• How to navigate the online retail obstacle course

    11 February, 2014 Company Online Retail

    With online retail sales continuing to rise at double-digit levels towards the end of 2013, there will be an abundance of growth opportunities for online retailers in 2014, if they can handle the pressure.

    Navigating your business around the challenges that this year will bring requires a focus on service, technology, stock and logistics – 2014’s holy grail of online retailing success.

    There were a lot of online retailers last year testing the balances of investment and support across these areas, resulting in wins and losses and some that had no impact at all. The businesses that can fine-tune this mix and leverage it will reap the rewards.

    Some of the obstacles that online retailers can expect in 2014 include:

    Increasing logistic costs

    Predicted growth will make it difficult for online retailers to efficiently manage inventory levels and increased delivery demand, as they scale up and attempt to meet the growth. Long-term investment in logistics is required to handle the more demanding times of the year without impacting other parts of the business and your bottom line.

    Pressure on service levels

    Service is king in retail and ‘taking your eye off the prize’ will be one of the greatest challenges in 2014, as other priorities become more demanding. Service levels will be under pressure as online retailers bear the brunt of increasing overheads in the areas of logistics and technology.

    E-complicated

    Technology departments and resources will be stretched to keep up with the business model changes that the market will demand of online retailers to remain competitive and industry leading.

    The agility of a business’s technology platforms and programs, in addition to the talent of its technology staff will be tested and online retailers that have been investing in customisation over the past few years will come off better than those who have been slow off the mark.

    Being accurate with inventory

    One of the biggest challenges any retailer has is ensuring that they have the right product mix and stock levels at all times. The pressure of being price competitive and having more competitors in the market in 2014 could lead online retailers to broaden their inventory in an effort to capture more of the market.

    But there is a smarter way to compete. Online retailers that invest time and money in getting to know their customers will have the right product mix creating invaluable inventory.

    Rising offshore competition

    Australia’s strong economy will attract more international retailers to target Australian consumers. This could have a positive and negative impact on the industry – while the influx of offshore retailers will see increased online options for Australians, local online retailers who fail to stay ahead of the curve in regards to delivery and technology could also be left behind.

  • The two-speed consumer shopping economy

    25 October, 2012 Company Online Retail

    Appliances Online reached a shopping milestone recently – becoming the first retail outlet to offer 24-hour Australian-based customer support, 365 days a year. If someone needs to order a replacement fridge urgently at 3am our locally based customer support team is on hand to answer any questions a consumer might have on any of our products, and to organise delivery at their convenience.

    This coincides with Appliances Online’s extended warehouse hours. We’re also trialling Saturday delivery services to make life even easier for working couples and busy families who might not be able to be at home for a two-hour window during the week.

    Although we’re the first online retailer to offer this immediate 24-hour Australian-based support service in Australia, we anticipate that 24-hour shopping will eventually become the norm.

    The ‘now’ shopper demands to search for what they want, where they want, when they want, and get it at a price that is fair value globally. Better yet, consumers should expect the product to be delivered the next day.

    Online businesses should be fully equipped to support the changing needs of the ‘now’ shopper. Online retailers who are willing to try new ways to make shopping a fun and rewarding experience will see the pay off.

    Yet the paradigm shift which has created the ‘now’ shopper has also created a two-speed consumer shopping economy.

    On one hand, online retail is the ‘sexier’ of the two retail experiences – like a new sportscar, it’s new, shiny and exciting, allowing consumers more opportunity to dictate their own experience.

    Yet the traditional retail experience still remains how the majority of Australian consumers shop and this Volvo-esque safe experience cannot be ignored in favour of its flashy cousin.

    Despite the tremendous growth of opportunities offered by online retail, there remains a high demand by people to walk into a store and touch products rather than reading about them in product reviews. Opportunities also remain for retailers who are willing to go above and beyond for each person who sets foot inside their store.

    Our Winning Appliances stores are an example of a traditional retail outlet that still holds a significant place in the shopping economy, even if its year-on-year growth is steady (off a 100-year-old base) rather than exponential.

    Despite the enormous growth and opportunity for retailers who can service the ‘now’ shopper, we cannot just ignore the needs of the traditional shopper. We are responding to the increasingly busy lifestyles of Australians at Winning Appliances by extending our store opening hours from 8am-6pm to allow people to shop before and after work.

    While there is a world of opportunity for retailers to challenge themselves in their quest to impress every customer and communicate with the needs of the ‘now’ shopper, we mustn’t forget the slower, safer retail experience, as this is still how most Australians shop – at least for now.

     

  • Flip the debate to realise opportunity

    27 August, 2012 Company Marketing Online Retail

    I’m bored of the sensational debate created by many traditional retailers and journalists where online is pitted against bricks and mortar retail. Hyperboles including ‘cannibalise’ ‘death’ and ‘extinct’ are bandied about to describe the impact online has had on many physical stores, in an effort to create an environment where the two can’t coexist symbiotically.

    This article recently published in Connected highlights this limited view of the issue. Unfortunately the journalist did not contact us directly about the article, but if they had we would have given the facts. At seven years-old Appliances Online is one of Australia’s oldest online appliance retailers. We are a pureplay online retailer with a national distribution network and a strong emphasis on customer service. Having served more than 200,000 customers I would argue against the claim we are ‘unbranded’. Our connection to bricks and mortar retailer Winning Appliances, which has eight bricks and mortar stores in NSW and QLD is also not a secret, yet the brands cater for very different types of consumers – those who like the efficiency of shopping online for products usually required to be delivered the next day, and the other customer type who likes to visit a store and talk to a knowledgable sales person. I am CEO of both companies, and 432 employees work across the Winning Group. Big Brown Box, which is also indicated in the article, was originally launched by Thorn Group and the digital assets were purchased by Winning Online Group (the parent company of Appliances Online) in 2011. We kept the brand as Big Brown Box as it was already a recognised market entity and is differentiated from Appliances Online and Winning Appliances as it only sells AV products.

    There are certain instances where the argument posed in the Connected article (“Are bricks and mortar retailers cannibilising traditional retailing by setting up unbranded online shops?”) is correct – particularly where online retailers adopt such an aggressive pricing strategy they cannot survive for the long-term. However it is also true that some traditional retailers have established online retail outlets that devalue the online space by providing a below-par experience to consumers. This exact example is not isolated to online, there have been many bricks and mortar retailers that have opened shops with the exact same strategy and failed to survive also. So to claim that this is an online strategy issue is just incorrect; it is just a poor business strategy that lacks creativity (I am referring to failed businesses that focus on nothing but price in general and am not isolating any business in particular).

    Yet there is a larger issue at stake. These limited arguments obscure the fact there is large opportunity for traditional retailers to embrace online, with or without an online store, as opposed to hiding in the dark and hoping online retail is a trend that will soon pass.

    I  dislike that retailers who have opened online storefronts are marginalised, as though we were all supposed to be united in ignoring the online marketplace altogether, leaving it open for newcomers. When, in fact, existing offline retailers, with experience and access, are best placed to create online stores.

    Online retail, and other advances in technology including smart phones and social media, have provided consumers with a voice. Customer reviews and opinions on products provides a plethora of information for the consumer to help make the best decision for them, quickly.

    As Forbes.com contributor Adam Ozimek suggests:

    “The pre-sale services offered Amazon, in particular customer reviews, are usually of far greater use to me than a showroom when buying electronic goods. Sometimes when shopping for electronics I’ll make the purchase in the brick and mortar (so returns are easier and I can get it faster) while looking up the ratings of the product on my iPhone at Amazon.”

    Traditional retailers should take advantage of some of the downfalls of many online retailers. Many offshore sites, and cheap product deals take weeks for the product to be delivered – whereas if traditional retailers adopt better pricing models and improve customer service they would be able to compete on a much more level playing field.

    The time has come for traditional retailers to flip the experience – retailers should be differentiating themselves by creating a fantastic customer experience that won’t be able to be replicated online. If you’ve ever visited an Abercrombie & Fitch store, with its club-like shopping environment, you’ll know what type of experience I am talking about.

    Online retail is to traditional retail what the printing press was to journalism.  It represents a tremendous opportunity for traditional retailers to evolve. For too long traditional retailers have been complacent – they have been inflating prices and countering this with poor customer service, driving consumers to look for other available options. The power of online should be embraced and encouraged in-store – traditional retailers could have readily available tablets to encourage customers to read product reviews, as well as implementing experiences you can’t get online such as cooking classes, product experts who take you through each product to show you its features, and even smaller tactics such as coffee on arrival.

    There has been a seismic shift in power from the retailer to the consumer, but we must never lose sight of the fact the consumer should have always been the most important aspect of any retail decision.

     

  • 5 business facts you don’t need a university degree to understand

    1 August, 2012 Company Marketing Online Retail
    1. Failing breeds success – Many millionaires have been bankrupt – often several times – on their path to success. Nothing is better to help you appreciate success than trying new things – failing – and learning from your mistakes. I encourage all my staff to have new ideas – however radical – and if they really believe something will be a success I encourage them to give it a go. If it fails it’s a risk that will benefit our business in the long run as the employee will be smarter and wiser with their next idea.
    2. Business decisions need to be made quickly and spontaneously – you can spend hours analyzing the psychographics of decision-making yet in the fast-paced world of online retail if you spend weeks on a decision your competitors will be one step ahead of you. In the business world, decision-making often needs to be instinctual and there’s no better experience than on-the-job training to put you in a position where you have to trust your instincts and internal ethics to turnaround a decision quickly. Being mentored by others and trusting your gut goes a long way in business.
    3. Everyone has a motive – employees from different parts of the business, customers and suppliers are all driven by different agendas. As a business professional it’s up to you to assess where people are coming from, and to weigh up the different emotions around a decision, to determine the best outcome for everyone.
    4. Employees aren’t replaceable – I’ve heard many friends talk about how they feel that they are just a number at the organization they work for, speaking of managers who are on power trips, treating their staff like they are expendable. Yet we treat our staff as the foundation of our business and invest in them continually. Our recruitment strategy is focused on making sure future employees are the right cultural fit and will be with our company for a long time, rather than looking too deeply into their resume and academic history.
    5. Customers are everything – treat consumers with respect and continually assess your business through their eyes. Ask them for feedback as often as possible and implement change based on their input. This is a simple recipe for retail success based on listening and learning from the people who buy products from you.

    After school, and a brief stint working as a door-to-door salesman (that ended quickly when I was attacked by a dog!) I started working in the warehouse of my father’s appliance business. While University is fantastic for many, on-the-job training also has its merits.

    Winning Appliances truck drivers taught me about customer service and going the extra mile to give customers and experience they don’t expect. Time spent with floor managers in showrooms taught me how to provide sales information to consumers in the most helpful way, networking with online retailers overseas taught me about ecommerce, and people in management positions taught me how to negotiate in much more realistic language than I would probably have ever learnt at University. I was lucky enough to have my father as a mentor who taught me to have the upmost respect for not only your staff but for your staff’s families as their lives are equally important as well.

  • “Sorry, that’s not my department”

    4 July, 2012 Company Marketing Online Retail

    On Saturday, while out shopping for a few supplies, two different consumer experiences were marred by the same lazy attitude and general disdain held by some staff towards their customers.

    The first happened when shopping for a new bed at a popular store… I walked into the bedding section and tried some arm-waving theatrics in an effort to chat to an employee who was surrounded by beds but was doing an Oscar-worthy impression of looking busy and simultaneously avoiding my attention. I asked said employee loudly if they could recommend any beds only to be met with the reply. “Sorry. That’s not my department” before they hurried off. Needless to say, I left, bed-less.

    Then, after stopping for a coffee break with friends at a popular café in Darlinghurst, we sat down at a table that was cohabited by dirty cups and plates. The café was busy, as you would expect from a well positioned, inner city café on the weekend, yet it still took a long time for a hipster waiter to saunter over to us and take our coffee order in a hurried and brisk fashion. A friend politely asked whether he would mind clearing our tables of plates, which was met with a look of shock, hurt and DISGUST, before replying that he was a barista, not a waiter, and consequently he did not touch plates or food. Instead, we picked up our plates and took them to the counter ourselves making sure the barista saw us…

    In a different age it may have been acceptable to waste people’s time with equal parts of arrogance and incompetence, simply because there was no other option available for consumers. Yet consumers attitudes have shifted. Time is money and people have options. If someone is taking the effort and giving up time on their weekend to walk into your store or café then you owe it to them to thank them with good customer service. Possibly even a smile. Because if you don’t the consumer will shop online or with a competitor, and will ultimately eat in the cafe next door. Employees should be willing to help out on every product on a showroom floor at least to the best of their ability, or to acknowledge the customer and then go and get help for them.

    A good experience is noticed but a bad experience is talked about, and shared, for months.

     

  • High drama at Winning HQ

    3 May, 2012 Company Online Retail

    It’s been 24-hours of high drama at the Appliances Online and Big Brown Box  headquarters… with a fire breaking out in an underground substation between our two offices and 200 people being evacuated.

    We’ve even made the news quite a few times in the past 24 hours… with the fire triggering a power outage, a threat to nearby residents and flats and massive traffic delays around the Eastern Suburbs of Sydney.

    Having a fire breaking out in our main office was a great way of testing our disaster minimisation system, which thankfully stood the test. The main thing is that everyone is safe. The encouraging thing is that our sites didn’t go down at all, and our technology divisions ‘mission critical automation’ came into fruition. Unless you were in the office watching smoke billow out from a sub-station beneath the ground (or following us on Facebook), you wouldn’t have had a clue we were being evacuated.

    We were able to leave a message explaining there was a fire for people who called in, and checked messages with a mobile phone and responded quickly to enquiries. We also had a message on our website explaining why the phone lines were temporarily down. Special thanks must go to our dedicated staff who stayed back until midnight to help ensure no deliveries were missed and all customers were  aware of what was happening with their orders.

    Today, we are still without power however our office, yet everyone is working using back-up power supply thanks to ActiveAir.com.au. The main thing is that everyone is safe. Unfortunately the fire did result in the death of a fish who sadly did not survive carbon dioxide being blasted into the building to put out the fire, and a few egos were checked when some of our staff wearing the Appliances Online uniform of a black hoodie were questioned by police who thought they might be ransacking the building.

    We send our best wishes to two people who were taken to hospital yesterday and wish them a speedy recovery.

    Some amateur footage of the scene from yesterday is below.

  • The great pricing debate

    2 May, 2012 Company Marketing Online Retail

    I was warned against purchasing BigBrownBox.com.au from Thorn Group, with my peers telling me that the world of televisions, home entertainment systems and sound equipment was the place of a great pricing war, where once sound marketing strategies were being held hostage to diminished margins and loss-leading products. I was told the AV market was home to a war with no winner in sight, a land where many businesses died well before their time.

    Yet I purchased the digital assets because I believe there is a place in the market for a business willing to service consumers’ needs – where a service (over the cheapest price) model would come up trumps.

    It has been widely reported that electronics retailer JB Hi-Fi has slumped to a three-year low, after the chain cut its full-year profit outlook because rampant discounting has damaged margins.

    Are you honestly shocked?

    When your tag line is “Always Cheapest Prices” it should be no surprise they would continue to discount against other retailers to the point of not being profitable. Price has become the only trick left as many businesses swap knowledgable sales personnel for a cheapest price guarantee.

    JB Hi Fi is not the only store with this cheap pricing mentality - other reputable brands stand by similar slogans and fellow online retailers even use words such as ‘cheap’, ‘discount’, ‘cash’, ‘negotiate’ and ‘price’ in their taglines.

    I find these kinds of promises troubling – particularly those that incentivise negotiating or paying cash. They suggest a consumer will pay too much if they don’t negotiate – and many shoppers would rather not.

    We love dialogue with our customers, but we’d much prefer to be educating them about a product and having them assured that we’ve set a competitive price to begin with. There’s something quite aggressive about ‘haggling’, and it’s not likely to result in a great experience between retailer and customer. We’re more aligned with the “Everyday low prices” angle in this regard, to borrow another retail catchphrase.

    Many businesses have put everything into having the cheapest price instead of innovating and building up their retail options and investing in customer service.

    In contrast, while our prices are competitive, a cheap price proposition is not our core business driver. Customer service is what sets us apart and helps us stay profitable. We have invested in expert AV sales staff, warehouses, trucks and drivers, and have $2 Million of Big Brown Box products in stock around Australia to provide next day delivery to most metropolitan areas.

    I’m well aware of the conundrum: cheapest pricing devalues a customer service proposition, yet consumers deserve the best price available. Therefore we have a best value guarantee in place for people who ask for it but it is not overt, and it is not our core business driver. Our best price guarantee also includes the fact our delivery is free, and before price-matching we ensure we are comparing apples with apples. Consumers also deserve to have their products delivered on time, with an Australian warranty and after sales service – which is what  our business offers.

    We absolutely refuse to use loss-leader tactics to attract people to our site. Retailers who do this also use price to upsell customers to higher price products with greater perceived value. Customers are pushed to sale in haste, without having done the right research and end up going home with the wrong product. We know this because these customers come to Big Brown Box, Appliances Online and Winning Appliances for their next purchases looking for genuine customer service and advice on buying the right product.

    The success of Appliances Online has led me to believe the recipe for retailing success is simple: If you put your customer into every business decision and think about how this will affect them, your retail outlet will have something its competitors don’t offer. What the AV world is lacking is customer service and expertise. When buying a TV I want to be able to ask someone about the latest technology and have them design a package that suits my needs – including a TV that is the correct size for the room it will be in, how the light of the room will affect visibility and how to get the best sound depending on where I live and the surrounding noise.

    Yet many larger retailers have failed to recognise this, putting financial statements ahead of providing a wonderful retailing experience. They look at staff costs and make a move to cut staff numbers instead of investing in staff and their customer experience and cutting costs in other areas of the business. They also place the cheapest price as the key driver for business which means that over time margins have decreased so much they make serious profit downgrades.

    In the words of  Seth Godin:

    It might be that low prices are the final refuge of the marketer who has run out of ideas and is left with nothing but a commodity.

    Or it might be that organizing your business around lowering prices through efficiency, mass scale and smart choices is a powerful way to grow.

    My guess is that both are true, but you better be really sure about which one you’re choosing. Hint: doing the second one successfully is really quite difficult, so if all you’re doing is writing a lower number on the pricetags, you’re probably playing the first game.

    As with all my blogs, I am sure that many people will not agree with my views yet this blog is how I view the retail space. Feel free to comment and add your thoughts to the debate if you wish.

  • How agency brands can hurt our customers’ experience

    15 March, 2012 Company Online Retail

    As consumers become more inclined to voice disgruntled opinions on social media and other online forums, brands are left without a smokescreen or an excuse for poor customer service.

    Impressing every customer is something we believe in at Appliances Online, Big Brown Box and Winning Appliances; as I mentioned in a post yesterday we often go the extra mile to reduce the fallout when things do go wrong.

    Yet some brands don’t share our high standards towards customer service, and in doing so put pressure on their stakeholders – us.

    In retail, proforma brands operate under a slightly different business model to most of the brands we work with; each brand allows retailers such as Winning Appliances and Appliances Online to act only as agents; the brands retain control of pricing, sales transaction and even delivery. This post concentrates on the customer service and delivery aspects of many agency brands… I’ll talk about other aspects in future posts.

    The proforma brand arrangement is perfectly fine as long as each agency has the same duty of care with regard to their customers as we do. When done seamlessly customers don’t even know they are dealing with the brand itself rather than with us – often the only sign is that the brand appears on their credit card statement instead of the retailer.

    Miele is an example of a proforma brand with exceptional standards of customer service – a standard which impressed me because this is a company that has been a wholesaler and has successfully adapted their brand to act as a retailer – not an easy change for such an old business. Miele deliver items with their own trucks, have a fantastic product range, and clearly communicate stock levels to the agents they deal with. Miele have a large share of voice and we almost never receive customer complaints from consumers who buy products via our retail store. The only issue I have with the Miele agency model is that they take away some of Winning Appliances service advantage in the market…

    Unfortunately the same cannot be said for many other agency or proforma brands.

    In January we conducted a sale across our three companies and many proforma brands let us down. Customers were left with a bad taste in their mouths as they had to call the agency brands instead of us and were placed on hold or ignored, promises weren’t kept, and products weren’t delivered on time. Many proforma brands made us look bad –– those who don’t deliver goods with their own trucks usually rely on third party transport options and many of these break items and some refuse to bring a product further than the front door, leaving the customer to install it. As part of our service offering we take away the old appliance and all the packaging to be recycled, but some proforma brands don’t offer all of our services. Simply put: they just don’t care about our customers as much as we do… in their minds we are the customer, not the people actually buying their products. Yet this thinking is inherently flawed.

    Although we did everything we could in our power to ensure the fallout was limited and each customer was happy with the (eventual) outcome, it was often a frustrating experience. We received many emails and comments from customers on Facebook saying that dealing with proforma brands was exasperating and stressful. I’ve copied some of these emails below and have left them unedited but removed the names of suppliers. I don’t want to name and shame each brand – for obvious reasons – but the emails make it clear how brands can easily improve each customer’s experience.

    The recipe is straightforward. Listen to your customers. Communicate with them as frequently as you need to. Have a customer support team manned with people who know about your product range. Don’t leave potential brand advocates on hold. Tell customers the truth so there are no surprises. Return calls and emails. Deliver goods when you say you will and let them know if there’s a problem. And if you say you have great customer support service, don’t let them down.

  • Going to great lengths for our customers

    14 March, 2012 Company Online

    To indicate the kind of customer service standards we believe in I’ve detailed the liaison with a customer which occurred recently below.

    A customer in Adelaide recently ordered an oven via Appliances Online on a Friday, and set up delivery for the following Monday. Although we offer national distribution and have plans to open a warehouse in Adelaide in the next few weeks, for the interim goods are either delivered by the brands themselves, or via third party couriers. In this case, we had organised for Electrolux (not a proforma brand – so we own the stock and the sales transaction with the customer) who has an existing warehouse in Adelaide to deliver the oven to our customer. However when Electrolux rang to confirm the delivery time the customer’s voicemail said they were out of town. Because of this miscommunication, Electrolux cancelled the delivery until they heard back from the customer.

    On Monday our customer rang us asking where the delivery was. Our customer had taken the day off work and had organised an electrician to come and install the oven that evening – which hadn’t arrived. She was upset. This situation worsened when we realised Electrolux had finished their deliveries for the day and the warehouse was closing shortly. The customer support staff member elevated the priority of this call two other staff members and I flew into action and spent the next two hours on the phone – calling in favours from Electrolux head office and their warehouse manager in Adelaide, and on the phone to other couriers in the vicinity of the warehouse. Eventually we came to a solution. Our auditor – and the only person I know who lives in Adelaide – managed to borrow a friend’s ute, pick up the oven from the warehouse (along with his wife from her work and his son from his first day at school) and personally deliver the oven to the customer in time for the electrician to install it.

    In terms of man hours, two people and myself worked on this deal – amounting to about six hours of our time – to make sure the customer delivered what we had promised. This isn’t a standalone case of going above and beyond for our customers, but it shows we are all hands on deck when it comes to providing our customers with the experience they expect. It also shows we value working as a team so we don’t let people down. We are not afraid to put the extra effort in – often at a cost above the original order – to help make our customers happy.

    special mention should be made to our auditor Nick Matsis from NRM Johnson and also to Electrolux for staying open to allow us to complete the delivery. I am sure there are not many companies who could call in a favour like this from their auditors and Electrolux are certainly a company (non agency) that understands customer service.

    In today’s world, customers are king and brands that disappoint are not easily forgiven.

  • Affiliate marketing: who we work with and why

    27 January, 2012 Online

    Affiliate marketing is an integral part of our marketing strategy, but it’s often one that confuses customers and our suppliers. In short: affiliate marketing, for us, is where external sites refer customers to our site for a portion of the sale value (never more than 3%).

    Of course, we’re very particular about who we work with as the customer experience is so crucial to the success of all our businesses and we are very cautious about how we are being represented on external sites.

    Who we work with

    At present we work very closely with the leading Australian CSEs (Comparison Shopping Engines) like Getprice.com.au and MyShopping.com.au as well as other product-focused sites like ProductReview.com.au. These sites allow consumers to compare prices across various suppliers, as well as collecting reviews about the different stores. As we have a high customer-satisfaction rate, a fantastic perception in the market and offer a best-price guarantee, these kinds of sites work well for us.

    It’s also important to us that our customers are able to leave reviews on third-party sites like these: it allows us to refine our service, while the high ratings are great for our market perception!

    The other sites we work with on affiliate relationships are niche-specific sites: content-driven portals sharing content about cooking, appliances, home renovation or anything else specific to us. These kinds of sites are more likely to use generic Appliances Online or Big Brown Box links or banners, rather than pricing and links to specific products.

    Who we don’t work with

    Recently we’ve been approached by several marketplace sites looking to partner with us. One that stands out is Zanui.com.au – an aggregator of products and suppliers with one key difference to other affiliates: they own the pre- and post-sale communications, the checkout/transaction process and the delivery of products. This means that we, as a merchant, would have little or no interaction with the customer.

    Zanui’s site’s been launched by Rocket Internet, an aggressive German venture capital group that move into new markets and launch several products at once. They’ve grown rapidly in the last few months in Australia – launching four sites and hiring hundreds of new staff.

    We’ve seen many startups like this before: they move heavily into the market and sell to merchants on the premise that if they don’t take up a property on their marketplace as a supplier, their competitors will. In this case, our competitors will undoubtedly start selling their products through Zanui, but we’re not concerned.

    We believe that we’re large enough to stand-alone in the industry now, and don’t feel intimidated by considerable marketing budgets of other groups or new players for several reasons:

    1. We will always own our pre- and post-sale communication, the transaction process and the delivery: it’s the only way we can continue to promise the highest levels of service possible.
    2. Competitors that do take up opportunities on marketplace sites like this are most likely not as concerned about service and the customer experience as we are, so we don’t see them as a threat to our core business offering.
    3. Selling through marketplace sites only dilutes our brand and confuses the customer: we’re confident about who we are as a company and as individuals, and we won’t risk altering how we’re perceived in the market.
    4. Partner relationships like these have the potential to upset suppliers, who are just as important to us as our customers and staff.

    More specific to Zanui: we’re a family business and a business going from 1 to hundreds of staff in a few months isn’t likely to maintain a strong work culture or ethic, which will undoubtedly carry-over to their service. That’s not what we’re about.

    I wouldn’t usually name a specific company in this way, but after meeting with Zanui I thought it was appropriate to state why our businesses won’t be partnering with them or other marketplace sites, especially as they claim to be moving so heavily into the market. We wish them all the best and will be keeping a close eye on this space this year.