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Shaun Ryan: [0:03] Hi, I’m Shaun Ryan from SLI Systems, and this is the Ecommerce Podcast. Today I’m talking to Braden Hoeppner from Coastal Contacts. Braden is the director of web sales. [0:14] Hi, Braden. Welcome.

Braden Hoeppner: [0:16] Hi. Good to be here.

Shaun: [0:17] Now, traditional question to get us started: What was the first thing you ever bought online?

Braden: [0:22] The first thing I ever bought online was a PEZ dispenser. Back in the earlier days, PEZ was something that I was collecting; and got together with several other collectors online and started trading and buying PEZ online, in the early `90s. And it’s been one of the things that I’ve probably purchased the most of online, over the years.

Shaun: [0:50] Is that right? So I’m a little ignorant. What exactly is a PEZ dispenser?

Braden: [0:54] A PEZ dispenser is a little candy dispenser that has a little character head on the top, and you flip it back and you pull candy out.

Shaun: [1:02] Ah, fantastic.

Braden: [1:03] It’s a big collectible.

Shaun: [1:04] So can you remember where you bought that from?

Braden: [1:07] You know what? It was a personal transaction. So it was literally sending a money order to some individual that I had found online and been able to then have them ship me the product. So even before transacting on a website…

Shaun: [1:24] Even before eBay.

Braden: [1:25] Yeah. I mean, eBay was sort of right around that same time, too; and definitely purchased a lot of products through eBay as well. But this was one step before eBay, trusting the person on the other end to actually ship you the product.

Shaun: [1:37] Yeah, wow. [1:38] [laughter]

Shaun: [1:39] And what was the most recent thing you bought online?

Braden: [1:44] The most recent thing is a Kindle.

Shaun: [1:46] A Kindle ‑ ah, from Amazon.

Braden: [1:48] Yeah.

Shaun: [1:49] How are you finding it?

Braden: [1:50] It’s great. I find that I read more.

Shaun: [1:52] Yeah. [1:54] [laughter]

Braden: [1:55] Just by using it ‑ so yeah, a Kindle and some e‑books have definitely been the most recent purchases.

Shaun: [2:00] Yeah, it’s fantastic. It just makes it so easy to buy the books online and to try the samples.

Braden: [2:06] Yeah. Great for traveling and great for just hearing about something ‑ need to read that book, to pick up a little tidbit of info, and I love it.

Shaun: [2:15] Yeah. It is a wonderful thing. And I presume the buying experience through Amazon was seamless?

Braden: [2:22] Yeah, seamless ‑ we bought it the day that they announced that they were going to release it to Canada, and seamless purchase, and showed up within two days. It was a great example of an ecommerce purchase gone right.

Shaun: [2:36] Excellent. So, Braden, can you give me some background on yourself? How did you get to be where you are at Coastal Contacts?

Braden: [2:45] So, worked in a variety of positions in Internet technologies ‑ Homestore.com in the earlier days, working on migrating some real estate, personal information management software to the online space, to make it software as a service. From there, worked in the local Telco here, developing web analytics and putting a real data‑driven process in place, to make decisions around how we were designing our portals and transaction streams, and different things like that. [3:24] Made a jump from there to AutoTrader in Canada ‑ so big, classified media.

Shaun: [3:29] Yeah.

Braden: [3:30] And established their web analytics channel there and exactly how we were going to leverage that technology, to redesign the website and continue to drive value for our advertisers there. [3:42] And from there, I had known about Coastal Contacts for quite a number of years and been looking for the opportunity to get back into something that was pure ecommerce‑driven, and so came over here. Been here for about two and a half years, as part of the marketing team, just really focused on driving sales, driving value for our customers through our pure ecommerce business.

[4:05] A few hodgepodges of different industries and different things, and it’s been interesting to see how the online channel has changed in each of those industries, and how marketing has changed inside each of those, to drive the behaviors that we want.

Shaun: [4:18] Yeah. It sounds like you’ve got reasonably broad experience, which I think is a great thing. You can always draw on that. [4:28] Now, tell me a little bit about Coastal Contacts. Most people have probably heard of you guys, but can you give us a quick summary of what you do?

Braden: [4:37] Yeah. Coastal Contacts, we’re the leading online optical retailer, globally. Out of our Vancouver office, we run nine websites in five different markets, selling contact lenses and eyeglasses directly to consumers. And we also have a European company, called LensWay, where they handle all the European operations. [5:01] So we ship all over the world. If you need replacement contact lenses or you need a new pair of glasses, we are significant savings over what the traditional retail channel would be. We have fast shipping ‑ all of those sorts of things, to make buying optical products easier, is essentially what we do.

Shaun: [5:20] Excellent. So do you have the one brand globally, or is that a separate brand that you have in Europe?

Braden: [5:26] We actually have separate brands throughout the world. LensWay is the primary European brand. Our US brand is the CoastalContacts.com flagship site. In commonwealth countries ‑ Canada, Australia, New Zealand ‑ we go under the name Clearly Contacts. And then we have four different brands in Japan that we manage.

Shaun: [5:50] OK, great. So I presume you guys have grown internationally through some acquisitions, with those different brands. Is that right?

Braden: [6:01] Yeah, there have been a few acquisitions over the course of the company, the European one and Japanese one, primarily. And then other markets we’ve done through just looking at an opportunity and growing it out of our base here.

Shaun: [6:17] And so the key thing that’s special about the company is the price and the ease of use for your customers. Is that right?

Braden: [6:25] Yeah, those would be the primary things. But really, what we’re doing, what’s really interesting about our industry and this company is we’re really changing the way that people buy those products. It’s almost when you go back a number of years and you think, “Who would have ever bought shoes online?” because you can’t try them on and this sort of thing. And Zappos has really been able to blow that model out of the water and say, “No, you can do this.”

Shaun: [6:47] Yeah.

Braden: [6:48] It’s the same thing with vision care. Contact lenses are fairly easy that way, in the sense that you’re prescribed that product, you know what you want, you come and you refill. We ship it to you, and it’s fast and it’s cheap. [7:01] On the glasses side, it’s almost like that shoe comparison, where it’s like, “Well, I need to try those glasses on.” We’ve been trained by our opticians and our doctors. When we’re fitting frames, we all have special cases that we have to be very meticulous about it.

[7:15] And really, the reality is that it’s very much like buying shoes. You find the frame that you want. There’s measurements to make sure you’re getting the right size. And we’ll put the prescription lens in for it and send it to you.

[7:28] And of course, if you don’t like the frame when you put it on your face, then just send it back, no problem. We take the returns back. So we’re really setting up a new model that’s direct‑to‑consumer for eyewear that hasn’t existed before.

Shaun: [7:38] Ah, yeah, that’s really interesting. And I suppose that the comparison to shoes fits quite well, because once you have the fit and the prescription lens, it really is down to a style choice, isn’t it?

Braden: [7:53] Yeah, absolutely.

Shaun: [7:54] Very much like shoes.

Braden: [7:55] Very much like shoes ‑ exactly.

Shaun: [7:58] And so I know Zappos allows you to return their products at no cost. Do you do a similar? Do you have a similar tactic there?

Braden: [8:07] That’s exactly our same model. So we’ll put the prescription lenses in for you and send them to you. And if you’re not happy, send them back, and exchange them, return them, whatever it happens to be. We want you to be happy. [8:20] Really, right now is where, in the early years here of buying glasses online, I think that it’s critical for people to understand we’ll take the risk out. So just return them, it’s no problem. The same way that when Zappos started with shoes, that was the issue. There is no risk to try this, just send it back.

[8:37] So we’ve taken that exact same approach. And people can return them, they keep them, whatever it happens to be; that’s fine. We just want to make sure they’re happy.

Shaun: [8:47] And do you get people buying six pairs and returning five of them, if they can’t choose between one?

Braden: [8:53] I think in certain cases different customers will try different things. In most cases we find even when people are buying multiple pairs that they’re so happy with the value that they’ve gotten, that they decide to keep them.

Shaun: [9:05] Wow.

Braden: [9:06] So for us becomes, “What? Hey, I can throw an extra pair of glasses in my car, or in my bedside table, or keep that one in the closet for when I get hit in the face with a baseball or something like that happens. It’s good value and it’s here; then let’s keep it.” [9:21] I don’t see people “abusing the system” in such a way like that. We want people to try them. To continue with the shoe analogy, we see people that have 10 pairs of shoes but people have only one pair of glasses. And we think that’s‑why you would treat your feet better than your face? We’re not sure.

[9:40] We encourage people to try more pairs and create a few different looks and that sort of thing.

Shaun: [9:45] Great. Now I had a quick look at your blog before we did this interview, and I saw you did a post about a mirror on the site.

Braden: [9:53] Yeah.

Shaun: [9:54] Tell me a little bit about that.

Braden: [9:55] Yeah, so one of the objections I think that customers experience when they’re coming online, trying to buy a product like glasses, is “What do they look on my face? How do they look?” [10:05] So we’ve developed a virtual mirror application where you can upload your photo and then select one of our pairs of glasses, and put them on your face. And you can get a sense of size, sense of style, sense of “How does that look on my face?”

[10:18] We’ve made it a little bit more interactive than that, too. You can choose your favorite four frames once you’ve shopped through our catalogue. Then you can share them with your family and your friends, and they can come back, and they can vote, and comment on the frames that they like.

[10:31] So you can actually get that feedback from your friends and family, through Facebook, or through Twitter, or through email, in a way that even you can’t replicate that at a retail store. You don’t go bring your 150 Facebook friends to the retail optical store with you. But if you publish your mirror to Facebook, you can actually get that real‑time feedback from friends to say, “Yeah, I like this pair. No, I don’t like that pair, ” or whatever it happens to be.

[10:54] We found that to be very successful, that customers respond well to that application. They like it. It let’s them have confidence in the product that they’re buying, before they make the purchase. And I think people also like to hear what other people have to say about it.

Shaun: [11:09] Yeah, that’s extremely creative. And the other huge benefit for you, obviously, is because you’re leveraging the social networks out there, then even more people get to see about this feature.

Braden: [11:19] Yeah, that’s right.

Shaun: [11:20] And they will come back to you, and their friends will come to your site, and so on.

Braden: [11:24] Exactly.

Shaun: [11:25] So that’s excellent, I haven’t heard of something quite like that before, so well done.

Braden: [11:32] Yeah.

Shaun: [11:34] So tell me a little bit about the other technologies on your site. What else are you using that’s working for you?

Braden: [11:41] Most of our technologies are built in‑house. So credit to our IT team for putting some pretty slick technologies behind the scene that put a lot of power in our marketer’s hands to be able to modify things on the website in real time, and make sure that we can respond to customer requests very timely that way.

Shaun: [12:00] Yeah.

Braden: [12:01] We’re very data driven, so our web analytics plays a key role in a lot of what we do. Whether it’s measuring a campaign’s success, or looking at optimization of the website, we rely on our web analytics quite a bit, to provide us that information that we need in order to drive the business forward. [12:20] On that web analytics front, we do do some customer personalization on the website. So based on your behavior that we’ve been able to detect on the website, even through anonymous profiles, we will start to tailor the website towards you.

[12:35] If we see that you are a particular fan of this particular frame of glasses, for example, and you haven’t purchased, if you come back to the website, we will promote that frame to you again. So that we can make that experience more and more personalized for you.

Shaun: [12:51] Yeah, that seems to make a lot of sense. And obviously, because you’re so data driven, you’ve seen the benefits of those personalization tactics.

Braden: [13:02] Yeah absolutely. We feel that the more closely that we can make the website function for what the user is trying to accomplish in that particular session, then the better off that we are. [13:14] In certain cases in the buying process, the customer might be more interested in simply exploring our catalogue. So let’s make it easy for them to explore the catalogue and drill down on different products that they might want to find.

[13:26] And then in a later visit they may be more inclined to purchase at that point, where they’ve had a chance to think about it and consider the purchase. They come back, now we can address that ‑ that primary concern of “Oh, you’ve looked at this product before. Oh, look, they happen to be promoting it.” That type of personalization we definitely see works.

Shaun: [13:46] Just to get down to the details then for those promotions, do you just put it up there so that they can easily access it, or do you put a special around it of some description? Do you offer some discount?

Braden: [13:57] We run different tests to see what different sorts of things will work that way, so there isn’t one golden nugget that I could necessarily say. I think the effort for us is what works for what product ‑ just a relentless focus on testing and changing and making sure that we are driving change, and making sure that we understand what the impact of each one of those are.

Shaun: [14:20] OK. So tell me a little bit about how you attract customers to your site. You’ve already mentioned the social networking through the mirror. And you mentioned briefly optimization of your site, which I presume is search engine optimization, as well as optimizing the user experience. How do you get people to your site?

Braden: [14:44] I think we have a very ‑ I won’t say traditional marketing structure or focus. But we do look at a broad range of marketing opportunities ‑ whether they’re online or offline, or even TV or print in certain markets ‑ where we need to get our brand, build our brand out there, and then layer on all that you would expect an ecommerce company to do. [15:10] So “Search, ” and “Email” and those sorts of things to make sure that we’re driving as much awareness of our brand as we possibly can, and making sure that that stuff then converts ‑ so that it is sort of a broad‑based marketing approach that we take and work towards building awareness.

Shaun: [15:29] And I mentioned for your traditional contacts, customers, they become recurring customers. Do they set up recurring orders, or do you send reminders that they need to order?

Braden: [15:40] Yep, a bit of both. So we have a program where once you place your order, you can sign up for an auto‑refill program where we know when you are scheduled to run out of contacts. So we will send you your next refill automatically. As well, a big part of our email campaigns are focused around making sure that we’re contacting people who are due to refill, or we know what product you were before ‑ so just a reminder, “Hey we’re here if you need more contacts,” et cetera.

Shaun: [16:11] Yeah, it’s definitely a lot of opportunity for return business.

Braden: [16:14] Yes.

Shaun: [16:15] Now tell me a little bit about what you’re working on at the moment. What are the opportunities you see in the coming year?

Braden: [16:25] I think in the coming year, there’s a few things that we have to do to make our site more feature rich. So I think when we started as a contact lens company, like I was saying earlier, it’s very commodotized. You’re prescribed a particular product. It’s about efficiencies. It’s about, “Can I find the product, and how fast can I check out?” [16:47] Now that we’ve layered glasses into the mix, it’s sort of a different experience. And now people are coming and instead of buying, you know what brand and what product you’re buying. Now you’re coming to say, “I need to shop through all of your catalog to understand which are the frames that suit me. Do you have this brand? Or do you have that look that I’m looking for?”

[17:06] And so it’s been a learning experience for us to figure out how we merchandise that and balance those two priorities on our website. So I think the glasses business is still relatively new for us. We’ve been in it for a year and a half. And it’s been growing really strongly.

[17:20] So now what we’re doing is continually learning and optimizing and building in new features for the glasses customers. So the Virtual Mirror is a good example of that. I think there’ll be more refinements to that.

[17:30] We have some additional search capabilities that we’re working on that will be coming soon. And it’s just a constant listening to our customers. What are they telling us that they need, in terms of information or tutorials, different things? And then making sure that we have a way of providing that and exposing that information to them.

Shaun: [17:48] Yeah. I can see it is quite different than the contacts, which are not really a fashion accessory, whereas the sunglasses are.

Braden: [17:57] Right.

Shaun: [17:58] So it’s a different experience for users.

Braden: [17:59] Yeah.

Shaun: [18:01] And do you have reviews on there?

Braden: [18:03] We do. Again, some properties have them, some don’t. So there’s some efforts that we’re putting towards moving customer reviews and different things that we have ‑ maybe one of our brands into the other brands. Before we go and do a wholesale implementation across all of our websites, we like to test and validate that there is a positive result that’s happening with whatever that technology happens to be. And then we’d like to roll it out. [18:30] So there’s a few pieces of that that have been deployed in different markets that we’re working at consolidating and making sure that we get out ‑ and the things that make sense to put on the other properties, that we do.

Shaun: [18:42] That just raises a question for me. Do you ever see differences in the different countries that you operate, in terms of what works there? Do you find something that works in Europe may not necessarily work with the American audience? Or are they generally, once you find something that works, it works globally?

Braden: [19:05] I think it can be a little bit of both. I think it’s important to test each of the learnings in each of the markets. So even if we see a big win in one market, there’s no guarantee that that’s going to be a big win in another. But I think there’s potential indications there. [19:23] So depending on exactly what that item might be, I think the answer might be yes; it might be no. There’s no question that there are cultural differences in different markets that we need to be aware of and we need to pay attention to, and different ecommerce trends in different places that we need to understand and be on top of and make sure that we’re leveraging appropriately.

[19:44] Based on that, there are certain times where features may or may not be as important in one market where they are in another. So those are constantly things that we are working through ‑ especially, one of the challenges of having multiple international brands is understanding those local nuances.

Shaun: [20:02] Can you think of any examples that you can share where something worked in one market where it didn’t work the same in another market?

Braden: [20:14] I don’t know that I can recall a specific example right at the moment, but definitely certain…

Shaun: [20:20] That’s all right. We won’t stop there. [20:21] [laughter]

Braden: [20:22] No, certainly some of the promotional messaging or exactly how we might promo in one market, it might be different in another ‑ just different sort of ways that consumers are used to hearing sale messages.

Shaun: [20:37] Yes.

Braden: [20:38] And stuff like that ‑ so that’s been one area that we work on localizing.

Shaun: [20:44] Excellent. Now we’ve been going for over 20 minutes now, so I suppose I should wrap up. But I’d just like to find out a little bit more about the size of the company. How much do you sell online, per month?

Braden: [20:58] Somewhere between $11 and $12 million a month.

Shaun: [21:03] Wow, excellent.

Braden: [21:04] So our fiscal year last year was about $140 million.

Shaun: [21:09] Fantastic. That’s amazing, isn’t it? For contact lenses and glasses.

Braden: [21:16] Yeah. Optical is a big industry.

Shaun: [21:18] Yeah.

Braden: [21:19] So if people keep learning and discovering that there’s new ways of buying those products, then we’re happy to serve those customers.

Shaun: [21:26] And what’s your growth like? How much did you grow, year on year?

Braden: [21:31] So year over year, our revenue was up 18 percent and our EBITDA profitability growth was 122 percent. So last year was a really good year for us. I think with the global economy the way that it was, we’re a company that’s well poised to take advantage of that. [21:50] We have a relentless focus on keeping our costs low and making sure that we’re driving as much optimization inside the business as we can. And those savings get passed on to consumers. So when a consumer is faced with a tough time ‑ whether they’ve lost their job or whatnot ‑ and they still need glasses, or they break a pair of glasses and they need a new one, then they are pushed in these times to look for additional value. And that’s where we sit very nicely and say, “Yeah, we’re here for you, in those times of your life where you might not be able to afford a $500 pair of glasses. But we can provide glasses for $40.”

[22:30] We’ve heard, time and time again, from customers, experiences exactly like that. I think those customer testimonials, where someone said, “I broke my glasses. I couldn’t afford a new pair, but I was able to because I found you guys,” is what makes it easy to get out of bed in the morning and come to work and say, “We’re doing something good for people here.”

Shaun: [22:52] Yeah, it’s just not ruthless commerce, but you’re actually helping people.

Braden: [22:56] Yeah.

Shaun: [22:57] Because if someone has a set of glasses, it makes a huge difference to their life.

Braden: [23:01] Absolutely.

Shaun: [23:02] Excellent. Well on that note, Braden, I want to thank you very much for your time today. You’ve given us some really interesting tidbits. It was fantastic. Thank you. [23:11] [music]

Braden: [23:12] Yeah, well thanks for having me.

Shaun: [23:13] And I’m Shaun Ryan from SLI Systems, and that was the Ecommerce Podcast. Tune in next time. [23:19]