Our host Chloe Thomas attended Channel Advisor’s Catalyst conference in Manchester last week, and has distilled the whole day down into this show of takeaways for the smaller eCommerce retailer. Packed with inspiration, thought-provoking bits, and some top tips. Including updates from Channel Advisor, Amazon, Mary Portas and Julie Deane CEO of Cambridge Satchel Company – enjoy!
Last Tuesday I attended the Channel Advisor Catalyst Conference in Manchester UK.
What is Channel Advisor’s Catalyst Conference?
Catalyst is a one day conference run by Channel Advisor.
Each year I aim to attend the UK one as my yearly chance to swot up on the world of marketplaces (Amazon, eBay etc etc).
There was just one stream of content (plus some expert round table sessions which I didn’t attend).
Channel Advisor is a software system for putting your products onto the marketplaces (and onto other things! I’m sure they’d describe themselves a little differently). They are probably the market leader in their field, and have been running the conference for several years.
But don’t think these takeaways are going to be all about Amazon and eBay and Alibaba. Whilst the conference is aimed at marketplace sellers the content is much more wide-ranging than just eBay this, NewEgg that. So there’s plenty in this episode for everyone in eCommerce.
I am going to run through the takeaways based on who said them!
- Mary Portas
- Julie Deane of Cambridge Satchel Company
- David Spitz CEO Channel Advisor
And at the end I’ll summarise the 5 key things to take away from it all.
Mary Portas at Catalyst
Quite a lot of pure inspiration at this year’s event. Both the Mary Portas session and the Julie Deane session were full of inspiring ideas and really just got you thinking.
If you see either of them on a conference agenda – go and see them, well worth it.
This session was a “Fireside chat with” which means one of Channel Advisor just kept asking Mary question – so I’ve done my best to distil it down into some key points for you.
VERY much about the WHY not the what. As a solution to whatever challenges are facing your retail business.
Therefore you’ve got to understand the human behaviour behind it all. Which means
Different approaches in physical and virtual stores – because people go there for different things
- in the physical store it’s about space, senses, experience and service
- Online it’s about speed information and convenience
To get that right you need to be constantly walking the shop floor – to spot errors and opportunities – even online. Walk that floor.
AND get to know the customer – through data and actual conversations (facebook groups are a great way to do this – my advice not something Mary mentioned)
Linked in to the whole human and why piece was what I think might be my number one takeaway of the day:
“It’s no longer about status symbols it’s about status stories”
Which in practical terms means you need to know why your business exists.
Why should they buy from you? What’s the story? Get it on that about us page, and in the welcome sequences
Why should they buy THAT product – what’s its story?
- Best tech?
- Best deal?
- Top seller?
- Where it’s from?
- Bonus freebies?
Julie Deane and the Cambridge Satchel Company at Catalyst
Julie took us through the story of the creation of her business – it was one of those ones where you’re both jealous and in awe at the same time.
SUCH a dynamic, ballsy, clever lady.
If you’re not familiar with the Cambridge Satchel Company they sell satchels (surprise surprise!), and Julie grew it from a £600 investment to be worth £50m in the first 5 years.
Rather than repeat the story (which I won’t do anywhere near as well as Julie did it) I’m going to run through the 8 key lessons I took from her session.
1. Having a clear goal / your back against the wall really helps
Julie started the business because her daughter was being bullied at school and she wanted to send her to a private school, which also meant sending her son, which meant she had the summer holidays to find a way to afford the £24k per year fees.
With just £600 to start it all off with.
The timescales, the lack of experience, and the kitchen table nature of the business meant that Julie and her mum just got on with it – logo done in 45 minutes, need a supplier – call up the person who has the connection every 35min until they give in.
Very clever, very tenacious.
She even said the biggest problems came when the business had an investor for the first time and had plenty of money and so got a bit lazy.
So use any adversity to your advantage.
2. A big issue for the self employed in the UK is feeling isolated and lonely
I know we have a LOT of listeners from around the world and I know this isn’t just the case in the UK.
Julie’s advice was that you have to find a way to connect with other people for support.
So if you are feeling that – you’re not alone. It’s one of the reasons I created the eCommerce MasterPlan World Facebook Group (free to join on Facebook) and the Get More Customers Club – to create a cost effective route for solopreneurs and those running businesses (which can be equally lonely) to be able to jump on a Live Session and chat their challenges out with people in the same position.
3. Her idea assessing model
Now this is actually a process I use myself when dealing with big questions – like “what course should I create next?” or “how can I get more listeners to the podcast?”
It’s not exclusive to Julie, but I don’t think I’ve ever talked about it on the show – so definitely worth sharing now.
Julie used this to work out which business idea she was going to execute on.
- She created a spreadsheet called “10 ideas to pay for school fees”
- Wrote down her 10 best ideas
- Created columns for each important criteria (eg “Can I start it with £600?” “will it work if I go under a bus?” etc)
- Ranked each idea 1-10 on each criteria.
- Totalled it up – and that gives you the best option to pursue.
A VERY simple way to make sense of a potentially paralysing set of options.
4. Adapt when things don’t turn out like you think they will AKA follow the money!
Julie thought she’s be selling satchels to kids.
It’s actually 17-35 year old women.
Assumed traditional colours – then Elle magazine phoned up and said “how bright can you go?” à florescent bags. à huge coverage in New York Fashion Week.
You have to be ready to twist and pivot
A great tool – find it here
Starts from $3.33/m
Enables you to quickly insert text you type a lot with a simple code – eg “panic30” could insert a whole paragraph explaining why the order is 30 days late.
6. British Library
They have 11 Business & IP Centres around the UK including St Pancras in London where you can get free templates of all kinds of agreements – including manufacturers and agreements, lots of IP advice, and do research – all for free.
well worth a look if you’re creating your own products / growing you business.
7. Ask the customers!
Julie wanted to expand into more colour options – but the price to get into one colour was high because of the minimum leather buy.
So she got a fashion blogger to run a competition asking what colour people would most like a satchel in – 83% wanted it in Irish green – so that’s the colour she created.
BUT took it to another level
Emailed each of those who has asked for that colour to say “You’ve chosen the winning colour, would you like a bag from the first batch? We’ll reward you by covering the P&P” (so no discount). Over 60% bought the bag meaning Julie had 3x the orders she needed to cover the minimum quantity she could make.
8. Margin for sales days
Like Amazon Prime Day, Single’s Day, Black Friday.
I make this point a lot – but it’s well worth making again – any promotion should get the customer to do what you want them to do for as low a cost as possible.
Here’s the example Julie shared.
They sell on Tmall into China. Where Single’s Day is HUGE.
2015 they sold 8,000 bags on Single’s Day. But made almost no profit – particularly bad when their manufacturing division can only make so many bags a week.
2016 they resisted pressure from Tmall, and only discounted to 20% – sold fewer bags, but made a much better profit.
And they’ve used the same approach to win on Black Friday.
- Sales fell 5%
- Profit up 35%
David Spitz State of the nation session
As is the remit of the CEO of Channel Advisor David did a magnificent job of making one believe that the sky is falling in on everything but marketplace selling.
A great impression for them to start the day with, which was (I think rather amusingly) not supported at all by Julie when she started her session by saying “I’m not going to worry about the whole Amazon thing”.
And that’s a sentiment I want you to remember as I go through the next section. These stats should give you pause to think about your business and it’s future a little differently – but this is not tear it up and start again time.
(hopefully that hasn’t scared the pants off you – and if it has, sorry all will become clear in a moment).
· eCommerce in western Europe has matured, the growth opportunity is overseas
Predicted size of eCommerce market comparing 2016 with 2020.
Blue = US; Green = Western Europe; Pink = APAC exIndia and China
Orange = China; Yellow = India; Green = Latin America; Brown = ROW
Basically between now and 2020 there’s predicted to be very little market growth (so increase in amount spent online) in Western Europe or APAC (ex China and India).
The USA, India and Latin America are going to grow quite a lot.
China is going to grow like crazy.
What does that mean?
- You might want to take advantage of those growing markets and cash in on their growth. Your sales should increase simply because more people are spending more money online.
- If you want to keep focusing on slower growth markets you need to up your game, the ‘easy / wild west times’ are over. So you need your email marketing working, your ad strategy paying it’s way, a focus on Conversion Rate Optimisation and of course – LISTEN TO YOUR CUSTOMERS.
· If you’re looking to enter a market – do your homework on the best route in
And that is probably going to point you to a marketplace entry method.
- China – 80% of the online retail market goes through Alibaba
- Germany – 40% goes through Amazon
- UK – 27% through Amazon
· If you’re selling in the UK (or anywhere where marketplaces are over 25%) you need a marketplace strategy
That doesn’t mean you have to be selling on the market places – but you need to know what your options are, and have a good reason for not being on them.
You can’t just ignore it anymore.
· Logistics is the battlefield of the next few years
As Amazon and big retailers keep lifting customer expectations the rest of us have to keep up.
Build it into your price structure.
Make sure your delivery and returns options are what your customers are looking for.
Looking at what Amazon’s been up to it looks like they’re on a pathway to building their own full logistics operation (right to the door), and once they’ve done that they will probably look to open it up to everyone else.
So Amazon could be fulfilling and delivering your own store orders in the future – that’s very much a prediction. But *probably* good news for retailers.
In the Get More Customer Club Live Session yesterday we were talking about how to get your products eligible for Prime on Amazon, and one of the members shared how they are using FBA to do that, and had looked at the new ship it yourself option but couldn’t get it as cheap as the FBA option! So they’re sticking with FBA at the moment.
Not such great news for couriers.
Some of this might sound a little scary and that Marketplaces are going to take over the world – I don’t think that’s the case. As David pointed out Amazon is focused on making the customer happy NOT on killing off eCommerce.
· Amazon Ads need to be on your to-do list
My last point from David’s updates – he’s also predicting that ad spend on Amazon will rival ad spend on Google in the future.
In 2016 55% of all customer purchase journeys started on Amazon (up from 44% in 2015), 28% started on search engines, and 16% on retailer websites.
So make sure you’ve got some time and money allocated to Amazon Ads this Christmas.
- “It’s no longer about status symbols it’s about status stories”
- Ask your customers and follow the money
- Protect your margin
- Marketplaces need to be in your strategy
- Amazon Ads should be in your test list for Christmas
Any comments questions – put them in the eCommerce MasterPlan World Facebook Group– and I’ll get back to you.
Make sure you don’t miss our next episode – it’s an interview packed with ideas from a very niche eCommerce business from the USA called “Violent Little Machine Shop” – you’ll have to tunein to find out more.
Have a great week and keep optimising!