Assia Benmedjdoub asks designers how they broke the export market, driving eCommerce sales as a powerful channel.
Joining the discussion is designer Lee Mathews, Bec and Bridge global sales director Jordana Sexton, Alice McCall general manager Nicole Macey and Australian Fashion Labels co-founder Melanie Flintoft.
Assia: When did you first start exporting and what were the key markets?
Melanie: We founded Australian Fashion Labels (AFL) in 2007. Following our success in establishing an Australian wholesale business, we looked to overseas markets in 2011 to grow sales and increase volume, enabling AFL to improve its supply chain. Our international focus was initially on the USA, UK and Europe. We now wholesale in more than 20 countries and retail in more than 55, with the US and China forming a major part of our revenue.
Jordana: We started exporting in 2008/2009. The USA and of course New Zealand were our first major export markets, now we are focussing on Europe.
Nicole: In 2004 when the label launched, wholesale distribution was the only opportunity to sell internationally. We launched our e-boutique in 2009, five years later. The UK, Middle East and Japan were first as those regions were where we had wholesale distribution partners.
Lee: Japan was our first key market. The brand makes a lot of sense there, our aesthetic translates easily so this became our first international market very naturally.
Assia: What were the initial challenges in setting up an export business?
Melanie: There are so many challenges in setting up a successful export business. Considering AFL makes to order, our first challenge was to establish sales distributions channels, then funding the working capital to produce the product. We also had to ensure our supply chain was set up to deliver and that we could invoice and collect payment. Each market has nuances to consider.
Lee: Navigating seasonal collections across hemispheres was the biggest thing we had to understand. Transseasonal pieces and styling has become important and making things in cashmere, denim, drill or heavier fabrications, as well as the classic silks and cottons of a resort brand. This also involves changing the view of international buyers towards Australians only designing for ‘high summer’.
Jordana: Warehousing and shipping and currency differences were a challenge. The Northern vs Southern Hemisphere seasonality difference was also a challenge and on top of that you have the time difference.
Assia: What were the most successful sales channels back then?
Nicole: Wholesale distributors with vast retail networks and extensive contacts were instrumental, as were the quality and quantity of stockists they were able to secure.
Jordana: Trade shows and wholesale came first, then the rest naturally followed. Partnering with the right agents, warehouse facilities in the USA to take care of local shipping within the USA has been key - you need a team on the ground. Initially wholesale was where we saw the growth up until about 2015/2016 and now our international export growth lies online through our eCommerce business.
Lee: We were thrilled to be picked up by Net-a-Porter and Matches Fashion. They are great partners because they believe in the brand and have helped us become visible to a global woman.
Melanie: We established a network of agents and distributors across the globe to support the wholesale business. The distributor network in some ways is “easier” as importation, billing and inventory management is undertaken by others. On the other hand, an agency arrangement can be preferred, but onus of importation, delivery, invoicing and collection resides with us.
At AFL, our agents participate in trade shows, however the primary method of sale is through direct buyer relationships and showings. eCommerce sales; both vertical through BNKR (fashionbunker.com) and our Tmall flagships in China and through wholesale eCommerce customers (e.g Amazon, Shopbop, Revolve, The Iconic etc).
Assia: What are your key markets or clients now?
Melanie: At present, 70% of our revenue is generated outside of Australia. The US, China and Australia remain our main wholesale markets, where we have established offices for local sales, PR and fulfillment. Similarly, these markets are also our focus for growth in our eCommerce, through BNKR and Tmall. We also have solid business in the UK and Middle East, whist South East Asia is a region we are exploring further.
Jordana: Bec and Bridge eCommerce is our strongest channel and when it comes to wholesale, we have forged strong partnerships with the likes of Shop Bop, Revolve and Rent the Runway in the USA, and are set to launch on Farfetch shortly.
Assia: How are you using your own eCommerce channels to expand your export business?
Nicole: Potential new customers and even retailers will explore a brand’s owned channels to determine whether it’s right for them. It’s our opportunity to tell the brand story, create direct connections with them, and drive demand.
Lee: Our online presence is more than just sales - it is our international window for the brand, serving as our home for PR, marketing, styling and brand awareness which serves to support the wholesale side of things. We have seen steady growth within the USA, UK and Asia where we now have dedicated eCommerce sites.
Jordana: Our eCommerce website allows us to reach a new and very-engaged international customer base which is an area of the business that we are increasingly investing in. Within this year alone, our international sales online have increased by 150% and have grown to become a larger percentage of our total online sales.
Melanie: In 2015, we relocated our single eCommerce warehouse from Adelaide to Hong Kong and Melbourne, to ensure we could meet a one- to four- day delivery anywhere in the world. Customer experience is critical for our success in eCommerce, and fast delivery is a key component of that. Seasonality is also a key factor. At AFL, we design both Northern and Southern Hemisphere ranges for every season, delivering every month.
This enables us to tailor and market product that resonates with the unique attributes of our customers, through four separate web-stores servicing AU/NZ, USA, UK and China. We also use local currency (AU$, US$, GBP) and even Mandarin for our China website cn.fashionbunker.com.
We have live chat customer care teams in AU and US, offering return locations in AU, USA, UK and HK, and use a suite of PR, digital marketing and AI driven segmentation to personalise our communications with our global audience. We now also hold inventory within China, for domestic Tmall eCommerce for our C/Meo Collective flagship launched in March 2019. We will be rolling out further Tmall expansion in 2020.
Assia: What advice would you have for brands wanting to set up international sales via eCommerce?
Nicole: Treat each region differently and personalise the process for your customers. We use their local currencies and pricing, relevant shipping and taxes, and offer preferred localised payment options.
Jordana: Go for it, however ensure you research shipping and choose the right partner and have your returns and exchange policies nutted. It’s also key to have the right person managing this as the customer service is an important part of running an eCommerce business, especially when it comes to response time.
Lee: Open communication around pricing, shipping and returns has been key. It’s the little things that make a difference when entering a new market and doing so with your eyes open.
Melanie: Through eCommerce, the opportunities to sell to anyone, anywhere at anytime has never been better. With that said, obtaining initial sales are easy; the challenge is scaling the offering, through combining the product (seasonally appropriate) with the PR/marketing for awareness and ensuring the user experience (including delivery time) is optimised.
Assia: What's the greatest opportunity in direct online sales globally?
Lee: Being on a website is like stepping into someone’s world. Storytelling makes the biggest difference when shopping directly from anyone online. This is how we want people to experience who we are and although we could be doing better, we have gained some special global VIP relationships because of this.
Nicole: Direct access to our customer and insights, which enable us to continually improve their experience.
Melanie: For AFL, we see the US and China as key markets with significant further upside. The markets are different, but we can grow them through a combination of further investment in digital marketing and strategic collaborations with ‘key opinion leaders’ (KOL).
Jordana: While we are still achieving impressive growth within our own domestic market, we are increasingly finding that our opportunity for growth internationally is exponential as the customer base in regions such as the US and UK is significantly larger with a notably higher average price point and item per sale spend.
Assia: What's the biggest challenge?
Jordana: While customers in regions such as the US are willing to spend and purchase more than our domestic customers, they also expect a lot more and have very high standards for speed of shipping, cost of returns and customer service availability. Of course, seasonality can also be a real challenge, for example our current resort collection product and content becomes less and less relevant to our Northern Hemisphere customers as we reach closer to the end of the year and into their winter season, which is why we are now producing Northern Hemisphere specific collections.
Lee: eCommerce is really powerful. Keeping up with the rapid changes and stock needed to keep providing the best possible experience for customers is always important and absolutely the biggest challenge.
Melanie: Our biggest challenge is tailoring our offering to diverse global businesses and supporting our localised teams who are critical in supporting our PR/brand awareness efforts.
Assia: Are there campaigns that have contributed to increased eCommerce sales from overseas markets?
Nicole: We’ve seen a mix of marketing activity work for us internationally – from participating in New York Fashion Week, to hosting a party at the Chateau Marmont in LA – it’s all beneficial when building your brand overseas. We also have an extensive celebrity and influencer dressing program in place, and the right combination of talent and product can drive sales instantly, or at the very least, increase your Instagram following overnight.
Jordana: We have had some invaluable placements on celebrities this year, such as Kendall Jenner and Hailey Beiber, which has allowed us to generate some really impressive results internationally. The infamous Instagram post of Kendall Jenner purchasing an orange Pepsi whilst wearing a matching orange Bec and Bridge dress generated so much attention both locally and internationally that we had a wait list of hundreds of customers before the product was even released.
Melanie: We have seen significant success from collaborations with Chinese KOLs with global audiences. We are also advancing our AI driven segmentation to personalise communication with customers by behaviour and/or stage of the customer journey.
Assia: What strategies do you have in place to continue this growth?
Jordana: This year we have been very focused on improving the online experience for our international customer base so that we can improve our returning customer rate and increase repeat sales. So far we have seen some really positive results with a 276% increase in our international returning customer rate since January. We have also begun investing in paid social marketing campaigns for our US customers which has proven to be an invaluable tool for generating new traffic to the websites. Of course, a loyal celebrity and influencer following has been crucial for us to grow brand awareness internationally also.
Lee: International growth has been organic until now, but it feels like we are entering a new phase where we are more ‘curated’. Our next challenge is to connect our online and offline experience better and continue to evolve as a bricks and mortar business, which is still our strongest sales avenue.
Melanie: Our focus is on communicating a consistent and clear brand voice. We also see opportunity to review our US eCommerce shipping direct within USA.
Nicole: It’s an organic process for us, we aren’t trying to force it. As an Australian designer in its 15th year, we’ve established significant international brand awareness in such a short period of time, so we’re extremely happy with where we’re at internationally, for the moment.