Small Brands Go Big with E-commerce

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Small Brands Go Big with E-commerce

By Jessica Binns - 01/05/2015
Happy birthday, e-commerce. If online shopping were a person, it would’ve been eligible to vote two years ago. In the two decades since businesses have been selling products over the Internet, the landscape has evolved dramatically, with global e-commerce sales expected to reach $1.47 trillion this year, according to eMarketer.

Most remarkable, however, is the democratization of the web-driven marketplace. Although the Amazons, eBays, and Walmart.coms of the world still gobble up plenty of market share (and then some), today’s nimble, best-of-breed technologies have helped to level the playing field for the little guy, enabling newcomers to enter the market and compete against established merchants.

In 2013, U.S. small and mid-sized e-commerce companies accounted for $76.76 billion, and analysis by e-commerce technology provider Bigcommerce and consulting firm Sagence predicts that the SMB e-tail market will surpass $100 billion in 2015 — more than the global revenues of Amazon and eBay combined.

There are more opportunities than ever to compete effectively via e-commerce and small brands are taking varied approaches to entering and leveraging the digital marketplace.

The curated Shoptiques experience
If you’ve ever thought wistfully of that charming little shop you stumbled upon off the beaten path when traveling to places such as Paris or Miami or New York City, Shoptiques will be your new best friend. For an initial fee plus commission, the web platform hosts online storefronts for a highly curated group of 850 boutiques (80 percent of applicants are rejected, says CEO and co-founder Olga Vidisheva) in the United States (48 states), the UK, and France, while also shipping to customers in Australia and Canada. Shoptiques’ goal is simple: connect customers with a unique, truly differentiated product assortment while also helping small, resource-strapped boutiques to gain exposure online. It takes care of the details, too: U.S. shoppers browsing a French boutique, for example, see prices in dollars, which include any applicable customs fees as well.

“If you think about offline, you have to be a great merchant and a great stylist and offer a great customer experience in person,” explains Vidisheva, who interned at Chanel between her years at Harvard Business School. “When you think online, you have to be a great technologist, know operations, and have great photography. You have to have really good data analytics. It’s a completely different skill set.”

That “different skill set” is precisely what has kept some small outlets from making the leap to online. Two Old Hippies, which sells apparel, footwear, accessories, gifts, and guitars, signed on with Shoptiques in June after ”trying to do e-commerce” on its own for a while, says marketing director Allie Kovall, adding that the Nashville boutique didn’t have the right personnel and high-quality imagery to launch a proprietary web store.

Like many boutiques, Two Old Hippies focused its energy and resources more on perfecting the in-store customer experience than improving its website, which has now evolved into a lifestyle site and blog, and did not invest the resources to build its own e-commerce site. Moreover, the boutique has so much merchandise constantly flowing in that choosing the right selection to put up on a website was overwhelming, she adds. Because Two Old Hippies orders small size runs of its designer collections, product often sold out more quickly than the store’s photographer could shoot it.

Two Old Hippies was more than happy to take advantage of Shoptiques’ photography services and now sends new product out to be photographed about once a month, says Kovall. (Shops that already have their own web-ready imagery can simply use that on the Shoptiques platform, Vidisheva notes.) Kovall worked closely with Shoptiques’ boutique relations manager Danielle Auerbach to determine the kind of products that would perform best online. “Ever since we’ve been following her guidelines, we’ve been doing really well,” Koval says, noting that clothing sells better online than shoes and certain prints, products and categories are more successful than others. Like all Shoptiques clients, Two Old Hippies fulfills web orders itself.

The store’s presence on Shoptiques has helped to boost not just global exposure but also foot traffic, with new customers stopping in who’d discovered an interesting product online. Staff are fielding calls from consumers across the country who previously were unfamiliar with Two Old Hippies. “We’ll direct them to additional product,” Kovall says. “It’s boosting sales.”

From one shirt to $1 million
Friends since kindergarten and raised in a coat-and-tie prep-school culture, Hobson Brown and Bill Nachman married their complementary skill sets (Brown worked in e-commerce and advertising, Brown in architecture and design) and long-standing interest in style to launch the Criquet Shirts brand of “perfect polos” in 2010.

The timing was right to start an online apparel business, says Brown. “Guys were moving more to the web for shopping at brands such as Bonobos,” he explains. The pair wanted to cater to “progressive-minded, country-club Patagonia” 30-somethings similar to themselves, he adds, sourcing GOTS-certified 100-percent organic cotton and manufacturing at least its PK knits in an L.A. factory (jersey knits are produced outside of Shanghai). Though unquantifiable, the Made-in-America cred is a selling point with some consumers, Nachman observes.

Criquet turned to Bigcommerce to quickly set up its online-only store that featured just a single product: the Players Shirt. “We started niche with one core style, but the product had pretty wide appeal,” Brown notes. “We wanted to do one thing really well and not spread ourselves too thin.” As a startup, the pair lacked the funds and resources to build their own e-commerce site from scratch.

After selling out of its initial product run, Criquet doubled revenue in its second year, quadrupled revenue in its third year, and as of press time was on track to double again in 2014. The brand generated $1 million in sales in 2013, says Brown, and the company has added new staff accordingly after a long period of bootstrapping. Today 50 percent of business comes from repeat customers.

Criquet has offered free shipping and returns for purchases of $50 or greater since the beginning; because most shirts are above this price point, the policy is designed to prevent a shopper from taking advantage of free shipping by buying a bunch of lower-priced hats or accessories, explains Brown. The free standard USPS Priority Mail shipping option reaches most customers from its North Carolina distribution center in two or three days.

Criquet’s successful launch spawned new product categories, including button-down shirts, and prompted the duo to open a Bonobos-style showroom, which they dub the “Clubhouse,” at their Austin, Texas, headquarters, which helps “bring the brand to life,” Brown says. Criquet signed on with PayPal Here on iPad to power its lightweight store POS, which Brown and Nachman can also take with them to offsite events.

The brand is active on Facebook, Instagram and Twitter, though each social platform works well for different reasons and purposes. For now, Facebook is best for driving sales, and while Instagram generates considerable engagement with followers, Nachman notes that it’s difficult to accurately track the path to purchase from that platform as users hop between their smartphone and PC or tablet. “They’ll be looking at Instagram on their phone and then go on their iPad or laptop to actually transact,” Nachman says. “But social touchpoints are a pretty high percentage of our sales, whether it’s a Facebook page or ad, or something else.”

Criquet put the finishing touches on a new category — crew-neck, v-neck, and cardigan sweaters — that became available in November, just in time for the holiday shopping season. “We want to grow in the tops segments,” notes Nachman. “The next logical place to go is shorts, but we’re a year away from that.”

Brown and Nachman rely on Bigcommerce’s flexible, scalable platform to take them to the next level of success: becoming a lifestyle brand and growing Criquet’s wholesale operations, which currently include just 20 outlets and account for less than 10 percent of the business. The brand targets the “green-grass market” of country clubs and golf courses in addition to high-end boutiques, aiming to nurture wholesale into a healthy 30 percent or 40 percent of company sales.

Jeffrey wades into the web
One of fashion’s most experienced professionals, Jeffrey Kalinsky has built a devoted following of customers fiercely loyal to his pair of boutiques, Jeffrey Atlanta (established in 1996) and Jeffrey New York, which brought fashion retail to the Meatpacking District when it opened in 1999 offering a carefully considered mix of established luxury labels such as Givenchy and Yves St. Laurent alongside edgy, up-and-coming designers such as Undercover and J. W. Anderson.

But after 24 years excelling in the brick-and-mortar business, Kalinsky decided to face the times and take his company online in June. “I love shopping and going into stores, and that was always what I thought the experience should be when buying designer goods,” he says. “But I’m realizing in this day and age there are a lot of people who want to shop from the convenience of their own home. They live everywhere and might not be able to get to my store.”

What’s more, e-commerce can help counteract retail-dampening forces such inclement weather. “In 2013, we had the worst winter ever in New York,” he adds, noting that snow storms often prevent shoppers from getting out to stores.

To build its e-commerce site, Jeffrey partnered with Celerant Technology, its brick-and-mortar POS provider and a vendor of multichannel retail software. Kalinsky says selecting the right merchandise mix to carry online was his biggest challenge in setting up the boutiques’ website at jeffreynewyork.com. “I wanted to put online the inventory that I was most excited about that we carried in store and offer the same kind of boutique perspective,” he says.

“My store has always been about people who want to see the best selection and not have to look at a million things to do that,” he continues.  “They’re presented a very edited version of ‘this is the best of the best’ and they appreciate that perspective.”

Kalinsky hopes his e-shop will perform as well as the brick-and-mortar stores, which typically sell 70 percent of product prior to markdowns (many department stores average 45 percent sell-through by comparison).

Jeffrey is in its infancy on social media, with a small but growing presence on Instagram and Facebook. “Social media helps your e-commerce, and e-commerce helps your social media,” Kalinsky observes, adding that support from Nordstrom Inc., which owns a majority share in Jeffrey and boasts more than 560,000 Instagram followers, should help to boost its social efforts. The company is also in the process of hiring a community manager.

So far traffic to the site has been steady overall, though weekends have been slower, which Kalinsky found surprising. In five years he hopes 15 percent of Just Jeffrey’s total sales come through e-commerce, though the veteran buyer admits that as a conservative spender, ponying up the funds to properly compete in the digital arena is challenging. For now the site doesn’t offer free shipping or returns, though that policy could change soon, he notes. And for the moment the e-shop is lean and clean: there’s little if any editorial-style content and apparel is photographed on ghost mannequins instead of live models.

Success on the digital front may take a bit of trial and error. “This might be a case where I’m going to have to spend more money to get people into my store than I want to,” Kalinsky concludes. 

Jessica Binns is a Washington, DC-based Apparel contributing writer.

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