SockShop.co.uk is a multi-million pound specialist online retail brand that sell socks and claim to have the biggest choice of socks on the planet with a whooping 12,000 SKUs!
It is one of over 6 fashion brands under Ruia Group – a family-run textile manufacturing, import and distribution business headquartered in Manchester UK, the heart of the Lancashire textile industry.
The SockShop was founded by entrepreneur – Sophie Mirman back in 1983 with 400-500 outlet stores located at airports and railway stations i.e. high footfall locations for the most part of the 80s. It’s attempted expansion to the North American market in the 90s marked the start of the end of Sock Shop. By 1990, Sophie was forced to sell Sock Shop off to BDO Binder Hamlyn. In 1996 it went into administration and was acquired Tulchan Group, who then sold it off to Harris Watson Holdings in 2003.
In 2006, The Sock Shop, was acquired by Ruia Group. They stripped it down to an online brand and have since manage to grow the SockShop by 20-30% year-on-year.
The official name of Sock Shop is Drew Brady & Co Limited T/A SockShop and they also own another online store: elinens.co.uk. I had the opportunity to interview Alok Ruia, a Director and Paul Hanley, Ecommerce Manager who manages brands; HeatHolders, Sockshop, eLinens.co.uk and Hawick Knitwear.
This interview will make a great listen if you run a specialist online retail operation or are considering starting one.
06:40 – Pay close attention to end-to-end User journeys as well as the look and feel of your eCommerce site
11:35 – eCommerce brand could experiment with a click and collect service by cooperating with established bricks and mortars (e.g. WHS Smith) with a booth at their premises. Good are delivered overnight, for customers going into the city or high street to pickup the next day
45:30 – Work with UK Trade Initiative, UKTI to investigate other platforms around the world; South America, China, Japan, and Australia
46:00 – Rakuten is a global multi-channel platform starting to make some big inroads
46:20 – eBay is great to get your brand out there – but be careful with it as it is price-led
46:40 – Tesco Direct is also worth looking into – especially for fashion brands through www.clothingattesco.com but they seem to want to get their own F&F brand settled in first.
Cross Border eCommerce:
26:00 – Amazon has enabled access to the U.S, Spain France and German markets for Sock Shop. They use full language translation in Spain, France and Germany.
27:10 – Partner with local companies to handle returns – the Sock has partners in America for the return side of things, and localised
27:25 – For international returns, it is best to under-promise and over deliver, so if you say three to four days into Europe it’s usually there in two to three days
Top 3 customer acquisition channels:
- Google organic
- Email marketing (automated)
30:50 – #1 Customer acquisition channel for the Sock Shop website….has got to be Google by a mile….We feed as much information into Google as much as possible
32:00 – Product content: all of our product content when it comes to description is unique to us
33:15 – Blog content: We don’t always necessarily talk about the brand, it’s about the models who are out there wearing the socks, and the celebrities who are wearing them, and just about the product or about socks itself
Use writers that know your product really really well
33:45 – The uniqueness of content is very important… whether it’s product descriptions, or blog posts.
37:32 – #2 Customer Acquisition channel is Amazon UK and International Amazon stores in the U.S, France, Spain and Germany. Amazon is where the world does their shopping.
40:10 – Amazon customers keep you on your toes – they have very high expectations for their eCommerce experience and it you slack as a brand, customers will find other sellers
41:15 – Fulfilled by Amazon (FBA) should be considered in cross-border eCommerce situations. Sock Shop is considering FBA for France because the French tend to be very keen on Next Day delivery, whereas the Germans are prepared to wait two or three days.
Email – Marketing Automation
38:40 – Joint #2 Customer Acquisition channel is Email Marketing: the Sock Shop use email marketing to engage with their existing customers, and new customers that come on through SockShop.co.uk, keeping them informed by email
42:30 – Split email messages down by gender, age, demographics and previous purchase history using email marketing automation platforms like Bronto – because recipients get more relevant messages, email engagement and click through rate increase
57:15 – Marketing automation facilitates relevance in messaging – utilise the sales data to send
Customer Retention and Loyalty
Sock Shop has well over 11,000 Feefo reviews
48:00 – Reviews tell potential customers how good your brand or store is at delivering product and customer service
Reviews help with SEO – more product page content to ‘feed the beast’
Signed up as a Google Certified Shop – the certification of online shopping (So it’s more information that’s feeding into their search engine to give a better)
54:30 – How would you get new customer to come back to Sock Shop as repeat customers?
- A great customer experience,
- A great product, and
- A price that you pay for that product that you’ve very happy with
55:30 – we don’t bombard our customers with too many emails
Conversion Rate Optimisation
58:27 – Quality traffic I think is what drives conversion rate, reduces bounce rate, and organically increases our revenue in that respect
58:50 – We’re constantly on the site all the time looking at what people are searching for, whether it’s our internal search engine
eCommerce Success is…
Pleasing customers in terms of product quality, customer service….obviously it’s got to be profitable, and sustainable, and keeping all our stakeholders happy – Ruia Group is part of the Ethical Trading Initiative – Alok
For Niche / Specialist Businesses…Understand your product 100%, and understand your customer. That’s what I would say, and then have a good team of technocrats to support the passion of the business – Alok
It’s going to be a long hard slog…you’ve got to build your traffic coming to your site. It’s going to cost time, effort, and money to make that happen. Whether it’s PR that you’re doing for your product, whether it’s money spent on Ad Words – Paul
Essentially speaking we’re there to produce … provide and supply a fantastic product which we’re all passionate about.
– Alok Ruia
What we are as a retailer online is that we know our product so well we’ve got 40, 50, 60 years’ worth of individuals’ experiences
– Alok Ruia
I think that’s the difference with us as an online retailer, specialist, because we know the product compared to a general merchandise retailer
– Alok Ruia
Selling abroad, it’s really a keen focus for us, especially moving forward into 2015, but yeah it’s going really well for us at the moment
– Paul Hanley
At the end of the day all that Google are interested in is getting that information out (customer reviews from Google Certified Shops), because the more information they’ve got the better the results.
– Paul Hanley
Start of Audio
Kunle: Hi 2Xs, welcome to the 2X ecommerce podcast show. I’m your host Kunle Campbell, and in this podcast I interview ecommerce entrepreneurs, and online retail marketing experts, who on uncover new ecommerce marketing tactics and strategies to help you, my fellow 2Xs and listeners, double specific ecommerce growth metrics in your online stores.
If you’re looking to double metrics such as conversion, average order value, repeat customers, traffic, and ultimately sales, you’re in the right place.
On today’s show I have the director, and marketing manager of a very niche specialist UK online retail store brand. They’re here to share insightful tips, and the direction of how to take a specialist brand forward in the online space.
Without further ado, I would like to introduce Alok Ruia. Hello? Who is the commercial director of The Sock Shop which is part of the Ruia Group, which is a textile company. And Paul Hanley, he is the marketing manager, an ecommerce manager of the group. He oversees everything, marketing and ecommerce. Hello, hi there.
Could you take about a minute or so to introduce yourselves, starting with you Alok?
Alok Ruia: Yeah, I’m AloK Ruia, I’m one of the family members of Ruia Group who owns the Sock Shop as an online entity. I’ve been part of the group for the last 10 years, and prior to that, funnily enough I didn’t join the family business. I was actually a school teacher, teaching economics and business to students from the ages of 11 to 18. And in the last 10 years I’ve got involved with Sock Shop, and a number of other sock products within the group.
Kunle: Welcome to the show, and we look forward to digging a bit more. Then Paul, could you please introduce yourself?
Paul Hanley: Hi, yes, my name’s Paul Hanley, I’ve been with Sock Shop now for just under six months. I do come from a long mail order and ecommerce background working for such companies like Dabs.com from the early 90s all the way through to the early mid-2000s, and I’ve recently worked for the Regatta Group. Brands like Regatta, Dare 2B, Craghoppers, and Hawkshead.
Kunle: Interesting. How long have you been with Ruia, Sock Shop?
Just under six months now, so I do have a clothing background from my experience previously at Regatta, but it’s a good learning curve for me as well.
Kunle: Absolutely, having gone through several fashion brands in online retail it’d be quite interesting to hear your insights, and to bring in your experience. Great …
Alok: We’ve also got Mansi [sp] with us. I thought it would be useful to bring in on the interview, being a family run business.
Alok: I thought it would be useful to get Mansi to talk because she does a lot of PR for this office.
Kunle: Absolutely. Mansi was actually the key person who got this interview for us, and she’s a PR Manager of the Ruia Group. Mansi, could you introduce yourself please?
Mansi: Yeah, hi. I joined the family business in January this year, so it’s coming up to ten months that I’ve been working here. I was previously at Benefit Cosmetics doing the PR there in-house, and I joined because we didn’t have any PR for the group, so I started off doing Sock Shop, but now I’m also working across some of the other brands we have as well.
Kunle: Very interesting, so again from the fashion and cosmetics industry, bringing in your experience. It’s quite interesting. Okay, let’s start up with the first set of questions. Really it’s more what I found out about the brand, and I just want to dig a bit deeper into the Sock Shop especially.
I’m aware there are about three major brands. There’s Heat Holders, Sock Shop and Hawick Knitwear. I’m going to specifically talk about Sock Shop now over this interview.
Sock Shop has been around for quite a while. Am I not sure that it was founded by retail entrepreneur Sophie Mirman in 1983, and you took the rails in 2006. Could you … I think Sock Shop was in administration at the time, however in 2006 you’ve managed to take it over, and turn it around. It’s coming to about eight years now.
Could you share some more information as to the background of Sock Shop to our listeners please?
Alok: Okay, Sock Shop was a roaring success in the 1980s, and in the early 1990s. It grew very rapidly, and even today when we speak to many people you mention Sock Shop, their memory is of Sock Shop in railway stations, airports, and I think any time it’s probably 400, 500 outlets in some form throughout the UK, parts of Europe, and North America.
Unfortunately, because of rapid expansion [inaudible 00:06:00] and quite often people say this, they went into North America, and that marked the end of the start of Sock Shop, and ever since then they’ve been struggling during the mid-90s onwards. In 2006 unfortunately we came to administration, and as a group, regroup we’ve been dealing with socks 20, 30 years and we saw an opportunity to acquire the Sock Shop brand, and possibly a few of the shops to see where we could take it.
Kunle: Okay, right. Let’s talk about Ruia Group. You’re third generation, and your background really is textiles. There has been an evolution, could you describe the evolution please of Ruia Group from first to now?
Alok: Yeah, from the first generation, ironically Ruia means cotton, so in Hindu from India Ruia means cotton, and Ruia Wala, is what we say … you’ve heard the term Wala. It can be a Punka Wala, and so on. Ruia Wala meant the cotton people. The name Ruia comes from the shortened version of Ruia Wala, so we’ve kind of specialised in cotton for many years, many generations. Probably 18th century onwards, from India.
My parents came out to the UK in the 1950s, and two uncles likewise developed a business in Manchester, the heart of the Lancashire textile industry for many centuries. That’s where lots of Asian people came from, and we have been working over three generations really supplying some form of textile product into UK, now into Europe, and also North America. More lastly in terms of Sock Shop and other products like [inaudible 00:07:56] onto the global market.
Kunle: Okay, so from the sounds of things you’re a wholesale business, and a retail business. Is wholesale predominant in the structure, or in terms of the share of revenue, or is retail more predominant … Is it changing?
Paul: Wholesale is predominantly the main revenue source for Ruia Group or Sock Shop. We do a number of brand or products under the Sock Shop label. Obviously the end gain for us would to be to get Sock Shop online to account for 60, 70% of all our sales revenue.
We’re approaching it in a very systematic way. We’re not hungry to grow online sales in some rampant way which compromises integrity of Sock Shop. We’re there to provide quality products at fair prices as all our customers say. As time goes on we’ve seen growth of 20, 25%, with Sock Shop online. But at this rate it’ll probably take at least another five to six years for it to reach a target at 52% of the total turnover in terms of socks.
Kunle: Interesting. Is this your first foray into retail for the group, or have you had experience with other retail brands prior to Sock Shop?
Paul: Within the group. We’ve done some concessions but not … when it comes to textiles we’ve not done a great deal of retailing in terms of bricks and mortar, no.
Kunle: Interesting, okay. So it’s a good experience in terms of the growth you’re experiencing really. Okay, great. The next thing is how … I’ve been speaking to a number of entrepreneurs now, and everybody, at least in the UK, had horrible things to say about the period of 2008 to 2010, the recession, Lehman Brothers, and the like. Did it affect Sock Shop? Because you started in 2006. You probably cleaned the business up for a year or so, and brought it in line, so how was 2006 to 2010 from a sales standpoint?
Paul: Yeah. From that point of view, because we’ve got some winning products, and that’s really one of the crucial points of an online retailer, it’s not about being fickle, you’ve got to know your product, you’ve got to be passionate about your product, you’ve got to give the customer the service they’re looking for. So, funnily enough, between 2007, 2008 and 2010 we didn’t really see any damage to the online offer at all. It had grown at 20, 25% steadily over that period, and with certain products that we’ve got, the wholesale offers at Sock Shop has also been supplemented by great product.
Kunle: Interesting. A recession proof business. Very interesting. Okay, so would you describe yourselves as the market leaders in the sock niche in the UK?
Paul: In the UK as an independent sock supplier distributing to the UK we’d like to think we are the market leader. We’re not as big as Marks and Spencer or Tesco in actual sales turnover of socks, but as a wholesaler where we supply onto the high street a number of our products we’ve, probably the whole landscape of retailers throughout the UK. So if you would go into Debenhams you’d see some of our products. If you went to Emenco [?], if you went to Tesco, you’d see the full range of products Fenwick, House of Fraser, and so on.
Kunle: Okay. I was going to ask the next question further down the interview but I just prefer to ask about it now. I read an article, I think in The Telegraph about the fact that you and your brother Vimal actually have a condition, retinitis pigmentosa, which is just called RP, which means you’re partially blind. You’re blind basically. What challenges are you having, given your condition being blind, running an ecommerce business? Could you shed some more light so people could get the context of?
Alok: Well the two of us are quite different as brothers. Vimal’s my eldest brother, so essentially speaking being of Indian origin the eldest in the family just by default will be boss as it were. But that’s not just the case, it’s not just by default. Vimal tends to take all the responsibility, not just for Sock Shop but the wider financials for the big …
Vimal’s character is very different to my character. Vimal is very meticulous in everything he does, and when he runs the ecommerce side of the operation nobody can get away with anything, and I think Paul would echo that in the last six months.
Paul: Yeah sure. I’ll agree whole heartedly.
Alok: Since he joined the business it’s been a baptism of fire because it’s not a soft option when you’re dealing with Vimal, not because of his character, but his attention to detail. It’s not just the operation of the website, and the way it flows, but also his knowledge and detail of products, and the way things are packaged, and getting the whole operation from product in, product dispatch, and product displayed on the website. He’s absolutely phenomenal in his memory and detail to everything.
Miral [?] tends to be a bit more wholesale commercial, and attend to … as I said at the beginning of this interview, I was a teacher, so attend to probably a bit more people oriented. Go out and look for wholesale retail customers, and that seems to my specialism and when it comes down to detail, I suppose it’s an advantage, detail isn’t my specialism at all. So the two will complement each other very well. Vimal’s very detailed, and I’m not.
The eye sight can be a problem for me but ironically it can be a real asset, and I think we discussed this earlier with Paul, find the way he approaches the website in quite a different way to a sighted person, that becomes a real advantage because you make sure that every ‘I’ and ‘T’ are fully crossed and dotted, so that nothing’s overlooked.
Kunle: Interesting. I’m going to give a use case here. So I’m going to pretend that I’m Vimal, and there’s been a major [inaudible 00:15:05] the website has gone responsive. This discretion is directed to you Paul. We’ve gone responsive, so it’s mobile responsive, and I need feedback from Vimal’s perspective. How would Vimal ask you? Can he still see the screen, or is it just hazy from your point of …
Paul: No, literally we … When I’m talking to Vimal about the actual website, whether it’s responsive, whether it’s on a phone or an iPad, or a desk top or a laptop, I’m literally describing every detail from the top of the page as much as I can put it into my own words, and we go down the page. So we will hit things like the mega-menu structure from after we’ve gone to the header, and I will describe how that is presented on the page to him in as much detail as I can.
Kunle: With colours? Is he aware of the colours?
Paul: Yeah, yeah definitely. I mean obviously we have some brand colours of the black background with the gold highlight colour, so I’ll do that, but a lot of the imagery that we use in there is quite colourful as well, but I will describe it the best I possibly can.
Kunle: Okay, so I’m on your website now, and so who chooses the … You have really good photos on the home page by the way, really good models, really good display, show case of socks there. Would you describe the … sorry about that … would you describe the slider images to him too or someone else handles that?
Paul: Yeah, no definitely. I mean it depends who’s in the meeting as well. I mean often we’ll have one on one to go through it, and in other times we will get together as a group so we have Ruth Hoyle who’s our brand manager who comes up with a lot of the ideas. She’s joined us early September, and has quite a strong fashion background, and is really creative, so she decides and does … For instance the autumn/winter Christmas photo shoot which we’re starting to see imagery on the home page starting to come through now, which we’ve just completed. That was all her concept along with her assistant Daniel. They come up with that side of things.
Alok: What we’ve recognised from this is that Vimal will see his weakness. He can’t comment really or influence the graphics, and the aesthetics to decide. His focus is how the site works, and he’s [inaudible 00:17:46], and that really works well because sometimes sighted people can get carried away with the graphics and the imagery, but when they look at the nuts and bolts and the way the actual site’s working, that can be sometimes overlooked, and that’s where … The irony is somebody who isn’t sighted can actually add some serious value to the offering.
Paul: Yeah, I was going to say I totally agree with that as well. A site these days has got to stand out. It’s got to look good, but at the end of the day we’ve got to remember that people are visiting the site because they’re potentially interested in purchasing from us. So the whole journey from the home page to finding the products, to adding into the basket to purchasing has got to be the strongest thing. It’s got to be up there along with the look and feel of the site as well. Like Alok said then it can get overlooked sometimes.
Kunle: I guess you break down the user journey from say category page. If I was browsing a category you could say I go up to the category page through to check out to Vimal of a recession, and then he could critique each step in the customer journey. Is that kind of? Okay.
It’s really interesting because you do get very emotional, and used to your space with vision, and you don’t tend to pick things up with full vision. If someone’s there detached visually from the experience, he could give really, really salient advice, and pointers to improving the user journey, so it’s quite interesting.
I thought to ask this question now so we could move onto our mid stage interview questions. So next are the mid stage interview questions, and my question really is, it’s probably targeted to Alok, and it’s in regards to the feature of Sock Shop. Do you see it being a pure online brand, or do you see bricks and mortar expansion, say to airports like it used to be?
Alok: Okay, people will love and remember Sock Shop for being the airport shop. For being this shop that you saw at Kings Cross railways stations. I think what’s actually changed since the 1980s is the price of fashion, the price of textile products relatively have come down since the onslaught of far eastern imports from China and so on, and we expect our products to be cheaper.
Also the cost of rentals in retail spaces has gone up. So that metric, that relationship between actual absolute profit margins, and retail rent has actually narrowed, and therefore to make socks work skilfully, and successfully financially, in bricks and mortar with these high rental locations, is a pretty tough call.
Certainly you’ve got the footfall but the margins are pretty tight. You get a railway strike, which they did in the 80s and that can just trance your business, and I don’t really think the bricks and mortar approach, the way we remember Sock Shop in the past, is ever going to return.
Having said that, it’s something that I’ve … I like the idea of experimenting with, would be a click and collect service that you could perhaps cooperate with a WHS Smith Travel, and you could do a click and click service where you have a booth there, and we turn our produce overnight, and people are going into the city, want to pick up their socks. They tend to go to WHS Smith and pick up their package. I could see that working. It’s something that … It’s working progress, the thinking behind it, but essentially speaking I think it’s an online offer that we’re looking at.
We do have a few concessions in a number of [inaudible 00:22:05] around the country, but we’re not seeking them out aggressively.
Kunle: I was going to mention this. It’s not necessarily a question, but do you see … Oh actually I’m going to change the question but, do you see, other than margins, short term margins, do you see brand opportunities from expansion? So the fact that I see a Sock Shop shop in Paddington Station, which has fantastic footfall through Heathrow Airport while travelling. I don’t necessarily buy from them but I trust them because I could see their presence on there, and then I search for socks. I happen to search for socks, and I come across the brand.
Do you see that multi … that customer journey from offline? Do you see if there are any advantages from that offline to online transition, and where you close off basically online, and your offline presence is pretty much, more like advertising, and expensive advertising I think?
Alok: Yeah, I think you have to be a mega brand to see it in that form. Socks, they’re a great product, but the most expensive sock product is probably a pair of cashmere socks that we do for about £30.
They’re not high, high value products in that sense that can justify a unit in an airport as a PR store. That’s my general feeling. And what is an essential culture in our organization, we’re very commercial, and perhaps it could be seen as a downfall that we’re not necessarily into fancy promotional campaigns that might be very popular systems, that can be very expensive, and raise a lot of awareness. Essentially speaking we’re there to produce … provide and supply a fantastic product which we’re all passionate about.
Because what Sock Shop is today, and it probably wasn’t in the 90s, is that everyone in our organisation up in Bolton, sleeps socks all the time. We know our socks. One of the guys in our organisation ran a sock shop factory in Leicester in the 1980s, and prior to that he was a shop steward at Bryson’s in Leicester, the heart of the sock nation in the 1960s, 1970s.
So we know our socks. That’s the difference in many ways, we’ve supplied socks to so many retailers in the land, but you know sock retailers have their buyers, and those buyers are graduates, and in six months they may be in socks, and the next six months they’re in shoes. We find that a bit strange, because that buyer sitting there knows a bit about socks. Feels the sock, but doesn’t know the actual details in terms of the way the garment’s made, the heel, the toe, the seam, the welt and the yarn that’s gone into it.
What we are as a retailer online is that we know our product so well we’ve got 40, 50, 60 years’ worth of individuals’ experiences in what we provide, and we’re very passionate about what our customer gets at the end of the day. Equally we have brands on our site, I felt we all recognise it [inaudible 00:25:47] sock is one of the best, but [inaudible 00:25:49] and we give total respect to that brand because those guys that are supplying that sock equally know their product.
I think that’s the difference with us as an online retailer, specialist, because we know the product compared to a general merchandise retailer like a Marks and Spencer that are ... they’ve been brilliant at socks and underwear for years, and years but sometimes we question those individual buyers. Are they quite passionate about their products as we are?
Kunle: How do you translate this in an online space on your website? How do you re-enforce your passion, and your specialisation in socks? Variety I guess?
Alok: We are in the buying. If your buying team knows what we’re looking for, from other brands plus our own sole label products, when the customer comes, tries the product, they are amazed, impressed, call it what you will, by the product that we supply and the price it goes out for.
I think you’ll probably recognise them Feefo comments that we get are always very, very praising about the operation that we’re running, because we know, yeah sure they will be a product that slips through, socks, manufacturing socks can have their problems, but generally speaking 96, 97% of the customers that do go out and likes our product are very happy with what we do.
Kunle: Interesting. Do you have die-hard fans who just are obsessed with socks, customer sorry, who are really obsessed with socks, and know their socks?
Alok: I think that we get some great feedback, and people even write poems on the website, and they love the socks.
Kunle: Okay. Apart from multi-channel approach, and having a high street presence, what about the opportunity about like cross border ecommerce? Are you getting a lot … Do you ship internationally? Are you getting a lot of interest in the EU especially, from the USA, from people looking for English brands, or British brands?
What’s been your experience really from a cross border? What’s your approach with cross border ecommerce?
Alok: I think that’s for Paul.
Paul: Yeah I’ll go with that one. We sell internationally basically. The website is set up for multi-currency and we ship EU, and we ship worldwide. We have a lot of sales coming in from the US, and France and Germany are our key markets.
We also utilise the Amazon seller central system to actually sell within these territories to supplement the website as well, and we’ve been on the US Amazon site since summer last year, so that would be 2013, and we went live with full language translations in France, and Germany and Spain this summer as well, and with Germany especially we’ve seen some really good strong sales.
Though Germany already is about a third of what the US sales we do on Amazon there. But both the website … Yeah, we feel like Amazon and the website both complement each other as well because obviously Amazon’s a great route to market for us, and it builds the brand for us. So they both work hand in hand in that respect.
Yeah, and selling abroad, it’s really a keen focus for us, especially moving forward into 2015, but yeah it’s going really well for us at the moment.
Kunle: Okay, so the site is geared towards fulfilling, well … the question …
Paul: Yeah, totally totally. I mean I was going to say we have partners in America for the return side of things, and localised, a bit more in Europe, with France and Germany, and Spain, the returns process is very straight forward and our delivery times are quite quick as well. Very much under promise and over achieve. So if we say three to four days into Europe it’s usually there in two to three days.
Kunle: Do you have warehouses in Europe? Or is everything shipped out from the UK?
Alok: Everything is shipped from the UK. As an online operation that’s the case Kunle, but as a wholesale operation we’ve got warehouses in central Europe, and also in the US, we’ve got a couple of central warehouses.
Kunle: Are you seeing demand outside of the EU and US like from China and India? Asian subcontinent.
Paul: I think with China, we talk about this multi-channel approach, and this multi-channel is an interesting one because sometimes we put it in two categories. You talk about online, or you talk about your own retail outlets. I think we’re a bit in the middle because our offline offer tends to be broadly speaking Sock Shop products with our retail partners.
For example, we’re supplying the Heat Holders brand to Tesco, but Tesco also supply into central Europe, so Sock Shop products are being seen in central Europe. We’re doing likewise in South Africa. We’re selling heat holders in South Africa, and quite often we’ll get people emailing Sock Shop or our Heat Holders website directly because they’ve bought a product in South Africa, and say, “Where can I get more of these things because they’ve sold out?” So the Sock Shop sale will increase based on them inquiries.
Kunle: Your footprint is quite important, especially with branded products. Everything comes back to the website eventually, the wider your footprint.
Alok: Exactly. [inaudible 00:32:00] in some form. The reason why I say this is that we’re in the process at the moment in talking with a partner who is going to be selling heat holders into China. We’re very excited about that. It’s like taking coal back to Newcastle in a sense, but they love the product, the innovation, the design, and the packaging, so it’s all come from the UK, so we pride ourselves on what the UK provides in terms of innovation.
We’re in the process in terms of the heat holder of potentially developing something that is very special which I probably can’t talk about at the moment, but in 6 to 12 months’ time we will be able to, but because of that we’re almost exporting our design, and our innovation, and this Chinese partner is hopefully going to be supplying the heat holders - the Sock Shop Heat Holder products into Beijing and Shanghai where sadly for them it can get very cold in places like Mongolia and so on.
Kunle: It reminds me of the Apple model, Apple is designed in the States, in Los Angeles proudly designed there, and then it’s manufactured in China, brought back to America, and then sold to the Chinese again.
Alok: Yeah, exactly. You’ve really made my day to suggest that Sock Shop and Heat Holders are just like Apple products. [laughing]
Kunle: Well you could stick that motto there as your messaging. Okay, so that’s a very interesting initial sets of question. I think the next thing I’m going to talk about really would be cost and acquisition. Let’s talk about your number one customer acquisition channel. I would give this to Paul I think, yes.
Paul: Okay, so for online obviously the Sock Shop website it’s got to be Google by a mile. We feed as much information into Google as possible because it gives us a massive spread across the most important platform in the world for driving traffic to us, and keeping the beast fed as it were with the latest information is so important. That not only does it mean that around 80% of our SEO work has gone in-house, but as a manufacturer who retails as well, it keeps us one step ahead of our competitors. Because of course we’re creating all this unique content via products, and we’re there first which means that our relevance as far as Google is concerned is right up there.
As far as customer acquisition and getting people to the site, it’s got to be Google for us.
Kunle: Okay. Let’s dig a bit deeper into this. You say Google. You talk about content. From my perspective there are two kinds of content from ecommerce, and an ecommerce context. One type of content would be your product information in terms of like what you sell, and the other bits of content really is how you promote stuff, like in your blog, or in video, things, promotional content.
When you say you’re feeding the beast, the Google beast, what kind of content are you talking about in particular, and where do you focus 80% of your time?
Paul: Okay, well I mean all of our product content when it comes to description is unique to us. We have a copywriter who writes all of that content for us. I think when you’re talking about competitors and people like that, if they’re buying from distribution they tend to get all their copy from distribution, from the manufacturer, so you tend to get a lot of sites which have all the same copy. In our respect, as we get it written … I mean obviously a lot of our products that we sell are our own anyway, but as Alok said we do sell other brands such Falc and people like that as well.
We make sure that all of our copy is unique on the actual products descriptions, and that is obviously very important that it is unique so Google recognises that. As far as the blog content. The blog content is certainly a lot more free form, as it were, free roaming.
We don’t always necessarily talk about the brand, it’s about the models who are out there wearing the socks, and the celebrities who are wearing them, and just about the product or about socks itself, because I think one of the things Google doesn’t like is when you sell, sell, sell, sell, and again we have an internal writer who writes all of our blogs for us who’s worked for the company for quite some years, so knows the product really, really well.
From that aspect the copy and the content that we’re producing is very unique to us, it’s very stylised to Sock Shop, it’s humorous as well but it’s informative. So it’s all done in-house, we’re not just copying and pasting press releases from manufactures and putting that out there, and hoping that we’re the first one to put it out there, and Google picks up on it first.
So I think that’s very important that the uniqueness of the … whether it’s product descriptions, or whether it’s our blog post that we’re doing is very important.
Kunle: I’m on a product page now, and I can see what you mean. I can see a nice tickers there. It kind of talks about the sock thickness. I like that in terms of the buyer. It’s a three point [inaudible 00:37:30] so it’s fine, medium and heavy. Then there’s a sock length.
These are things quite unique to … No one else is likely to have these features on their product pages. Then there’s a size guide which is pretty standard. Interesting.
I’m just going to look at the category of pages … quite interesting too. Very, very neat. Five items per row, okay, great. Then there’s some description at the top of category pages. Very, very interesting.
Okay, so …
Paul: I mean yeah, it’s an ecommerce site at the end of the day. We can’t reinvent the wheel unfortunately. We don’t have the resources to go and try a million and one different things, but as far as Google is concerned which, like I say, we field drives, all that traffic to us, it’s all about making sure that the content that Google picks up on is unique to us.
That’s what gives us the edge over the competitors as far as say someone like Google … sorry, when Google is concerned because they will rank us higher because of that. Obviously pricing is a completely different aspect because people sometimes … Yeah, exactly, but as far as the content is concerned at least everything on there is written by ourselves as it were.
Kunle: A couple of days ago I came across John Lewis, they generally push out a retail report every year, and there are all sorts of trends, and last Christmas was their first mobile Christmas in their terms, quote and unquote, and I’m quoting them, quote and unquote them. The reason why it is, it was the first time ever they had mobile traffic surpass desktop traffic, and it sort of sustained itself to date.
Right now on John Lewis there’s more mobile traffic than there is desktop traffic. Is that the case with Sock Shop at the minute or …?
Paul: We’re not quite there yet. I would say we’re kind of 50/50 at the moment mobile traffic against desk top traffic, and I know looking at the analytics that it means like late afternoon, early evening from about four o’clock onwards, we do see the percentages change quite considerably, so from four o’clock onwards building up to say seven, eight o’clock at night, once Coronation Street and EastEnders is finished, our mobile traffic goes up to the roof where it’s probably around 75 to 80% of our traffic as opposed to during the day when it’s not quite possibly the other way round.
But it’s certainly more desktop than laptop users during the day when they’re obviously I guess when they’re at work. But in the evening certainly we’re seeing a lot more traffic coming through on tablets, iPads, and Android tablets and the like.
Kunle: Very interesting. Okay, it’s fascinating in terms of like data, and how data mimics or matches real world actions really.
Paul: I live on analytics. The last thing I do when I go to bed at night is check Google Analytics to see what we’ve been doing during the day. I mean it’s like an addiction, it’s worse than crack I think [laughing].
Kunle: I installed the mobile app for analytics, yeah. Let’s talk about your second most important cost and acquisition channel.
Paul: Second most important acquisition. I think we’re looking at Amazon and email to promote … like I was saying previously, Amazon dot co UK does fantastic business for us, and we’ve expanded, as I said last year into North America using Amazon.com, and we’re on Amazon.fr for France, and Amazon Germany, and Amazon Spain this summer as well.
But Amazon is a great platform for us because it allows us to try different things, and it gets the brand out there. Once somebody’s bought a Sock Shop product from us on that platform, it’s really in their mind then. Whether they continue to buy from Amazon, or whether they come to Sock Shop dot co dot UK is a different matter, because obviously Amazon just makes it so easy to purchase, and it’s almost like it’s you’ve got to be on Amazon these days because of the fact that that’s where the world does their shopping.
Because it’s a one click purchase, and it’s done [inaudible 00:42:10] and it arrives when it arrives no matter which company has sent it out. Certainly that’s very important for getting the brand out there for us, but
I think email as well, engaging with our existing customers, and our new customers that come on through the Sock Shop dot co dot co UK site, keeping them informed by email. I know it’s a bit old school considering, compared to the newer social media like Facebook and Twitter and Pinterest and all those, but email is still so important.
Everyone has an email account, and making sure that we’re targeting customers correctly via that medium is very important. So I think Amazon and email are our second and third, or joint second customer acquisition channels definitely.
Kunle: I absolutely agree with you Paul. Eric Schmidt, Google’s executive chairman, two weeks ago was asked … Well he alluded to the fact that Amazon is Google’s number one competitor, because some people, like my wife for instance. Any time she’s looking for anything to buy in lunch, doesn’t search Google first, she searches Amazon. She goes into Amazon and types … That’s very telling in terms of where Amazon is, and I’ve come across Amazon only businesses in the past, where they just set up an Amazon, like there are many toy businesses that are setting up right now for the Christmas season.
Yeah, it’s fascinating. It’s Internet for ecommerce. So I agree with you. And great your email.
Paul: I think they keep you on your toes as well Amazon as well. I mean as we know from our Feefo reviews we have really good customer service experience for our customers. I think for Amazon as a whole … certainly for us, and as an ecommerce business as a whole, it keeps you on your toes as far as your customer service. You can’t slack on Amazon. If you slack then your ratings go down, and people just don’t buy off you because there’s so many options to buy. I think they also help ecommerce as a whole in that respect.
Kunle: That’s a very, very good point. Do you fulfil with Amazon, or do you fulfil directly from your warehouses?
Paul: We fulfil directly from our warehouse up in Bolton, any of our retail customers. As Alok said previously we do have other warehouses round the world, but as far as our retail customers are concerned everything’s fulfilled from our warehouses in Bolton.
We have looked at fulfilment via Amazon in that past, and I think we might look at it again in the future for other territories such as France. They’re very keen on next day delivery whereas the Germans are prepared to wait two or three days. We may look at other territories as well for fulfilment by Amazon where the Far East and places like that, just because of the logistics of that side of things, it’s easier to have that one centralised. But that’s for next year, but at the moment everything’s shipped from the UK.
Kunle: Interesting. I’m going to go back to the email thing. Email isn’t old school. It’s not old school. I always tell [laughing].
Paul: [laughing] And it’s for me, who’s been doing this for 25 years.
Kunle: Oh yes, in terms of your history yes. Because at the end of the day, as an ecommerce brand you’re an email company at the end of the day, and all cost and acquisition traffic should see email as at least a secondary conversion path, because I see it over and over again in analytics where email appears to be from a last interaction standpoint. It appears to be the major driver of revenue, because when you send out emails you make money.
But emails are so important for growth and ecommerce. Facebook could change its algorithm…Google could change its algorithm and you’d always have you email data bases, although there are deliverability issues on there, but yeah.
Paul: I was going to say, as far as emails are concerned we actually changed platform in the summer, and we moved to a Bronto platform and it just allows us to now with the sales data that we’re getting in, and the functionality within the platform, it allows us to do so much more with the email as well, so it’s literally not just bombarding now our base with one stock email, we’re splitting down by gender, we’re splitting down by age, demographic, and things like that.
So we’re focusing the men with the men’s products, we’re focusing the women with the female products, out of our ranges that we’re pushing on that particular email, and we can see that the amount of clicks going up, because we’ve got those analytical data available to us, it’s just working more, and we’re engaging more with the customer, and giving them a better service in that respect. We’re scratching the surface as well with what’s there.
Kunle: Last purchase birthdays. I mean the work flows … Because it requires probably a dedicated hand to hack it out because there’s segmentation. It means more relevance so your click-throughs are high, and you could design various work flows, and so if you clicked in this then they could get a series of emails over a period of time. It’s very, very interesting.
Paul: Exactly, and customers don’t always open their email straight away, and sometimes they need a gentle reminder, and sometimes it’s a week or so later when they’ve come round to actually reading them. Often surprises of say we’ve sent an email out a week or two previously, and then we’re still getting orders from that email because customers are still opening the email a week or so later.
I mean one of the great things about the platform we’re on now is that over a period of time we’re getting that customer information of when they’re actually opening emails, so it means that we can actually reduce the amount of emails we send out so we’re not bombarding them, but we can send it at a time when they’re more likely to open it as well. So it puts us still at the forefront of their mind.
Kunle: Very, very interesting. Thanks for the points there. Okay, next set of questions would be talking about, it’d be customer retention, and loyalty. Well prior to that, let me have one more question, and … Do you recommend, or would you have any advice for other multi-channel points, acquisitions channels our listeners can sort of explore beyond Amazon, Google and email?
Paul: I think there’s a number of different platforms who work well in different countries. I think in the UK we pretty much predominantly think that Amazon is the be all and end all, and yes it does work for us well in France, and Germany, and Spain, and in North America, but I think we also don’t necessarily realise there are other platforms out there.
I know Rakuten is doing an awful lot of work at the moment to give Amazon a bit of a bloody nose worldwide. They’ve got a lot of money that they’re spending on the marketing side of things, whether that works for them or not, we’ll have to wait and see on that.
But we’re also working with the UK Trade Initiative, UK TI as well to investigate other platforms around the world, and South America, in China, and Japan, and in Australia, those sorts of areas. In France and Germany as well, a bit closer to home. There are other platforms which we don’t necessarily know about, which work better than Amazon even though Amazon are in those territories themselves. You’ve got to investigate these territories of where you actually want to sell into I think, but I think obviously Rakuten is one which is a worldwide one which is starting to make some big inroads into.
Kunle: I think it started from Japan.
Paul: Yeah, they are yes.
Kunle: Yeah, they’re Japanese. Very interesting.
Paul: I know they bought Play dot come obviously a few years ago to get a foothold in the UK and try to change it quite considerably. I don’t know how well that worked for them, but I know they recently launched Rakuten dot co dot UK, or Rakuten dot co dot UK, which they’re going very much after that Amazon market I think.
Kunle: What do you think about eBay?
eBay is fantastic. It’s great. They’ve spent an awful lot of money, and I think they’ve changed a lot over the last 18 months to two years to make into a more … take it away from more of a car boot sale for want of better phrase, and they’ve got some big brands on board like Tesco, and I think Argos are on there, and things, and they use it as an outlet more than anything else. It’s great for that. I think from our products there’s an awful lot of competition out there so you can get a bit swamped on eBay I think, and it’s a lot more price led, and we don’t [inaudible 00:51:16].
Kunle: It’s a race to the bottom on price, and margins are really thin. Then they take 6 or 7%.
Paul: Indeed, definitely, and we’re not about that as a company, yeah. It’s a great platform though, and again it’s good to get your name out there, but it’s hard work, it’s very hard work.
Kunle: It’s hard work yeah. Okay, that’s quite interesting. I also heard Tesco have an outlet, like a marketplace, but it’s quite select in terms of who they allow on there.
Paul: It is at the moment. We have investigated Tesco a bit further, and I think from a clothing point of view they want to get their own brand on there settled in first. F & F, I think or something like Frederick. They want to get that settled on there before they’re looking at other clothing brands, but we have investigated it, and we’re on their radar. So I think Tesco would probably be one to get onto if you can do, and as I say we are biding our time on that one. As soon as we can we’ll be on there I think.
Kunle: Really interesting points there Paul, thank you so much. Okay, let’s move onto customer retention and loyalty. I see you’re a gold Feefo trusted merchant, you’ve got over 11,000 class Feefo reviews 96%, how important are reviews, and how does that connect to customer service?
Paul: It’s very important as far as getting new customers, and retaining existing customers. I think services like Feefo are great because one, it tells potential new customers how good we are, and we do try and be the best that we can to give our customers the best possible customer service, because at the end of the day, and it might sound a bit cliché this, but it is the start of a journey with us because we do other things like birthday promotions for them, we do … If you’re a repeat customer then … a multiple repeat customer then we have breakpoints where if you’ve bought 10 orders with us, anniversary type things, we will give you a partial refund on your order just to celebrate the fact that you’ve been with us for such a long time. But I think reviews are great because it shows us in a positive light, but it also shows us as well that if we do make a mistake or something goes wrong we also rectify it quickly as well.
From that point of view it gives a really good impression of us, and it shows that we’re not infallible, and we will sort it out quickly and efficiently when something does go wrong. It’s also good from an SEO point of view as Feefo well because it’s new content coming on which is unique content to us, and it’s talking about us, so it’s all relevant, so again it feeds the beast that is Google.
So from that point of view it’s great. I have to say as well speaking of Google, without turning this into an advert for Google, we have just signed up as a certified shop as well. I think Google have obviously identified this fact that you’ve got services out there like Feefo and Trusted Reviews and the like, and I think that the certification of online shopping, that’s what they’re advertising it as, but basically it’s another way of getting customer data from ourselves, whether it’s order based or whether it’s reviews from the actual customers themselves. So it’s more information that’s feeding into their search engine to give a better [inaudible 00:54:49]
Kunle: Just to let in the guests, the listeners, on Google certified shop. It’s kind of like a review system from Google, similar to Feefo and the like, and the rest of them. It’s Google, Google going again into that space. Just to let them know. I’m on their site now, and it looks pretty much the same thing as … My thoughts are how is this going to … Is this going to eliminate third party reviews, and Ad Words? On Ad Words search you sometimes have reviews on AdWords. It’d be fascinating if they wean that off eventually.
Paul: It’s a difficult one because obviously we’re in the very early stages with the certified shops. They’ve only really just been opened out into the UK. I think they’ve been running in the States for a while, over the last 12 months or so now, so it’s difficult to see how it’s going to go out there because we just don’t know, because Google changes the goal post so often. And rightly so in most respects because they change them to make sure that the quality of the results that they’re serving up are right at the end of the day. But yeah, I mean it looks like they’re very much going after the Feefo type products, and the trusted review type products because obviously with Google being the world’s most used search engine, (certainly in the Western world) it’s obviously trusted, so why not add that extra layer on as well.
At the end of the day all that Google are interested in is getting that information out, because the more information they’ve got the better the results. It can only be good for people like ourselves who want to do the best for their customers as well, and we’re not feeding into it any rubbish as it were just to make sure our search ranking’s up there, and that’s what Google recognises I think.
Kunle: Is it a free service?
Paul: It is yes. It is at the moment. [laughing]
Kunle: Wow, okay. You don’t have a choice. Okay, that’s a very good one. As a guest I’m Google certified shop, check it out please. Great, okay.
How important are repeat customers to business?
Paul: Very important. At the end of the day obviously it’s more revenue that’s coming in for us with more sales, but also as well if we’ve got customers who are repeatedly buying from us, they’re going to be talking to their friends, and they’re going to be writing reviews for us, and saying how … the products that they’re buying from us are great, and the service that they’re getting from us is great.
From that point of view we want to keep them in that relationship with us, and obviously like as mentioned previously we do a number of things that help us keep them in that relationship over and above the fact that we’re offering them really great products, and a really great service as well. It doesn’t just encompass one thing, the fact that yeah great we’re getting repeat orders from them, it’s so many other things as well like I’ve described.
Alok: I suppose it’s a reflection of what you’re doing with your business is good, is right. If they’re coming back and spending money again, people can talk but the cliché is money does talk, and in this case if you’re ready to let go of a bit more money to get product back, we must be doing a good job, and that’s what will make our business survive in the future, to make sure that we do a good job pleasing our customers.
Kunle: I think my next question has to do with the fact that … How do you get customers back in the door? A use case again. I purchased a pair of say running socks for a race I was … on Saturday. Say last week Friday I purchased, fulfilled, I was very happy with it. How would you get me Kunle to come back to Sock Shop the next time I need a pair of dress socks, or business socks for my suit, or over winter?
Alok: Is that any different for a non-online retailer that … I’d probably say the answer would be the same for online or offline in terms of a great customer experience, a great product, and a price that you pay for that product that you’ve very happy with, and if you can do that as an online customer online business you’re doing the right thing, and that’s all that can happen.
If you push it too hard with customers then I think sometimes online business it’s easy to communicate with the customer, five, six, seven, eight times a week if you want, but you don’t want to turn that customer off. You want to be in their psyche so you talk about the ‘running socks’ these guys sent me some great running socks. They do what they should be doing, they came quickly, I’ll use them again for dress socks. It’s quite simple that, isn’t it?
That’s my view and Paul might be …
Paul: No, I totally agree with that. I mean one of the things that I’m quite keen on is the fact that we don’t bombard our customers with too many emails, as we’ve already discussed it. It’s a great way of keeping the brand within demand, and if we ‘ve given them great service in the first place when they first ordered we’ve got to make sure that we keep our brand within the mind but without bombarding.
Because at the end of the day we can’t forget the fact that there’s a massive amount of choice out there, and if we’ve given them good service, we’ve sent them great products, and they love the products, then we’ve got to only hope that they will come back to us to look around for their next purchase. We can’t force them to do that though so we’ve just got to make sure that we keep it in mind without bombarding them.
Kunle: Top of mind. Excellent.
Alok: Another element within that is you use the example again of the running sock and the dress sock. We have the biggest choice of socks on the planet. We have 12,000 SKUs, so hopefully whether it’s a running sock, a dress sock or a waterproof sock, you’ll come to Sock Shop, and you’ll think they’ll … So we’re delivering a solution to people looking for socks to cover their feet.
Kunle: Three things I’ve picked up from what Alok and Paul have said. One’s the experience they get in terms of how well they’re treated on store, so things about the ease of finding the product in the first place, and how fast it was delivered, how they were treated by customer service if there were any issues.
The second is choice. If they have enough choice you’ll be top of mind. The third is being top of mind but without actually bombarding them with too many messages, whether it’s Facebook updates or emails. It’s stay top of mind but be aware that there’s a fine line between spam and communication, and adding value really. Just being top of mind.
Very interesting points gentlemen. I really enjoyed that.
Paul: With the email side of things as well, making it relevant, if you’re on the right platform, you’ve got that right data from them, then make it relevant to what they’re interested in. There’s no point in sending them a million emails about products for ladies when they’re a man and they’re looking for suit socks, and dress socks, and things like that all the time, you actually may buy the others for gifts for family members or friends or whatever, but keep it relevant as well.
Kunle: Someone like me who likes running, you’d probably send a series of athletic or running socks when they become available, or over a period of time, I guess?
Alok: Exactly, because we can utilise the sales data that’s in our email platform, we can see that you predominantly buy running socks, so when if we want to do a e-shot which is sports related, then obviously we are more likely to target you for that rather than the entire base.
Kunle: Just want to, because we’re running out of time here. Conversion rate optimisation, are you actively optimising the site with CRO or …?
Paul: Conversion rate is one of the most important things to us. It’s what we look at the most. Quality traffic I think is what drives conversion rate, reduces bounce rate, and organically increases our revenue in that respect. We’re constantly on the site all the time looking at what people are searching for, whether it’s our internal search engine, whether it’s key words from Google Analytics, we’re looking at what people are searching for, and understand what they’re coming onto, and we’re always looking to reduce that bounce rate down.
Because if the quality of the key words that we’re looking at is high, then people are going to get to the actual products that they want to see. For instance, if somebody’s looking for farrow trousers, and they search for farrow, and they land at Sock Shop, apart from the fact that the name of the company gives away what we actually sell, they’re only going to see farrow socks, and farrow underwear, they’re not going to see farrow trousers.
We’ve got to make sure that those key words are strong, long-term key words are strong within Google, what we’re pushing out, and into Google, and what Google is spidering, because at the end of the day if somebody searches for farrow socks, and they come to us they will see farrow socks, and that will lead to they’re more likely to purchase, which will increase our conversion rate. Quality traffic is the way we approach things more.
Kunle: Yeah, and I guess that there’s a logic, and that a lot of though is put into your brand, in terms of your brand landing pages. I can guess in fashion a lot of people are very brand focused with their searches. They’re looking for particular kinds of socks from brands. Obviously for the mid and long tail, and then the core would be more your top of funnel general key words.
Okay, great. The next set of questions has to do with average order value. Do you track customer lifetime value in the store?
Paul: Not particularly. It’s more about how many times customers repeat with us more than anything else, because it really depends on what they’re purchasing at the time, and who they’re purchasing it for. We’re very strong on cartoon hero socks for instance, the [inaudible 01:05:41] socks and Doctor Who socks sell incredibly well for us, especially around this time of the year, but then other times of the year the same customer might be spending a bit more on dress socks, £20, £30, we have seen an increase in our highe¬¬¬r end brands, and products, increase in sales over the last 12 months considerably. People are prepared to spend more but it’s more about how many times they repeat, and making sure that they come back to us which obviously we [inaudible 01:06:14]
Kunle: Is summer less busy, as compared to autumn and winter?
Paul: Well it’s a hard one for me to answer that really, because I’ve only been here since June, but we had a really good year in July and August, and our sales were up probably 25, 30% over the previous year over the same period which is great, and obviously I can’t just put that down to me starting with the company unfortunately, as much as I’d like to, but it certainly wasn’t me.
But then September we … it was hard, as it was for a lot of clothing companies, we still did good business, and the percentage increase wasn’t there really, we did pretty much the same this September as we did the previous September. October’s been much better for us, but September’s, a lot of companies I think Next Group have announced today that for the first time in 20 years they’re announcing a profits’ warning because September was that mild everyone’s had winter clothes that we’ve obviously launched in August our autumn/winter collections, and people haven’t … the customers just aren’t that interested in them because the weather’s been so mild, and a lot of retail companies, clothing retail companies have struggled with that as well.
It’s not been a disaster for us, but … and October is back to where we expect it to be as the more inclement weather’s come back in. But no, summer should be quieter for us, but this year it was better than the previous summer,
Kunle: Good. Let’s hope for a very cold winter come January [laughing].
Paul: Funnily enough that’s exactly what I’ve put down on my notes [laughing].
Kunle: Anyway one other question in regards to repeat customers, average order values has got to do with a brand in America I came across called Man Packs, and what they do is quite clever. They’re a niche business, and they’ve got a lot of PR of the back of what they do. They’re a subscription based business.
So guys we don’t really like going to buy vests, socks, and boxers, underwear, from shops every now and then, and some of us have yellow patches on our white Ts and stuff like that. The subscription based business for the basics, on a regular basis. Are you exploring subscription based give how often people change their socks, are you exploring subscription based business? It’s quite new in ecommerce anyway. In the future or it’s just interesting to find out what your thoughts are on the subscription based business, given the fact that socks are things we change every now and then?
Paul: Yeah, definitely socks lend themselves to that type of subscription based business incredibly well because every couple of months we could be changing them all. We’re looking for new pairs or whatever. We have investigated it, we’ve seen the businesses start up in the States, and monitoring how well they do. I think it sounds a good, straight forward business, but the actual logistics of it for the backend side of things are a lot more complex than people think.
So I think it would take some preparation on our part, and some serious development to be able to get the right technology if you like on the backend, to make sure that people who are subscribing are getting the right products out to them when they want it. So yeah, it is something we’re looking at, but I think it’d be something maybe next year we investigate a bit further. Great for repeat business of course.
Kunle: Final set of questions. This one is … It’s quite interesting in terms of the repeat business exactly, and it’s almost effortless repeat business, because once you get the customer into the funnel, or into the sell it just means you’re able to almost well model your business like it was a sort of a service business from that standpoint, and you’d easily be able to calculate your customer lifetime value off the back of that, if subscriptions last for X numbers of years, or X number of month. Interesting anyway.
Final sets of questions has to do with revenue, with growth. Where do you envision Sock Shop’s next phase of growth to be from a cost and acquisition standpoint? I think since 2006 or 7 it’s been growing by 25% year on year, and it’s a fact that Sock Shop given the next over the current pace of growth, given the next eight years could be 50% of the business, which is substantial compared to wholesale.
But how do you see and envision the next phase of growth? Where do you see … How do you see getting your next set of customers to make this happen? To make it a reality?
Alok: I would like to just think it’d be good organic growth which would reflect that the products and the service that we’re providing is very good. People get to know about it word of mouth, with their friends and their family, and think Sock Shop is a great one stop shop, so when it comes to they come to purchasing socks, and going out aggressively in an organic way to acquire customers, I think can be a bit of a distraction at the worst, and at best it’s a short term gain.
We’re not aggressive in the way we go, we see nice steady growth, and that’s been based on some basic school practise in which any business, whether you’re a wholesale business or a bricks and mortar retail business should be doing.
We’ve opened up these new platforms, Amazon US, Amazon Germany, Amazon France and so on, and it’s kind of happening in a steady way, and I think that’s the way I’d like to see it going. Okay, it’d be great if we woke up the next day and you see sales grow by 50% from the previous year, but to go out aggressively and heavily PR it or invest hundreds of thousands of pounds or millions of pounds into celebrity endorsements and so on, I don’t think is necessarily what we’re about. We’re there to please the customer and a steady growth at 20, 25%, if we manage that, for the next five, six, seven years, we would be a very contented business.
Kunle: Absolutely, I think it’s not being too greedy, too aggressive, going by the concept of the black swan effect. Small moves, small losses, small wins. Sometimes small wins bring big results. So it’s all about taking pace. It’s a marathon not a sprint at the end of the day. I would agree with you.
Would you confirm if you’re a seven, six, seven, eight figure business?
Alok: Sorry, say that again?
Kunle: Are you a six, are you a seven figure business in terms of?
Alok: I don’t understand the question.
Kunle: Are you a seven figure business from a turnover standpoint?
Alok: Sorry, I’m not getting. Paul can you?
Paul: Yeah, I mean yes we are, is the easy answer to that.
Alok: I don’t know if I’m being a bit stupid. What was the actual question again?
Kunle: Seven figure in terms of millions.
Paul: Yeah, we are a multi-million pound.
Kunle: What does ecommerce success mean to you?
Alok: For me, Paul will have a different take on it because he’s got an ecommerce background from different organisations. I’m coming at it from the viewpoint that socks, and this particular segment, ecommerce success that we run a very successful business in terms of pleasing customers in terms of product quality [inaudible 01:14:39] I’ve said quite regularly through the interview, obviously it’s got to be profitable, and sustainable, and keeping all our stakeholders happy.
One comment I’ve not made is that Ruia Group is part of the Ethical Trading Initiative and we are working closely with our suppliers to ensure that our off suppliers get a good deal from us, and we supply responsibly from them, and a business that will be there in five, six years’ time, bigger, stronger, keeping all its stakeholders happy from the suppliers to the customers, to the employees, and to the investors. That’s what for me would be a successful ecommerce business. It could ecommerce, it could be bricks and mortar, it could be a mixture of the two.
Kunle: Fundamentals. I like the give back aspect of things, building the business and then being ethical in the way that you conduct business both to suppliers, and how you source your products. Great.
The final set of questions really has to do with one piece of advice you’d give ecommerce entrepreneurs looking to sell in an ultra-niche, or specialist products online. If one of our listeners is looking to set up a store that’s quite specialist, what parting piece of advice would you give them?
Alok: Understand your product 100%, and understand your customer. That’s what I would say, and then have a good team of technocrats to support the passion of the business.
Paul: I think from my point of view it’s going to be a long hard slog. Don’t think it’s just going to happen overnight. You’ve got to build your traffic coming to your site. It’s going to cost time, effort, and money to make that happen. Whether it’s PR that you’re doing for your product, whether it’s money spent on Ad Words, whether it’s spent on your platform like Alok says, getting the right products, knowing your products.
It’s just going to be a lot of work, and don’t just think that you can open a website. We’re not back in 2005 or 2000, you can’t just open a website and it’s an instant success overnight like it used to be. It takes a lot of work, and effort, and patience these days.
Kunle: Much more sophisticated. Great, thank you so much for being on this show, and if our listeners wanted to get in touch with either of you, what’s the best social media, email or … How best can they reach you if?
Alok: Social media?
Woman: Yeah, maybe Twitter probably is the best, and then we can get in touch with them.
Kunle: Okay, on your handle at Sock Shop okay. Right. Thank you so much again guys. It was a fantastic interview. To show you how good it was it was meant to be one hour and it’s almost done an hour 20 minutes, but it’s been really, really good stuff. Thank you so much again, and see you guys soon. Bye.
All right. Take care.
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