Thursday, September 30, 2010

Why custom designed shoes?



A questions we're often asked is, 'Why did you decide to sell custom designed shoes online?'. It's an obvious question to ask and I recently realised I haven't actually written a blog post on this.

We came at the idea from two angles:

1. Mike and I were working at Google but were keen to have a proper go at a startup after experimenting with Darwin Dating and Swift City part time a few years before. We were thinking about good industries to be in. I had developed a passion for retail while working at Supercheap Auto prior to Google, and after spending some time in the UK and US with Google I'd seen first hand how far behind the Australian online retail market was, so we figured that might be a good industry. Through Darwin Dating we'd seen that a concept that people wanted to talk about was not too difficult to market. PR pitches are much easier if the story is innately interesting and people like to tell their friends about interesting things. We figured with the growth of social media over the last few years this impact will only grow. So we wanted a product that was unique, different and that people would want to talk about.

2. On holidays to Europe Jodie would always organise 24 hour stopovers in different Asian cities so we could visit some local stores where you can custom design shoes. She'd design the shoes in the store then we'd head off to Europe and the shoes would be waiting for us when we got home to Australia. On subsequent trips friends were asking Jodie to design shoes for them too. Clearly women loved the concept of being able to design their own shoes and word of this idea had spread easily amongst Jodie's friends.

In December 2008, while taking a break over Christmas these two ideas came together and we decided that an online store where women could design and order their own shoes might be an interesting concept to explore. To get to where we are now, we spent the next 4 months putting together a business plan and talking to as many people as we could about the idea to get their insights. In March 2009 Jodie and I took some annual leave to find suppliers. Mike left Google in May 2009 to start work on the website and shoe designer. I left Google in August to organise the operations side of the business. We launched on 8 October 2009 and hired Vanessa shortly after to manage our operations in China. Jodie joined us full time in January to focus on marketing and PR. We launched Shoes of Prey Japan in May, hired Qun the same month, hired Carmen in June and launched Shoes of Prey Russia last week. We've funded the business ourselves and we're having a lot of fun.

Tuesday, September 28, 2010

Shoes of Prey launches in Russia!


Last week we launched Shoes of Prey in Russia - www.shoesofprey.ru. Earlier in the year we had received an email from Leighton Prabhu, a Canadian native and former Pricewaterhouse Coopers manager living in Moscow. Leighton now runs a consulting business advising and helping companies launch in to the Russian market, and he was interested in taking on the Russian operations for Shoes of Prey. Jodie and I met with Leighton when we were in London in July and we all clicked immediately. Leighton has a great understanding of online retail and already knew the difficulties we'd been facing converting our Russian traffic into sales.

Russia has been our 10th largest country by visits to Shoes of Prey, but way down the list in terms of the number of sales. Some of the issues with converting our Russian traffic include:

  • Language barriers
  • Shipping - despite being connected to China geographically, Russia is one of the most expensive countries in the world to ship our shoes to from China, and recently DHL stopped shipping to personal addresses in Russia. Having someone on the ground we can ship to who on-ships shoes to Russian customers where required, and who can receive returned shoes will be a big help.
  • Customs - Russian customs can be a minefield, from what we've experienced and read it's not a very well organised or efficient operation. Having someone on the ground who can help out when there are customs issues will be a big help.
  • Payment methods - Russia is one of the epicentres of worldwide credit card fraud and for that reason, credit cards aren't regularly used for online shopping in Russia. There are a number of alternative payment methods that are used in the market like cash on delivery and kiosk systems. Having Leighton on the ground to help us organise these will help.

We launched Shoes of Prey last Friday night at a fashion event in Moscow. The event "Fashion Passion" was held at Club Rai, one of Moscow's leading clubs, and we had the chance to unveil our brand to over 500 party goers. Leighton has hired Olia Lykahovets to help running Shoes of Prey in Russia. Olia has experience working on the marketing brand team of a major international consumer goods company, and has recently earned a Master's degree in Economics (Université Paris-X and the State University Higher School of Economics). She will focus on PR in the Russian market.

Shoes of Prey Russia joins Shoes of Prey Japan as a market where we've partnered with local firms to localise the Shoes of Prey offering. The strategy for now is not to roll out local operations in too many countries but focus on markets where we think the concept would work, but localisation is essential for that to happen and even then only do that when we find local partners with the skills to manage the operations well.

Welcome to the team Leighton and Olia, we're excited to be working with you and look forward to offering Russian women the opportunity to design their own shoes!

Sunday, September 26, 2010

Landing Pages



Something we've been a little slack at is putting together pages talking about the different types of shoes we offer, like wedding shoes, bridesmaid shoes, shoes for large feet etc. A couple of weeks ago we finally got our act together and put some of these pages together.

The logic of these pages is 3 fold:

1. To provide customers browsing our site with information about the specific shoes types of shoes they're after.
2. To improve our search engine rankings on terms like 'wedding shoes', 'bridesmaid shoes' and 'shoes for large feet' etc. and provide a landing page for people who arrive at our website after searching for those terms.
3. To provide a landing page for our Google AdWords ad groups targeting different types of customers searching for things like 'wedding shoes' etc.

Below are the pages we've put together. Where possible we've included photos, video content and testimonials that are applicable to the content on the page. We used Google Insights for Search to determine which keywords are most popular in each category, and we then made sure we included those keywords in the content:

We're hoping that this information is useful for our customers and helps to drive some traffic from search engines. If you've done a similar content strategy on your site or have seen someone else do it well we'd love to hear about what you/they did and how it went.

Thursday, September 23, 2010

A/B Testing - We'd Love Your Thoughts


It's been on our agenda for a long time but urged on by some commenters on this blog, particularly Niki Scevak who I caught up with last week it's finally made it to the top of our to do list!

Based on our traffic and conversions we think we'll need to run each test for about 1-2 months to collect enough data to get a statistically significant result, so we want to make sure that the things we test have a reasonable chance of making a decent impact to our conversion rate.

We have a few ideas of things to test but we're probably a little too close to the website to judge it properly, so we thought we'd ask for people's thoughts here.

If you were going to run an A/B test on Shoes of Prey with the goal of increasing our sales conversion rate, what would you test first?

Update: A friend made the good point that I haven't actually explained what an A/B test is and not everyone is a web geek - good point! An A/B test is a structured way of testing two different variations of something on a website to see which has a better outcome, in our case, conversion rate. Simple tests can include testing two different photos on a home page to see which converts better, or two different coloured 'Add to cart' buttons. There's a great example on the website Which Test Won? at the moment of a blue shadow behind an 'Add gadget to your site' button increasing versions by 50.5%! Most variations aren't quite that dramatic, but 20% improvements are not out of the question for a lot of A/B tests.

Tuesday, September 21, 2010

Shoes of Prey Video Content

One of the key issues affecting our conversion rate is that there is so much choice on the Shoes of Prey website. We now offer over 4 trillion possible shoe designs and customers regularly tell us they have a difficult time making a decision on which shoe to purchase.

We're working on a number of things to help our customers make a decision and one that we've recently worked on has been a series of videos on each of our leather types. Here are a few of the videos form the series:





The full series is on each of our leather pages on our website.

Our theory is that by educating our customers and providing them with more insights into the materials used in our shoes, they'll be in a better position to decide on which material they want to use when designing their shoes and will feel more confident to place an order with us. The videos also talk to the quality of the materials and the workmanship and help to provide a clearer picture of what our leathers and materials look like.

We've had the videos up for a few weeks and we've had a number of customers tell us the videos helped them settle on which shoes to order. Naturally we'll be tracking the results through Google Analytics and hopefully customers who watch these videos are more likely to purchase from us.

Have you seen other online retailers using online video really well? We're keen to experiment with this some more.

Friday, September 17, 2010

Customer Survey



We're planning to email a customer survey out to all our customers who have created Shoes of Prey accounts, designed and saved at least 5 pairs of shoes but never made a purchase. While we talk to a lot of these customers over email and phone, we want to get some more solid feedback to understand what we need to work on over the coming months. Here's our planned survey questions, we play to use Survey Monkey to distribute the survey and collect the data:

We’ve noticed that you’ve spent a lot of time creating beautiful designs on Shoes of Prey, but you’ve never ordered from us.

We’re curious why.

Please help us understand how we can make Shoes of Prey even better for you.

As a small token of our thanks, we’ll add a $10 USD (or local currency equivalent) credit to your account if you complete this survey. (*Limit 1 per customer, and invite only.)

====

How old are you?
Select an age bracket

Have you ever purchased shoes before online?
Yes/No

What do you like about Shoes of Prey?
Text box

What don’t you like about Shoes of Prey?
Text box

What is preventing you from making a purchase?
Text box

What additional features (if any) could we add to the website to convince you to make a purchase?
Text box

How likely are you to refer a friend to Shoes of Prey?
Very likely ----- Not very likely

Do you think Shoes of Prey shoes are good value for money?
Yes/No

Were you aware that you can return your Shoes of Prey shoes for any reason for a remake or refund?
Yes/No

For the $10 USD gift certificate, what currency would you prefer it in?
USD, AUD, GBP, EUR, JPY, NZD, CAD

Thank you for participating. Your answers will help us make Shoes of Prey better for you and the rest of the Shoes of Prey community.

We'd love your feedback. We plan to keep it relatively succinct but if there's anything else you think we should be asking our customers please let us know.

Wednesday, September 15, 2010

TV v YouTube



Back in March we ran an incredibly successful campaign with a YouTube video blogger that resulted in a permanent tripling of our sales. 3 weeks ago A Current Affair ran a story that featured us which has also had a massive impact on our business, and I thought I'd write a post comparing the two.

Traffic
The YouTube campaign saw 197,000 people visit our website on the day the video went live, and 500,000 people for the week, a massive traffic spike. More people visited our website that week than watched the video due to people spreading the word about the site to their friends via word of mouth and social networks.


A Current Affair is watched by 1.3 million people, however the story drove less than 15% of the traffic to our site that the YouTube promotion did! 22,000 people visited our website the night of the A Current Affair story and 70,000 visited in the week that followed.


It's obviously a much bigger step for people to go from their TV to our website compared with a YouTube video to our website, particularly when the YouTube video had a clear call to action to visit our website to design a pair of shoes and enter the competition we ran in conjunction with Blair. That said, it's nothing other than amazing that a 16 year old YouTube video blogger can drive 7 times the traffic to our website that one of the top rating TV shoes in Australia can!

Sales
That said, while traffic is great, sales is what we care about.

Initially the YouTube campaign saw very little uplift in sales. The 500,000 people visiting our website were predominantly 11-15 year old girls, and they aren't our target market. Eventually, with some additional social media work from us, word spread from this audience to their older friends, older sister and their mum's and within 2 weeks of the video going live, sales had settled at triple what they had been prior to the video, and they never went back.

For the A Current Affair story the increase in sales was immediate. The story aired at 6:30pm on Wednesday 25 August and within 2 hours that day had become our record sales day. The following day, Thursday, doubled that new record and Friday would have been a record day as well except for the previous two. It's 3 weeks since the story aired and our Australian sales seem to have settled at more than double what they were. The overall volume increase in sales from the A Current Affair story is slightly higher than the increase the YouTube campaign lead to, but the difference isn't large. Clearly we're very pleased with both campaigns!

Type of Customer
The 70,000 people who visited our website following the A Current Affair story were the highest converting potential customers, compared with the 500,000 who visited following the YouTube promotion. That said, the 500,000 who visited our site are very tech savvy and the increase in blog posts and social media chatter will have had long term benefits for SEO and brand awareness. The 70,000 from A Current Affair are much less tech savvy so these other benefits will be less from this group. For example, we've had a lot of emails from people who have never purchased online before and would like to physically see our shoes before purchasing - providing more motivation for us to set up a Shoes of Prey store.

What's also interesting is the type of customer purchasing from us after each promotion. The YouTube promotion lead to a whole range of different people buying from us, professional women buying work shoes, brides to be buying wedding shoes and women who love fashion designing shoes to match the season's trends. The A Current Affair story was a custom fit angle rather than a custom design angle. In the last 3 weeks we've sold an incredible number of wide shoes, narrow shoes, shoes with different sized left and right feet and very large or very small shoes. That's slightly dangerous territory for us to be getting into, because custom fit is difficult online, but we're confident we've got these issues worked out. The ideal story for us would have been a custom design story, but in the world of PR you can't always pick the angle, the media organisation will want to go with what their audience will be most interested in, and we're certainly more than happy with the results!

Conclusions
What I find amazing about this is that on the whole, the two campaigns have had a fairly similar effect on our business. A 16 year old video blogger working out of her bedroom in the US has had as much of an impact as one of the top rating TV shows in Australia. Digital media is often pitched as a great niche marketing activity, while TV is pitched as a way to get in front of a mass audience. Our experience would indicate that's not necessarily the case anymore.

Monday, September 13, 2010

Shoes of Prey - Phone Support

2 weeks ago we added a phone number to our contact us page which displays to customers with an Australian IP address, and we think it's working quite well. We average around 5 calls per day and for many of the calls the customer has ended the call planning to make an order. The customers who call in tend to be less internet savvy than our average customer, so speaking to us on the phone no doubt helps them feel more confident to make a purchase online when they may not have done this before.

In doing research into ways to build trust with customers, having a phone number listed on the site was something that was mentioned as helping customers trust you as a business, so even if they don't call just having the number there might help with conversions. We also added a video of Carmen saying hi and introducing herself on the contact us page.



On the operational side for now we've gone with a simple Skype In Australian number so any of Carmen, Mike, Jodie and I can just login to Skype to receive calls as they come in. We can all be logged in at the same time and each be on a separate call too which is convenient. We mentioned on the website that we'll be available to take calls between 10am-4pm Sydney time.

Moving forward, Brad Lindenberg of Lindgolf uses a company called Toll Free Forwarding to give him a US number that forwards to his Australian phone. It's reasonably priced so we'll probably do that once we launch the phone number into other countries.

Friday, September 10, 2010

The Micro Brewery and Shoes of Prey



We've been thinking more about our idea for a Shoes of Prey store and last week Dom Price, a good friend regular commenter on this blog emailed us the following thoughts (reproduced here with his permission):

One business that I think you share an element in common with is the micro brewery. We've got one that popped up in Manly about 2.5yrs ago, and it's an interesting concept. When it first arrived, everyone suggested it would fail. The premises had seen many a brilliant idea come and go, Manly already had loads of pubs, and at $10 a pint, surely no-one would drink in there. But just like you are shoe salesmen/women, these guys never set out to open up a pub. They set out to open a beer appreciation society. The mechanism they chose was opening a premises. Cleverly, what they've done since is look at ways to expand the business through different channels that don't restrict the consumer to be onsite. They now sell bottled beer through a counter in the pub. You can also buy it from very select and local bottle shops. You can even buy a party keg which is dropped off in a little mook. It doesn't matter how they sell it (within reason) as its all consistent with their motto of "hand crafted beer brewed naturally" - 4 Pines Brewing Company.

There are two things that resonates with me and lots of the punters when you visit their premises. Firstly, in one corner behind a massive glass window is all the equipment that brews the beer. Common assumption is that to be a micro brewery, you have to have all that there. Not true. Well partially true, but most of it is for show, but it really sets the scene. Secondly, they have a massive chalk board wall which has the "hand crafted" and "complex/special" brewing process that shows your average punter how their beer was produced. You won't believe the number of visitors that get magnetised by that and love to go on telling the story, not just of the amazing beer they had but their fascination and knowledge with how it was produced.

If you guys continue on your thought process to open up a retail store, I think there are some amazingly powerful messages that you can use to replicate parts of your process in the store and send strong messages to your customers about the experience they have with their shoes, rather than the single dimension of how good the shoes are.

Some great ideas in this for us. Have you seen businesses take a similar approach where they take something relatively normal like a pub but turn it into something that offers a unique, fun, educational and interesting experience for the customer?

Wednesday, September 8, 2010

Product Page Research

If you read this blog even semi-regularly you'll have picked up that we're on a quest to increase our low conversion rate.

One of the pages we've updated recently is our product page. It's a key sales page, if you save your shoe design, or click 'Buy' on a shoe from our gallery this is where we take you. The old version of this page didn't have a lot of information on it so we set out to improve upon it.

In researching what we wanted on our new product page I decided to look at how other good online retailers do it and read some blogs on what makes a good product page. I found that a lot of online retailers have very similar product pages. Either they've all copied each other or they've done their testing and similar things work for each of them.

After looking at other sites and thinking through the information a prospective customer would like to see on this page, here's what we came up with:


Some of the key things to note about the page:

  • Lots of photos of the shoe and simple navigation for looking at them and zooming in on them.
  • We have tabs showing you general information as well as info on delivery and returns.
  • There's a big 'Add to Cart' button as this is the action we want people to take.
  • There's nice big leather swatches to give a clear idea of what the materials look like that the customer has chosen.
  • Pricing is clearly listed at the top of the page.
  • There's buttons at the bottom for easy sharing of the shoe on social networks.

We're much happier with this new design that the old one, and hopefully it helps to contribute to a higher conversion rate. Ideally we'd be testing a few different version of it, but for now the next step is to reduce our checkout to a single page rather than the 4 step process we have currently. If you have any suggested changes for our product page we'd love to hear them.

Monday, September 6, 2010

Google AdWords Lessons

When I worked at Google something we would always encourage our customers to do is to create specific Google AdWords campaigns to tie in with offline marketing activities. The theory is if people hear about your brand and product offline, they're going to go to Google and search for it, so you want to make sure they can find you.

When we heard A Current Affair were going to air the piece on us 2 weeks ago we decided we should follow that advice and we created a specific A Current Affair Google AdWords campaign. We chose keywords like:

  • A Current Affair
  • A Current Affair shoes
  • ACA
  • ACA shoes
  • ACA design your own shoes

In the 4 days after the piece went live on A Current Affair we received 451 clicks on those keywords at $0.07 per click, a cost of $33.28. Not bad. In our rush to get everything ready for the piece going to air we didn't consider how many people would have watched the story and missed our brand, so searched for things like 'design your own shoes' which are in our normal AdWords campaigns. We generally rank 3rd or 4th organically on 'design your own shoes' in Australia, so it's particularly important for us to advertise on that and related terms for when people have heard of our concept but forgotten our brand name. Unfortunately I hadn't increased the daily budget on our Australian AdWords campaign. With our low conversion rate we only bid around $0.10 or $0.15 per click and generally only spend about $12 or $13 per day on our Australian targeted AdWords campaign (which we get about 120-130 clicks for) and we have a daily budget of $30. When I logged into AdWords 2 days after the ACA piece we'd spent $36 on both the Wednesday and Thursday, we'd been hitting our daily budget and our ads weren't showing = big lost opportunity! (If you haven't been hitting your daily budget every day AdWords allows you to spend up to 20% more than your daily budget on days when you have reached your daily budget to make up for the lower days).

I immediately increased the daily budget to $100 and we spent nearly $50 on the Thursday for 500 clicks. If we hadn't been maxed out for part of the day we could well have received a lot more visitors. On the Friday and Saturday spend tapered off to $28 and $17 respectively.

While Google AdWords only makes up about 10% of our sales and a relatively small portion of our sales and marketing (at the moment), we average a spend of about $30 per day across all our campaigns, this was a great lesson in ensuring you have AdWords campaigns running to tie in with your offline activity, and that you have sufficient daily budget to make the most of people searching for you!

We've got big plans for AdWords in our business. At the moment we're building specific landing pages for things like 'wedding shoes' and 'bridesmaid shoes', so once those are live we'll start ramping up our spend on those keywords, as the landing pages should help increase our conversion rates compared with what we're getting just pointing people to our home page.

Thursday, September 2, 2010

Meeting with Peter Pitt, Director of HypeDC



Jenny Oye of Oye Modern who is a frequent commentor on this blog put me in touch with Peter Pitt from HypeDC and last week I caught up with him for a coffee to talk shoe retailing.

HypeDC was founded in Mosman Sydney 12 years ago and has since grown to 30 stores. They sell short run, limited edition street shoes - think Converse, Vans, Onitsuka Tiger etc. It was fascinating talking to Peter about what has made HypeDC such a success. Here are my 3 key takeaways:

1. Keep your stock fresh
HypeDC never order the same shoe again, even if it sells incredibly well. They might order something similar, or make some small changes to the shoe, but they won't range the same shoe twice. They do this because they know their customer. Their customer wants to be unique and have limited edition shoes, and their customer loves shopping. Shopping for their customer is a fun pastime rather than a once or twice a year event. They purchase when they see something they like, not when they need a new pair of shoes. So HypeDC need to constantly have new stock to keep the store fresh and exciting for their target customer.

2. Manage your stock well
HypeDC put a lot of time and resources into inventory management. If a particular shoe is selling well in 5 stores but not in the other 25, they'll move that style of shoe from the 25 stores into the 5 where it's selling. As a particular style sells down, different sizes will be moved around so that stores selling that shoe have enough of each size in stock. This means HypeDC don't need to discount their shoes as much to get rid of old stock. It's only when they only have a few sizes left in only one store that they discount the shoes to move the last few pairs. This helps them maintain margins and keeps their brand away from discounting.

3. Hire the right people
HypeDC have a strong internal culture and if they hire someone new who isn't a good fit into the culture, team members are quick to tell management that this person doesn't fit and the managers will act on it rather than keeping someone who isn't the right fit in the business.

Some great lessons for us here as we consider opening a Shoes of Prey store.