Make it personal
The L’Oreal Melbourne Fashion Festival Business Seminar is now one of the most respected industry forums in the world. Assia Benmedjdoub kicks off a four-page spread on the March 2010 instalment, with a breakdown on presentations from e-entrepeneurs Sarah Curren and Sojin Lee.
“So the MSN guys said let’s test your theory. I’m going to call your call centre and see if they can get me a pizza. Because I’m in Seattle and I don’t know where to get a good pizza.”
Sojin Lee is recounting a story involving Tony Hsieh, the chief executive of online shopping giant Zappos, and a bunch of nameless execs from Microsoft portal MSN. Hsieh is credited for turning Zappos from a $1.6 million business in 2000 to over $1 billion in gross merchandise sales eight years later. He’s a little cocky about attributing this success to customer service – its call centre once fielded a four hour conversation – and as Lee goes on to tell, this cockiness invites a cheeky bet one late night in Emerald City.
“So the top guy at MSN picks up the phone [and calls Zappos],” she continues. “‘Hey, I’m in Seattle, I don’t know what I’m doing and I need to find a local pizza’. He said there was silence for a good six seconds. And everyone is looking at Tony thinking yeah right, whatever. Six seconds later, the operator said ‘I can take your number and I’d be happy to call you back once I’ve ascertained that information’. Then they hung up and waited.
“Two minutes. Three minutes. No call. They started making bets. About five minutes later the phone rang. It was the operator. She said, ‘Sir, I have found three locations and reviews based on those locations. I’m happy to make that call for you, otherwise I’m happy to email you that information.”
Lee shakes her head and pauses. This is a company which allows its call centre staff to work free of scripts, quotes or call limits and accepts 365 day returns from its customers.
“That for me defined everything right about Zappos. The consumer comes first. The service comes first.”
Lee has been invited to speak at the L’Oreal Melbourne Fashion Festival (LMFF) Business Seminar, an annual event which has featured everyone from Topshop genius Jane Shepherdson to H&M head of design Margareta van den Bosch since its inception.
This year Lee is here to talk about fashionair.com, a fashion entertainment website she launched just six months ago with financial backing from Simon Fuller; yes the man responsible for American Idol, So You Think You Can Dance and the Spice Girls. With a strong luxury fashion background behind her, including roles at www.net-a-porter.com, Bottega Venetta and Chanel, Lee says she was itching to create a more “experiential” offer for online consumers. A transactionless Zappos for the well heeled, if you like.
What makes Fashionair different to other online players however, is its changing software platform.What you see today might look entirely different in two months time. Lee has no time for “off the shelf” web solutions, which she describes as being developed by a “bunch of coders sitting in Silicon Valley who don’t really understand fashion and the emotion of fashion”.
“We are in beta format – in the tech world, this just means we’re progressing. But for us, the beta format means much more. By having a partner like Simon Fuller, one of the advantages we see is the ability to be maverick. We don’t have a fixed business model that pins us down to be a certain way, that we don’t have to be in a format or concept that we have today.”
Currently, Lee describes the website as the “BBC of fashion” with fixed television programming including ‘The Chic Fix’, a fashion news segment; Seven Days Of Chic’, one girl - one week of wardrobe choices; and ‘Fashion Insider’, a program which looks at the lives of fashion designers and entrepeneurs. This is interspersed with online shopping solutions and a ‘My Fashion File’ section, which allows consumers to save their favourite shows, compile wishlists, add quicklinks of favourite stores and upload their own photos.
These ideas are framed around research Lee conducted in the lead up to Fashionair’s launch.
“Our research showed that content-driven sites drove more traffic than pure transactional websites; because transactional meant it was a fulfilment and distribution fulfilment,” Lee says. “What consumers still wanted was the journey and inspiration...and video is that perfect medium. What better way to tell a story? To capture the richness and vibrancy of fashion.”
For the time being, revenue is generated through affiliate advertising and subtle sponorship opportunities with companies like Victoria’s Secret, which is featured in its video content. But without the initial backing of someone like Fuller, My Wardrobe founder Sarah Curren is a little more urgent about the bottom line.
UK-based Curren and her husband sold their home for $750,000 in order to fund their entry into e-tail in 2006, having operated bricks-and-mortar boutique Powder for three years. They’ve since undergone two rounds of private investment, with 42 members currently making up its shareholder register, five of which sit on its board. The night before taking to the LMFF podium, Curren was well into her third funding drive, hosting an online presentation to potential investors from her hotel room.
The money will be plowed into customised content solutions for international consumers – so for instance, Australian shoppers won’t be bombarded with autumn/winter material in mid December.
“That’s why we went down the route of getting investment in the first place, to make sure we could be as good as we could possibly be,” Curren explains. “And that took money. We [used the first round of funding to] jump from this cheaper, low-cost entry in getting the site live, to spending $75K on a more sophisticated platform.”
Since its launch in April 2006, My Wardrobe has ballooned from 45 womenswear brands to over 200 labels across men’s and women’s fashion for autumn/winter 2010. With continued investment, Curren is also aiming to increase the breadth and depth of her product offering from 20 units of each size to 50 – 60, saying there simply “isn’t enough stock” for seasonal sales and promotiona. She is aiming to become a £100 million operation by 2015 and already, turnover has increased 100 per cent year-on-year. The key to this growth is service, service, service and product, product, product, Curren says.
“Through really strong editing of collections and really rich editorial content, we’re now seen as an authority in this space. Understanding the customer is really key, you need to adapt the level of customer service to various stages. It’s not a one size fits all approach.”
The company, which draws 85 per cent of its customer base from the UK, has broken its shoppers down into three key categories: Core Customer, someone who may have ordered once, is not fully engaged with the site and has an average order of £140; Loyalty Customer, a shopper who is receptive to emails, engages with the site on a weekly basis and has an average spend of £260; and a VIP/Concierge customer, somone who spends £500 and over on a seasonal or yearly basis and, as a result, has a dedicated concierge manager as well as a micro-site to pre-order products before they go live. Up to 25 per cent of revenue is driven from emails and, with a database of over 80,000 users, these are tailored for each segment.
“You can’t send an email that’s one size fits all,” Curren says. “You send out more emails to less people; of smaller groups of your database. The open rate for product versus designer/trend emails is also interesting; product or ‘new in’ gets a 22 to 25 per cent open rate while an email focused on a designer is over 40 per cent.
So if you do something that’s targetted at [what] she’s really interested in, she’ll feel more engaged and incorporated with the site.”
In April 2008, My Wardrobe became the first UK retailer to allow consumers to click live and purchase from streaming video. This allowed them to engage with ‘My TV’ as a purchasing avenue, in addition to viewing the latest trend and product advice, seasonal catwalk footage and designer interviews. In fact, the company’s level of engagement with its consumers goes so far as using core metrics to analyse their shopping patterns and trends.
Curren says 7am often achieves the best open rate for emails, while traffic on its website spikes at 8.30am – 9.30am, lunchtime and 6.30pm onwards on a weekday. Traffic dives over the weekend “because that’s the day the customer goes off into the High Street and the boutique”.
“It’s so important to look at this data because that’s when you can really start to ensure the content you have or the emails you drive will be opened at the most optimal, receptive time.”
That’s not to say there haven’t been crossed wires along the way. When the company first introduced menswear in February 2009, Curren discovered the strategies used for women didn’t quite work for their hairier counterparts. A PR-led campaign in consumer magazines flunked because “men don’t actively seek out fashion pages” and while women were loyal to stores, men were loyal to brands, meaning they didn’t care where they bought it from, as long as they bought it. Free shipping on initial orders was used as an incentive to encourage men’s spending on the website.
A little help from the ladies didn’t go astray either, with February 2010 seeing a mixed basket rate of 36 per cent, meaning shopping carts had both men’s and women’s fashion inside.
“The way we approach guys now is marketing-led and not about product,” Curren says. “It’s about engaging them in something they’re interested in such as sport, film, music and accepting the My Wardrobe is going to be a secondary communication. We had to change the tone of the site down to the blog because it was seen as too feminine; so we changed it to Style Feed.”
Aside from working on search engine optimisation – which accounts for 80 per cent of all revenue – Curren has one final piece of practical advice for audiences.
“Keep focusing on the customer. The dangerous thing, if you think you can launch a site and leave it, you’ll find after three or six months, it will be out of date. It’s about constantly evolving, moving on and bringing new experiences to the customer.”