Launched in beta earlier this year by a team of 20+, mydeco is an affiliate-cum-online media property focused on selling interior design products and hosting a community for home furnishing shoppers.
We caught up with CEO David Kelly to talk about the site’s planned launch of widgets, its focus on driving conversions through 3D room-planning software, and the way it has gone about building its design and development team.
Can you give us an update on how the business is going? What’s the plan for the recession?
It’s going well. All the reasons why we built the business in the first place look pretty solid. There was always a big market opportunity and that’s still there. The passion centre of the home still exists now.
Even with the economy as it is now, people are still spending money on the home. On the shopping side, people are looking to save money and take advantage of good deals. On the community side, people will continue to use the site, which is very engaging.
We went through our Series B funding in July and the timing of that was pretty good. We made sure we got some good investors in the business, which we are excited about.
What’s the next stage for the site?
In the short term, it’s about making the site more effective. Since launching the site in beta in February, we’ve proved that the overall model will work and have started to improve the functionality on the site, based on feedback from consumers. We’ve improved the shopping experience by adding more retailers and introducing new ways of searching – by style and colour, for example. We’re always adding new features and functionality.
In the longer term, we’re aiming to do more partnerships with media companies and other partners. Rather than just bringing consumers to mydeco, we are starting to take mydeco and move it out onto other sites. In Q4, we will offer mydeco content widgets to blogs and other news sites both in and outside the UK, such as ‘top ten articles’ or ‘top ten items sold on mydeco’. That way, consumers get to see mydeco on all these great blogs and sites out there that are focused around the home.
Beyond that, we’re planning to offer our search tools to other sites, as well as our 3D tool, which is called the Room Planner, which just went live on Channel 4. We’re also looking to syndicate content out to other sites.
What’s your business model? Is mydeco essentially a very advanced affiliate operation?
The way we are structured at the moment is around three revenue streams. We get sales commissions through being a super-affiliate, I guess. We have products from over 700 retailers on our site now. We also have advertising and sponsorship, including product placement, competitions, advertorials and so on.
The third one is almost a B2B play to allow us to monetise the tools we offer. For example, we are offering the Room Planner through real estate portals such as thinkproperty.
The real estate market is having problems at the moment, but once people see we have hit the bottom and start to come back, conversion will become key. Portals will be able to use our tools to convert floor plans into 3D spaces – a bit like Grand Designs. People will literally be able to see how their home would look if they moved around the furniture and converted kitchens and so on. They would also be able to change all the materials in the room. That should increase conversion and become financially attractive to real estate sites.
Going forward, on the affiliate model, we are looking at the introduction of an e-basket. The reason for that is we are starting to increasingly see people wanting to buy multiple items on the site. If we stay just as an affiliate, we might not be serving our retail partners as well as we would like. People are increasingly looking to buy for little areas in their rooms. At the moment, if you buy two items, you can shortlist everything but you would need to buy the products individually. We need to keep ahead of the market.
Is there a trend among some customers to do all their research on mydeco and then visit the high street to buy? Do you have any plans to do offline tracking?
We knew that would happen when we created the business. But we are doing a couple of things to grow the business in that context. We have built a voucher system, which is being experimented with a couple of retailers at the moment, where if you like a product, you click a button and put your mobile number in, and the retailer will give you a special voucher code for you to reclaim when you go into the store.
We know that some consumers are going to want to use the site and see high-end products physically, and the voucher allows the retailer to get those customers into the store. The traditional concern is that people might decide to go to a particular retailer, but by the time they have got in their car and got to the high street, their attention has been distracted to another retailer. Groups of retailers tend to be situated next to each other.
Secondly, we’re also extending that with geospatial search where with some retailers, we will map products to locations where you can go and see them, with directions. We will know where the shopper is living or working as they will be registered on the site. Then we will be able to tell retailers that we have sent them x number of customers in a month, and which stores we have sent them to. They will start to see us not just as an affiliate but also as a lead generation and brand awareness partner.
We see that integration of online and offline as a big opportunity for us, rather than a problem.
How important is faster broadband uptake in creating a lush environment for users? Does the experience suffer on slower broadband connections?
I don’t know what the average on BT Broadband is, but we tested the site on BT Broadband on different browsers and it seemed to be performing pretty well on those broadband connections. It’s quite an image rich site, as you would expect, so we have tried to focus in on page load times. For search results, we might return 20 results rather than 40, and we have given users the option of an image-only view so they just get the thumbnails of each product. With the 3D Room Planner, we’re also working to improve performance on that, but we don’t seem to have any negative feedback on those issues.
How did you go about building the team and structuring the business?
What we wanted to do was to create a core team, with a hub and spoke-like structure, with the best people we could find in marketing, tech, design and so on. We have multiple skills for multiple areas. We have tried to stay at around 30 people because academic research shows communication becomes a bit more tricky if you move beyond that. We also use temporary staff wherever necessary.
We have tried to create the best technical team we possibly can, because we are a very tech-heavy organisation. We have lead architects for search, for 3D and for back end systems, and these guys engineer the business and have full knowledge of how the systems work. The work itself is performed by our partners in different parts of the world. We have dedicated teams in Montevideo and Kiev, where we can get highly skilled and motivated but cost-effective resources. That’s working really well. You need to create the right balance where you keep the knowledge in-house.
What are you looking for from your retail partners?
There are some simple things. Having a website that works really well is really important, as the differences in conversion rates between retailers are often explained by how well websites work. If the site doesn’t work or is difficult to use, or the product isn’t available, that is disappointing for a consumer. When a consumer leaves our site, they are excited about the prospect of buying a product so having an effective site is very important. That’s the fundamental one.
The other thing that explains differences in conversion is the focus the retailer has on online merchandising, and the integration between online and offline merchandising. If consumers see a product in search results, in editorial, newsletters and so on, that integrated approach drives conversion.
If a retailer has a team dedicated to making sure that the consumer gets multiple messages around particular products, and those messages are clear, there will be good results. People like Sofa.com, who we work with us on giveaways in our newsletters and on our homepage, do that very well.
Site Review: mydeco