How 5 eCommerce Brands Created Major Profit With Small Pivots
Sometimes, a pivot is all you need.
In business, the stubborn among us wither and die, while those willing to adapt and change see the greatest success.
Ecommerce is no different. In fact, the pivot – changing your approach or perspective – is even more crucial because of the changing nature of the medium itself.
It’s no secret that ecommerce is big, big business, and only showing signs of getting larger. How big? Industry watchdogs predict that worldwide B2C ecommerce sales will hit just over $1.92 trillion in 2016. It seems the sky’s the limit.
But that’s in a perfect world. Sometimes, you need to think bigger. Sometimes, you need to change it up a little… or a lot.
Sometimes, you need to pivot to succeed.
Check out these five brands that have pivoted their way to major profits.
1. Brandy Melville
Despite sounding like the most American of American monikers, clothing retailer Brandy Melville was actually started over twenty years ago in Italy by Silvio Marsan and his son Stefan. The first US store didn’t appear until 2009.
Since then, they’ve opened a handful of physical stores in the United States and Canada, but remain largely an eCommerce entity to the tune of (an estimated) $125 million in 2015, and annual growth between 20-25%.
The Pivot: Eschewing Traditional Marketing and Development
Despite that success, you’re unlikely to see any Brandy Melville ads, and you’ve probably never even heard of them unless you’re a teenage girl. And that’s just how the company wants it.
Entering the lucrative American marketplace, they didn’t spend millions on billboards, TV spots, or celebrity endorsements. They opted instead to leverage the power of social media to build a huge teen following using pro models, customers, and employees on its feeds. For their efforts, they were christened the “first Instagram retail success” by Bloomberg in 2014, and are today a top ten teen clothing brand.
Teen centric, with a controversial “one size fits most” approach, their target audience – teen girls – don’t seem to mind their unconventional approach, and the brand actually relies on a product and development team made up largely of teenage girls… about 20 of them research and select new styles
Their brilliant instagram account (3.7 million followers) is definitely one to emulate.
Don’t be afraid to be be different than everyone else. Just because something hasn’t been tried (yet), doesn’t mean it won’t work.
2. Man Crates
At the other end of the spectrum we find Man Crates, which is exactly what you’d think it is based on their name: crates of stuff for men.
Their gift boxes for men, both generic and custom, range from eating to drinking, grilling to outdoors, and sports.
You can even personalize products with names and designs. And that’s where they ran into trouble: the personalization option became increasingly popular, and combined with their fast shipping guarantee, they quickly found themselves having difficulty (they actually had to stop sales during the Christmas rush in 2013 because of the backorder). At that time, they had been outsourcing their laser engraving to a local business and renting time on their machines each day. But they couldn’t keep up.
The Pivot: From Outsource to In-house
Rather than scrap the personalization options, they went the other way and decided to innovate and pivot. The fix? They evolved from simply boxing third-party goods to include their own manufacturing element and bought 16 laser engravers with a custom-built ventilation and electric grid, and a brilliant new queue system to allow for 35-36 orders per hour per machine… and all right on-site. Goodbye bottleneck and frustration.
The result? 20-25% of their business is currently customized orders (and growing), they’ve seen 4000% growth in four years, $21 million in revenue, and were named the 4th fastest growing retailer in the US according to 2016 Inc. 5000.
Rethinking your workflow and production methods may seem expensive and frustrating, but if you don’t adapt to fit the needs of your customers, you’re dead in the water.
You know to brush and floss twice daily. But what are your thoughts on tongue cleaners? Orabrush was hoping you’d be firmly on the “yay” side when they launched. When up to 90% of the bacteria that causes bad breath resides on your tongue, how hard could it be to convince people they need a tongue scraper?
Turns out, very hard. After years of just scraping by (no pun intended) that included an infomercial that cost tens of thousands of dollars to produce and resulted in only about 100 new orders, they had a bit of a breakthrough courtesy of YouTube.
The Pivot: Content Over Budget
You don’t have to spend $40,000 on an infomercial, or $5000 on a full-page ad. Orabrush pivoted from that antiquated thinking and created a low budget video called “The Bad Breath Test” which has since been viewed over 26 million times, and their popular YouTube channel has over 180,000 subscribers, a “Diary of a Dirty Tongue” series starring Morgan the Orabrush tongue, and sales in excess of one million orders.
One fun, innovative idea is better than one enormous budget any day of the week. Consumers respond to useful, interesting, out-of-the-box marketing more than they do the usual stuff (just look at the infamous Dollar Shave Club video for more proof).
And that’s easier than ever to do online… all you need is a digital camera and a YouTube account.
Everlane, the online clothing retailer founded in 2010, has a simple motto that resonates with their customers: Modern Basics. Radical transparency.
Online clothing retailers are a dime a dozen. Want to stand out? You need to pivot away from the masses and be radically different…somehow.
The Pivot: Unparalleled Transparency
60% of survey respondents said buying from “socially-responsible companies” was important to them, and 30% said they plan to increase the amount they spend on goods and services from those companies.
Everlane saw the writing on the wall and opted for total and complete transparency on pricing, production, and everything in between. They offer product breakdowns so the customer sees exactly how much it costs them to produce items, seek out and provide virtual visits to environmentally and socially responsible factories, and host a popular “Transparency Tuesday” Q&A on Snapchat each week when customers and fans can ask any question they want.
Since going transparent, Everlane has over 350,000 customers, revenue of $12 million in 2013, around $24 million in 2014, and an estimated $35 million in 2015.
When you connect on a genuine level and are completely honest and open, growth is sure to follow.
5. Nasty Gal
Started as an eBay store selling vintage clothing in 2006, founder Sophia Amoruso has guided her company to fantastic growth and profit. Nasty Gal is now one of the premier ecommerce clothing portals.
In the beginning, Amoruso went on vintage clothing treks herself, and with a keen eye and strong fashion sense, she was able to identify and procur items her customers wanted. Her eBay store was profitable, and she considered her endeavour a roaring success.
And then eBay suspended her account in 2008.
The Pivot: Embrace the Change
Amoruso could have happily continued selling vintage clothes on eBay if the platform hadn’t forced her hand. Instead, she moved to her own domain – nastygalvintage.com – and sold out her entire inventory on the first day.
This marked another pivot for the brand, as Amoruso understood her growing popularity meant she could no longer meet demand with just vintage finds. So, she started selling a few select new items from some of her favorite brands, and even branched out into original designs starting in 2012.
Nasty Gal passed $300 million in revenue in 2015 (and received the highest performance score of all eCommerce portals that year, beating out Apple, Amazon, Macy’s, and everyone else), a threefold increase since hitting $100 million for the first time in 2012.
Fantastic growth (92.4% compounded annual growth rate over five years), rabid fans, a healthy social media presence (19.9% of its web traffic comes from social media platforms), and a fierce, confident persona that appeals to the “awesome girl” that is its target.
The eBay suspension could have been the end of Nasty Gal, but it marked the start of its meteoric rise to eCommerce superstardom because Amoruso was willing to pivot and embrace the changes thrust upon her. She recognized when to change her direction (vintage used to select new items to original designs), and she was willing to go with the flow. Her results speak for themselves.
Wrapping it up
No matter how good your product, no matter how detailed your business plan, into everyone’s life a little challenge will fall. The stubborn refuse to budge from their original thinking.
The wise pivot and succeed.
What other pivot-to-riches stories have you heard? Have you had to pivot yourself? Leave your comments below:
Guest Author: Mo Harake brings over 12 years of ecommerce and digital marketing experience leading brands like FIJI Water, 7Diamonds, Kill Cliff and venture-backed startups to his work as Managing Director of Stray Digital. For more on his approach to ecommerce, content marketing and growth hacking, visit him on LinkedIn or at the Stray Digital blog.