Lee Brown from Online Golf – 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 Lee Brown, from Online Golf. Hi, Lee.

Lee Brown:  [0:10] Hello.

Shaun:  [0:11] Welcome. Now, the traditional first question: What’s the first thing you ever bought online?

Lee:  [0:19] I can’t remember exactly. It’s probably a book, or a CD, or something like that, something fairly generic.

Shaun:  [0:26] A lot of people buy books. It’s a common answer to that question. How about your most recent purchase? What was that?

Lee:  [0:35] It was a baby monitor. I bet that’s an unusual answer.

Shaun:  [0:40] Yes, that is my first baby monitor answer.

Lee:  [0:43] From Amazon, none the less.

Shaun:  [0:46] Fantastic. It worked OK?

Lee:  [0:49] Yes, fine.

Shaun:  [0:51] Excellent.

Lee:  [0:52] I’m not fond enough, even though I run a web company, I’m not a massive online shopper myself. I still do like shopping offline. But at the same time, there are certain trusted people that you know are going to deliver. Obviously, Amazon for us is one of them.

Shaun:  [1:10] Yes. Just out of interest, what made you buy that particular thing online rather than going to a bricks‑and‑mortar store?

Lee:  [1:17] One of things that I think bricks‑and‑mortar stores have caught up a lot in the last few years, and I think the web has actually given them the proverbial kick up the behind. [1:27] But, one of the things I always worry about is actually stock availability and the range that you’re going to find in a traditional store. Also, sometimes when I research a product that I don’t know a lot about, for example, baby monitors, very often you can find the information later, and just go ahead and buy it there and then.

Shaun:  [1:46] Yes, there’s convenience and a broader range of choice online.

Lee:  [1:53] Yes. Also, I think times are changing a little bit. But people find that even though you’ve got to wait a day or two, often it’s just as good as the store because of stock availability.

Shaun:  [2:08] Lee, can you give me a little bit of background about yourself?

Lee:  [2:12] Well, I’m a qualified accountant. I got into this business by a fluke, really. I actually got married about 11 years ago, something like that, and I had my honeymoon in San Francisco. At the time, the web was pretty big, and I didn’t even know really what it was. It was just starting to develop over there. [2:40] The first thing I ever saw was a car being downloaded on the Internet, and it took about three hours ‑ a picture of a car. I thought this is never going to catch on.

[2:47] But after that, I looked into what was going on, and I kept it at the back of my mind for a few months. Then, I decided I wanted to sell something online, but I wasn’t sure what.

[3:03] Because I was a keen golfer, I flukily got into that really and took it from there. But, it’s fair to say that when we started, we had actually no idea where we’d get to today.

Shaun:  [3:15] Right. So tell me a little bit about Online Golf. Where are you based, and what do you do?

Lee:  [3:23] OK. We’re based in Essex in the UK, just north of London. We sell golf products online. Our main website is Online Golf, but we run another website as well that’s selling golf products. [3:40] We also have one small bricks‑and‑mortar store, and we’re the market leader in our niche of online retailing for golf. We provide a business that’s very customer‑oriented.

[3:56] We sell all types of golf equipment from accessories, clubs, clothing, everything. We built our business based on, it sounds obvious, satisfying the customer and also building strategic partnerships with our vendors.

[4:14] The other thing that I think is key to our business is that we’ve got a very good list of partners that we work with for various aspects of the business, and also we have a continuous plan of change, which is something that we implemented a few years ago where we’re always on to the next project.

[4:35] We’ve got a whole list of things we want to do, and we continue driving the business forward.

Shaun:  [4:39] OK. That sounds interesting. The partners you’re talking about, are they the manufacturers of the golf clubs, or are you talking…

Lee:  [4:49] All across the business. We find core things within our business that we don’t want to subcontract, that we think we can do better than anybody else. They would be things like marketing ‑ all of our marketing is done in‑house ‑ our delivery of products, our customer service, our purchasing, all the things that we feel that give us an edge. [5:17] But outside of that, our strategy with regards to, for example, our website has been to partner with people, for development, for functionality within our site, such as SLI, amongst others. That’s proven to be very successful.

Shaun:  [5:35] Excellent. Now, I was reading a little bit about you on your website. It sounds like you have a massive warehouse where you keep a lot of your product and stock.

Lee:  [5:48] Yes, we do.

Shaun:  [5:49] How many products do you have in stock, and why do you do that rather than, say, drop ship them?

Lee:  [5:56] We’ve got 7,000 products in stock, 7,000 different SKUs. Drop shipping is something that was discussed a lot when the work really started to get going. Ten years ago, everybody talked about drop shipping. [6:13] I think the reality is though that, just like any other bricks‑and‑mortar retailer, online retailing is about service. It’s about economies of scale. Those things just don’t exist if you try and drop ship. Manufacturers are not geared up to drop ship.

[6:31] Plus, why would you hand over your reputation to somebody else? I guess in the long run, if manufacturers ever get good at that, then you wouldn’t exist yourself.

[6:40] The reality is I don’t really think that in the business of delivering physical products that anybody really does drop ship. Maybe there are occasions where you can do things with some items, maybe high‑value, low‑volume items and things like that.

[6:59] But, in our business, where it’s low‑value consumer items and branded goods, I think you do need to stock the products and offer service. In the UK in particular, people do expect everything tomorrow, or the day after at worst. So, that’s critical.

Shaun:  [7:20] That makes a lot of sense. Tell me a little bit about the size of your business. Can you share with me how much you sell online per month?

Lee:  [7:30] Our revenues in general are heading towards about 15 million per annum at the moment.

Shaun:  [7:36] Excellent. You’re growing, are you?

Lee:  [7:41] Yes. This year we’ve grown about 30 percent, which means that obviously we’re very happy with that because the economy in the UK has been quite difficult. But, we’re managing to continue to grow through our strategy of putting the customer first and continuous improvement.

Shaun:  [8:01] That sounds fantastic during a recession, because I would have thought golf would have been one of those things people could, perhaps, they could hold off buying a new set of golf clubs.

Lee:  [8:12] Yes, that’s true. Our business is pan‑European, so we do deliver to all of the main EU countries. We have a growing business in most countries within the EU, so that’s helped to diversify slightly away from the UK, which was probably more badly hit than, for example, Germany or France, although they were hit. So that has helped. [8:40] I think also in a recession, being online can be a help because people have a perception of online and online value. So that’s probably a good place to be.

[8:50] We’ve also continued to invest heavily in stock, and I think that it’s been the case this year that some companies haven’t done that. They’ve cut back on stock holdings. I think we’ve gained from that as well.

Shaun:  [9:01] How has that helped you?

Lee:  [9:03] I think that some companies thought this year that it was going to be a difficult year. Therefore they destocked or didn’t order as much stock for the season. Because we’ve kept good stocks, then we’ve managed to pick up business because people just simply didn’t have the choice.

Shaun:  [9:21] Right.

Lee:  [9:22] Smaller retailers would have cut back, or dropped lines out of their range, or things like that. We took the plunge that we were going to continue to buy as normal, assuming that we were still going to grow this year, even if it wasn’t going to be as much as we’d like. We projected to grow. I think back in October we were budgeting to grow around five percent this year, and we’ve gone 30, so we’re quite happy with that.

Shaun:  [9:49] That’s superb. You don’t hear of many people exceeding what they were budgeting for this year.

Lee:  [9:56] No, that’s true.

Shaun:  [9:58] Now tell me, you do your marketing in‑house. How do you attract new customers to your site?

Lee:  [10:09] This is something that I think constantly about, and some of our marketing has to do with lines of performance because we do work hard to continue to retain customers by offering them services such as we offer loyalty points on our website. [10:30] We email our customers regularly about special offers and deals. We try to keep people feeling they’re part of the golf community that we’re selling to them. But of course with the sort of business that we are and also being the World Wide Web, still half of our visitors each day are new visitors.

[10:55] The main marketing channels are still search engines. We’ve done search engines for a long time, and we don’t see that changing any time soon. So, The majority of our focus is on search engines, both paid and SEO. I would say we spend, I don’t know, 40 to 50 percent of our marketing efforts on that activity.

[11:27] Other activities are, as I said, email opt‑in, which is key, growing our email database and attracting new visitors into that database. Other things we do ‑ we do have affiliates, although we don’t see that as a key part of our growth strategy. We do have other referring sites and other ad hoc marketing.

[12:00] We’re thinking about how we can slightly diversify, because at the moment it’s interesting to think about what’s going to happen on the web. But, certainly in the last one to two years, search engines have become dominant in everything.

[12:16] It’ll be interesting to see if that continues, or whether they get more dominant, or whether we do have to diversify a little bit away from it.

Shaun:  [12:23] Yes, it’s somewhat of a risk because you rely so much on that traffic from the search engines. If you did something wrong, or if they changed an algorithm or something and you didn’t rank as well, it could have a huge impact on your business.

Lee:  [12:37] Indeed. But also a part of that is paid. A good portion of that is paid search which we’re heavily on top of, which gives us a very good return. So, I think we’ve got a good balance. But you’re right, over half our sales comes from search engines. The reality is that people, when they’re serious about buying, that’s where they go.

Shaun:  [13:00] Yes, that’s very common. Tell me, you mentioned you’ve got a bunch of projects that you’re working on. What are some of the biggest opportunities you have online at the moment?

Lee:  [13:11] Well, obviously some of the projects I probably don’t want to go into too much detail about. In general, I think that there’s still a lot of change to come online because websites are still, in the main, copies of traditional catalogs.

Shaun:  [13:33] Yes.

Lee:  [13:34] I think in the future, there are going to be enormous opportunities to really change the way that people browse for products, navigate around websites, how they learn about products, how they find complementary products and things that go together. I think it’s going to change quite a bit. [13:53] I think video is going to be a big part of sites. In fact, video’s already a big part of our website. But I think it’s going to become the norm. I think that websites are going to almost become a bit like TV channels in a way, mini‑TV channels. I can see huge strides in video and use of video.

Shaun:  [14:16] Can you go into that a little bit more? How are you using the video on your website?

Lee:  [14:22] At the moment we’re using video in several ways. The most simplistic way is that we have product videos so people can learn about products using manufacturer videos or, for example, advertisement videos that you would see on TV, that sort of thing. [14:44] We have a company that can produce videos for us in kind of an automated fashion which are along the lines of a short, if you like, sales pitch: “This is why this product’s good. Here’s the features.”

[14:57] Also we’ve used, for example, video in our search results, which has been very popular. In fact, when we put video in our search results, we doubled the amount of video viewing that was going on.

Shaun:  [15:12] That’s interesting. I had seen that. Just for our listeners, if we describe how that happens ‑ when you do a search on your site, there’s a link to the video for the products that have the video in the search results. Is that right?

Lee:  [15:25] Exactly. Basically, when we send the information over to SLI, it includes the video information, and then they know which products have video on them. [15:38] As the results come up, if there’s a video link, then a small icon comes that says “View Video Show Reel.” They can click that directly from the search results, and the video will actually appear overlaid over top of the search results.

[15:51] So, you don’t have to click into the product to go any deeper. You can actually watch that video there and then, and then enter the product into the basket afterwards.

[16:01] What we found is that people really wanted to watch video from the search results. We were quite surprised because, for example, about 80 percent of our users use the search. But when the video was on there, they represented 50 percent of the total video viewing.

Shaun:  [16:22] Interesting. Have you found that the videos helped with your sales?

Lee:  [16:27] Yes. People that view a video are 85 percent more likely to buy than people that don’t.

Shaun:  [16:32] Wow.

Lee:  [16:33] Which is obviously enormous.

Shaun:  [16:37] How many of your products do you have videos for?

Lee:  [16:40] I don’t know exactly. It’s hundreds, and we’re adding new videos all the time.

Shaun:  [16:46] With that stat, that makes a lot of sense.

Lee:  [16:48] Yes.

Shaun:  [16:52] Tell me a little bit about the technologies you’re using on your store. What works best for you, and what are you working on?

Lee:  [17:03] I’m not entirely sure what you mean by “technologies.” Our store is a completely bespoke, written store for us.

Shaun:  [17:13] Right.

Lee:  [17:14] We feel that there are several benefits of having that route in terms of setting up the infrastructure of the website for the best search engine results, for best navigation and the best ability to move your business forward in how you want to do that. [17:33] Now within that, we’ve got several partners such as SLI. We’ve got other partners that do customer reviews. We’ve got payment partners like PayPal. There are probably three or four different partners within the site. Each one of those partners will have either their own road map of improvement or will have a road map with them.

Shaun:  [17:56] OK.

Lee:  [17:58] I’m not sure if that totally answered your question.

Shaun:  [17:59] That’s great. Who are you using for your reviews?

Lee:  [18:04] Bazaarvoice. They’re based in the USA. I think they’re one of the best in the world.

Shaun:  [18:12] Yes, I’m very familiar with them. We have a number of customers that use Bazaarvoice. Obviously, you’ve been happy with the service from them?

Lee:  [18:23] Yes, very good.

Shaun:  [18:24] Excellent.

Lee:  [18:25] It’s one of those things. The thing is with all these things, for example, internal search, customer reviews, whatever it is, essentially the technologies can on the face of it seem fairly simple. [18:37] But actually, when you dig a bit deeper and you have somebody who’s actually continuously improving their product, it gives you a big advantage because these are things that you wouldn’t work on as a business if they were left to your own devices.

Shaun:  [18:54] Yes. I know what you mean, because on the face of it, reviews sound like a very simple thing to implement. If you spoke to a web engineer, they’d probably say, “Oh, I could probably bang something out in a couple of days to do that”. [19:06] But when you look at the intricacies of actually running the reviews and vetting them, there are a lot of subtleties go into it. There are a lot of advantages in using a third party like Bazaarvoice.

Lee:  [19:22] The other thing is that these guys have ideas. It’s not just what they offer you in the product. One of the key things, and this took me a while to actually dawn on me, if you like, is that these companies bring ideas, benchmarking. They bring a kind of new focus on these different things. [19:44] For example, the video on our search results was SLI’s idea. It wasn’t our idea. We probably would have never thought of that. So, that’s also a big part of the partnership.

Shaun:  [19:59] Excellent. As you mentioned, e‑commerce is changing. How do you keep up with the latest trends beyond hearing ideas from your vendors? How do you keep up with the latest trends in e‑commerce?

Lee:  [20:16] Well, I know there are lots of different things. The thing is because you’re in business, you feel… I think fear keeps you looking at everything around you. I do feel that there are a lot of things talked about e‑commerce, and probably about half of it is complete nonsense. The other half of it may be a little hard to understand. [20:40] The thing is if you get too bogged down in every single thing that’s being talked about normally by marketing and media firms based in London, or New York, or something, you can lose site of the fact that you have got essentially quite a simple business. You’ve got to keep focused on the simple elements to make it work.

[21:00] But at the same time, you’ve got to look around you. Obviously, I don’t think there’s anything specific that I look at. I do read some sort of e‑commerce/mail order monthly publications that come out occasionally. But, I still keep abreast of the news, keep abreast of what other sites are doing.

[21:22] In our industry, we don’t really copy anybody else. But if you look outside at some of the best websites, you can see what’s going on. I think that’s important.

Shaun:  [21:30] What are some of those websites you look at?

Lee:  [21:35] I think Amazon is an obvious answer.

Shaun:  [21:38] Yes.

Lee:  [21:38] I do think that they really have evolved phenomenally well, and they’re in a very strong position. A couple of years ago, they were almost seen as a little bit behind the day, but I think the fact of the matter is that they’re easily at the forefront of the business. [21:58] They’re continually challenging and adding in new ideas. I think they’re the first business to allow third parties to sell on their own website. Very interesting, the way that they’ve grown their business, and they continue to do so.

[22:13] I wouldn’t say Amazon are particularly fantastic behind the scenes. But the website, the functionality, and how they do their business is first‑class.

[22:22] Another website we look at is Play.com, which I’m not sure if you’re familiar with that outlet. But it’s fairly big in the UK and I think it is in the US as well, selling DVDs, and videos, and similar sort of thing.

Shaun:  [22:35] Yes.

Lee:  [22:36] What Play.com are very good at, and I think this is a key thing for most online businesses, is trying to turn browsers who are really just browsing around with no particular thing they want to buy into buyers. [22:50] We’re all faced with that, because even the best ‑ our conversion rate is on a good day three percent. That’s probably fantastic, but we all know that two to three percent is where we are.

[23:04] The businesses that convert the people that are just kind of browsing around, not sure what they want to do, into buyers are the ones that are winning. That’s really quite a skill.

Shaun:  [23:14] Yes, excellent. It sounds like you’ve got ‑ I think you’re ahead of the curve with what you’re doing with video on your site. I think other e‑commerce sites will be going that way before too long. [23:30] Lee, I just want to wrap it up there. Thank you very much for your time. You’ve shared some really interesting insights that I’m sure our listeners will appreciate. So thank you very much, Lee.

Lee:  [23:41] Not a problem.

Shaun:  [23:42] That wraps up another “E‑Commerce Podcast.” I’m Shaun Ryan from SLI systems. Tune in next time. [23:47] [outro music]