Caravan | Blog

Thought Leadership in Tech, Art, and Software
OMG illustration of woman with VR headset
Immersive Art:
Executive Summary
1024 683 Jim Fenner

Immersive Art:
Executive Summary

How AR, VR and MR are changing Art, Artists and Art Spaces

Hello, and welcome to Caravan’s Art and Tech white paper series. 

Caravan has worked with some of the largest art galleries and artists in the world to help them sell millions of dollars of art and art merchandise online. This unique perspective gives us the ability to act as a compass to our clients, and help them embrace technology and forge their business in this modern age.

This paper serves as a primer for you, the art purveyor, to the rapidly evolving field of extended reality art – who is creating it, who is curating it, and how the art market is responding to its latest revolution.

Portrait of African guy isolated on black background wearing headset of virtual reality

For a long time, humans have been attempting to augment and enhance their reality. Our vivid imaginations allow us to dream the impossible and make it real. For most of our history, the artist can work in many mediums, but all had to exist in the physical realm. Observed, usually not touched, and certainly not changed after the fact. However, for the past 50 or so years, this has slowly been changing. As technology becomes available, someone will attempt to make art with it, or from it. 

Young woman wearing virtual reality device over dark background.

With the increasing pace of technological innovation, the rate of art creation in this digital medium has skyrocketed. Things are getting interesting in how we are building tools to augment our surroundings. In this issue, our focus is transfixed on our new “Realities”, Virtual, Augment, and Mixed, and how the technologies behind them are carving out new spaces within the art industry. Caravan took an in-depth review of the technology, the artists and the people behind the scenes to get a good look at how people create an XR experience. We then analyzed how these tools are being used as sales and marketing tools by businesses and institutions to help their bottom lines. We interviewed some key industry veterans, who have helped define how these technologies are being embraced in industry.

In short, the “Realities” encompass new production tools, new sales tools, and new revenue streams for buyers and sellers of art. Virtual and augmented reality will increasingly become part of the expected experiences of the next age of consumers. Although the technology is still advancing, there is enough of a base to create something tasteful, interesting, and eye catching, all focused on conveying the emotion of an artwork. This technology can be used to help sell art, and help reduce costs of shipping and logistics.

Beautiful Young Girl Wearing Virtual Reality Headset Draws Abstract Lines and Figures with Joysticks / Controllers. Creative Young Girl Does Concept Art with Augmented Reality. Neon Retro Lights Surround Her. Computer Graphics.

In this paper, we look at 4 key parts of XR:

  • Creators & Creations
  • Current XR In Art
  • Monetization of XR Art
  • Implementing XR

Enjoy this exploration of XR and how we feel it can benefit your business. As always, reach out and continue the conversation with us!  


Why this topic:

Much like how our Blockchain paper was inspired by technology impacting the art industry, so is this installment is about Virtual and Augmented Reality. There has been an explosion in interest around XR in art, with dozens of vectors to pay attention to. The Caravan team was inspired to use our unique position as technologists in the art space to provide a consolidated overview of what kinds of conversations are happening, what innovations are emerging, and what galleries, curators, collectors, museums and artists are doing to push XR contributions to art into centerstage.

Our aim is to provide an understanding in this paper for our clients and readers, with clearly defined terminology used across a broad selection of topics related to “XR” in Art. This paper serves as both a primer and a resource for more in-depth coverage from other publications. Additionally, we plan to release follow-up papers with tighter focus and specificity on issues raised in this paper – particularly in regards to galleries and museums making a concrete plan to increase their preparedness and profile for XR experiences.


Caravan has worked with some of the largest art institutions in the world to sell millions of dollars of art and art merchandise online.

If you have any interest in topics or questions, reach out to us at: art@crvn.net.

If you want to check out the first installment in the series, check it out here:
crvn.net/art-blockchain

CADAF Miami Logo
CADAF Miami:
An Art Fair From – and For – the Future
1024 1024 Jim Fenner

CADAF Miami:
An Art Fair From – and For – the Future

From December 5th-8th 2019, Miami is home to one of the most exciting art fairs of the season – the Contemporary and Digital Art Fair. CADAF for short, the fair features incredibly varied work from over 70 artists and galleries, with pieces rendered in cross-reality digital spaces, art created generatively and with blockchain, video and installation work, and much more.

Caravan had the opportunity to partner with CADAF and provide social media marketing and lead-generation services. Our work promoting awareness around blockchain and extended reality in art and the art market intersects precisely with CADAF and its mission. In fact, one of the central theses of our Immersive Art whitepaper on extended reality is that collection of modern digital art is at an incipient stage, and will most likely grow towards mainstream awareness as it finds a home in more traditional showing spaces – much like CADAF’s exhibition during Miami’s famed Art Week. CADAF’s organizational team are tireless evangelists for forward-facing art, and this event is enormously important in making digital art not only better known for collectors, but a commercially viable pursuit for the artists themselves.

If you’re in Miami this weekend, consider CADAF a must-attend event.

A Recap of CADAF NYC from earlier this year
Woman in VR Museum
Immersive Art:
Glossary
1024 683 Jim Fenner

Immersive Art:
Glossary

In order to understand a topic well, it is important to be familiar with the basic terminology. Caravan has broken out some key terms and concepts into this glossary. Comment at the end if you have any requests for additional terms to be added to this list.

VR Illustration

Virtual Reality/VR

Virtual Reality is an immersive simulation of a digital environment completely contained within the hardware and software in use by one or multiple participants. The hardware typically consists of a headset that rests over the eyes and ears to provide 360o visual and auditory information, with hand-held controllers and other haptic controls to allow a participant to manipulate and explore the environment. The in-headset visuals can be viewed by spectators on a second screen.

AR Illustration

Augmented Reality/AR

Augmented Reality is the practice of overlaying digital information, usually visual, over live video information of the real, physical world. This is done through a screened interface like a phone or tablet. The digital overlay can be triggered by a number of means – location, visual markers, time stamp and more – and is often used to add contextual information to what a user is viewing through their device or, in some cases, embellish or add to the visual experience. In Augmented Reality, the digital overlay cannot interact with, or be affected by changes within the physical environment (unless those changes disrupt a device’s ability to detect a marker). For example, if you attempted to ‘push’ an overlay image in the space it appears to occupy, your hand would just pass through it, rather than moving in response.

Mixed Reality Illustration

Mixed Reality/MR

Mixed Reality is quite similar to Augmented Reality, with the defining difference being that digitally rendered information in Mixed Reality can interact with and be affected by changes within the physical environment. For instance, the use of haptic gloves that give physical feedback may allow a user to ‘hold’ and manipulate virtual objects, affecting the user’s senses while also changing details about a virtual object.

Extended Reality Illustration

Extended Reality/XR

Extended reality is an umbrella term for VR, AR and XR, as the three practices are commonly spoken about in tandem. XR is a useful contraction for when the central differences between its constituent technologies aren’t crucial to the topic of discussion.

For the purposes of our paper, we will frequently use XR as a concise way to reference a range of technologies and practices whenever appropriate.


Cinematic

High-Definition graphics in a virtual world that are typically meant to be observed statically and not interacted with. The processing power used to render cinematic graphics is largely consumed by visual fidelity, at the expense of being able to interact with or alter the environment. Cinematic VR is conducive to virtual representations of real-world artifacts, as is the case in the Kremer Museum.

Interactive

Interactive graphics in a virtual world that can be manipulated by a user’s actions. The processing power used to render interactive graphics is largely consumed by the programmatic logic that dictates how the object reacts to user interactions, leaving less power to render visuals at highest possible resolutions. Interactive graphics are usually employed for games or boutique experiences.

Marker

An object or pattern in the physical world that can trigger a reaction that renders new graphics in Augmented or Mixed Reality experiences. A simple example is a QR code, which, when viewed through the camera lens and screen of a phone, can launch a link in a browser. For AR/MR, a marker usually triggers new graphics or information in the visual display.

Distributed Ownership

A market concept of ownership by either a limited or unlimited number of shareholders, to whom dividends are paid upon accrual of value through interest or sales. In relation to art, it refers to a sales model where artworks serve as investment vehicles. In relation to digital art, it refers to both an ownership system for digital information as well as a patronage system of investment in new artists, as popularized by firms like Kaleidoscope VR.

Replicability

The ability to create identical facsimiles of an original object or information source as it relates to the feasibility/time investment required to do so. Digital experiences are highly replicable, which has disrupted conceptions of pricing for XR art.

Blockchain

Blockchain is a public, distributed list of digital records that are resistant to modification, which underpins many modern technologies and systems like cryptocurrencies. Blockchain is frequently discussed in the art market as a potential technological improvement to current and historical approaches to provenance and fraud detection.

Version Control

A system of archiving all changes made to a codebase, typically with descriptions of what was changed and why. In many cases, a key use is a ‘roll back’, where an older version of a codebase is reinstated. For digital art, version control is a way for collectors to see how an artwork that has been updated since its collection has changed – potentially to be reinstated per their own preference.

Open Source

Software where some or all of the codebase is publicly available and, optionally, available for public modification of the core software system itself. This is a popular methodology for rapid iteration of new software that borrows from previously tested best practices.

Headset/Head-Mounted Display/HMD

The core piece of equipment required for a true VR experience – a headset usually consists of one or several screens placed directly in front of the eyes in a visor, as well as audio outputs over the ears. There are many popular headsets in the emerging VR space, including the Oculus family, HTC Vive, PSVR, Valve Index and lower-tech offerings like Google Cardboard and Daydream.

Maureen Towey Headshot
Immersive Art:
Interview with Maureen Towey
1024 683 Jim Fenner

Immersive Art:
Interview with Maureen Towey

Q: For the New York Times Daily 360, you’ve said that some pieces were produced in a day and some took significantly more time. What are some factors that determine how labor-intensive a VR project will be?

There were a lot of factors that affect workflow timing. If we produced a piece in a day, it was usually because it was breaking news so it had to be turned around quickly for it to be relevant on the Times website. If we knew we had to turn around a piece quickly, we would plan a more simple shot-list so we could turn around the edit right away. If we were working on, say, a culture piece, we often had more lead time and could take more risks with our approach. For almost all our pieces, we were working with consumer grade Samsung 360 cameras that only had two lenses, so that made the post-production process a lot faster than if we were using bigger rigs. 

Q: How would you advise an art gallery or museum interested in exhibiting virtual works or creating virtual works get started?

If you are showcasing your work through VR, be very thoughtful about what qualities will work best in that medium. For example, objects that play with scale often work really well when viewed in 360 because you are able to move around with a big object or get super close to something small. Whenever we tried to place a camera in the middle of a room to look around at paintings or drawings, it didn’t work as well. If you can cover the work better with regular photo or video, then do that, because VR is heavy production.

Sensation of Sound illustration
From ‘Sensations of Sound’

Q: What’s one thing you’ve learned through experience that can be a pitfall in XR production?

Staying simple and slow can be really great. Remember that there is a lot of visual information in a 360 frame so, sometimes, you don’t need to do a whole lot to make it feel great.

Q: Do you see a growing space for XR in the fine art world?

There is always room for new technologies in the art world. Either as an artistic medium or as a way to communicate with audiences. 

Maureen Towey is a director working across artistic mediums. She recently premiered “The 8th Year of the Emergency” a short film she wrote and directed. For The New York Times, Towey directed “Sensations of Sound” for NYT VR and served as the Senior Producer for The Daily 360. Towey has worked as a Creative Director for award-winning musicians such as Arcade Fire, Ray LaMontagne, Tune-Yards and Esperanza Spalding. She recently directed a music video for Sharon Van Etten. As an ensemble member with Sojourn Theatre, Towey directs radical community-based arts events, such as Finding Penelope and The Islands of Milwaukee. A highlight of her live performance work was directing Black Mountain Songs, which was co-created with Bryce Dessner of The National and starred the Brooklyn Youth Chorus (BAM in NYC, Barbican in London). Towey has been recognized as a Fulbright scholar (South Africa), a Princess Grace fellow, and as a PBS/AOL MAKER. 

Website: maureentowey.com

Young woman wearing a virtual reality headset.
Immersive Art:
Creators Preview
1024 683 Jim Fenner

Immersive Art:
Creators Preview

Creators and Creations

XR art is a vibrant, exhilarating, and broadly encompassing leap forward in how humankind experiences  itself. It provides dazzling visuals that engross and engage. It creates spaces for empathy and exploration. It reconsiders how art is valued and shared. And, to our great thrill, its contours are at this point only barely explored.

While this papers only serves as a high-level survey of how widely the phrase “XR Art” can be deployed, Caravan seeks to broaden your consideration of how innovators and establishment figures alike are staking flags along the digital horizon.

Of course, there’s more to XR art than just putting on a headset and watching a short film. The manners and forms in which XR artists are creating are themselves evolving along with the technology they use to produce their creations. To that end, having a basic literacy about XR art means understanding it to be fundamentally without a set definition, as evidenced by how varied virtual art has been executed. As Penrose Studios head Eugene Chung tells Artsy, “You have to basically define the medium as you go. It’s almost like you’re trying to create the paintbrush while trying to create a painting.” 

In Section 1, we’ll explore three different ways to categorize XR art. While they intersect, the technologies, practitioners, exhibitions and histories of each provide important delineations. Let us begin.


Art made with virtual tools in virtual spaces to be observed wholly as a standalone work, requiring special viewing apparatus

Anna Zhilyaeva, @Annadreambrush on Instagram, is a popular Tilt Brush artist who captures the process of creating virtual art in widely viewed videos. Some of her works are wholly original and sculpture-like, while others extend the canvas of existing material art and paintings to extrapolate the scene beyond its original borders. While the creations can be viewed in two dimensions through her prepared videos, a virtual reality headset lets a viewer enter the entirety of the three dimensional space she prepares.

It should be noted that this sort of immersive experience can be created by a number of technologies. Tilt Brush is a tool/application that takes advantage of the relationship between a physical hand controller and the virtual space running in the app, allowing the creator to build a virtual space through physical movement using a ‘brush’ and ‘palette’ to select colors, shapes and materials. This method calls to mind traditional means of art creation. 

Alternatively, virtual spaces can be built via keyboard, mouse and code using graphic applications like Unity. As opposed to the virtual in media res style adopted by Tilt Brush users, creating virtual spaces in Unity happens exterior to that reality, although it can be just as immersive when the application is fed into a user’s headset. An excellent look at how such a project can be undertaken can be found in this post about reactive installations by Isaac Cohen, celebrated virtual reality artist and Unity VR Artist in Residence. 

Man experiencing VR Art exhibition To The Moon

Since the tooling varies from physically- driven painterly controls to computer code, the production of XR art can frequently be a collaborative affair between artists working in a directorial capacity with technicians executing the production of the artist’s vision. An example of such collaborative work is To The Moon, an immersive art piece created by NASA Artist in Residence Laurie Anderson and her co-creator Hsin-Chien Huang. While the previously mentioned works can be experienced at a user’s own home provided they have the files and equipment necessary to do so, Anderson and Huang’s three collaborations have required a user to attend a physical gallery location. 

To assist with the technical creation of digital Fine Art, entire content creation firms have begun to engage artists directly – one of which is Acute Art:

“‘Our role is to provide artists with the technical capacity to realize their visions,’ says Acute Art CEO Jacob De Geer, adding that the process can take months, if not years, depending on an artist’s fluency in alternative media such as multichannel video and how developed their vision for a given piece may be. Kapoor’s Into Yourself—Fall, he says, took some 10 months from conceptualization to completion.” – Robb Report


On the horizon, Adobe is planning to release a new app for its Creative Cloud – Aero. Aero is intended to uncouple dense technical knowledge and the ability to create rich augmented reality experiences. Verge, an online tech news periodical, describes it as an app that “…lets artists use drag-and-drop modules to create animations and responsive AR experiences that automatically take into account factors like physics and lighting, which would normally require knowledge of programs like Unity and Apple’s ARKit.” Adobe’s apps are industry-standard tools for professional media creation, so the promise of Aero isn’t to be minimized, especially if it is released as part of the Creative Cloud. In that event, Adobe CC’s over-10 million subscribers would have easy access to powerful technology, lowering the barrier of entry. This is an important step forward in reducing the time investment and other costs of creating AR experiences.

In regard to user engagement with this content, hardware and dedicated apps can have a chilling effect on adoption, and are obstacles Adobe is approaching head-on. First, the filetype produced by Aero can be used natively on a user’s phone in existing apps, rather than requiring the download or purchase of proprietary software. Further, Project Glasswing is Adobe’s experimental translucent surface specifically designed to display AR content over physical product displays. With these innovations in mind, Adobe is clearly investing in a much wider pervasion of AR content for users to engage with in the coming months and years.


Caravan has worked with some of the largest art institutions in the world to sell millions of dollars of art and art merchandise online.

If you have any interest in topics or questions, reach out to us at: art@crvn.net.

If you want to check out the first installment in the series, check it out here:
crvn.net/art-blockchain

blockchain technology concept. The chain lies on the keyboard
Bearish on Blockchain:
Executive Summary
1024 683 Frank McDermott

Bearish on Blockchain:
Executive Summary

The Art of Blockchain: Blockchain in Art

Tech adoption in the Art world— among galleries and art institutions— continues at a frenetic pace with a predominance of the focus and spending among gallerists going towards integrating Blockchain into the art sales process. 

Our expectation, however, is that it won’t have a prevalent impact on your business for at least another 10 to 20 years. For a blockchain product to truly provide security, privacy, and verifiable provenance will require the entire industry—and its clients—to adhere to one comprehensive digital standard, adopt a standard way to sell artwork, and disclose vital information (albeit encrypted) to some third party. 

Currently Blockchain-based products are almost entirely directed towards the needs of a select group of high-end art investors and venture capitalists, rather than almost all other collectors. While this certainly represents a portion of buyers, the material advantage of blockchain for actual collectors, as opposed to investors, is currently limited. 

If you have clients that think on the few hundred year timeframe for their investments, then you probably should do some reading/watching if you haven’t already:

(Warning: This video is a bit geeky, but it explains the core concepts well. While watching, if you replace “money” with “assets/ artwork,” and the “A”, “B”, “C”, “D” nodes with various types of art buyers and sellers, you will get a sense of how this applies to validating the transaction of buying and selling art.) 

Our strong recommendation is that our clients focus on the things that will provide nearer-term value to their business. If your focus is on emergent digital technologies, social media marketing, and digital viewing rooms that will help you sell more art, there are already market-ready solutions which will provide a more immediate ROI. 

Focus on what you do best—fill the world with great art, style, and taste—while the world of blockchains shakes out and develops. 

blockchain illustration

Why are we talking about Blockchain? 

The pervasion of digital technology in the art world has been growing and accelerating for many years. From new media, new materials, and new methods, the majority of the Art Industry has been cautious in adopting/investing in cutting edge solutions. Yet, artists and gallery owners now have access to a faster track towards evolution than ever before. 

As the industry turns towards modern best practices to incorporate into sales strategies, we have noticed that there is an enormous amount of talk about new technologies and how they can be applied to the art world. One of these, of course, is Blockchain. 

Blockchain is a beautiful implementation of a novel technology—one that shines when applied at enormous scale. As a means to verify and track transactions across time based upon complex contracts is, in theory, an advantage to addressing some of the Art industry’s key challenges. 

Specifically, there is a flurry of talk around privacy, provenance, security, and trust, and how products and services built using blockchain will promise solutions to address these concerns. 

Although we are huge fans of blockchain, as technologists who read this industry literature, we are finding more and more that the benefits of blockchain are being uniquely showcased. A lot of what is promised is theoretically viable – blockchains are trusted digital entities of complex contracts. However the limitations of real world application of blockchain, especially as it pertains to the Art industry, are mostly overlooked. 

Over the past 9 years, CARAVAN has worked with the most renown art institutions, artists, and galleries to help market some of the largest artists and art exhibitions in the world, and help sell millions of dollars of art and art merchandise online. 

We wanted to share our thoughts on the matter, and shed some light on the pros and cons of blockchain and how it pertains to the art industry. Although we don’t cover every single aspect of blockchain and all of the various ways it is being implemented, we feel there is enough here to better inform your opinion on the technology and how it pertains to your business. 

Ideally, you’ll be moved to get in touch and learn about how CARAVAN can help you help sell art online or on premise and promote your exhibitions and artists.


Caravan has worked with some of the largest art institutions in the world to sell millions of dollars of art and art merchandise online.

If you have any interest in topics or questions, reach out to us at: art@crvn.net.

If you want to check out the second installment in the series, check it out here:
crvn.net/art-v
r

Neon sign that says 'This must be the place'
Product Optimization for Dropshippers that won’t break the bank 1024 682 Jim Fenner

Product Optimization for Dropshippers that won’t break the bank

(or, why I decided against selling Moon Lights)

In brief: Dropshipping is about capitalizing on ecommerce trends. Finding trending products that work on your site with your inventory, brand and audience can be time-intensive and costly. Here’s a smarter approach to product optimization to make sure your time and money is going towards products your actual customers will buy. Skip to the end of the article for a list of resources and a helpful glossary.

“You gotta spend money to make money” is a universal truism, and for dropshippers, that seems to go double sometimes.

The blessing and curse of dropshipping is that as a shop owner who is unencumbered with owning and stocking physical inventory, the sky’s the limit when it comes to what you want to sell. Shopify and its awesome dropshipping inventory/fulfillment acquisition, Oberlo, make it only a few hours work to set up a store that sells pretty much anything you can imagine… which is a perfect example of what psychologist Barry Schwartz calls The Paradox of Choice. This usually applies to shoppers in a store with too many things to pick from, but what about the store owner in charge of stocking that store — do they face the same paradox?

The answer, dear dropshipper, is yes — and it’s one of the biggest and costliest time-sucks in running your dropshipping operation. To crib another cliche from the universal truism bank… there has to be a better way.


Picking Your Products as a Service (PYPaaS — just kidding)

The Ins and Outs of Inventory Selection

The typical profile of a dropshipper — whether it’s a mompreneur, a hobbyist who wants to monetize their knowledge, a young person learning about ecommerce and business or even a seasoned professional — is someone who wants to some income by running a store where data drives the decision making — pick a niche market by its size and viability, market your selected products to them, cull what fails and expand on what works.

Make more than you spend,

and spend less time doing it.

Expanding on what works is commonly called product optimization — the means by which a store owner (dropshipper or otherwise) finds the best inventory to stock to increase their AOV (average order value). Sometimes that means finding and working with trending products. Sometimes that means A/B testing through paid advertisements on search engines or social media. Ultimately, the goal is the same — make more than you spend, and spend less time doing it.

Image of one dollar bill
There’s a lot more where this came from, bucko — Photo by NeONBRAND on Unsplash

There is a thriving industry devoted to doing that work for you, in the form of blogs and vlogspaid services, and in-shop appsMany of these resources are great and valuable, but unless they’re taking your unique shop into account, the information they’re pushing isn’t always the golden-bullet for hands-free, high-margin sales endeavors.

Thumbnails of youtube videos about best products to sell
You know… these.

Specifically, the idea that some products are trending in general tends to cut across the best practices used by experienced dropshippers — stock a cohesive inventory from known suppliers, reduce ad costs through organic SEO by providing in-shop content on what you sell, and bank on repeat visitors being your highest yielding and least labor-intensive sells. If you have a well-cultivated audience that comes to your site to buy gardening supplies, for instance, then following a blogpost about “Top trending products to dropship this month” to the letter and suddenly shoehorning unrelated products like sunglasses, bluetooth speakers, yoga pants and off-brand diaper genies could do more harm than good. It can confuse your return visitors, cloud your content strategy, and wrestle away time you could better spend optimizing your product selection yourself.

Further, if you build an audience on one trend and then switch gears the next time a blog post suggests new items, you may be spending money on advertising to people who were drawn into your shop temporarily and are now less likely to find your marketing appealing. This isn’t to say following trending products is a bad thing, but rather, it’s only the first step on the way to higher sales and lower ad spends.


About that better way you mentioned…

The art of picking trend products that are right for your store

search screen for sunglasses in oberlo
Time to sell some sunglasses! Oh cool, there are one hundred and sixty three THOUSAND options.

So you’re ready to start working with trending products on your shop, but you don’t want to ‘spray and pray’ new and unrelated items into your inventory — we’re on the right track. Here are a few steps to take to start optimizing your inventory value — with either the inventory you already have or new and trending items — without having to pay out of pocket for every insight.

One store with bike cleats and dumbbells makes sense. Toss in a Bob Marley poster section and things start to get muddy.

Identify your customer base as a guiding light

This is a truly obvious point, but should be at the core of your decisions when introducing new items to an established customer base. If you’re a new store and you don’t have one (or you’re selling general purpose goods), there are many guides that can help you select a good niche. Some dropshippers elect to sell purely by the market value of a niche without much of a concern for their own stake in what they sell, while others prefer to select niches in areas close to their own heart so they can speak on the topic more passionately. One way or the other, your already-won customers are your lowest cost, highest value acquisitions, and are more statistically reliable to produce net-positive revenue for you going forward than building new audiences from scratch. So, even if that Luna Moon Lamp is trending EVERYWHERE, it might not be worth your time or the cohesive value proposition of your shop to try for a slice of that pie (or cheese, in the moon’s case).

*Note: It’s fine for shops to have multiple audiences! A customer base is often composed of smaller divisions of the same type of a shopper — stores that sell sporting goods should market to cyclists differently than they do to powerlifters. Identifying your customer base is about finding the best venn diagram for you that keeps your content and marketing obligations down and your average order value (AOV) up. One store with bike cleats and dumbbells makes sense. Toss in a Bob Marley poster section and things start to get muddy.

DAR.WIN logo

Add inventory incrementally to keep experiments clean

As with any data-driven project, control your variables. Adding new items all at once can make it difficult to investigate changes in your web traffic patterns. Are you getting a lot of new traffic? Increased bounce rate? Higher cart abandonment? Most web metrics are less clear-cut than last-click-attribution, and so if you’re doing a studious job of vetting new products for how they perform, it’s best to give your experiments as much focus as possible. This is crucial when adding items that seem to break with your standard inventory. A new set of bamboo-rim sunglasses showing up on your Print on Demand for New Dads shop might work out great, but it certainly isn’t the closest sibling to the rest of your inventory. Adding in sunglasses, ab rollers and pool floats all at once is basically negating the value of any traffic or sales metrics you produce in comparison to the previous state of the store.

So, take the time to add a new product intentionally, write meta copy about why it’s a good fit for your store (“Provides eye protection during diaper changes!”), and allow the product time to produce accurate metrics.

Goose your new stuff so customers actually see it…

If you already have a large inventory, new products can get lost in the shuffle, artificially suppressing the potential value of keeping that item available. Having a “New In The Shop” or “Hot Products” collection is an easy way to break a new product out of its standard collection or category. If you have a homepage slider featuring products you can select or a regular newsletter, these are louder outlets (meaning you are more aggressively putting your thumb on the scale in a featured product’s favor) but can also be an accelerant to pull attention to new stock. Keep in mind that any inorganic treatment an item gets (in other words, how you treat or feature it against how your standard stock performs) can affect the longer-term value of your metrics. Obviously selling inventory is always good, but if you’re running experiments for product optimization, artificially inflated presence of a new product in your shop can create a false impression about a product’s value.

DAR.WIN Logo

… but keep your promotion focused.

You should be able to make some assumptions about distinct groups in your general customer base — demographics, locations, specific collections of interest. If you’re actively segmenting your customers for marketing purposes, try to keep promotion of items you’re experimenting with to those relevant segments. It will reduce the amount of marketing spend going towards an experimental effort and reduce friction from shoppers less likely to engage with new products of that type. This is the core of product optimization — expose new inventory to likely buyers and invest after you have evidence of engagement.

Customer partitioning can be done in a variety of means with varying levels of reliability (from customer surveys to unique sign-up forms to order history). DAR.WIN is an app available for Shopify that automates partitioning by assessing customer behavior patterns to generate unique Visitor Profiles for your shoppers. DAR.WIN users can install DAR.WIN for free, export lists of customers in each segment, and send targeted emails to that segment featuring products they’re most likely to buy (selected by machine learning algorithms). For product optimization purposes, DAR.WIN offers a Product Highlight feature that allows shop owners to feature a hand-picked product in line with automated recommendations. To learn more about how DAR.WIN makes product optimization painless, quick and cost-effective, watch for part two of this article or check out our YouTube channel for gems like this:

https://youtu.be/6-uWOJz_B30
The narrator on this video sounds devastatingly handsome, doesn’t he?
DAR.WIN Logo

NOW spend money — but only on your remaining unknowns

OK, the dads are buying the bamboo shades.

A real thing you can put on your face.

You’ve established that your experiment works (a target audience in your customer base is positively engaging with your new product selection). Now it’s time to experiment with volume, margins and bundling. Volume is the amount of a piece of inventory you can move (with dropshipping, your supplier is on the hook for fulfillment, so make sure that part of your supply chain is capable of fulfilling your needs). Margins are how much money you make each time you sell an item, cut against the cost to stock an item and market it.

*If you want to get incredibly good at balancing fulfillment capacity and optimal margins, play this paperclip factory game— but be warned, by clicking on that link, you’re about to lose hours becoming a paperclip magnate (but get a free B-School education in the process).

A burger might be sold at cost or even at a loss, but the selling a soda and fries for hundreds or thousands of times the cost to produce is the genius of working products together as a bundle.

Finally, we have bundling, which we can use as a catch-all term for how you frame your product’s sale proposition in light of your other inventory. Your bundling approach may involve recommended items (another thing DAR.WIN is built to do), it may involve chaining items into suggested sets during checkout, or it may even mean taking a product and selling it with other items under a single SKU. The idea is that once your meta copy is perfected and you feel the product has been introduced successfully to your audience, what is the highest volume/highest margin way to get it into carts — again, increasing your Average Order Value.

*Bundling and Margin science to achieve your best overall AOV is a topic worth a full course rather than just a mention in an article. The most famous example is fast food value meals. A burger might be sold at cost or even at a loss, but the selling a soda and fries — which cost pennies to stock and move at the volume they sell for in each value meal — at hundreds or thousands of times to cost to produce is the genius of working products together as a bundle. Where one individual item’s margin might be depressed, the bundle as a whole achieves a higher AOV than any item sold individually. Your ongoing experiments can include these kinds of trials — maybe the bamboo sunglasses can only sell at a 5% margin, but pairing them with sunscreen or a sunglasses case and pushing the value of those items higher may mean more absolute revenue than you’d make otherwise.

The title of this section is ‘NOW spend money’ — but we haven’t yet. Essentially, the investment now is classic A/B testing, which we’ve managed to avoid until this point. We avoided it because A/B testing works best when the variables are identified and minimized and costs can be kept down. Our goal is to achieve the sales knowledge produced in such tests, not throw as much money as we can to an ad buy. Obvious trials include selling singleton versions of your new inventory vs. bundled versions, different price points (again, balancing the volume of sales you can generate against the margin being won from those sales), and even different audience segment targeting (if an item is unisex, like sunglasses, try a few ads appealing more specifically to dads, fitness women, etc. to discover new market penetrance). If you need help getting started with A/B testing, specifically on Facebook (a common marketplace for these kinds of experiments), this article is a great place to start.

*For dropshippers looking for an advanced strategy, look into multivariate testing — an emerging discipline in ecommerce that condenses the time and sample size required to make quality conclusions on ad tests while running several variable at once. Since there are exponentially more factors at play in multivariate testing, data are usually provided through computational processing like machine learning.

DAR.WIN Logo

Annnnd stop the ads or wag the dog (I promise that’ll make sense)

Trends are, by definition, things that artificially swell in interest for a set period of time, only to ebb later. If you’re adding new items based on trend articles (a totally reasonable thing to do), pay attention to when your items fall into the ebb phase naturally. This is super easy for seasonal items. Whether or not you leave them listed and live in your inventory is one matter, but make sure that your marketing spend isn’t fighting an uphill battle to sell pool floats in November.

The exception to this rule is if you’ve landed the pretty rare status as the place to go for the thing. That means you have organic listings, word of mouth, steady and/or growing traffic, and ongoing sales for your experimental item. Dropshipping, at its core, is about experimenting to find what works — sometimes, as in this example, success find you in spite of what you thought your store was. An example might be a local farmstand that sells produce, jarred preserves and then decides to start selling honey sticks. The sticks are high margin, have staying power, and are easier to move than the other stuff that has less of a shelf life. That farm shop can stay close to home when honey season (if there is one) sails by — or they can revamp the entire stand to capitalize on their new mountain of liquid gold. Either one leaves money on the table — the question is which is a better bet for the goals of the vendor (an exit strategy to sell the stand at a period of inflated value? A dynasty stand that lasts 30 years on stable margins? These examples are both applicable to online store).

Liquid Gold! Photo by Amelia Bartlett on Unsplash

While the breakout success of an experimental item doesn’t require that you change from a baby clothing store to a sunglasses shop, for instance, you may find yourself in a position where that’s what makes sense. Brand reconstruction is time consuming and costly, so this should be considered a pretty rare case — but if the sales are growing and the market seems steady, it may be the best decision to make based on your experiments. Famously, it’s questioned whether the dog wags its tail or the tail wags the dog — in this case, you’ve optimized your product to the point where it’s wagging the rest of your store. Make sure you have a plan for that possibility.


Product Optimization = Store Optimization

What we’ve discovered is that there are ways to add experimental items — often trending, often outside of the typical profile of our shop’s standing inventory — in a way that can save time and money as opposed to brute force methods. We’ve also learned that products can be optimized — in the discovery of their best segment of your customer base, in their sweet-spot pricing and bundling options — through procedural experimentation. And, hopefully, it’s become apparent that this technique applies not just to your new inventory selections, but to your entire store as a whole. Using apps that leverage machine learning help you make better data-driven decisions about design, copy, pricing, customer profiling, ad strategies and full-blown branding shifts. As dropshippers, data-driven is what we are looking for to make intelligent business decisions (and is the hard of product optimization) that yield higher net profits. Poring over data in Google Analytics has been something wise webmasters have done for years to optimize their site for desired behavior flow — as a shop owner, using more ecommerce-focused tools can help achieve the same result.


Wrapping up

Not to keep hammering at the same point (but really, what are wrap ups for?), your goal as a dropshipper is to spend less money to sell more items for the highest profit you can generate from those sales. Product Optimization — the process we’ve outlined where you find the best way to sell your inventory (especially new or trending inventory) for the most money to the most people — is essential to meeting that goal as a store owner. While there are many approaches that might work, our recommendation is that you utilize a machine learning program for large data experiments while saving your money and elbow grease for more refined conclusions that become evident after your broader experimentation.

While all of this work might seem like a lot of labor to locate a sweet spot for a single product, I’ll offer one bit of wisdom I’ve gleaned from working with dozens of dropshippers — one killer product, properly optimized, can make a store. It can bring it from a side hustle to a full-time gig. It can change monthly revenues from hundreds to tens of thousands. It can pivot an entire business strategy. But without the intentional, procedural approach to discovering and refining that product outlined in this article, there’s no telling whether or not your store is that one perfectly optimized product away from becoming that kind of enterprise.

Good luck and happy dropshipping!


Recommendations from this article:

Apps:
Oberlo — Dropshipping inventory sourcing and fulfillment
(free with paid plans at volume)

DAR.WIN — Product Optimization with Machine Learning
(free with paid plans for professional tools and longer data history)

Product Genie — Inventory Discovery
(free three day trial with paid plans)

Learning Resources:
Oberlo Newsletter — General dropshipping wisdom and trending items

AliExpress Dropship Club — Bite-sized videos on different dropshipping topics

Dropship Lifestyle — Frequently updated blog with great info on niche discovery

A Crash Course on A/B Testing Facebook Ad Campaigns from ConversionXL

Multivariate Testing Defined

Machine Learning 101 from a Googler

Just For Fun:
Universal Paperclips Game— become a blackbelt in understanding supply chain and pricing while losing hours of sleep.


Glossary

(NB: these definitions can be very expansive, and their description here is to clarify their use in this article rather than to provide a comprehensive outline of the broader topics each invokes):

AOV
Stands for Average Order Value. This is the flat average of the monetary worth of what’s been ordered in consideration of how much it costs to fulfill that order. This is typically calculated by sales revenue (your bottom line not counting expenses) / # of orders. A tighter metric for experimental store runnings is sales profit (your bottom line after operational and marketing costs have been deducted) / # of orders. The value in this case comes from profit and sustainability, rather than the number of zeros on the price tag.

Machine Learning
In our context, Machine Learning is the use of computational algorithms to produce actionable datasets. In other words, having a computer crunch large numbers to provide information to a user that would be difficult to discern otherwise. Some examples include averaging traffic patterns of all shoppers, parsing patterns within subsets of shoppers, and creating data-driven product recommendation sets from those patterns.

Data-driven
Essentially, the opposite of ‘gut’ or ‘instinct’ as a means by which business owners make decisions. Data-driven operations merely show the averages of observed interactions across a large sample set — watching how all shoppers behave on your checkout page, for instance, rather than getting a small number of poll answers from volunteers. Often, data-driven conclusions butt up against gut feeling — odd product pairings or strange inventory pivots. Neither approach can be empirically put at odds with the other, but data-driven hypothesis can usually be tested more conclusively than human assumptions.

A/B Testing
Traditionally, the discipline of running two ads with a single variable to optimize performance. These variables are things like images, copy, pricing, bundling, demographic targeting, and more. The more tightly the variability is defined, the better the conclusions will be drawn at the end of the trial. The goal of A/B testing is to spend less money on your ad buy in general by only promoting your most proven value propositions.

Multivariate Testing
A newer model of ad testing (evolving beyond A/B testing) where multiple variables can be tested at once, drawing more concrete observations from smaller data sets. Multivariate testing is typically supported by machine learning services and is super valuable to read up on, but is better approached once you’re comfortable with ad testing at a more hands-on level.

Niche
A specific population of consumers likely to purchase your inventory whom you can target with ads. Broad niches require more overhead and are more difficult to make concise assumptions about (since they include people with different goals and preferences), while overly specific niches may not be populated well enough to support ongoing sales efforts. Dropshippers typically research a niche based on how saturated that niche is with options already, how much money they can make from inventory targeting that niche, and how well they can speak to members of that niche from a place of authority. Your task as a dropshipper is to balance the size of your selected niche so it’s big enough to sustain operations but concise enough to speak to with a degree of generality.

Segment
A segment is a sub-niche — in other words, distinct cohorts of shoppers in your selected niche. For example, your store’s niche market might be new parents. One segment in that niche is dads, and another is moms. Extending that, you may also have baby shower buyers, non-native speakers, first-time parents vs. parents of several children, and more. Segmentation of your niche audience allows you to spend less money and time marketing products to more highly attuned buyers. Segmentation can be done through a variety of means, either through self-identification of the shopper (like in a questionnaire at checkout or on an email signup form), or can be done programmatically by a machine learning app like DAR.WIN.

Organic vs. Inorganic
In our context, organic refers to traffic you didn’t directly pay for (people finding you on a search engine or social media by searching for terms related to your shop and finding you in non-ad results) and inorganic traffic refers to traffic you pay for (when visitors click through ads and promoted posts to get to your site). Obviously, organic results are the result of SEO (search engine optimization) labor, which while it may not have a cost per click associated, is certainly expensive in terms of manhours and, if you choose, consultancy.

SEO
Search Engine Optimization. The various means by which you can have your site (or individual pages on your site) appear in SERPs (search engine results pages), and how to appear more prominently for certain valuable search terms.

Value Proposition
The framing of why your product is worth purchasing or your store is worth patronizing. These can be concrete (like pricing, shipping time, personalization) as well as emotional (ethical product sourcing, support for artisans, partial donation of proceeds). A value proposition is meant to increase your profit — whether that is long-term or short-term is a matter of customer acquisition and loyalty strategies.

Young woman holding credit card and using laptop computer. Online shopping.
Machine Learning for Ecommerce with DAR.WIN:
A Primer
1024 727 Jim Fenner

Machine Learning for Ecommerce with DAR.WIN:
A Primer

Diagram of DAR.WIN's influence on ecommerce

Searching for the phrase “Machine Learning Ecommerce” doesn’t do much for the average online store runner who actually wants to try machine learning out and learn the basics without being overwhelmed. With the abundance of forecast articles that start with ‘By 2025’, you might be surprised to learn that machine learning tools are already available, easy to use, and affordable for mom-and-pop shops — tools like DAR.WIN!

We made DAR.WIN for ecommerce professionals who want to start using Machine Learning on their own sites without the overhead of expensive hardware, harsh learning curves, or complicated maintenance (we have a free, automated tier that you can set up in minutes!). Our users love our easy-to-navigate dashboard and have seen sales increase by over 20% shortly after getting started. In short, we wanted to make a consumer-friendly machine learning app that makes your life as a store runner easier and your store more profitable.

Gif of DAR.WIN metrics being measured
Big Data = Big Numbers — this is how DAR.WIN got so good at recommending cross-sale items.

Now, we’re providing some insights into the basics of how Machine Learning and ecommerce work together — and we want you to join us as we go.

In this channel, we’re going to be covering topics like:

  • The basics of Machine Learning for online store owners
  • What sorts of features you can expect from machine learning tools in ecommerce, like product recommendations, visitor segmentation, store personalization, real-time price adjustment, email cross-sales and cart replays
  • How to apply what you learn from your machine learning system to become a better store owner — both online and brick-and-mortar
  • Different approaches to Machine Learning for stores with varying inventories, dropshippers and dropshipping, virtual products and more

Machine Learning (and Artificial Intelligence, lest we forget) for ecommerce will continue to emerge as the primary means by which individual online retailers improve their sales performance —and we’re here to help figure out how to make it work for you so you don’t miss out!

If you happen to already have a Shopify store, you can try out DAR.WIN for free and let us know what sorts of visitor insights you’re gaining. If you have any questions about trying us out, we’re located in Brooklyn, NY and are always happy to chat!

Learn more about DAR.WIN and Machine Learning for Ecommerce here: https://dar.win.