Here, we speak to MD Jason Russell about the health and beauty retailer’s acquisition and conversion activity, as well as the challenges of starting an e-commerce operation from scratch.

Can you tell us a bit about the business?

Beautique is the online store for Urban Retreat, a group of salons started by George Hammer, a very well known entrepreneurial figure in the beauty industry. We have the biggest urban spa in the world, in Harrods, as well as others in Manchester’s Harvey Nichols and Heathrow Terminal 1.

Beautique was started around two years ago and there are some really interesting things we can do with the business. The site is being redesigned to give it a more luxurious feel.

Another main aim is to enhance the educational side of the site. We have a number of experts who are well known in their particular fields – such as make-up expert Daniel Sandler, or Roja Dove, who calls himself the professor of perfume – and they contribute articles to our learn section. I’m looking to build that up to increase our search visibility and improve conversion.

We would also, down the line, like to do more live chats and videos, especially as we have these fantastic locations. Daniel Sandler does a lot of work with Videojug.

What are your aims in terms of driving business to the online and offline parts of the group?

Although we are a standalone operation – we have our own warehouse and fulfilment – my aim is to make the relationship between us and the salons as close as possible. We try and pull in Urban Retreat as that lends us credibility, while the more members we get, the better it is for Urban Retreat as a group. We also do cross selling through vouchers, which have had some take-up.

Although it’s early days, has anything worked particularly well for you in terms of customer acquisition?

In terms of acquisition, we’ve been doing pretty much the standard stuff you would expect from someone of our size. We’ve been doing a lot of PPC and shopping comparison, as well as affiliates with Affiliate Future. We’ve done some work with Kelkoo, Bizrate,, Ciao and Pricegrabber.

PPC has worked tremendously well for us. For every £1 spent on Google Adwords, we generate around £8.

With shopping comparison, we’re refining our campaigns because there are so many niche companies out there, selling luxury hair and beauty products. We are being a bit more selective about the products we put on there. Our competitors have a very loyal database, but we have a number of exclusive deals with brands for the web, so we’re going to maybe concentrate on five or six brands, rather than the whole gamut of products. On shopping comparison sites, people click back and forth and you end up splurging money with no conversions.

Also on the acquisition side, we are planning to provide bespoke content to a number of affiliates alongside our data feeds. The content side will be great for us as we have all these experts.

What has your experience of implementing customer reviews been like, in terms of costs and other challenges?

We’re in the implementation process, having signed contracts with Bazaarvoice a few weeks ago. I’ve used customer reviews in a previous role, where we had our own in-house system. I knew more or less what I needed; primarily integration with Mercado and Omniture for site search and analytics. We’re a small team, so we need to make sure everything works and integrates together seamlessly.

It is expensive but it is great for conversion and fantastic for product intelligence. We are looking at increasing our conversion rate by around 40-60%. You can tie it in with your search strategy by doing top-rated products and so on.

I noticed you are shipping internationally. Are you looking at any international acquisition activity?

Scandinavia is a big market and I’m setting up some Scandinavian PPC at the moment. Ultimately, we will look at multi-lingual sites, and I’ve previously done some foreign language email marketing, which can work very well.

As for shipping internationally, it can be quite challenging, although the European and US postal systems are becoming more integrated. Eastern Europe and Russia are difficult.

We also face a challenge in making sure we don’t lose money on our postage, and we do that by charging customers a little more for international shipping. But people spending £100 on beauty products will probably not mind that postage is £11 instead of £8, for example.

How challenging has recruitment been for you?

Staffing is very difficult but I’ve been very lucky. I’ve experienced this all through my career. You have to go with someone who either has experience, has done a thesis in an online-related subject, or get someone who’s a bit of a nerd and likes playing around with stuff.

It is also very difficult on the development side. We have a Romanian girl starting with us, who has an incredible amount of experience in .NET.

Where do you stand on the ‘agency versus in-house’ argument as you scale-up?

I’m a massive fan of in-house. I’m very biased towards that approach. You just have to make sure the people handling things are up to date and know what they are doing. With analytics, we are going for a hosted solution and there’s no reason why we can’t handle that here. Analytics is massively challenging but you’ve got to take it one step at a time and make sure you retain focus on your KPIs.