Friday, January 7, 2011

Partnering with Westfield


On 24 December we launched the Shoes of Prey store on Westfield's new online shopping mall. We're selling a range of ready made shoes which we've developed based on the popular styles and colours that are ordered from our website.

I must admit we were all a little sceptical when Westfield first approached us about their online mall:
  • Do customers really want to shop from an 'online mall'?
  • Why not just search for the specific product they're looking for and purchase it from a retailers site?
  • Aren't there already shopping aggregators like eBay and don't they only work when they're either early to market like eBay or highly specialised like Etsy?
  • Won't this be a half hearted attempt from Westfield designed to protect market share?

We met with Westfield and were impressed:

  • Westfield are making a very large investment in their online mall, equivalent to what they would spend on a small physical mall. They have a huge team of people with great online retail experience working on the project.
  • This isn't a short term play, Westfield have a 10 year plan for their online mall.
  • There are some good ways they add value for the customer. A customer can go to westfield.com.au and easily search for 'red shoes'. They'll see red shoes from a number of different retailers. They can then cut the results in otherwise like shoe type or size so they're presented with a number of options from a number of retailers with exactly what they want.
  • The site has a premium feel to it. Unlike eBay, Westfield are only working with a small number of retailers, you can't just sign up and sell on their site. This ensures a certain level of quality for the customer.
  • Product imagery is consistent across all retailers. All product shots must be high quality and taken with a white background. This provides a much nicer experience for the customer when compared with looking at product shots on sites like eBay.
  • The Westfield brand is recognised, trusted and associated with shopping. This will make it much easier for them to market and gain traction for their online mall.
  • They're launching at a time when online retail in Australia is starting to gain some traction and traditional retailers are starting to take it more seriously.

I should add that I love eBay, it's been a very successful company and provides an excellent shopping experience. My point with making the comparisons above is that Westfield's offering is different to eBay's. That said, Westfield have some challenges:

  • Purchases are made directly from the retailers, so if a customer buys products from 3 different retailers they'll need to pay for shipping 3 times and will receive 3 different parcels. That said this is not different to what happens when shopping on eBay or Etsy.
  • Customer support is also provided by the retailer, so if there are any issues the customer must deal with the retailer. The logic here is that the online mall is like a traditional mall, Westfield are providing the framework but the customer deals with each retailer directly. This may prove to be confusing to customers as shopping online is quite different to shopping in a traditional mall and the Westfield mall is heavily branded as Westfield, so customers may think they're dealing directly with Westfield.
  • Westfield have an API so retailers can provide a live stock feed to Westfield, but not all retailers are using it. So a customer might buy something from westfield.com.au only to be contacted by the retailer to be told they're out of stock. This shouldn't happen to often if retailers are manually updating their stock file regularly, but it's not an ideal situation.
  • It remains to be seen whether customers will want to shop in this fashion. Customer's shop from aggregators on eBay and Etsy but both those businesses have a proven, compelling offer, for eBay it's price and breadth of range and for Etsy it's buying handmade products. Westfield's offer is different, but because it's new it remains to be seen whether it's compelling for customers.

I really hope the mall is successful. If Westfield market it properly and it gains traction it's going to introduce a lot more Australians to online shopping and contribute to the growth of the industry.

I'd love to hear your thoughts, what do you think of this move by Westfield and the Shoes of Prey store?

8 comments:

  1. The site looks great. You guys are amazing.

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  2. Hey, I've read your blog for a long time, first comment though.

    I am surprised that you thought Westfield and SoP were a good match. SoP sells hand-made, boutique, one-off shoes, but Westfield is a run of the mill middle man. Westfield's brand capital comes from it's physical locations, not it's purportedly more exclusive online mall experience. So surely matching with Westfield is lowering SoP exclusivity? Aiding Westfield *a lot* more than SoP.

    Westfield will take any brand or company that comes it's way and who has the money to pay rent. In the good times, Westfield were destroying their brand capital by cramming in 'pop-up' stores in the middle of it's shopping centres, destroying the atmosphere and ambience. I just can't see how this is something SoP would do.

    I just don't see how this advantages the marketing of SoP as a boutique, hand crafted product/brand? Even though I can see how it provides brand exposure, I would have thought there would be better ways.

    Without the proices of designing their own shoe, how will people differentiate SoP from a generic shoe brand, other than by price, on a website such as Westfield's?

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  3. interesting play by Westfields. Its the equivalent of an online shopping mall. I think they had to give it a try. but it feels like you are shopping at a bunch of different stores.

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  4. Thanks Frances.

    Anonymous, thanks for sharing your thoughts. Very interesting. The direction we want the Shoes of Prey brand to go is still evolving in our minds, but recently we've been thinking there is more of a mass market opportunity than we originally envisaged. We still want the brand to keep a boutique and definitely hand crafted feel, but we have a broad range of customers shopping from us for many different reasons, so we're not sure the exclusive approach is one we want to keep.

    The Westfield brand is synonymous with shopping in Australia and Westfield have managed to develop two very good, high end shopping locations in Bondi Junction and their new Sydney CBD centre. We feel that those two centres in particular fit with the Shoes of Prey brand, and while we don't want to go down the offline retailing path right now, Westfield are pitching their online mall in a similar manner to Bondi Junction and the Sydney CBD malls so we feel like it's a good fit. We're hoping their online mall, marketing properly by them, opens up online retailing to a whole new group of Australian consumers and we'd love those customers to be introduced to the Shoes of Prey brand.

    Our lack of differentiation from the other retailers on the Westfield site is definitely an issue without our online shoe designer. It's a good test for us to see what we can do competing with ready made shoes in the market and even if we don't sell a large number of shoes, we like being in the mall for the brand awareness and credibility we see that stems from being associated with the Westfield online mall. Hopefully this all pans out as planned, but we're confident it will.

    Matt - their approach is for it to be like a mall with a number of different stores. Customer service and order fulfilment is handled by each store rather than Westfield themselves, as if the case in their physical malls. I think there is a good chance customers are going to be confused by this as that's not how stores normally work online, but eBay and Etsy have both managed to develop similar models, which consumers understand, so hopefully Westfield can do the same.

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  5. Hi Michael
    I see how Westfield wants to go more upmarket and you more mainstream.
    So what's the partnering model here? CPA, CPM, fixed cost a bit like a rent, or a % of your sales? On what criteria are you going to assess whether the investment is worthwhile or not?

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  6. Hi Thien, good questions. Westfield haven't specifically asked us not to but I shouldn't disclose the commercial details on this blog. That also means I can't answer the second half of your question about how we assess whether the investment is worthwhile either!

    What I can say is we are very vigilant about how we spend our marketing dollars, tracking the return on investment and making changes based on where things are and aren't working. We'll most definitely be assessing this activity like all the others.

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  7. Thanks for the reply. Being a Brisbanite I had no idea Westfield did up-market ;-).

    Interesting that you saw your brand as targetting a niche, but that it is far more mass-market than what you expected.

    I really hope the partnership works for you!

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  8. Hello from Perth. Well the brand exposure part worked. I just received a Westfield newsletter and SoP shoes were displayed at the top of a free shipping promotion. I hadn't heard of SoP prior to that newsletter and the images of the shoes lead me to find out more about SoP. The only thing I point out is that I assumed SoP was also in a bricks and mortar Westfield as well - I'm probably not alone in that assumption.

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