Chewy.com – ‘Zappos on steroids’
CEO Ryan Cohen has reportedly described Chewy.com as “Zappos on steroids”.
The online only pet food retailer operates a 365-day 24/7 help service and offers hassle-free returns. Forbes reported in January 2017 that Chewy employed ‘416 of its 3,400 staffers to answer phones and texts in round-the-clock shifts’.
But its commitment to customer love is most impressive when you look beyond the numbers at how Chewy treats its customers.
Those few that receive a mistaken or damaged order are told they are welcome to donate the order to a local animal shelter and Chewy will send a new order straight away.
Pet owners receive birthday cards, and even flowers and a message of condolence when they die. In 2016, Forbes tells us, Chewy mailed two million handwritten holiday cards, costing the company ‘$940,000 in postage alone’.
— Jared Ell (@MrJaredEll) May 31, 2017
The retailer offers free 1-2 day shipping on orders over $49, enabled by three distribution centres (with another three in construction). There’s also an autoship option offering a discount on regular, scheduled deliveries
Chewy’s customer service commitment
Given Chewy’s success ($900m revenue in 2016, it’s fifth year in operation), it’s no surprise that this week PetSmart has bought the company in a deal worth $3.35 billion. Chewy will now operate as an independent subsidiary of PetSmart, with the more traditional retailer hoping to learn lots about operating online. Customers will hope Chewy’s unique service isn’t compromised.
In 2016, Chewy overtook Amazon, taking 48% of the online market compared to Amazon’s 40% and PetSmart’s 2% (according to 1010Data). However, just like Amazon until a couple of years ago, Chewy is reportedly not profitable yet, due to the money it spends on acquiring new customers.
Forbes spoke to an industry insider and report that ‘Chewy’s customer-acquisition cost could run as high as $200 per first sale, given that the company pays to appear at the top of Google searches for each of the hundreds of brands it carries.’
Of course, spending lots of money to build your audience is a common theme in ecommerce. If Chewy’s customer service continues to delight, the retailer has a better chance of retaining its customers and making a big profit.
UNTUCKit – ‘brotailing’
UNTUCKit began selling shirts designed and tailored to be untucked. Its effective strategy is what Bloomberg has called ‘brotailing‘, elegantly describing the retailer as more of ‘a mirror than an ideal’.
What does that mean in practice? Well, they sell primarily one product, originally only online, and use a sophisticated mix of marketing to target a demographic familiar with the problems that this product solves (looking crap in an untucked shirt, and crap in a tucked-in shirt).
This marketing mix includes radio advertising (e.g. on Howard Stern’s show), print placements in US Airway’s in-flight magazine, display ads on relevant online publications (e.g. male outdoor lifestyle), social advertising and retargeting.
Like many ecommerce startups, the watch words are quality and focus.
What’s really interesting is the way UNTUCKit has expanded into high street retail. Its first store, in New York, opened in 2015, and is now one of eight in total across the US.
As you can see from the image below, the same focus seen online has been brought to to the high street, with a curated feel that allows for intimacy and dialogue with the customer.
A perfect example of brotailing can seen on the store finder of UNTUCKit’s website, where each store location also provides you with a neighbourhood guide detailing local restaurants and bars that are worth a look.
Trendyol – data-led assortment
Trendyol is Turkey’s largest online fashion retailer, selling 20m items a year, with 70% of all women in Turkey having used the site. It’s a big website reminiscent of other pureplays in its use of timed offers and 24-hour shipping.
What make Trendyol interesting is its mix of its own private labels alongside big brands. For its private labels, Trendyol claims to have 1,000 suppliers within 50km radius of its HQ, and can use this proximity to factories and material sources, with advanced supply chain technology, to test new products and then rapidly scale up if they prove a hit.
Demet Mutlu, Trnedyol’s young founder, tells Business of Fashion that “We can move from concept to design to manufacture to sale in just one week.” That means thousands of styles can be tested daily, and Trendyol can offer fast fashion prices much lower than some high street brands such as Zara.
The result is that private labels represent 38% of Trendyol’s revenue and the site has garnered a big reputation across Eastern Europe, Central Asia and the Middle East. Though Trendyol only ships within Turkey, resellers abound in these other regions, often promoting products on Instagram or Whatsapp. Goods can then be delivered in bulk to resellers, who will dispatch the goods on to buyers.
Part of Trendyol’s popularity in these regions is down to a marketing strategy that sees Trendyol private labels worn in Turkey’s most popular soaps, broadcast in neighbouring countries, as well as tie-ups with some of Turkey’s biggest fashion influencers.
All of this means that Trendyol claims 90% of its web traffic is organic. 70% of sales come from outside major metropolitan areas, showing how Trendyol gives Turkish consumers access to a digital storefront when they lack a high street.
Purchase reengagement, as pointed out by Mary Meeker, is phenomenal, with items purchased per shopper rising above 10 in 2016.
Glossier – from blog to ecommerce brand
We’ve already covered Glossier on the Econsultancy blog, but here’s a recap.
Into The Gloss, ostensibly Glossier’s content marketing arm, actually predates the cosmetics retailer. After creating an online magazine that, to quote my colleague Nikki Gilliland, was ‘borne out of the realisation that most beauty brands were out of touch with how women interacted with make-up’, the Into The Gloss team launched Glossier.
The ecommerce company sells a limited range of skincare products that are seen as the ‘holy grail’ in the sector. To create this range, the company regularly canvassed its readers and social followers on topics such as brand colours and product specification.
Social media is where the brand stands apart from much of its competition. A lot of the imagery is designed to promote the brand’s aesthetic, not simply the product range.
Furthermore, user generated content plays a big part in promoting Glossier. Gilliland argues that its products are ‘purposely created so that consumers will want to take photographs of them. Understated and minimal, the products are lusted after for their appearance as much as they are for their practical purpose.’
Such a strategy creates lots of demand ahead of any particular product’s launch. An eyebrow gel, for example, had a waiting list of 10,000.
Social media truly has been integral to the brand’s user growth, which has topped 500% over the course of 2015 and 2016.
UGC on Instagram
MM.Lafleur – the ‘anti-Amazon’
MM.Lafleur is the officewear retailer for women don’t particularly like shopping. It was founded in 2013 and offers a personalised service. Simply fill in a form about you and your tastes, and MM.Lafleur will send a ‘bento box’ with 4-6 pieces in it, ranging between $100-300.
It’s not a subscription service, so there’s no obligation to buy and you can request a box whenever you want. Shipping in both directions is free.
Again, a common theme amongst the retailers on this list, attention to detail and product quality are paramount. It’s MM.Lafleur’s ability to find just the right items that creates loyal customers.
In a fairly natural move, MM.Lafleur has opened showrooms, with six locations (often in business districts) offering personal stylist appointments. Customers turn up to a customised wardrobe and personal stylist, and develop real-world relationships with the brand, perhaps drinking coffee or prosecco whilst trying on clothes.
One of the reviews on the website says it all – “I feel like MM.Lafleur ‘gets me'”.
Allbirds – quality not quantity
Just two designs of training shoe, made from sustainable New Zealand wool, making them lightweight, breathable and machine washable, Allbirds have become part of the uniform for startups in Silicon Valley.
The company is committed to improving the product based on customer feedback, and Mary Meeker illustrates just how many changes have been made in the diagram below.
To do this, Allbirds sends customers a survey to gather feedback, as well as drawing in knowledge from the customer service team.
Simplicity and desirability seemingly go together – Allbirds being admired for their smart versatility as a work and play shoe. It also helps that the shoes come with an unboxing experience that nerds everywhere will love.