Monday, May 31, 2010

How we tripled our sales using YouTube

Back in March we wrote about our marketing experience with Blair Folwer, aka Juicystar07, a 16 (now 17) year old video blogger on YouTube.

About the only thing that could have worked out better for us in the week after the video went live was the conversions we were getting from the massive spike in traffic. Blair's audience is 13-17 year old females. They love shoes and clearly love to design shoes but we're a little out of their budget so initially we weren't seeing sales spike in the same way that traffic to our site was.

In the week after the video went live we went into overdrive to best capitalise on the non-converting traffic.

1. The 13-17 year old girls were talking about us on Facebook and Twitter so we made some changes to our website to make it easier for them to share the shoes they'd designed through these social networks.

2. We ran searches on Twitter to find every conversation about our brand, and we joined those conversations and engaged with the people who were talking about us.

The goal from these two activities was to have the conversations that were starting with 13-17 year old girls, reach their older friends, older sisters and mothers who form our target market.

3. We wrote our blog post about our experience from the video.

In addition to sharing what we'd learnt, part of the goal here was to have the business press write about us - professional women form a key part of our target market.

So we used Twitter to spread the word about our blog post. The post was picked up quite quickly. Robert Scoble tweeted the link nearly as soon as the post went live. He's got nearly 120,000 Twitter followers and is quite well known in Tech circles.

Google's @App_Engine account tweeted about it because we use Google AppEngine to host our website, which was lucky given the enormous traffic spike the video sent us. Here's the data from their tweet:

And here's the data from our original tweet:

You'll see in those last two bitly links that nearly 100 people retweeted the story and the link to the blog post and that nearly 3,000 people clicked those links and visited our blog. No doubt some of those people were journalists who then wrote about us.

And here's some of the press about the blog post that we came across:

And the final impact? In addition to being an amazing story about the power of online media, our daily sales are now consistently 3 times higher than they were in the weeks leading up to the video going live, that's a permanent 300% uplift in sales. Not all of that sales increase can be put down to the video, our second website redesign (not the latest one) and the changes we made based on your fantastic feedback has helped conversion rates, but there's no doubt that a good portion of the increase is a flow on from the video.

Online media, we love you.

Thursday, May 27, 2010

Sky Business News Interview

Justin Baird, who has one of the coolest job titles in the world, "Google Innovationist"and I were interviewed on Sky Business News a couple of weeks ago about our recent marketing efforts with JuicyStar07 on YouTube.

Tuesday, May 25, 2010

Why Our Website Re-Design Failed

This is a cautionary tale about how, sometimes, logic does not prevail when it comes to selling goods online...

A few weeks ago I visited the Chocri, the brilliant "design your own chocolate" website. I was instantly hooked, and quickly designed some chocolate to buy. The only thing holding me back was their shipping policy - they don't ship to Australia!

However, the whole experience really resonated with me. It was fun, easy and I had my credit card in my hand in less than 5 minutes.

After all of this, it made me think about our own website for Shoes of Prey and how we could improve it. Admittedly, we're not selling $6 bars of chocolate - but the principle, I thought, should be the same.

I set upon redesigning the site using a style heavily inspired by Chocri's experience. This is what I ended up with:

The design I came up with was definitely different - in fact it completely moved our positioning on the spectrum between being a "designer shoe" brand to something closer to a transactional site (like Zappos) or a shoe making service (not unlike a dress maker, just for shoes):

By all accounts, this new design seemed much easier to navigate, more "fun", and provided a better explanation of the service. The overwhelming majority of the feedback was positive. Our friends and acquaintances seemed to love it. Here's a sample of what they said:

"Wow - that's heaps better. Doesn't really give the "bespoke" feel that you were going for before but does look more "legitimate"."
"This version definitely appeals to me more."
"f*^% yeah, heaps better!"
"100% better than the current design."
"In short - that new design rocks my socks off."
"Love the new site design. So much cleaner and cooler and more professional. The look and feel is great."

Our Japanese partners were the only ones who had reservations. In the nicest way possible, they said the site looked "cheaper."

But buoyed by the positive reviews, and with high expectations, we launched the site to our $USD traffic (roughly 50% of our visitors).

The result? .... Let's just say it didn't set the world on fire. If anything, our sales went backwards. Our bounce rate increased and time on the site dropped as well.

We wanted a revolution, and it just didn't deliver. More importantly it cheapened our brand; and in the long run, that wasn't acceptable. Consequently yesterday we switched it off.

Why didn't it work? It's probably because buying premium shoes is an emotional, self-defining experience. Consumers need to connect to the shoes above and beyond merely having an easy to use website. While our existing design has many flaws, it conveys certain emotional cues about how you will feel once you receive our shoes. For that reason it continues to sell shoes.

There's probably a lot more we can do from this point. In fairness, we might have tried to move too far along the spectrum towards being transactional. In the coming weeks we'll probably play around with some alternative designs that try to find some sort of compromise.

So, in summary, it's interesting to know that building a "better" website won't necessarily improve your sales. A lot depends on how you position yourself in the market, and how your customers want to perceive you. For a brand new retail concept like ours, it's really hard to know instinctively how to get this right. Experimenting, though, will certainly help.

Sunday, May 23, 2010

GoGet - Car Sharing

I wanted to give a shout out to the car sharing service we use in Sydney - GoGet. Aside from being great for personal use, they are amazing for business use and that's actually what I use them most for.

My friend Jeremy Levitt put me on to them about a year ago and we signed up to one of their business accounts. It costs $5.10 per hour plus $0.35 per kilometre to rent a car which is incredibly good. And they literally have 100s of cars in Sydney, including 1 just behind our office and 3 within 100m of Jodie and my place in Surry Hills. In addition to cars they also have vans, including a new one about 300m from Jodie and my place. For the last 2 weekends we've had Shoes of Prey stands at the Fashion Forward Festival and Sydney Fashion Weekend and Courtney the Hiace Van (they all have cute names) has been a godsend. Rather than having to buy a van to do events like these, or hire one for a full day we just rent Courtney for 3 hours to take our stand and shoes to the event, then 3 hours to take everything back to the office again. So easy. And the cars and vans have their own dedicated parking bays which saves trying to find a park in inner Sydney.

You book the cars online, and you use a swipe card which you can keep in your wallet to unlock the cars when you've hired them. You're billed once a month. The whole process is so easy and simple. GoGet's customer service is great, whenever I've called them the people are all so friendly and helpful.

The only thing that perplexes me is how they make money. It must be a hugely capital intensive to have all these cars, and cars aren't cheap to insure and run. GoGet seem to have a reasonably good usage rate, though only once out of about 50 bookings has a car not been available near me when I wanted to rent one which I find amazing. If anyone has come across a business plan or articles about the business side of car sharing I'd love to have a read!

If you don't have a car I can highly recommend signing up to GoGet. If you do have one get rid of it and sign up to GoGet.

Update: And after reading our post we received the following text message from GoGet: "Hi Michael. Thanks for the compliment! Dealing with Jodie and yourself is always a pleasure. Cecile and Tanya."


Wednesday, May 19, 2010

Welcome to the Shoes of Prey team Qun!

In addition to being in the process of interviewing for our first Australian based employee, we've just hired our second employee in China, welcome to the team Qun!

On our recent trip to China, Jodie and I saw first hand what an amazing job Vanessa was doing for us in our Guangzhou office. And we realised that if the business was to continue growing she would need someone to help her.

So Vanessa has been busy interviewing potential candidates and the stand out applicant was Qun. In addition to a number of years retail experience in clothing and drug stores, Qun has most recently been working in a shoe factory, so she's got the right experience we need to work with Vanessa in our office in Guangzhou.

Interestingly for Mike, Jodie and I, Qun doesn't speak English. None of us speak Mandarin or Cantonese so we'll continue to communicate with Vanessa day to day and Qun will report in to Vanessa.

Qun is apparently also an excellent cook. I made some attempts to cook Vanessa some Western food on my last 2 visits to China, but I didn't manage to source the right ingredients to 'cook' anything other than salad sandwiches or porridge, and clearly taking the team to MFC doesn't exactly cut it. Jodie and I will need to get our act together for our next visit in June if we're going to return the favour for the delicious Chinese food Qun has promised to cook us.

Welcome Qun, we're excited to have you join the team. Or as Google Translate puts it:


Monday, May 17, 2010

Online retail in Australia - there's hope

Despite our three earlier posts about the poor state of online retail in Australia, it's not all doom and gloom.

In the last few years a couple of online retail industry groups and websites have started in Australia. launched last year and is a great source of information, tips and ideas for the Australian online retail industry. Article's like this one on Australia's largest online retailer, DealsDirect are inspiring.

Last year National Media launched Online Retailer, a 4 day conference, expo and networking event for Australian and New Zealand based online retailers. I didn't attend last year's event but the ratings and reviews from last years event look great. And this year they've launched the inaugural Online Retail Industry Awards.

Steven Noble of Forrester Research is currently working his way through the industry talking to online retailers to put together a series of 3 reports on the industry in Australia. I spoke with him last week to share our insights from Shoes of Prey and we're looking forward to the results of his research.

While it's not strictly online retail, I also subscribe to Inside Retailing, a daily email of all things Australian Retail and they give some coverage to online retailers. I was excited to open the email a few weeks back to see my favourite online custom shoe business covered by them!

And there are some great people in the industry. I've still not met most of them but I caught up with Chris Hitchen of GetPrice a few months back and he was very generous with sharing his experience. I also recently spent half a day with Brad Lindenberg of LindGolf who was very generous with sharing a lot of his experiences in retailing custom golf clubs online. I've also got a huge amount of respect for the retail team at Google in Sydney. In addition to working with pure play online retailers they spend an enormous amount of their time pitching the benefits of online retailing to the sometimes lagging traditional retailers in Australia.

And even these traditional retailers are gradually coming around. Chris Hitchen of GetPrice tells me David Jones have recently hired a new head of e-commerce and while it's no longer up, I was excited to see David Jones run an e-commerce site complete with product descriptions and photos for products they were promoting for Mother's Day (hat tip to @miakgarlick for spotting that one!)

So while online retail in Australia might have some way to go, things are moving in the right direction and perhaps sometime in the near future we'll see online retail sales in Australia reach 6% of total retail sales as they did in the US last year.

Thursday, May 13, 2010

Interview with Brad Lindenberg of Lind Golf - Custom Made Golf Clubs!

Brad Lindenberg founded and runs an excellent custom made golf club website called Lind Golf. He's based in Sydney so we met up to discuss our very similar businesses and I interviewed him for the 22michaels blog.

Part 1

Part 2

Monday, May 10, 2010

Shoes of Prey launches in Japan!

In January this year we received an email from Yusuke Mitsumoto asking if we'd be interested in working with he and his business partner Jun Haranaga to launch Shoes of Prey in Japan. We receive a few similar emails each week and we generally explore them a little but we were particularly interested when Yusuke got in touch with us.

Firstly, Japan is the third largest economy in the world, it's a very prosperous country of 128 million people and it's such a different market to Australia. I saw this first hand when I was at Google. Japan is the only market in the world where Yahoo leads in search engine market share, and it needs to be treated very differently to other markets. We've also seen with Shoes of Prey how different Japan is. We're selling lots of shoes in markets like Australia, New Zealand, the US and UK. We've had sales in most European countries including quite a few to Russia, Germany and Italy and we've even had a few sales in China! But we've not sold a single pair of shoes in Japan. As Google do, it's clear we need to treat Japan differently to other markets and local marketing and customer support is the best place to start.

Secondly, Yusuke and Jun launched and run a very interesting car sharing business in Japan called Cafore. I love car sharing, we use GoGet in Sydney, and Cafore is a slightly different take on car sharing. People can rent out their own cars to people who live nearby. Cafore organise this process, as well as insurance to cover the renting driver and take a cut of the rental fee. It's a new and different approach to car sharing, it's going really well and Yusuke and Jun have managed to get a lot of press coverage for the business in Japan. Their CV's interested us too. Jun used to be a software engineer at Yahoo! (a very similar role to Mike's at Google) and Yusuke was an account manager at the advertising agency Ogilvy (a very similar role to Jodie's at The Campaign Palace!).

We had a few discussions on Skype and we clearly had very similar thoughts on the business. So once we'd talked through the basics of how we could work together, Yusuke jumped on a plane and spent 4 days with us in Sydney. And we got on brilliantly. In addition to thinking the same way about things like the importance of customer service, we enjoyed spending time with Yusuke personally as well.

So Mike and Yusuke have been working closely together for the past month on the translated version of Shoes of Prey and moving forward we're going to take care of the technology and manufacturing while Yusuke and Jun take care of the marketing in Japan and the customer service.

It's with great pleasure that we present to you: Shoes of Prey Japan - which officially launches tomorrow.

Friday, May 7, 2010

Etienne Jambou - Magma Mobile

An interview with Etienne Jambou of Magma Mobile. Watch the intro in the first video for details.

Part 1 - Magma Mobile and the Mobile Web

Part 2 - E-Commerce, Shoes of Prey

Part 3 - Running a Startup

Wednesday, May 5, 2010

Tax Reform in Australia - Impacts on Small Business

Dr. Ken Henry's tax review has been released and on Sunday the Australian government indicated some of the changes from the review which they'll be implementing.

The biggest impact is on miners. With China's growth the government has introduced a Resource Super Profits Tax of 40% on profits that miners earn from the exploitation of non-renewable resources. BHP and Rio Tinto's share prices are both down about 10% on the news.

An interesting fact I read recently is that 25% of Australia's GDP comes from mining. And with the mining boom, 21.4% of our total GDP is exports, more than half of which comes from mining. Only Germany and China have a higher percentage of their GDP coming from exports.

25% is a huge proportion of our GDP to come from one industry, and the country is making a lot of money selling our resources to China and other countries. However this is not something that will necessarily last forever and we need to be investing some of this money in education and encouraging growth in other industries so that our economy is prepared for any downturn in the mining industry in the future. So while I feel bad for the mining companies facing this new tax, I think it's a sensible move for the government to make.

The two main changes for a small business like ours are:

1. Company tax rate falls from 30%-28%
Without a change in personal tax rates this change won't necessarily have a big impact on what we earn from the business, but given we're unlikely to be drawing money out of the business for a while, paying 28% company tax instead of 30% improves our cash flow and leaves us with more money to invest in the business.

2. Employer Superannuation Contributions to rise from 9%-12%.
This is not quite so good for us, particularly as we look to hire our first Australian based employee, but like the new mining tax I think this is a reasonable thing to do. Australia's population is aging, our generation is likely to live longer than previous generations and we need to fund people's retirement. The changes are to be introduced gradually over 10 years so the impact won't be big initially. Australian wages should be a relatively small percentage of our costs too. This change will have a bigger impact on service based businesses where wages form a higher percentage of their costs.

The most disappointing thing about the government's announcement on Sunday is that very few of Dr. Ken Henry's recommendations are actually going to be implemented. Australia's tax system is very complex and the Henry Review had a whole raft of recommendations to simplify things like payroll tax and issues around trusts all of which the government has put on hold for the moment. While these changes aren't being implemented now the government has left them on the table to be discussed, so hopefully this or future governments look to implement some more of Ken Henry's changes moving forward.

Have you had a chance to read up on the new changes? Any thoughts?

Saturday, May 1, 2010

We're Hiring: Extraordinary Customer Service and Startup Wonderperson

We've been really pleased with Shoes of Prey's growth in the last 7 months and there's so much happening we need some help, so we're hiring our second full time and first Australia based employee.

Here's a job description:

Salary: $30k - $50k (based on experience) + bonuses and shoes.
Location: Our office in Woolloomoolloo, Sydney.

Job Description:
You'll be working in a startup so your job is going to be mixed and varied. You'll take charge of our customer support and will be responsible for ensuring our customers are the happiest in the land. Working in a startup so many different activities crop up all the time so we'd love your help with lots of those things, like social media marketing, video posts on the Shoes of Prey YouTube channel, PR and events and even business posts on this blog. And if you have ideas on how we can improve Shoes of Prey and you'd like to work on those, we're all ears.

We're quite flexible with how we work and you can be too. Some days we'll all work from the office together, other days we work from home. As long as customers love us and the work gets done we don't mind when and where you work.

The opportunities for career and personal growth within the business are yours for the taking. We have big plans for Shoes of Prey and if the business continues on the path we have planned there will be opportunities to take on all sorts of different tasks within the business such as developing systems and processes, training, mentoring and managing new employees and helping with marketing and business development opportunities. If any of this is of interest to you and you're good at it we'd love you to do it.

Some of the key day to day activities:

  • Engaging with our customers over email in the most friendly, fun and supportive ways possible.
  • Doing the same with our customers on website chat.
  • Reviewing customer orders and sending these to the workshops.
  • Working with Vanessa to track and manage our orders.
  • Helping develop and document our systems and processes.
  • Assisting with book keeping which Michael is hopeless at.
  • Helping out with the organisation of events like the Bondi Markets and Sydney Fashion Weekend.
  • We may get excited and experiment with a phone number for customers to call us on.

Skills Required:

Additional skills we'd love but we're happy to teach:

  • Experience in fashion or online retail.
  • Social media - using Facebook, Twitter and YouTube to engage with our customers.
  • Online marketing, Google Analytics, Google AdWords etc.
  • Book keeping
  • Photography

To apply please email a cover letter and resume to We're advertising a little earlier than we actually need someone, so we're not in a rush and plan to take our time to find the right person, but if the right person comes along tomorrow, they're hired! Please help us spread the word. We'd love for you to tweet or post this link to Facebook and if you know of someone who suits we'd love you to pass this post on to them. Thanks!

Update: A Shoes of Prey gift certificate is on offer for the person who refers the person we hire!

Update: We've filled the position!