Josh Hansen from Hansen Surf – Podcast Transcript

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Shaun Ryan: [0:02] Hi, I’m Shaun Ryan from SLI Systems and this is the Ecommerce Podcast. Today, I’m talking to Josh Hansen from Hansen Surf. [0:08] Hi Josh!

Josh Hansen: [0:09] Hi Shaun, how are you doing?

Shaun: [0:11] Really good, thanks, welcome. [0:12] Now, traditional first question, what’s the first thing you ever bought online?

Josh: [0:18] Ironically, I haven’t done a ton of online shopping. I do quiet a bit of hunting and fishing. I’ve bought most of my licenses online from some of the .GOV sites where I’ve done some of that hunting, be it South Carolina, Kansas, and Montana. [0:43] I do spend a lot of time reviewing tons of different sites out there selling similar products as the ones we sell here at Hansen’s.

Shaun: [0:52] Yeah, that makes sense. Hunting licenses, that’s something new, I haven’t heard that before.

Josh: [0:57] [laughs] I kind a figure, but I started thinking about it. To be honest with you, I don’t actually do a ton of online shopping myself.

Shaun: [1:09] Now that’s cool. Can you give me a little background about yourself? How did you get to be where you are today?

Josh: [1:17] Well, I’m the youngest son of Don Hansen who started Hansen Surfboards. I was born down here in San Diego, went to high school actually in Montana. So, I was out of the whole surf business, which is kind of what we do. It isn’t kind of what we do, it is what we do, is sell the surf lifestyle.

[1:41] Went to school at University of Vermont, got an undergrad in business. Information technology was my concentration. After I graduated, I moved back out to San Diego and I’ve been working for the family biz ever since.

Shaun: [2:04] Excellent, so, tell me about the company that your dad started. What’s the story?

Josh: [2:11] Don was born in South Dakota. When he was about 19 he moved out to San Diego after he had seen a surf movie that one of his fraternity brothers had shown him in the basement of the fraternity and decided he wanted to go out and check out the beach. [2:35] He moved out to San Diego and started surfing. He loved it and so he decided, I need to start making a living, so he started Hansen Surfboards.

[2:50] Originally, we started out as a surfboard manufacturer in 1961. Don grew that business to one of the biggest surfboard manufactures in the world at one time. We did almost 6000 surfboards a year. In 1971, he transitioned into retail as the surfboard manufacturing got weak and things started changing. We’ve been doing retail ever since.

Shaun: [3:27] You have a physical retail store; is it just the one store?

Josh: [3:29] We do, we have one location located in Encinitas, California. It’s a fairly decent sized footprint. We offer a wide range of different products for all demographics. Again, we sell the surf lifestyle products and that kind of beach lifestyle.

Shaun: [4:00] Expand on that just a little bit; surf lifestyle is like the clothes and the sunglasses?

Josh: [4:05] Companies like Billabong, Quiksilver, Volcom, OluKai, and all these brands that are rooted in surfing and in surf. You don’t have to be a surfer, you have to love the beach, and you have to love the Southern California lifestyle.

[4:26] We’re located right on the beach here, a little bit north of San Diego, on Coast Highway. Geographically, we’re located in an ideal place and we sell that whole kind of beach, surf, and surfing lifestyle.

[4:45] It’s clothing, sandals; we do all the hard goods. We have a fairly decent sized kid’s area. Again, it’s just all that surf specific lifestyle products.

Shaun: [5:02] Great. How long have you been online for?

Josh: [5:06] We’ve been online seriously for about five years now. It’s been the last two years where we’ve started to gain some momentum and really take the online business seriously. Even through this economic slowdown; we’ve managed to maintain some pretty good momentum in that online avenue channel of sales.

Shaun: [5:40] So, the online part of the business is relatively new compared to the years that the retail store…

Josh: [5:44] Yeah, absolutely. It’s very new and we’re learning every day. Again, everybody, not just me, who is in the trenches, and my team of people who are in the trenches with the online, but also all of our buyers who buy for our brick and mortar side of our business.

[6:04] We have six people who do the buying in the brick and mortar; they’re even starting to realize how important the online channel of business is for the overall health and prosperity of the company.
Shaun: [6:21] Right. So, what sort of percentage of sales do you do through your online store?

Josh: [6:26] We’re getting close to about 15 percent, in any month we’re over 10 percent. In our busiest month online, which would be December, we’re pushing about 15 percent. We’re definitely tracking to be even a bigger percentage of the company sales, even in the next quarter, as soon as the next quarter.

[6:58] We’re seeing brick and mortar sales are contracting a little bit. It’s a tough time from the actual… we’re seeing a slowdown in people walking in our store. Average sales have come down.

[7:15] On the online side we’ve seen an increase in traffic. We’ve seen larger sales per customer. Again, we’re doing things better, which is obviously helping the overall visibility of our site which is also increasing revenue from that channel.

Shaun: [7:40] Great. So, how fast is the online store growing?

Josh: [7:47] Right now, we’re seeing incredible growth, anywhere from 50 to even 100 percent growth when you start comparing month-to-month, year-to-year sales. It’s been pretty exciting to see where we’ve been going. It’s been exiting to see how we’re having more and more days where we’re even a much greater percentage of the overall sales.

[8:17] When we do have our slow periods of time in our brick and mortar, that online channel has been very strong and helping make-up some of the dollars that we’ve lost in our brick and mortar side of our business.

Shaun: [8:33] I was speaking to a UK store that’s in a similar space, Shore.co.uk who’s found the online actually outgrew the in-store sales. That could happen to you as well.

Josh: [8:49] Our brick and mortar store, to give you an idea, our footprint is almost 30,000 square feet, and we have been here a long time. Our volume has a single door location, is pretty big, but no question, the power of the Internet, and then the idea that we have so many customers who are seasonal to this area and come from some of the areas inland that are land-locked. We are seeing those customers coming to our store, buying in store, but then also wanting those products at other times of the year, and migrating back to our online store.

[9:31] As we’ve provided a better service, and better search, and more visibility through the search engines and whatnot, we’ve just seen our sales increase almost every day.

Shaun: [9:44] That’s great. Tell me, how do people find you?

Josh: [9:46] We do a lot of different things. We spend time with search engine optimization from an organic standpoint. We do some CPC campaigns. We feed a lot of our products out to the shopping networks. We are true believers in grassroots marketing, and we’ve started really taking a look at how we can grow the business just through basic grassroots marketing.

[10:22] We’ve done a program in our store, in our brick and mortar store that’s been very regional, with offering the Hansen dollars for anybody in school up through their senior year in high school; we call it a goods-for-grades program. They can bring us their grades twice a year, and we will give them dollars for those grades, but it’s being a only in store program, and it’s been very regional, and so we are working to try to take that program and move it to the online audience, and give it more visibility and obviously we will see more regional traffic, but then also offer it to everybody who lives in our kind of regional area.

Shaun: [11:13] Yes, that’s interesting, that’s something that could go really really well for you.

Josh: [11:19] There’s obviously challenges behind launching a program like that, but again, I believe with the power of social networking, and just in general, the power of the Internet, you can really drive a lot of traffic to your site with a great idea. It’s really having that idea and then executing and portraying the idea to those online eyeballs, if possible.

Shaun: [11:55] Yes, you just have to make it easy so that will work well on a site.

Josh: [11:59] Exactly. I’m a true believer in keeping things simple and our online model that seemed to work the best is just simplicity, simplicity, simplicity, just keep it simple.

Shaun: [12:16] Yes, but oddly enough, it’s difficult to keep things simple. It’s not a trivial thing.

Josh: [12:21] Yes. There’s a lot of moving parts. Obviously, we’re seeing that with all of the different things that we’ve… But, at the end of the day, I still believe at least, where we’ve got to have the most success is… It’s not so different than analyzing someone who walks in to our store. They walk up to one of our customer service people or better yet, they just look around and everything is organized in the proper way.

[12:52] Then those customer service people are the tools to help people find what they want, provide them the information that they need on those products and so on and so forth.

Shaun: [13:03] So, Josh, what do you think your biggest opportunities are online?

Josh: [13:09] I think simply that from a visibility standpoint, I think, just being online provides you just an incredibly powerful marketing tool, not only to the brick and mortar, but also channeling and bringing a whole new revenue stream into the company. I look at it as the real way… our brick and mortar business is still the bread and butter of our business, so I use the online channel to really bring visibility, bring people to our website to provide the information about our products, and regionally, hopefully they will come into our store versus some of the other stores.

[14:06] If you go around and take a look organically through Google and Yahoo and some of these other search engines, I feel like we’ve done a pretty good job. We obviously have a long ways to go. I think that’s an opportunity to just continue to grow, that regional visibility, and obviously the more regional visibility, you’re going to have more visibility on a national or worldwide scale, which obviously will help increase revenue.

[14:35] That’s probably the biggest opportunity that we see online.

Shaun: [14:42] The search engine optimization that you are doing, are you doing that yourself, or are you getting third parties to help you?

Josh: [14:50] Again, I think SEO is more or less a commodity anymore. I think that just basic fundamentals or┬áSEO is so important. I think a lot of companies out there, maybe because of their size, aren’t able to really optimize on a product level, on a category level, and so we’ve trained our team to just understand the basic fundamentals of optimization. I do have a guy, a resource outside of our company, who also helps with some of the organic as well as CPC campaigns and optimizations and stuff like that.

Shaun: [15:39] Do you have an ecommerce site that you hold up as one you admire and look to sort of follow?

Josh: [15:47] I actually have quite a few out there. A couple that stand out and that I really pay attention to, one that I think many people out there would probably know or recognize the name is Zappos.com. One of the reasons is Zappos has gained quite a bit of interest in our specific industry. One, because of their incredible growth, but two, because of the service that they provide. I’m a real believer in providing great customer service and an experience that will make people want to come back to your brick and mortar store, or to your online store.

[16:38] I think Zappos has done a phenomenal job of doing that. I also look more from a regional standpoint. There’s a company out there called Killer Dane. It has had a lot of success in certain categories of products that we sell. I do pay attention to those two companies, and visit their sites almost on a daily basis.

Shaun: [17:11] Cool. Can you tell me a little bit about the technologies you use to run the store? What do you expect from when you use them?

Josh: [17:21] Probably the most, the newest technology that we are running would be the SLI search, and in January when we started budgeting out where we were going to spend our dollars, in our online channel, one of the things that jumped out was search, internal search. We took a look at a few different companies offering that, and so I turned out to be what we felt was the best option.

[17:59] Some of the other things to get away from search that we’re using, we are using a product reviews tool. I’m getting ahead of myself a little bit. We are working right now to set that up. We have it half-implemented right now, a reviews tool to help solicit reviews on products and get feedback from our customers.

[18:25] We use…

Shaun: [18:27] Just to interrupt you, which tool are you using for reviews?

Josh: [18:32] PowerReviews. PowerReviews. It turns out you guys are a partner with PowerReviews, so we’re in the process of, one, finishing the implementation of the PowerReviews and all of the tools that’ll help us solicit those reviews after customers have purchased from us.

[18:52] And then, obviously, I’ve been working with our customer service guy, Brian at SLI, to then work with your guys’ engineers to actually feed those reviews out into the search results, so now you not only have your product searches, but you also have the reviews integrated in with those products.

[19:15] I think that can be a really powerful tool to help conversion and whatnot.

Shaun: [19:19] Yeah, definitely. So, there’s the site search and the PowerReviews. What other technologies?

Josh: [19:29] I use a company called Clickable for some of my CPC campaigns, and it’s just an interface to help manage those campaigns. X-Cart is our shopping cart. It’s an out-of-the-box, fairly inexpensive, shopping cart, which we’ve done a lot of customizations to, to fit our needs and wants as a company.

[20:03] And then the other, newest, technology that we’re going to be using to help build content, to help grow our regional presence online, is what we’re implementing and hopefully launching in the next two to three weeks, a CMS system called Drupal.

[20:25] It will help allow not only me, but other people within our organization, to upload content. Without really having any knowledge of HTML and coding, they can actually build pages, input content on specific programs, and be able to essentially not have to rely on – I hate to use the work experts, but people who know their coding and things.

[20:58] Rather, we can do it ourselves, in-house, without having to always rely on somebody else.

Shaun: [21:05] Yeah, which will just make it faster and let you put more content up there.

Josh: [21:08] Exactly.

Shaun: [21:10] Just quickly, before we wrap up, what do you think are your biggest headaches?

Josh: [21:16] I think there’re quite a few headaches. Probably the biggest one that stands out is finding the best way to manage inventory. In any business, inventory levels and managing those inventories can help you and hurt you all at the same time.

[21:43] So, internally, finding that right level of inventory, and then how to manage that inventory through all the different channels of our business has been a challenge and is going to be a work in progress.

[22:01] Another challenge has been simply navigating through this whole pricing war that’s going on online and making sure that we’re selling product, we’re being competitive, but still being competitive in a way that works for us and that we can stay profitable and maintain margin.

[22:31] I’ve been actually going out there and trying to work with some of our vendors to realize and pay attention to the fact that there is this monster animal called the World Wide Web and that maintaining price and patrolling products, distribution, and where things are visible online is important.

[23:03] It needs to be managed from a manufacturer’s level to make sure that everybody stays healthy.

Shaun: [23:12] Yeah. I imagine that the manufacturers have their own websites and sell some of the same gear that you do, right?

Josh: [23:19] Absolutely. And that’s another challenge that we’ve been dealing with. We’ve been in the business. We’ve been around a long time. We’ve been partners with a lot of these manufacturers.

[23:33] Over the past two or three years, a lot of these manufacturers have turned to the idea of “Well, we’re just doing to sell direct to the consumer ourselves through the online channel.” That’s been a challenge in trying to navigate through that and figure out the best situation for both of us.

[23:56] I understand we all have to do what we have to do, as companies. I think there’s a happy medium, if the companies all work together to create a situation that’s healthy for the manufacturer and for the retailer.

[24:17] Right now, in our industry, there’s been so much migration to that direct sales, vertical, channel without really working together – vendor, manufacturer, and retailer – to come up with that perfect solution.

[24:36] Again, like any business, it’s always going to be a work in progress.

Shaun: [24:40] Definitely. Just, finally, how do you keep up with the latest trends in ecommerce?

Josh: [24:45] I do. I ask a lot of questions. Again, I work with a guy outside of our company who’s fairly up-to-date on all the newest technologies. I read a lot. I read “Internet Retailer” and pay attention to that magazine.

[25:05] I think there’re a lot of great articles in there about other companies out there that are in the online business and, in a lot of cases, on a much bigger scale than even we are yet.

[25:21] I think that reading is a good thing. I go to the Web at times. When I see things out there on different sites that I’m not sure what’s going on, I’ll go to the Web and, again, go to my resource outside of our company and ask him a lot of questions.

[25:42] That whole online channel is changing so fast, it’s almost impossible to keep up. So, we’ve said, “Hey, look. We’re going to do what we’re going to do. We’re not going to try to keep up with every new, latest and greatest technology.”

[26:00] We would rather pick and choose the ones that we feel are necessary and Steady Eddie instead of just always trying to launch the latest and greatest technology that’s out there. There’re a lot of them. [laughs]

[26:21] You’ll read about one and you’re like, “Wow, that’s incredible!” A lot of these technologies take time to implement and really get good at using, and using effectively. In a lot of cases, by the time you finally are getting good at using that particular technology, there’s something new out there that everybody has flocked to.

[26:46] Again, we’ve just said, “Look, we have to, obviously, stay up-to-date with new technologies,” but, again, we’re going to pick and choose the ones that we feel are most necessary and then just hopefully grow with those tools.

Shaun: [27:02] Well, Josh, I think we’ll wrap it up there. I just want to thank you very much for your time today. I appreciated your insights. It’s been fantastic having you here.

Josh: [27:11] Thank you, Shaun. I appreciate it.

Shaun: [27:13] OK. That was Josh Hansen from Hansen Surfboards. I’m Shaun Ryan from SLI Systems and that was the Ecommerce Podcast. Tune in next time. [27:20] [music]