Justus Wilde from Amblique – Transcript
Shaun Ryan: [0:13] Hi, I’m Shaun Ryan from SLI systems, and this is the E‑Commerce Podcast. Today, I’m talking to Justus Wilde, Online Strategy Director for Amblique in Australia. Hi, Justus. Welcome to the podcast.
Justus Wilde: [0:21] Hi, how are you doing?
Shaun: [0:22] Yeah, really good, thanks. Now traditional question to get us going, what was the first thing you ever bought online? Can you remember that?
Justus: [0:28] Can’t probably remember. I think it must have been an airline ticket, but it would have been many years ago.
Shaun: [0:33] An airline ticket, right. Can you remember the most recent thing you bought online?
Justus: [0:38] Yeah, actually I bought a fancy dress costume, a kick‑ass superhero costume yesterday for a friend’s fancy dress party from an American site, which is really good, actually ‑‑ BuyCostumes.com.
Shaun: [0:50] BuyCostumes.com. Great.
Justus: [0:52] Yeah, it’s a great site. Good user experience. I’ve used it before, and quick delivery and a really nice interface, so recommend it. [laughs]
Shaun: [1:00] Just tell us a little bit about the experience buying that costume, like you went back to them because you’d used them in the past?
Justus: [1:07] I have used them in the past. I mean I’ve bought a couple of costumes online just for parties, and I just found that the offerings locally wasn’t very strong both in terms of range and pricing, so had a look overseas. [1:21] The site recognizes that you are from Australia and sort of customizes the experience, and the delivery dates and the pricing. The range is just amazing, and you get the items within a week. So we’ve used it for parties for the whole… actually for company things. We bought some costumes for some conferences, and yeah, it’s a really nice site.
Shaun: [1:41] Great. Obviously buy a few costumes. [laughter]
Shaun: [1:47] So tell me a little bit about yourself. How did you get to be where you are today?
Justus: [1:54] Yeah, sure. I got involved with online pretty early on. I sort of got the opportunity to build my first website when I was 15. My dad had this friend in America that was running a health education service, and at the time, I was in a school break, and she said, “Oh, can you build this website?” I said, “I don’t know, but I’ll give it a go.” [2:13] So I got involved with that, taught myself, and ever since that project, really enjoyed working on web projects. I guess from there I went to study marketing NIT and started a business while I was studying, initially just to support myself.
[2:30] Then as my knowledge sort of grew I got involved in e‑commerce space and founded another business that was particularly focused on that in terms of building actual e‑commerce websites and providing strategy around how to drive them so that our clients make money.
Shaun: [2:45] Great. So tell us about Amblique. What do you do, and how long have you been around?
Justus: [2:50] Yeah, sure. So we started Amblique in 2006, early 2006. At the time, we were in a bit of a lucky situation because I had a previous web business that we started in ’99, and I mean that wasn’t a significant business. It was essentially just a couple of guys that sort of used it to build small projects and earn enough money to get through university. [3:14] Towards the end of that business, we started building a content management system, and by the time I guess I finished university, we had a number of clients and the business was making a profit so it made sense to keep going. Not long after that, we sort of had 30 customers on the system, and it was running quite well, but then I started to really focus on the e‑commerce space because I saw it as an interesting category.
[3:41] So I started a new business and took the software from the previous business, but just focused on e‑commerce because that was the sort of most profitable category. That was 2006.
[3:50] But within a couple of years, we decided to build a strategy and sort of a professional services section that would focus on optimizing our clients’ businesses, because we essentially found that just providing the software was a tool, but we really needed to help our clients drive the operation from a strategic point of view, but also from an operational point of view.
[4:20] So we built up sort of the strategy arm of the business and we’ve built the business now to a team of 50.
Shaun: [4:26] Great.
Justus: [4:28] Yeah, I mean these days, we pretty much focus on delivering three key things to our clients which is traffic, user engagement, and, ultimately conversion. So the software is an element of that, but we focus more on a strategic aspect and the software We use lots of different software tools apart from our own to deliver that.
Shaun: [4:48] OK, yeah, understood, so can you tell us a little bit about your clients? What type of e‑commerce sites do they operate, and can you share with us who some of those clients are?
Justus: [4:58] Yeah, sure, I mean we are very strong, I guess, in the fashion space, so we’ve got about 60 clients across Australia. We’ve got a couple in New Zealand. We’ve seen that most of them are multichannel retail operators, although we have a few pure‑play businesses as well. [5:16] Some of the key businesses we work with in Australia are specialty fashion group operate six brands out of Australia. They’re the largest female fashion retailer, so they operate brands like Millers, Katies, Crossroads, Autograph, City Chic, and La Senza, which is Australian arm of Victoria Secret.
Shaun: [5:35] Great.
Justus: [5:36] Retailer Power Groups, which is a men’s retail chain with three brands, and then we’ve got businesses like Forever New, Suprere, Bardot. So they’re the kind of clients. But we also have some that are not in the fashion category. Matt Blatt is a furniture retailer that we do a lot of work with. It’s quite an interesting one, too.
Shaun: [5:55] Great. So predominantly fashion, but a few a customers outside of that as well.
Justus: [6:00] Yeah, and we’re trying to branch beyond fashion as well so we’re actively targeting businesses outside of that, but we’ve just sort of fallen into that category I guess because we’ve done some good work for a couple of clients and then from there it organically grew.
Shaun: [6:13] Yeah, yeah, that makes sense. There’s a few things here. Obviously you’re operating primarily in the Australian market, and from everything I’ve heard, the online commerce has been growing very rapidly in Australia. Can you talk a little bit about what you’ve seen there in the e‑commerce market in Australia in general?
Justus: [6:28] Yeah, I mean with our clients, we’ve seen very aggressive growth in the last couple of years. I mean some of them are growing 300 percent. Some are growing 100 percent. Some of the more mature ones a little bit less, but that’s really key to our offering because we add value to our clients by helping them make money. [6:48] And I mean last financial year we saw an average growth across our entire client base sort of 195 percent in terms of revenue, so that was financial years. I do think that will slow down a little bit.
Shaun: [7:00] You can’t keep up that rate of growth. [laughs]
Justus: [7:02] No, no, no. You can’t. [laughs] It would be nice, but, yeah, I mean more people are coming on board. I think there’s been so much in the media about online retail that finally we’ve sort of caught up to some of the other countries, and I mean general consumer sentiment is a lot stronger in terms of being confident to shop online so I think that’s really helped our clients.
Shaun: [7:26] What are the main ways your customers are getting traffic to their site, like how are they driving traffic to their site?
Justus: [7:33] It depends on who they are. So we’ve got pure‑play retailers that don’t have their own brand. I mean the key thing I guess is product, so I guess they’re focused very heavily on search engine optimization, paid channels such as Google AdWords, or different aggregation channels and affiliate channels. So I mean that’s for those guys, and that can be very effective. [7:59] For example, we’ve got a kid’s stationary website that we look after, and that’s quite an interesting one because we’ve had to roll out a bit of a global strategy because this website relies very heavily on the back‑to‑school seasons. So we trade across the globe.
[8:17] The site accepts different currencies, and we structure our marketing around back‑to‑school periods in Australia, which is in January, and then in July in America, for example, and the search optimization and the affiliate networks that very much target it towards those geographic areas, and that works really well for them so I mean that’s one example.
[8:36] But then our multichannel retailers, it’s a combination of all mediums. I mean they also have to do search engine optimization, but they get a lot of traffic from brand aware traffic from brand aware customers, so people looking for their brand, people going into stores and doing research afterwards, etc.
Shaun: [8:55] So are you helping them actively leverage the store traffic and use that to drive the store traffic to the site afterwards?
Justus: [9:05] We do. I mean the majority of our clients we initially get engaged to write a strategy document which focuses on their overall model and then supports that with a technical plan that looks at how we derive the traffic. [9:21] Depending on who they are that would include things like driving traffic for the stores by promoting the site through the stores, not in terms of simple things like banners in the windows, etc., but a true multichannel offering, so being able to order from within the store or at least getting the staff to promote the site when this product is not available in certain sizes.
[9:46] It’s actually a pretty hard thing because a lot of the retailers are struggling with the multichannel approach and it’s a bit tricky when you have businesses that motivate their staff with commissions because then you have a problem around attribution of the sale.
[10:03] So we’ve had to come up with some workarounds for a few of our clients where we had to measure what level of online sales the stores generate and attribute that back to the stores so that they can earn their commission on that. So I mean these are some of the challenges that they’re dealing with.
Shaun: [10:21] Yeah, yeah, I can see that can be quite a difficult challenge to get that attribution right and to convince them it’s worthwhile putting the effort into it.
Justus: [10:29] Some of them initially were quite worried about cannibalization, and I’ve been a firm believer for a long time that online really supports offline. We’ve done some initiatives to prove that. [10:42] I mean you can’t absolutely measure it, but some of the activities and promotions that we’ve run online that have allowed users to redeem the promotions in‑store or online have shown what percentage actually go to store versus online activity. That’s been quite interesting. In some cases we’ve seen online activity drive offline a lot harder than online itself.
Shaun: [11:05] That’s really interesting. They’re searching online, finding what they want and then going to the store to actually buy it so they can get it right now or maybe they want to touch it.
Justus: [11:15] It largely depends on the product. If we look at a client like Matt Blatt, they sell anything from a $150 stool to a bed frame or lounge for $10,000. That is a really big range of products and I guess their buying process is vastly different with segmented traffic and purchases. [11:37] It’s really interesting if you look at a campaign to drive traffic for particular products. If you see a real spike for a product that’s $10,000 and you overlay the in store sales, you’ll see that there’s more sales the days following that. It’s quite obvious. You can see the trend of the traffic to the site, people doing research and then walking into the store the same day or the next day to make the purchase.
Shaun: [12:04] There’s a lot of positive stuff happening, but what other problems do you see your customers have beyond the multichannel attribution that you’ve already talked about?
Justus: [12:14] I think some of the key issues around the overall business model for the traditional retailers. There’s some real market disrupters that have entered the space like of ASOS. They’re running a million bucks a day between Australia and New Zealand which is massive when you look at the local operators. [12:34] There’s such a strong offering in terms of range and service that these retailers really need to think about their model and how they can differentiate themselves. I think service is a key thing in leveraging their asset. In terms of the store network, it’s a key thing.
[12:49] I think that companies and other retailers are still struggling with that in general about what is going to happen next year, what’s going to happen the year after that, and what kind of investments do we have to make to protect our business let alone grow it.
[13:04] So I think that’s a really key challenge and it’s interesting watching how the different retailers are reacting to that. Some are being very proactive in terms of being innovative in terms of producing new models, bringing in different types of products from overseas, setting up distribution in Asia, et cetera. Others are not taking it very seriously.
[13:30] I think it’s interesting because the ones that are innovating now I think are the ones that will really strive and survive that. So I think that’s a key challenge just from a strategic perspective.
[13:43] From an operational side, customer service and logistics are always key issues. Getting that right at scale I think is challenging for some of the retailers particularly when they’re not used to servicing a website. A lot of these retailers are used to replenishing stores and buying in bulk and this is quite a different model. Those are all things that can be learned and adapted, but I think it’s a lot of change for these businesses to go through.
Shaun: [14:13] I bet it is. It’s happening very quickly. It’s like they’ve suddenly woken up and realized they have to play in this space, otherwise they’re going to be out of business or have a much smaller business than they’re used to.
Justus: [14:26] Exactly.
Shaun: [14:28] What are some of the trends you’re seeing in terms of new types of things that your customers are doing online?
Justus: [14:36] Mobile has been an interesting space. We’ve seen a huge increase in mobile traffic. You only have to look at the Apple sales figures and see how many more mobile devices they sell over computers to explain that. Some of our clients are doing up to 20 percent of their revenue from mobile devices now.
Shaun: [14:59] One question on that. How do you see the split of mobile between phones and tablet?
Justus: [15:04] Again, it’s very different if you look at different websites. If you look at something like a furniture site, we see a lot of tablet use. If you look at like YouFashion site, which is targeting a younger demographic than there’s still tablet use, but it’s not as high as perhaps the furniture site. I think it might be related to teenagers not all having a tablet yet. Some of them obviously do, but maybe not as many as professionals. So it depends on the audience a little bit, but I think it will even out more. [15:38] The real key thing is, in terms of being successful, selling on mobile devices the user experience is quite different. On a tablet, many sites work quite well and it’s similar to a desktop experience. On an actual phone, it’s a little bit different.
[15:56] The conversion rate difference between a normal site and a tablet user is negligible if they’re at all. Whereas the conversion rate between a mobile user and a desktop user is different unless you have a true mobile optimized experience.
Shaun: [16:13] Are your customers developing those mobile optimized websites?
Justus: [16:16] Yes. We’ve spent a fair bit on time in the past few months working on those for a number of clients. We’re testing a few different approaches. It’s really interesting to see what’s going to happen in terms of mobile applications versus pure mobile websites. We’ve done a lot of work on the website space. [16:37] Applications are getting trickier and trickier with all the different devices that are coming out now. From a user experience point of view, some applications are still stronger than the actual mobile sites.
[16:48] I guess we’ve had different results with different types of customers. Our Friendship client has done really well on tablets, but some of our other clients have done really well on the mobile device. So I think it varies on your audience in terms of what kind of decisions you should make.
[17:08] The overarching thing is that you need to optimize for mobile. I think that’s a key trend and I would expect that all of our consumer retail clients will do 25 percent of their online revenue via mobile devices very soon.
Shaun: [17:23] I also wanted to talk to you about social media. That’s another huge or very important part of most e‑commerce sites. In particular I was wondering, there’s been a lot of interest in this site called Pinterest particularly in the US in recent months. It seems to be “hockey sticking” if that’s a word. But traffic to the Pinterest site has grown widely. Are you seeing Pinterest influencing online commerce in Australia?
Justus: [17:54] Not to a large degree. We are seeing it a little bit, but no significantly. I think it will come. Social media in e‑commerce is a tricky topic. I think some businesses made the mistake of thinking ‑‑ for example, with Facebook ‑‑ that you could purely put a store within that social network and expect your large social audience to shop through that and make a lot of money out of it. I think several parts are valid. Even ASOS openly admitted that it wasn’t a very high‑return investment project for them. [18:30] In terms of creating a social commerce experience, I think it’s quite challenging. Brands need to find a way to really use the social graph to influence the purchases rather than use it as a transaction channel. The sort of in‑context commerce, I think it’s fairly under developed. I haven’t seen many good implementations of that, but I think there will be a lot of development in that space over the next few years.
[19:00] When I was in America at the Internet Retailer Conference, I saw quite a few really interesting startups that build tools around social commerce. Things like ShopOn, for example, which was like a social rewards system. It was kind of interesting. The premise there was you would reward your most influential social advocates. So it was kind of like a system where if you recommend a brand and based on those recommendations there’s a number of sales, then you get bigger rewards. It’s similar to an affiliate system, but it was quite clever.
[19:38] I saw some comparison tools where you could build wish lists and carts on a website and then quickly share those with your friends. If you connected to the site via your Facebook login, it would straight away tell you what your other friends had in their wish lists and how they rated them. I guess they sort of brought a social context within the site and I think that’s quite an interesting aspect.
[20:08] Again, I haven’t seen anyone do it really well. I think there’s beginning elements that are starting to makes sense, but I haven’t spoken to anyone who’s said, “I’ve implemented this and I’ve made a really good return investment on it.”
Shaun: [20:22] The interesting thing that the Australian retailers are able do that you just referred to as “look to what’s happening in the US and other markets.” I’ve already worked it out or am currently working it out. You can leverage that learning without having to go through it all yourself necessarily. That’s one of the reasons why e‑commerce has been able to grow so quickly is you’re able to look to the US and other markets to see what they’ve done.
Justus: [20:51] We do that all the time really. We looked at the stats and reports. If we write a digital strategy for a particular client, we get access to a lot of steps from over there. You can’t use that as a baseline because I think still the level of activity in the States is higher than here, but it’s a good sanity check. [21:14] I guess the best risk mitigation tool you can use is looking at some of the other sites. What level of traffic are they getting? What level of conversion are they getting? What technologies have they used? What’s worked? What’s hasn’t worked? It’s really useful.
Shaun: [21:28] I think our time is almost up, Justus. But I just want to thank you for your commentary and your insights today. I’m sure everyone is going to find it very interesting.
Justus: [21:38] Thanks very much.
Shaun: [21:39] That is another E‑Commerce Podcast in the bag. I’m Shaun Ryan from SLI Systems. Tune in next time.