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There was a clear front runner at the 2018 Australia Post Online Retail Industry Awards. eCommerce operator Showpo took out an unprecedented four top gongs, including Online Retailer of The Year. Here, founder Jane Lu tells Ragtrader her four most important business lessons.
1. Taking a short-term hit to invest for the future
It’s hard to know when to call it when a business decision isn’t working. But it’s even harder to call it when it is working, because there’s a chance you may be missing potential elsewhere.
Our decision to close down our three bricks-and-mortar stores to go pure play online was one of these. Showpo launched as an online store, and two months later we opened our first bricks-and-mortar in Broadway. By the following year, we had opened two more stores that were kiosk-style stalls in the middle of Westfield CBD and Bondi Junction.
Despite being very small in size, they were cash cows!
Our resources were limited at this point. We were self-funded and at this stage, the company only had myself and the general manager working on the business, along with the help of customer service and order fulfillment staff.
We saw the huge potential there was in the online store and knew that there would be so much to gain if we put more of our attention on it. So we went all in!
In February 2013, we closed all of our stores down. This was a really tough decision to make - to close down a profitable sales channel. However, without the distraction of managing the stores, within two months, the growth of the online store easily made up for the loss of bricks-and-mortar sales.
2. Getting with the times
With so much innovation and change all the time, (particularly in the digital space) it can be hard to know what’s a fad and what’s going to stick.
And even though I’m technically a millennial, I just don’t understand the formula as well as I should. So often something will go viral and I would have never considered it beforehand. It may seem obvious, but I still have to constantly remind myself that it’s not about what I want, it’s what our customers want.
So when we were first approached by Afterpay, couldn’t get my head around how it worked. I've had a credit card since I was 18, so didn’t understand how the product could be so popular, but it was.
And it took us a while, too long, to get onto the service because of my hesitation. But we definitely saw increased AOV and repeat shops from these customers.
This error in my judgement made me realise that it made me no better than the traditional retail powerhouses that didn’t get onto eCommerce and social media quickly enough. This agility is how Showpo managed to gain a significant market share of the industry with no money or experience when other retailers couldn’t see the potential.
3. Investing in good people
For a long time, we hired relatively junior staff, because after all, we were junior ourselves. I may have had the CEO title, but I was CEO-in-training.
A few years ago, the general manager and I realised that we couldn’t get to our $100M in revenue by 2020 target by ourselves. We needed to hire those that were the best in their field, to help us lead and drive growth.
This was a daunting task to hire people that were of such high calibre because we actually didn’t know how to assess their skills - this was a new challenge in recruitment for us. We leveraged off our network of industry experts to help us with this process.
Now we have such an incredible team – it’s what makes work exciting for us – that we have these interesting challenges to work through and we have the best people in the industry to work on them with.
4. Starting from scratch – and being okay with it
When our Instagram account took off, so did our international sales. Great news huh?
The bubble quickly burst when we realised that this has serious legal implications because we were called “Show Pony” at the time and there were so many other fashion business around the world with that name - including in our largest (and very litigious) US market.
When I realised this, my heart sank.
At this point, I thought that all we had really built up was our Show Pony brand and our social media following and a bit of inventory - that the business was pretty much all the goodwill behind the Show Pony brand. I thought I had lost it all, and was so angry at myself for not taking more care when choosing a name.
We spent three months trying to think of different names. We had come up with hundreds. But somehow, after these three months, we circled back to: why don’t we just drop the NY and call it Showpo?
It sounded pretty stupid at the start, but it grew on us. It’s good for brand recognition because it’s close enough, and we didn’t understand how SEO really worked but we figured it’s gotta give us the best SEO outcome out of all the options.
So we did it. Not only do we love the name now, but it’s meant that we have the domain, unique social handles, and yes it is great for SEO! We didn’t feel any dent in sales from the rebrand and a name like Show Pony with its connotations would’ve limited us to a certain demographic of customers, whereas Showpo has allowed us to give it the meaning we want and to expand our product offerings and our demographic.