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From Shopify VP Analyzes Customer Acquisition Cost on Google and Meta

How could Shopify's optimized customer acquisition cost affect Etsy?

Possible What happens if… A possibility worth considering, not a forecast.

Shopify's improved marketing efficiency may intensify competition for e-commerce shoppers. Scott Kramer, a VP at Shopify, is using internal analytics to identify the Customer Acquisition Cost (CAC) across advertising channels like Meta and Google. This detailed analysis allows Shopify to better understand how to allocate its marketing spend and target customers more efficiently, potentially leading to more aggressive market tactics. As a major e-commerce platform, any significant cost advantage or increase in marketing efficiency by Shopify could intensify competition against other platforms, including Etsy, for consumer spending and market share.

Reported by 1 independent outlet Written Yesterday
Effect
Mild negative
How direct
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When
Within weeks
The story
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How it reaches Etsy

Reported by news outletsBrind's reasoning

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The facts so far

As reported. Each one links to where it comes from.

  • Scott Kramer, CMO of Naked & Thriving, uses Shopify’s analytics to identify its CAC across various channels, including Meta, Google, and ChatGPT.adweek.com
  • Kramer excludes past customers from future campaigns on those channels, noting that email and SMS are used to drive repeat customer revenue.adweek.com
  • Meta still claims the majority of ad spend for many brands, making it hard to test new channels and win at scale.adweek.com

Why it matters

For Etsy, which operates in the highly competitive e-commerce space, the actions of major rivals like Shopify are critical. As costs are rising on every channel, any ability for a large competitor to lower its CAC translates into a potential cost advantage, which could be leveraged to aggressively compete for consumer attention and sales.

This situation reflects a broader industry challenge where consumer behavior is constantly evolving and the customer journey is fragmented across many channels. Marketers must contend with this complexity, and the ability to accurately measure and optimize CAC is becoming a key differentiator in the market.

What we don't know yet

  • Will Etsy respond to increased competitive pressure from Shopify by adjusting its own pricing or marketing spend?
  • How will the overall rising cost of advertising channels affect the ability of all e-commerce platforms to maintain scale?

What would change this answer

Etsy launches a major counter-campaign or new featureThis would mitigate the effect, as Etsy would be actively defending its market position against increased competition.
Ad costs continue to rise across Meta and GoogleThis would reduce the impact of Shopify's CAC optimization, as the overall cost of acquiring customers would increase for all platforms.

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Beyond this explainer

Questions worth asking

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  • About Lifetime Value (LTV)

    How does Shopify's focus on lowering Customer Acquisition Cost interact with the average lifetime value of customers acquired through different channels?

    Explore Lifetime Value (LTV)
  • About Omnichannel Strategies

    Given that the customer journey is fragmented across many channels, how are platforms like Shopify and Etsy integrating their marketing efforts?

    Explore Omnichannel Strategies

Explore connected ideas

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Lifetime Value (LTV)Omnichannel StrategiesEtsy

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The full eventShopify VP Analyzes Customer Acquisition Cost on Google and Meta Everything aboutEtsy

Brind's analysis is written by AI from the reporting linked above and can be wrong. This explainer is a possibility worth considering, not a forecast: steps marked as Brind's reasoning are not stated in the reporting. It is not investment advice; do your own research.