Multichannel Success Podcast Season 4 Episode 5 - Transcript
Tracking and using Customer Intent - with David Mannheim
Mark Pinkerton [00:00:05 - 00:00:48]
Hello and welcome to this episode in season four of the Multi-Channel Success Podcast. Welcome to this remote episode of the Multi-Channel Success Podcast. In today's episode, we're delighted to have with us David Mannheim, who is the founder of Made With Intent, of which more in a little bit, and he is very much focused on how consumers buy and what are the intents they have and how to make the most of that. So welcome, David. Thank you very much. How are we all doing? We all good? We're all good. I'm going to refer to you as DM from now on because we also have my co-host David Worby on the line, who I will call DW.
David Mannheim [00:00:48 - 00:00:50]
I'm very happy to be called DW.
David Worby [00:00:50 - 00:00:54]
I sound like Danger Mouse and you sound like DW Sports.
David Mannheim [00:00:55 - 00:00:57]
Well, yeah, I know what I'd rather be.
David Worby [00:01:00 - 00:01:04]
The banter begins already. Yeah, well hopefully.
Mark Pinkerton [00:01:02 - 00:01:13]
Yeah, well, lovely to be here. So, DM, if you can tell us a little bit about your your background and where you are in in things at the moment.
David Worby [00:01:13 - 00:02:01]
Oh, my background. Well, when I was three years old, I got my first bike. I don't, I don't know how far you want to go back. Um, um, well look like career wise. Uh, I was, uh, I was an ad man, right? Always wants to do advertising, studied at a university, obsessed by the creative. Guinness ads and the three ads. If you ever remember those, um, they were great ads, weren't they? Uh, did you do those? No, I just admired them. Um, I studied them though. I remember studying them cause they, they were really disruptive in the day. The, uh, you remember the horse on surfing or they're coming through the waves for Guinness, um, outstanding, creative, um, and then somehow
Mel [00:02:00 - 00:02:01]
I get.
David Mannheim [00:02:00 - 00:02:01]
I love you.
David Worby [00:02:01 - 00:02:49]
fell into analytics, I guess, digital marketing created this squiggly funneling down from digital to UX to CRO to experimentation to personalization. Um, started my own agency for some unbeknownst reasons back in 2015 called user conversion. Uh, did really well from that ended up selling it and working with some of the biggest retailers in the UK, uh, wrote a book called the person in personalization, which was for my sins, more of a memoir than anything else. And started business number two, not so long ago, a couple of years ago called made of intent, a product, not a consultancy. So it's, it's been varied, unexpected and fun. I'm going to use the word fun.
Mark Pinkerton [00:02:50 - 00:02:52]
It certainly tells, Mike. And now the highlight, of course, is being on our podcast today.
David Worby [00:02:56 - 00:03:10]
There you go. Exactly. So yeah, it's definitely, it's interesting, isn't it? Moving from consultancy to product as a function. Are you guys firmly in the consultancy land? Have you ever done product before? I did product a very long time ago.
Mark Pinkerton [00:03:09 - 00:03:14]
I did product a very long time ago, but generally I'm a consultant these days through and through.
David Mannheim [00:03:16 - 00:03:25]
Yeah, I think we're all about services. But I loved your intro, David. It's just a bit disappointing you got through five minutes of it without mentoring your beloved Manchester United.
David Worby [00:03:26 - 00:03:34]
They're not beloved anymore. I go through waves of loving and hating them. Thankfully it's been the international break, so I've had a bit of a...
Mel [00:03:33 - 00:03:35]
I've had a bad day.
Mark Pinkerton [00:03:34 - 00:03:35]
Relaxed.
David Worby [00:03:34 - 00:03:59]
Relaxed. Yeah, I haven't managed to focus my efforts elsewhere. I mean my other love is Disney, I think most people are aware of that. It's a love-hate relationship, you know. It hates me and I love it because it likes to take as much money from me as possible and I will just continue to feed it money. The mouse is very much a machine, but yeah I'm a huge Disney fan as well.
David Mannheim [00:04:00 - 00:04:04]
Well, if there's anybody listening from the wonderful world of Disney, do get in touch.
David Worby [00:04:03 - 00:04:25]
Oh, 100%. In fact, that's all I wanted to do, chaps. As soon as I sold User Conversion, I applied to 14 different job positions at Disney, just in the hope and the whim that I would somehow... I mean, they do say never work for your heroes, right? But I just wanted to scratch that itch, and it just didn't come to fruition.
David Mannheim [00:04:27 - 00:04:28]
Oh, well.
Mark Pinkerton [00:04:27 - 00:04:31]
Well, I was going to say shame, but I don't think that is a shame.
David Mannheim [00:04:28 - 00:04:29]
Well, I was going to say Shane, but I...
David Worby [00:04:32 - 00:04:38]
Yeah, you'd probably see behind the curtain, wouldn't you, and probably not like what you see either.
David Mannheim [00:04:40 - 00:04:43]
Well, there you go. It'd be wonderful to try at least once.
Mark Pinkerton [00:04:43 - 00:04:44]
Yeah.
David Mannheim [00:04:43 - 00:04:44]
Yeah.
Mark Pinkerton [00:04:45 - 00:04:54]
So I want to start the sort of meat of the conversation today around consumers and how should we think about consumers?
David Worby [00:04:56 - 00:06:21]
I think it's a fairly simple answer. You should think of them as like people, not numbers. It's an interesting one, isn't it? Because as we've become more analytically driven, thanks to the advent of digital marketing, you tend to think of consumers as numbers. I'll give you a really nice example. I was at a conference just last week, and the conference was about AI. And they had a coffee machine with real people, real baristas serving you coffee. But in order to get a coffee, you had to scan a QR code to talk to a chatbot to order your coffee, and it would give you a number. I was number 749. I actually never got my damn coffee after waiting 15 minutes. I don't think that's the point. The point is, there's a reason why Starbucks say coffee for David. It's because Howard Schultz once said, Starbucks is a people business, not a coffee business. And what that coffee machine company thing was doing was focusing so much on efficiency, which actually was funny that I never received my order, but it was focusing so much on efficiency that it removed any kind of personal element from the customer service. So I think the answer to the question is, you should think of them as people. Don't forget, at least, that you're dealing with human beings, which are rather complex.
David Mannheim [00:06:21 - 00:06:59]
Yeah, and I was talking to someone last week who said, just don't forget that you are one of them. Absolutely. And that kind of brings the reality of real people with real-world problems doing real-world things into a world that only previously saw customers as best cohorts, but often as large swathes of groups of nameless, faceless bits of data. And I think trying to get out of that and into thinking them as individual people like you and me is not that difficult. Doing it is where it becomes very challenging, I would have thought.
Mark Pinkerton [00:06:58 - 00:07:41]
Yeah, and we also, I mean, we had Ian Scott, who is a retail store expert in on the podcast recently. And one of the things that, you know, he doesn't talk about technology in retail so much, he talks about the people and their ability to generate enthusiasm for the audience effectively. And his favourite is Lush, which is not a technically advanced outfit. Normally, in terms of stores, you wouldn't think so anyway. But, you know, the classic case of stores putting in automation actually reduces the consumer engagement side of things.
David Worby [00:07:41 - 00:08:23]
Well, it does. You look at any restaurant now and you go sit down at a restaurant, you'll likely scan a QR code. It's interesting, you know, that that wave was brought on by COVID, like a necessity, not to interact with other people. And it's turned into a social norm and there is probably a hell of a lot of evidence. In fact, I know of some from Nando's actually that I probably shouldn't repeat. So I won't, but where scanning a QR code will not only increase throughput and efficiency, but also average order value. So it's great for the business. I just wonder whether anybody sat down to ask how good is this for our customers and our long-term relationship with our customers.
David Mannheim [00:08:24 - 00:08:57]
I think that's the point. You've hit it, the nail on the head for me. It's about the long term versus the short term, because I think it's very easy to see all these expeditious stuff and these value efficiency creation things through the lens of what do we get from these people in the short term. But actually, if you're trying to build long-term customer value, it could actually be detrimental. However, with investment horizons only shortening, it does seem to me that the focus is on short-term gain rather than long-term value. Of course it is.
David Worby [00:08:58 - 00:10:12]
You only need to look at psychological effects of ego and greed and power to understand that short-term is everything. We mentioned United in the beginning, let's carry on that. Take Manchester United. They were bought out by the Glazer family on nothing but debt. And they employed a CEO who was an acting sporting director of Ed Woodward who purchased players for short-term benefit, putting them on huge wages like 300, 350,000 pound a week just to be called as assets on the balance sheet. Now, what's the long-term impact of that? Well, the long-term impact is we can't bloody well sell them because their wages are too high. But the short-term impact is it made Ed Woodward look really good because the balance sheet looked really impressive. It's a fascinating psychological behavior. I mean, I wonder that's why you say CEOs or e-commerce directors or those in position of power move around every two to four years. If you know that you're only going to be a business for two years, what are you going to do? Are you going to focus on the long-term or the short-term?
David Mannheim [00:10:14 - 00:11:09]
Yeah, no, I'm really with you. I didn't think it would take you too long to get a Manchester United quote in. So well done in the first 10 minutes of getting an anecdote from Manchester United in. Top draw for that. Mine is kind of a bit about the kind of whole VC world, which is, if you like, dominated a lot of the sectors that we talk to, namely UK retail or fashion retail or accessory retail, you know, and back in the day, those were investments for the long term. Now they're not. Those brands theoretically are going to continue for a long time in lots of cases. But if the investment horizon is two to three years, that precludes doing really good things that maybe don't have a good payback in the first two, but might in the in the last three, four and five years. And I think that's to the detriment of those brands in the long term. I mean, look, the VC world is long talked about as damaging certain sectors. Maybe that's not for today, but I can see that trade off between long term and short term happening in real time.
David Worby [00:11:09 - 00:11:49]
Absolutely. You probably see that in most industries, right? It's probably prevalent in healthcare, and finance, and travel, and not just retail. It's just, we're probably not close enough. And politics, goodness me, you only need to look at politics. Oh, let's not go down that rabbit hole. But you only need to look at politics to understand, well, this person of power, Keir Starmer and the citizens, might have a four-year tenure. What's he going to do? Is he going to set up the country for the next 50 years, Margaret Thatcher-style, or is he going to focus on his popularity over the next four years, for his own personal gain for the four years thereafter?
David Mannheim [00:11:49 - 00:12:02]
Yeah, I know what you mean, we shouldn't really go there because it's going to take too long. But I would argue, he's going to spend two years doing some good stuff and then two years fighting for election. So, you know, what long term value is there in that? Exactly. Shall we move on?
David Worby [00:12:01 - 00:12:02]
We'll be gone.
Mark Pinkerton [00:12:02 - 00:12:32]
I want to focus on how do consumers buy or what are the buying stages that they go through and how can we make the most of understanding those stages. I mean, you know, it's the classic sort of ad driven, you know, awareness, interest, AIDA models. But, you know, what's your take on it? DM.
David Worby [00:12:33 - 00:14:53]
Well, I mean, let's relate it back to what we were just talking about, not about Mr. Starmer, but about long-term and short-term measures of success, metrics, KPIs, right? And if you're in a short-term KPI cycle, if that's your measure of success, then it's highly likely that you'll be focusing on immediate impact. You know, how many times have we heard low-hanging fruit before? Where in that funnel, the ADA funnel, for example, you know, which was created in 1898, over 120 years ago, or indeed various funnels that are similar to that, they're all roughly the same and we're in marketing, right? So we love a good acronym. They'll always focus on the A of ADA, the last A, the action, right? How can we get more people to convert? Success isn't too much of a concern. Interest isn't too much of a concern. Desire isn't too much of a concern. It must all be about action. And it has created this form of what we call digital directness, where brands online are so overt and obvious and transparent in their almost desperation for a user to convert there and then for them to take action within that session. Examples will include, as soon as you land on a website, you'll see the 10% off pop-up. They'll immediately greet you or you go on a product page like a booking.com, for example, and you'll be like, 50 people have bought this. 500 people saw this just last month. 10 people have got this in their basket right now. And the power of persuasions is really powerful. We've all read Robert Cardini's book, right? There's a difference between persuasion and manipulation. And I feel as though the short-term metrics and measures of success are the ones that are ultimately driving those tactics. So those tactics are a result of the fact that we're measured against conversion rate, this quarter's targets, this annual budget. And they don't preclude things like retention, CLV, customer loyalty, and that type of thing.
David Mannheim [00:14:54 - 00:15:29]
I think this is fascinating and it takes us right into the heart of our question about what our retail is doing wrong today. But question, David, if you found a business somewhere, I'm sure it exists somewhere, that doesn't have those short-term investment horizon challenges, what would you see as the natural stages through which your customer goes in order to reach a kind of intended purchase? And more importantly than those stages, how do you value those stages rather than the short-termist analogy you've just given?
David Worby [00:15:29 - 00:16:45]
Yeah, so Patagonia, I think, is a good example. I think another good example might be Netflix, although they weren't originally there. And I'll explain why. Netflix have just released their annual reports for their shareholders. And they refuse to have their KPI, their core metric, as subscriber growth, both percentage and in numbers, on their paper, on their board paper. And when asked why, their CEO turned around and said, because we don't think it's a reflection of where our evolution is in our market. We don't think it's a measure of success that we should be focusing on. And when pushed further, he said the measure of success is about engagement. Now, think about that for a second. If your measure of success is subscriber growth, as Netflix once was, right? If your measure of success is subscriber growth, you're going to set up every area of your business to achieve that measure of success. So it would be things like focusing on, I'm making this up, right, because I don't know Netflix too well, but focusing on discounts, free trials, getting people to sign up as easily, quickly as possible, new content to draw people in, that type of stuff.
Mark Pinkerton [00:16:44 - 00:16:49]
Yeah, and trying to retain them through effectively making it very hard to unsubscribe.
David Worby [00:16:50 - 00:17:35]
Well, exactly. Cause we're talking about subscriber growth, new customer acquisition. Okay. Now they changed that measure of success to engagement. Why? Because that meant that their, their tactics, their strategies of how they're going to achieve that measure of success now no longer becomes about almost goading people into subscribing, but it becomes about the quality of the content that enables them to stay for longer periods of time is basically a proxy for retention. I don't feel like I've done a good job at answering your question, but the, I think the message that I probably want to communicate is how you measure is a reflection of how you sell or sorry, how you sell is a reflection of how you measure. Um,
Mark Pinkerton [00:17:35 - 00:17:50]
Yeah, I think that's I think that's true. And I would also say that by choosing that as a, you know, as a KPI, that they are effectively aligning the business better with what their actual customers want them to do.
David Worby [00:17:51 - 00:19:59]
Do you want another example, by the way? I'll give you a really nice Disney example because I'm a huge Disney fan. I don't know if you've been to, have you been, you boys been to Walt Disney world, I don't know, the past five years. Paris. Yes. Four years. Okay. I'm probably thinking Walt Disney world. So the one in Orlando, I I'll, I'll tell you the story. So about 15 years ago, uh, you know, you would go to space mountain and you would go on the ride and above the space mountain sign, there'll be an estimate wait time of say an hour. And most people believe that our, it was probably in the interest of Disney to inflate that, um, sorry, underestimate that, that hour, because people waiting in queue didn't mean that much to them. They don't, I guess don't want to wait in queue either. Right. I mean, what do you do when you wait in the queue? You can't spend any money in the parks. You're just waiting for the next ride. There are almost like inactive, uh, people that can't do anything. So it was neither in Disney's interest nor the guests interest to wait in that queue for an extended period of time. Okay. So the hour was mostly a believable, uh, wait time. Now, what happened if you fast forward 10 years, so just five years ago, they introduced this other line within space mountain or the rides called a fast pass line. What happened here in order to get in the fast pass, you'd have to pay for that privilege. Okay. Now what happens when you start doing that? Well, the measure of success changes from let's reduce the wait time as much as possible and improve the guest experience. So let's get as many people through the fast pass line where they have to pay as much as possible. What happens there? Well, instead of the hour becoming a believable measure of how long I'll be waiting, it becomes an unbelievable measure. Why is it in Disney's interest to under inflate that time? If anything, they're going to say it's two hours away. So by the way, you should probably buy the fast pass queue system. Do you know what I mean? The measures of success changed. So how they sell also changed.
David Mannheim [00:20:00 - 00:20:06]
Well, I suppose we've always thought that, you know, measure what matters is a decent
David Worby [00:20:00 - 00:20:01]
I'm
David Mannheim [00:20:06 - 00:20:17]
kind of thing to live your life by, and it just tells you what the underlying motivations of the business are when what they're measuring is short-term sugar rush impact benefit.
Mark Pinkerton [00:20:18 - 00:20:36]
But I also think there's a moral imperative with that story, in terms of not providing disinformation to consumers, I think that is inherently wrong, and I think organisations should be slated for it, as politicians are increasingly.
David Worby [00:20:34 - 00:21:03]
Oh, yeah, that's for whether Disney does over inflate their queues. But I will say it's not in their interest to make those queue times believable. There were stories of every 40 people for zero for every 40 people that went through the fastpass queue, they would let five in through the standby queue. So you can see how like that ratio is really impactful to the guest experience. And it's turned a hell of a lot of people off.
Mark Pinkerton [00:21:04 - 00:21:10]
Yes, they won't go back. It maximises revenue short term, but it doesn't help long term.
Mel [00:21:12 - 00:21:40]
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Mark Pinkerton [00:21:43 - 00:21:51]
So, if I can bring the focus back onto retailers, what are retailers doing wrong? What do you see that retailers are doing wrong today?
David Worby [00:21:51 - 00:23:11]
Well, I, I think that they, they measure incorrectly or sorry, they over-index in the wrong measures, much to this point of the Disney example, the Netflix example. I feel as though the measure of success for a lot of online retailers is conversion rate. Now think about conversion rate. Conversion rate is a reflection on how you want people to buy. It's a measure of success that's retrospective. It's already happened or it hasn't. It's binary. It's a yes or a no statement. And it's a measure on results, not necessarily, let's say performance. Um, it's in no way indicative of the quality of users or audience on your site or that are enjoying your product. It's just a proxy metric for all, for something else. And I feel when you start to focus on conversion rate, this aggregated entity, everything else before it also becomes aggregated. It's why we look at pages, PDP, PLP, basket, checkout, homepage. We reduce a website journey into nothing but page templates. And I think that's the most unhuman thing you could do because it aggregates the journey. That way of thinking doesn't appreciate that there's a person on the other side of the screen. And that is why we have the 10% popups in our face.
David Mannheim [00:23:13 - 00:23:28]
So while those measures, therefore, may be wrong, or let's just call them lazy measures that maybe once were attractive, on the basis that measures have to be relatively easy to A, understand, and B, to report on, what should they be doing?
David Worby [00:23:28 - 00:23:56]
So I don't think we're ever going to move away from conversion rates. I'm not saying conversion rates the enemy. I'm just saying it's a symptom of something that we've created as businesses to make things more accessible, right? I'm going to give you another story. I'm going to give you the inspiration for Maid of Intent, my new business, and that is football. Let's bring it back to United, shall we? Chaps, have you ever heard of the term expected goals? Yes. Okay.
David Mannheim [00:23:57 - 00:23:58]
No.
David Worby [00:23:58 - 00:26:04]
Let me educate and ruminate for a little bit. So educated goals is this statistic that helps you understand the quality of the chance. So it's not about the number of times that you ping a ball at a net. It's not about the fact that you had 30 shots on goal or off goal. It's about the quality of those shots. For example, I would much rather have 30 shots in the 6-yard box rather than 30 shots outside the 12-yard box. So OptoSports, a research house, created this term XG, expected goals, i.e. the likelihood that a shot will turn into a goal. So it's about the quality of the chance. And they do this by looking at the angle of the shot, the distance of the shot, the possession of play beforehand, et cetera, et cetera. They model all that to give a figure. For example, if you would have seen two weeks ago, Ollie Watkins missed an absolute sitter, that was a 0.84 XG, i.e. for every 100 times that you would have had that exact same chance, you would have scored it 84 times. Now, I think that's a beautiful metric. Why? Because it looks at the predictive, at a scalable measure of what should happen, not a retrospective measure of what did happen, i.e. it focuses on performance, not results. Why does this sound so familiar? Well, a goal is much like a conversion. It's binary. It happens or it doesn't happen. It's retrospective. It's already happened. You can't interfere with it in real time. Whereas an expected goal is akin to an expected conversion. XG is like XC. It's something that's indicative of quality, of performance, not results. It allows you to understand whether you are underperforming or overperforming. Should you have scored that goal? Should you have converted that user? Or did that thing not happen? So I think that's the answer for me. I think that's a golden metric.
Mark Pinkerton [00:26:03 - 00:26:09]
So you're moving from a post-event into a forecast, effectively.
David Worby [00:26:09 - 00:26:12]
Yeah, like a laggard against the forecast.
Mark Pinkerton [00:26:09 - 00:26:11]
Yeah, like a lot of them.
David Mannheim [00:26:12 - 00:27:12]
Well, no, I'm not sure that I'm not sure that's true. Cause the thing I would spring to mind when you were talking about that, David, was the notion of trapping demand. Demand was that mysterious figure that was available to you from which you achieved a portion. And what you're describing here is, you know, a man on the 18 yard line hits a ball, the likelihood is he's going to achieve X, not Y. And we used to have the idea in the old days that, you know, a shopper or a visitor gave you a potential for X and you achieved Y. So it's kind of, it's trying to mapping that Delta. It's the Delta between what actually is likely to happen and what theoretically could happen. And we've lost, I think we've, we, we generally lost demand as a concept. We only really have sales, which you kind of go to the bank with. Um, so I like that idea. We should try and work up a model that puts that back into the KPI equation.
David Worby [00:27:11 - 00:27:23]
What we do is called made of intent. That's exactly what we do in our business. We are trying to change the way retailers think about how they measure, which ultimately impacts how they sell.
Mark Pinkerton [00:27:29 - 00:27:34]
So how do you track and build up the information in order to assess intent?
David Worby [00:27:35 - 00:28:49]
Well, if we take football as the inspiration, what football did is that they measured, originally, I think it was 16 attributes of, again, angle of shot, irrespective of who took the shot. It was the build-up that led to the quality of the shot itself. So think of them as implicit signals or actions. And the same is true online. If you think about how we buy in a store, we, a shop assistant, a car salesman, for example, we look at one's body language, one's tone of voice, one's hand gestures, to determine where they are in their buying stage. Are they just browsing, for example, or are they really interested in committing to a purchase? And OK, that's a bit of a flippant example. But what I'm saying is that what are the hand gestures and body language and tone of voice in an online environment? Well, it's mouse clicks, it's movements, it's speed and tempo and engagement. And if you model all these nuanced implicit signals together, they give meaning. They give context. That's how you create and understand intent. It's through modeling implicit signals.
David Mannheim [00:28:52 - 00:28:54]
I like it. I like it.
Mark Pinkerton [00:28:55 - 00:29:00]
And what specific signals are you able to track in this day and age?
David Worby [00:29:01 - 00:29:48]
We'd be surprised. So I mean, we have a single tracking script that ultimately just tracks everything, you know, by way and a large anyways. And but you'd be surprised that your intent is measured on your actions in that moment in time. So what do you do as opposed to what it is that you've previously done is of a far greater indicator for me to understand that you want a pint of milk by quickly going to a milk aisle. That's of a greater indicator of your intent, the speed at which you go to the milk aisle and your specific actions than the fact that you've been a Tesco club card for six year holder for six years. I do think that people's way of thinking, the entrenched way of thinking, much like just replacing Giambi is the thing that holds us back.
David Mannheim [00:29:48 - 00:30:09]
I think that's a fascinating angle, and it makes me think that if the technology, as you said, is there to execute all this stuff, the challenge is the human brain can't or won't or isn't ready yet to conceive of it. So how do we get the machine to do more, or how do we get the machine to educate the human brain that it can think differently? Well, that's a whole new podcast episode.
David Worby [00:30:08 - 00:30:35]
I must admit, I don't even know if it's that. I think it needs somebody to start the dance for others to dance. And I don't feel as though, you know, nobody to our knowledge is doing it. To be fair, there is other tech that is focusing on this, albeit not to this great level of depth that we're at least trying to do. And I feel as like we're the ones that are just getting up to dance, you know, at the wedding first. I'm hoping that others will follow.
Mark Pinkerton [00:30:35 - 00:30:44]
Yeah, lots to think about. And I'm going to have to call it a wrap at that point. So thank you, DM. Thank you very much for your insights.
David Mannheim [00:30:44 - 00:30:48]
You're very welcome. You've tied me out now. I'm going to go have a green tea or something, or a beer. And thank you, DW.
David Worby[00:30:59 - 00:31:10]
Thank you, guys. Enjoyed that one. And we will talk to you on the next one. Thank you. Thanks to our sponsor Shopline, trusted by over 600,000 merchants worldwide to unlock the power of modern commerce. Find out more at shopline.com
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