How a start-up boosts their sales 5x with the smallest cost by technology

A big company with the huge capital is no longer an advantage in this digital world nowadays. Fast-fashion might be one of the most typical industries that witnesses the ups and downs of the giants clearly. The collapse of big brands such as Aeropostale, Rue21, Gap and recently Forever 21 has been constant shocks to the clients. Although they have built their brand in customer’s mind very successfully, it doesn’t mean that they can attract the customer to the store and earn their expected profit. These famous names invested a lot of money to the luxurious offline locations renting fee while the online channels haven’t been invested properly and different channels are not connected efficiently. Meanwhile, if you’re a start up, it seems that there will be more to earn than lose. The stories of the companies that newly appeared in the market a few years ago and have grown powerfully to reach the top positions such as GymShark or Pomelo are definitely the well-worth lessons for start-ups to increase their sales and expand business exponentially.

1. Gymshark

Let’s start with GymShark which was started with Dropship model. This brandname is established in 2012 and their sales increased 5 times from 2016 to 2018.

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The biggest lesson from this company is the marketing strategy. Started with Dropship model, Gymshark started to sell supplements then they expanded to the wider niche market: gym stuffs for the young.

a. Pioneer in turn influencer to brand ambassadors

To raise awareness and target customer, Gymshark connected to different fitness influencers and let them as the affiliates to introduce the products. I by chance knew about this brand while I was following Chloe Ting’s Youtube Channel with her workout videos.

b. Erase online and offline barrier with Omnichannel System

Although online channel had made important contribution to the revenue of Gymshark, it’s inevitable that they need to connect customers via offline channels to maintain and grow the attraction of customers. One strategic focus has been to foster a sense of community, and to instill the feeling that the brand is about more than just the products it sells. Gymshark organizes meet-ups and expos to let fans have a chance to meet their favorite fitness influences. This attracts a sheer of people with long queuing line in front of pop-up stores — which are also one of their strategies in choosing location — save renting cost instead of investing money in the luxurious locations or tradeshows.

When organize these kinds of events, it’s very important for them to track down all stocks online and offline channels. They mostly allow customer to buy and try on in the pop-up stores but it’s still possible to get them shipped later. Thus, their system needs to be furnished to guarantee to check the stock availability and the seamless distribution.

c. Provide the affordable price to clients

As Gymshark use online website as well as other online social channels to advertise themselves, they can save money to provide the clients with the best price. Plus, they don’t increase their price then offer the deal in the special days such as Black Friday. Instead, they constantly offer the affordable price to the clients which creates their difference from the competitors in the market.

2. Pomelo

Pomelo is also one of very interesting stories about a business which was founded by David Jou — who was born in Korea — a fashion capital of Asia. He intended to build a business for a niche market as well — a brand for the young who want to pursue Korean style. Launched in 2013 as an online store, Pomelo developed its sales dramatically and has over 8 e stores in Thailand now.

Omnichannel Key Word

The prominent key word that I can learn from Pomelo story is Omnichannel Strategy and use technology as a driving force for the business to boost sales and save the cost while increase client’s experience in all touch points.

Specifically, because the store does not perform the main function of the product displayed but acting as a point to try the product to allow customers to come to experience the product and try the product on their own first, that is what is right for Pomelo. Before deciding to buy, website and storefront work seamlessly. Customer choose products and can choose pick-up/try-out location. That is why Pomelo now has three types of locations for customers to try on its clothes.

— The first is Pomelo’s standard stores, which are located in major shopping malls.

— The second type is the company’s pickup locations, which essentially are smaller, brick-and-mortar stores with only fitting rooms.

— The third is Pomelo’s partner locations, which include cafes, gyms, and co-working space.

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David Jou emphasized the importance of physical store or pick-up locations in this industry as all customers want to touch and try which is impossibel with online channels only. Plus, to reduce the returning rate of customers while buying online, it’s very efficient to allow customer go directly to store, try it on, buy others if their initial clothes which they chose online are not fit for them.

And you might not know, with this Omnichannel Strategy, this fashion e-commerce start-up Pomelo has raised US$52 million (S$72 million) in fresh funding from a group of investors. It opened its first retail store in Bangkok in 2018, and now has a total of eight physical stores (pick-up location or true store) in Thailand and a new 550-square-metre flagship store in the heart of the Orchard Road retail district in Singapore.

In conclusion, it’s clear that Omnichannel Strategy plays an important role to the development of these emerging brands. These start-ups cannot be compared to the big brands when it comes to the amount of money invested in locations or marketing but finally, the winners are not the long-standing companies. In this digital trend, no matter how powerful and how old your company is, if your company doesn’t take advantage of Omnichannel operation or marketing, be careful as we don’t know what day is the end.

Emmy Le
Author:
A tech-lover and a data-driven business consultant who deploys disruptive innovations to Magento retailers in Omnichannel Age

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