learned a lot and I will make sure there's links in the show notes for all of this. I, I, you know what I always say in e-commerce, there's always times to take advantage of things before they become table stakes. Like I, I remember buying AdWords for less than five cents a click back in around 2006, 2007. I remember when you could put words on a page in the same color as the background for SEO optimization. Different things like that. And so there's always different things at different times that you can take advantage of and get a bit ahead.

55:16And this feels like one of those things. So I think if it's not, there's no risk in trying it. So I think to me, that says it all right there. There's only potential upside. Thank you. Thank you. Very well said and very well summarized, Jay. And please download it as well and use it and let me know. If there's any feedback, you know we're always innovating changing things and feedback is always is the core thank you so much rohan thank you so much jay thanks so much for listening to the end of this episode and now as many of you know at the end of every episode i like to share a one percent tip and that's the whole theme of this show if you improve one percent a day at the end of the year you're actually three thousand seven hundred percent better.

55:58So here's your 1 % win today. Email your list with a one question survey. That's right. Just one question. Now here's why that matters. The average email open rate is around 21%, but for highly engaged email lists, it's around 30 to 40%. And what the difference is, is email engagement directly impacts deliverability. So if your readers are engaged, they'll get delivered more and they'll open more. So the more subscribers open and click and interact with your emails, the more likely future emails will actually land in their inbox and not in their spam folder. If no one opens your emails, ESPs, email service providers think it's spam and they just put it in the spam folder.

56:45So you need to get people to reply, open and click. So by sending a short, engaging one question survey, just literally something like, which flavor should we launch next? Or what's your biggest struggle with this product? Or, you know, you could make it fun. Like what product should we get rid of? You're not just getting valuable insights on your products, but you're also training inbox providers like Gmail to treat your emails as worth opening. So how do you do it? Three tips here. One, keep it dead simple. Don't overcomplicate this. Make it really, really simple. Just one click one question no big forms nothing one click you could literally even make two links in the email if they click one for one answer and another for another make it as simple as possible to make it fun make it something that people think about make it personal make it something that they maybe have an opinion about maybe it's your most negatively reviewed product you're asking about you could literally say that this was our worst reviewed product what should we replace it with something like that you know like when you admit something is wrong people are going to be less likely to ridicule on social media.

57:51So make it fun. And then the last one is really important here. This is kind of like the bonus tip, follow up and share the results with your list later. People love to see what the answers are. And it's just another reason to get people to open another email. So you could even put that in the original email, make it super short. Like which flavor should we add? Click. We'll share the, we'll share the answer with everyone that replies. Boom. That's it. And then make sure to send it because that's a guaranteed another open not guaranteed, but highly likely, which is very good for engagement and the stats for the email provider.

58:26So the beauty of this is it works if you have 100 email subscribers or if you have 100 ,000, it doesn't matter. It drives engagement. It will increase deliverability. And most importantly, too, it'll give you insights directly from your customers who matter most. So that's your 1 % win for today. Thank you so much for being a listener. If you're getting anything out of this show, I just have an ask. Would you mind leaving a five-star review in Apple Podcasts or Spotify or wherever you listen? It's the main way that we get recognized and people find out about the show. And the more five-star reviews there are, the higher it moves up in the rankings, which is helping other Shopify merchants maybe find it and learn some of these tips and advice.

59:09So that's it. We'll see you on the next episode. Thank you so much for being a part of our community.