Dave Baird from Magnet Street – Podcast Transcript

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Shaun Ryan: [0:03] Hi I’m Shaun Ryan from SLI Systems and this is the E commerce Podcast. Today I’m talking to Dave Baird from Magnet Street. Dave is Vice President of Marketing and co owner. [0:13] Welcome Dave.

Dave: [0:14] Baird: Hey, great to be here, Shaun.

Shaun: [0:16] Great to have you on here. Now a traditional question to get us started. What was the first thing you ever bought online?

Dave: [0:21] You know, I think it was either a book by Oren Harari called “Break From the Pack”, or probably, I used to have to travel a lot, so probably it would have been plane tickets. But I think it was the book.

Shaun: [0:33] So, tell me about the book. What’s that about?

Dave: [0:36] Well, “Break From the Pack”, oh it was probably, how many years ago? Bottom line, how do we run a business, you know and we’re going to get into more of that, but being a magnet business at that time, how do we not be a commodity and absolutely provide service and something way more unique than just the product itself.

Shaun: [0:59] OK.

Dave: [1:00] And it just got yes?

Shaun: [1:01] So, it’s basically a marketing book about differentiating yourself?

Dave: [1:05] There you go.

Shaun: [1:06] Cool.

Dave: [1:07] That would have been better. Yes, I agree.

Shaun: [1:09] Very topical. So, what was your most recent purchase online?

Dave: [1:15] You know as I was thinking about that, I have four kids. I have high schooler, a middle schooler, a grade schooler, and a pre schooler. And I think we buy shoes online the most. I would have to say shoes from Zappos because they’re growing like weeds.

Shaun: [1:29] Yes. Both the kids and Zappos.

Dave: [1:33] Yes.

Shaun: [1:34] So, Dave, could you give a little bit of background about your self? How did you come to be where you are today?

Dave: [1:40] Wow. Let’s see about that. Well I used to be in the finance business, both in the investment side and lending side up until probably 12 years ago. And that’s when I connected with my father who is out of Chicago and I’m in Minneapolis, Minnesota. [2:00] You know, until we kind of came up with this concept to run a short run printing/magnet company I had done mostly mutual fund sales and that type of thing. And then just seemed like an interesting idea, that the time was right and we just kind of ran with it from there.

Shaun: [2:16] OK, well it’s quite a contrast from finance through to magnets. Obviously something attracted you to it.

Dave: [2:25] Yes, there you go. I don’t…

Shaun: [2:29] I’ll try not to make any magnet jokes.

Dave: [2:32] That’s all right. I’ve heard them all.

Shaun: [2:35] I’ll bet you have. So, tell me about Magnet Street. What do you guys do?

Dave: [2:39] Well, like I said, we started out in manufacturing magnets about 15 years ago now. And back then, it’s hard to believe you couldn’t get full color, certainly, on a magnet. And you know, magnets have been around for a long, long time helping people promote.

Shaun: [2:57] Yes.

Dave: [2:58] You know, you name it. People have been using them, magnets to stick up on the fridge and keep your information in front of your potential consumer all the time. But back 15 years ago, you basically were looking at a black and white or red and white printed product. [3:14] So, we were the first ones that allowed you to do full four color quality, even a photograph on it. And do it in a short run. If you wanted full color 15 years ago, you would have had to order 50 to 100, 000 magnets to make it somewhat economical. Well, we were the first ones to really make it economical to order 250, 500, or 1,000 magnets with your photograph on it.

[3:37] Or we did a lot of sports schedule magnets back then. So, we were really the first ones to bring color into that equation and that’s why we got started in real estate at the time, 100, 000 realtors out there who all wanted to get their picture out in front of their potential clients. So, it was a great combination of the two at the time.

Shaun: [4:00] Cool. And is that still a large part of you market, the real estate, or who are you selling to now?

Dave: [4:05] Well, if you’d asked me that question three years ago, I’d say absolutely. It was a huge part of our business. But housing in the U.S. here has basically just been obliterated over the last three or four years. So, that part of our business, unfortunately went right along with that. But yes, we still deal with tens of thousands of realtors every year, for sure.

Shaun: [4:27] And so who else are you selling to now that that has sort of slowed down? Have you made that up elsewhere?

Dave: [4:34] Yes, well thankfully, we wouldn’t be around had this not happened. About a year or two before real estate really started to take a beating is when the whole concept of “Save the date magnets” really started to show up on the horizon. [4:49] We were doing a lot of search engine optimization work back then. This being about, I suppose, six or seven years ago now. And really, brides are what led us to this business where they all of sudden needed some kind of medium to send out a message to their guests that they were planning on inviting to a wedding. You know, invitations are typically sent eight weeks out before a wedding.

Shaun: [5:14] Yes.

Dave: [5:15] Well, now they started sending out some form of save the date announcement six to twelve months before their wedding saying “Hey, we don’t have all the details yet, but we’re getting married on October 5th, and so save the date and we’ll get you the more details later.” Well that turned into a roaring business and thankfully the magnet itself was a great medium to deliver that message. So, it would obviously stick around for six to 12 months and they’d be reminded and they’d be able to find that date when they needed it. [5:44] So, we were really at the right place at the right time and it just struck a chord with us and we ran with it big time. Quite frankly, we wouldn’t be here today if it wasn’t for the bride.

Shaun: [5:55] Wow. It’s amazing. It’s a business I’m almost certainly I’d never heard of. Because when I got married it was before you had to send out that save the date things.

Dave: [6:04] Believe me, I’ve been married 22 years. Twenty two years ago, not in a million years, I couldn’t imagine this even being an industry, no.

Shaun: [6:12] So, is that business still growing? Are you still increasing…?

Dave: [6:16] Absolutely.

Shaun: [6:17] You are? OK, great.

Dave: [6:19] Absolutely. You know there’s 200,000 weddings in the U.S. every month. So, marriage might not be doing well, but weddings are doing extremely well. And you know, thankfully, yeah, the “save the date” is still a relatively, when you compare it to the amount of wedding invitations business, which now that’s been the next pleads of our business, we’ve just kind of moving down the pipe but you know, wedding invitations is another significant, significant part of our business now. Yes, but the save the date, we have grown, I don’t know, 60 months in a row in that business. So, it’s been fantastic.

Shaun: [6:56] Right. So, you still have a core printing business and the magnets are just a big part of that business, is that right?

Dave: [7:03] Absolutely. Yes.

Shaun: [7:05] And they help differentiate you from other printers. Can you share with us how much you sell online per month?

Dave: [7:11] It varies based on the seasonality of some our markets, but probably between…well, I shouldn’t say “probably” between, but between a million and two million dollars a month.

Shaun: [7:21] OK. Great. And how fast is that growing, year on year?

Dave: [7:25] Well, that depends which segment you’re talking about. If it’s real estate, we’re just trying hold on to dear life.

Shaun: [7:30] Yes.

Dave: [7:32] Within the wedding segment and our consumer, birth announcement segments, depending upon which product line you’re talking about, anywhere between 30 and 150 percent a year.

Shaun: [7:42] Wow.

Dave: [7:43] So, the consumer side is doing extremely well.

Shaun: [7:46] Yes, that’s great. And hopefully the real estate side will come back one day.

Dave: [7:50] I hope so [laughs] . We’re counting on it.

Shaun: [7:52] Yes. And so you mentioned you’ve done some search engine optimization to help attract new people to your site. Is that how you found out about the bridal “Save the Date” opportunity?

Dave: [8:08] Yes, that’s certainly what led us to it, because we were doing a lot of optimization around just calendar magnets, and schedule magnets, and those kind of things, but then just through our research, this whole term “Save the Date Magnet” kept popping up and hitting us in the face like, “What in the world?” We had no clue what it was. [8:27] But thankfully, it was just in its extreme infancy, but our company was positioned perfectly, because we had just gone digital with all our printing, so that meant what used to be a small order used to be 250 or 500 units, and all of a sudden we could print 25 economically for a bride.

[8:47] So, it just fit perfectly with where we were at that exact time, and like I say, it took us five months, and we had that business up and running, and it just exploded. We were very fortunate to be where we were.

Shaun: [9:00] So, I’m interested in exactly how you find out that people were searching for those terms. Was that through looking at the Google reports about popular dates, or were you….?

Dave: [9:10] Yes, exactly, and if I can remember correctly, and this has been five, six, years now, but the tools that were available were nothing like what’s available today. [9:21] But it was…I also want to say through Yahoo that, we were able to go in and see with the term “magnet”, what was being searched specifically, keywords that contain the word, “magnet.”

Shaun: [9:34] Right.

Dave: [9:35] And it would tell you, right, how many times that’s being searched a month. So all of a sudden, this “Save the Date” thing kept popping way to the…very high on the list on a monthly basis. [9:47] And then you start, and you thought about the seasonality of that business, and although you’ve got some real nice peaks at certain times, it’s a 12 month, 365 day a year business, whereas we’ve been so used to real estate which was so heavy July through December, but we had to look for other things to do January through June.

[10:08] Well, this just fit perfectly as a perfect complement to our business, and since then with the addition of invitations, and programs, and “Thank You” notes, and all that good stuff, it’s just rounded out our year just perfect where our press is just running every day. It’s just fantastic.

Shaun: [10:25] It’s fantastic. And it’s a fantastic lesson for other e commerce operators to pay careful attention to not necessarily the words you’re targeting, but other words that are associated with your business, because within there are opportunities, and this is a great case study for that.

Dave: [10:42] Our consumers and customers are way smarter than we are. They told us where to go a lot quicker than we ever would have figured it out.

Shaun: [10:49] So, beyond search engine optimization, how else do you attract traffic to your site?

Dave: [10:53] You know, we still do a lot of direct mail, so we’re still utilizing catalogs and postcards, and we’ve really partnered with several hundred bloggers out there, who we certainly advertise with and we get written up from, so we certainly get the word out that way.

Shaun: [11:13] Yes.

Dave: [11:14] I would say that would be our most common ways of attracting customers, and then thankfully, within the bridal community, one thing every one of these women have in common is, they love to talk and communicate, I should say…

Shaun: [laughter] [11:27]

Dave: [11:28] …about what they’re doing, or what they did do. So we’ve invested heavily in their experience with us, because if they had a great experience with us, they’re going to tell everyone.

Shaun: [11:37] Yes.

Dave: [11:38] If they had a bad experience with us, they’re going to tell everyone, so they keep us honest, for sure, and it’s thankfully that we’ve invested so much in the service aspect of our business that word of mouth faction we have has been great.

Shaun: [11:54] Yes, that makes a lot of sense, and it’s great business practice. So, Dave, what are the biggest opportunities you have? What do you see coming up over the next year or so?

Dave: [12:06] Well, the continued growth of our invitation line, for sure. I mean we have the printing capabilities, and, well, that’s certainly the one we’re the most excited about. And then on the birth announcement side, there are four million births a year in this country. [12:22] We feel like we’ve got a product that really makes an awful lot of sense. The first thing people do when they get the picture of the new baby, of their cousin, or niece, or whatever, they go stick it on the fridge. Well, why not make it a magnet to begin with and they’re not looking for a magnet to stick a picture to? It already is a magnet.

[12:41] So, we think the birth announcement magnet will really be the next “Save the Date” product. We see it growing every month, so we know it’s out there. It’s going to need a few more shots in the arm, and we’re getting ready to really start focusing on that. I think the birth announcement…

Shaun: [12:57] Now, that makes sense.

Dave: [12:59] Yes.

Shaun: [13:00] I’ve got a magnet of my niece that my brother sent me [laughs] sitting on my fridge, so it’s exactly…

Dave: [13:07] There you go.

Shaun: [13:08] Yes, so I relate to that. And potentially, you’re selling to some of these…some of your customers who have gotten married and have gone on to have babies.

Dave: [13:20] Oh, absolutely. It’s a natural…that’s one of our challenges that we’re looking for our new site to do is, we just want to keep that connection going. We start at the beginning with your wedding, but we want to carry it all the way through to the graduation of your kid from high school. We think we have a neat product line that can serve you all the way through.

Shaun: [13:39] And so in 60 years time you’ll have the memorial, sort of funeral [laughs] …

Dave: [13:44] Well, we’ve joked about our “Save the Grave”, magnet.

Shaun: [13:50] …So is there an e commerce site that you pay particular attention to, that you look up to for ideas around how to improve what you’re doing?

Dave: [14:01] Well, I tell you, I was a big fan of Woot early on, and that’s probably pretty common by now, but to me, that was the first great example of an e commerce site that had a voice and had a real personality to it that wasn’t just boring: “OK, I’m going to your site. I’m buying a TV. Great.” [14:25] It was the first one that really started to make a connection between a company and an end user in a fun way. Although I’m probably not that sarcastic or cynical, I would probably like to be with our customers, but I’m not.

[14:40] It’s really challenged us to figure out what exactly is our voice, what can our customers really identify with us, and what’s really going to make them feel comfortable doing business with us?

[14:52] It’s a different concept, but I’ve even wondered, why can’t we have a product a day that we really feature and say, “We’re selling 100 of these today, and when they’re gone, they’re gone.”

[15:04] But the reality is our product line, we’re unlimited. We’ve got a very long tail, so it’d be somewhat disingenuous to our customers to say, “Well, we’re only selling 100 orders today, and when we’re done, we’re done.” But I just like it. I like the concept, but I’m not really sure how it applies to us.

Shaun: [15:24] Fair enough. So tell me a little bit about your e commerce store in terms of the technologies. What platform are you using?

Dave: [15:32] I’m starting to talk out of school here a little bit, but I’m going to do my very best. If we go too deep, you’re going to find out that it’s a pretty shallow pool here. [15:41] I know that our site is built on a Java platform using Spring framework, and we’ve done it 100% in house with our own e commerce team and our own web team and what-not. That’s basically the framework we’re using.

Shaun: [16:00] What size is your team that’s built that?

Dave: [16:04] Currently on our team in house here we’ve got about 10 or 11 folks in that group.

Shaun: [16:09] OK, that’s a decent sized team. What are your biggest headaches? What’s not working right?

Dave: [16:13] Here are some of our challenges. Unfortunately, you think more about those on a day to day basis than you think about the things that are going well. [16:20] We’ve just spent a significant amount of time rebuilding our complete shopping cart and all the technology to go with that. At first glance, it’s like, “We going to build a new shopping cart.”

[16:31] You say it fast, and you’re like, “Oh, OK. That’ll be great. Well, what are we going to do next month?” Then you realize how the shopping cart touches every single facet of your business, and you better not get it wrong.

[16:43] So it’s been a huge project, and we’re actually getting ready to roll that out in about two weeks. Our team is getting very excited. We’re in the final stages of testing right now, so that’s certainly very exciting.

Shaun: [16:56] What’s going to be new about it?

Dave: [17:00] I tell you, as crazy as this sounds, we sell a very complex product in that here’s a magnet that’s four by six inches, and here’s an in design template. The bottom line is you can go into our design studio and literally change everything: change colors, change fonts, put up new pictures. You totally customize it to make it yours. Then you’re going to roll it right out into our shopping cart. [17:30] We were just starting to drop designs. We’re just struggling with where all the information was going. The bottom line is no one’s going to notice a difference other than the amazing amount of data that we’re going to be able to stream from it now. That’s probably one of the newer upgrades as well, that we’re going to be able to analyze our customers’ behavior patterns and what-not.

[17:50] Unfortunately, most people going forward won’t even realize that anything has changed, but the reality is behind the scenes, it’s going to make everyone’s life amazingly better. I don’t know how else to put that. A lot less headaches around the office, that’s for sure.

Shaun: [18:07] Excellent. And over the next year or two, once you’ve got the new e commerce cart out, what else do you see coming? What other changes are you looking to make?

Dave: [18:18] I would say some of the more fun ones are our personalized recommendations will be coming out this fall. Finally, we’re just going to have so much more intuitive, “OK, if you purchase this, you would also probably be interested in this”, because we’ve got so many complementary products that if you buy this magnet, well, you might want this, envelope seal, or you might want this cheerier product. [18:41] It’s just going to be way more intuitive suggestions as far as what would make sense to be in your shopping cart as well. So that’s certainly exciting.

[18:52] We’re going to have a whole new Facebook. Our customers live on Facebook, and so that’s certainly going to be an awful lot of fun to finally have a fully integrated, like, “Hey, you’re shopping here now. Eight of your friends in your Facebook community are in the store right now.”

[19:07] One of our greatest challenges is that you’re on our site, and you’re all alone. It’s not real emotional. Well, we’re competing with not just other online websites; we’re competing with the brick and mortar store down at the corner of your hometown.

[19:25] We want to create that experience online where, hey, you’re here with friends. You’re looking at a product. You can put them into a bucket and say, “Hey, look at the three I’m looking at. Which one do you like?”

[19:37] So just trying to create that experience online has been a challenge, but, boy, there are so many tools available now that are going to help us do that.

Shaun: [19:46] Excellent.

Dave: [19:47] And then just being able to personalize our content based on what we know about you based on what colors you like or what time of the year you’re getting married, so just using all that knowledge to give you a more personalized experience.

Shaun: [20:00] How interesting. On the personalized recommendations, are you building that in house, or are you using a third party to provide the technology behind that?

Dave: [20:09] You know what? You’re going to ask me that, and I know we’re using a third party, and for the life of me I can’t think of who we’re using for it.

Shaun: [20:16] No, that’s fine.

Dave: [20:17] Again, just like with SLI, it’s like we could try and build that, but who are we kidding? We only have so many people that we’re going to put to so many jobs. [20:28] Let’s not reinvent the wheel. If we can find a good partner that economically makes sense, let’s do it. We’ll keep the in house stuff in house and not have to worry about… We don’t need to rebuild that. It’s been done very, very well. I’m good with it.

Shaun: [20:41] Cool. That’s excellent. Dave, you’ve provided us with some really interesting information during this interview, and I wanted to thank you very much for your time today. I really appreciate it.

Dave: [20:52] It was a lot of fun talking to you.

Shaun: [20:54] That was Dave Baird from MagnetStreet, and I’m Shaun Ryan from SLI Systems, and this was another E commerce Podcast. Tune in next time.

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