Established in 2005 by husband and wife team Andy and Sam Hood, Amara is an online retailer which sells luxury gifts and home furnishing brands.
I've been talking to Andy Hood about the business, and his approach to selling luxury goods online...
When and why did you launch Amara?
My background before launching Amara was as an investment banker with Lehman Brothers. I quit at the end of 2003, and my wife and I spent a ‘gap year’ travelling and doing things we wanted to do.
During this period we did a lot of work on our house, including a lot of interior design, and one idea we had was to set up a business selling luxury, high quality products for the home.
I originally intended just to help my wife Sam set up the business and do something else myself. However, early on I though this had to involve some sort of e-commerce strategy as well as a shop.
I looked around, and there were no other sites at the time that I felt were doing it properly. So I looked after e-commerce, though I had no great experience in this area, and Sam ran the shop and the interior design consultancy.
Was it a learning process along the way then?
It’s been a fantastic journey, though I’ve probably made every mistake I could have made so far. It was purely intuition initially, I just had a gut feeling we needed to get into e-commerce.
I had a site built, but had to bin it after 18 months – we made the classic mistake of having a site that looked good and performed well, but we simply didn’t pay enough attention to marketing it.
Though we have managed to grow the e-commerce business at a respectable rate, around the middle of last year we had to make a big decision about whether we kept Amara at a small boutique-y level, or to grow the business, so we wrote a comprehensive business plan to set out how we intend t achieve this.
Now we have a clear vision of how we want to develop, and this has included hiring agencies to look after our online and offline PR, and pay more attention to our SEO and PPC strategies.
We are strong in certain areas, such as our Missoni Home range, but we don’t do so well in terms of generic product search.
What is the turnover like?
Today the turnover is still small, in the hundreds of thousands, though we have grown since launch, and managed to increase sales by 28% during last year.
What are the challenges involved in selling luxury items online?
We’re trying to span the bridge between classic luxury retail, where a customer walks into a store and demands a superior level of service, and e-commerce functionality, and that is the challenge.
A lot of luxury brands either have no e-commerce platform, or else sell online in a very limited way. The higher the price tag, the more information needs to be provided for the customer.
For instance, you need to use images effectively to convey the quality of the products. If you’re selling a trinket box, then you need to allow customers to zoom in and see the intricate lock and key, or to show textures on materials. You need to try and immerse the consumer in that product. Going forward, we will use more video on the website to showcase products.
We also try to welcome clients and make it easy for them to contact us personally with the online chat option; if customers need any help or advice they can speak to Harriet.
How has the live chat option worked for you?
When people start using live chat, we tend to convert. Harriet will go the extra mile with customers, and she's great at giving advice on which colours will match, offering reassurance about products etc.
If you can engage in chat with a customer and get to that level of dialogue, then you are getting somewhere. I would say that, for every 20 sales on the site, four or five come through live chat.
How big is the team behind Amara? How have you funded the business?
There are six of us, and we have a 10,000 square foot warehouse in rural Essex. We have invested our own money in the business, and have grown organically, rather than taking on funds to try and grow more rapidly.
We out-source all of the web development, and the PR and marketing.
How have you approached areas like checkout design?
I’ve attended a lot of conferences on e-commerce, and tried to learn as much as I can since I started out with no specialist knowledge. I read Mike Baxter’s online checkout report that he wrote for Econsultancy a couple of years ago, and used that advice to improve our checkout process.
Mike’s theory is simple; that a customer starts the process of buying from your website with a certain amount of momentum, and you need to keep that momentum going, right through to the end of the checkout process. Every time you put something in the way, it acts as friction.
What kind of changes did you make? Did it work?
One thing we did was to remove the compulsory registration and tried to make the process clearer and more intuitive, and this helped to double the conversion rate.
Are you continuously looking to tweak things and improve the site?
E-commerce is so fluid, and what is good design at the time can become old fashioned 18 months later. However, there are some things on the web that users become used to and take for granted, such as placement of checkout links and other common features.
My advice is to try and stick to best practice and not to try and reinvent processes that customers have become accustomed to when using websites.
We tend to look at the website at the beginning of the year, sine you don’t want to be making changes from September onwards. We spend a lot of time studying the site, and have large whiteboards where we can write notes about possible ideas for improvement. It’s always a work in progress.
Do you still have the original store?
No, we closed it before the worst of the recession hit, though we will be opening a store in London this year. For us, it was a necessary evil, as many of our suppliers simply wouldn’t allow online only retailers to sell their products, and are often only interested in the large department stores.
Without having the store in place, we simply wouldn’t have been able to get these brands onboard. Now we do have them, we have the credibility to go to other brands and open accounts with them.
What are you planning next?
As well as opening a store in London, we intend to open a wedding list feature. I think there’s a massive opportunity in that marketplace for an exclusive, appointment only, service.
Couples can come into the store and choose the list, and then relatives and guest can buy gifts using our online platform. John Lewis does this very well online, but I think there is room for the type of service we will, be offering.