5 fashion business takeaways from the Ecommerce Live Conference

ecommerce.co.za's conference offered helpful info on marketplace growth, reducing returns and why you should keep building in Africa.

5 fashion business takeaways from the Ecommerce Live Conference

Ecommerce.co.za brought startups, investors, payment partners, and service providers of all kinds together for a 1-day conference at the Sandton Convention Centre on Wednesday. I went not really knowing what to expect.

I was betting there wouldn't be much mention of fashion/apparel (between Veldskoene, Luxity & Lisa Raleigh, there was more than I thought), but I was also betting there would still be some value to extract for you, because how would there not be, at an e-commerce conference? So off I went.

Didn't hit my step goals, but I did put this together for you, all relevant to South Africa and some relevant to the rest of the continent. It's help for the work that isn't fun for most of the types of people drawn to design and fashion, but it's often the stuff that unlocks success and lets you sleep better at night. Drop any questions in the comments and if I have answers from yesterday that aren't below, I'll share.

Shall we? β˜•


1. Get marketplace ready

Yes, people already sell fashion as vendors on Takealot, Bid or Buy, OneDayOnly, Hello Pretty and more, but the marketplace peak isn't here yet and we are seriously accelerating toward it. The headline: Everyone's gearing up for Amazon's arrival in South Africa next year; maybe February, maybe April, I've heard both. Either way, platform service providers are ready to go.

Parcelit, a warehousing solutions company, already has Amazon API integration set up, while still using manual workarounds for some local marketplaces. There are whispers of a marketplace solution from Walmart/Massmart on the way. Getlion, a new local player that appears more fashion-brand-friendly than most, will also be entering the marketplace arena this October. So if you're thinking a marketplace might be a good distribution channel for you, now's the time to look into what you'll need to succeed on one.

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If you're unsure about listing on a marketplace, I'll be digging into this a little more to understand the pros/cons/full use case for fashion brands; I think it deserves its own edition of the newsletter. Send me your questions and I'll ask them for you.

2. Believe in your global potential

I'll admit that if I were betting on any South African fashion brand to become a global success, I would not have put my money on the one selling veldskoene. Following investment in 2019 (led by Mark Cuban and Ashton Kutcher thanks to an intro from Steve Watts) and the powerful distribution support that came with it, Veldskoen has a locally-stocked presence in 32 countries today, as shared by co-founder Nick Dreyer. Dreyer's key point: Become a very South African brand before attempting new markets.

Nick Dreyer on Veldskoen's global footprint:

"The one word that keeps coming to mind is duplication: Get it right in South Africa. Get your message out, get your brand right, get your sales strategy right, get your technology correct, and find a way to scale past e-commerce when you move abroad... We started on Shopify in South Africa, we learned how to do that really, really well. We then immediately went and did it in the UK we found a 3PL (third-party logistics), a last mile guy, and we built the site out. We just reused our content, made our content UK specific, ran for seven months, and then guess what happened β€” our first retailer came. And then our first big retailer came. But then we opened up in Australia, and we started online and we duplicated and duplicated. And as we went along, if we made mistakes in Ozzie, we corrected them across the world. But we started really small every time we started, and the big secret of the success is that we actually started."

"If you had to ask 10 people at this conference right now whether you can sell a product in 30 countries from South Africa, what your greatest obstacle will be, they'll probably say it's exchange control. They're not wrong; exchange controls is a problem. It's really difficult, but it's only as difficult as you make it. If I ever listened to anybody that told me how difficult it would be, we would never ever have done it. We just went and did it, and we apologised later and we fixed it. The truth of the matter is, if you ask for help, you can get it in our wonderful country because we actually do care about each other, and we can help each other to succeed. And that's what we've done very successfully in Veldskoen for the last five years. If somebody wants to sell a dog collar in Spain, send me an email because I can tell you how to do it. For for the love of God, please do not learn how to do it in Spain; you don't want to register for VAT in Spain, I promise you."

"Make sure that you're a proudly South African business that celebrates human capital, that makes use of the supply chain in South Africa, that hopefully manufactures in South Africa, but if you can't do, at least assemble in South Africa, and find ways to be authentically South African. Because the one thing I can tell you being in 30 countries is that people are desperate for our products. People are desperate for our talent and the doors are wide open if we can just get going."

[edited for clarity & length; emphasis mine]


3. Nail the elements of omni channel success

Have you ever come across something great online, received ads for it after looking, then bought it, only to have the retargeting continue with a discount offer on the product you already bought 3 days later? MD of HaveYouHeard Kirsty Bisset has β€” a pair of thigh high boots she wore to present.

Those communication and support gaps between your multiple marketing channels and points of sale are the problems she explained that a successful omni channel strategy should solve. It's a worthwhile exercise: Omni channel shoppers have a 30% higher lifetime value than those who shop using only one channel. TL;DR: Connect all your channels (social, site, physical stores), listen to your (now richer) data, measure your results, and do it again.

Kirsty Bisset on omni channel success:

"Omni channel is not about adding; it's actually about taking away. It's about removing those barriers, making sure that the steps that a consumer can take from awareness to conversion to purchase, all of that is stripped away. It's definitely not about control. Of course, there are aspects of it you can control β€” what platform to use, how much you spend, what agencies you use; but a lot of it is all about putting control back in the hands of the consumer and making sure that they are the top priority."

"It is definitely not about disconnection. I have a lot of clients come to me and say, I feel I'm losing that human-to-human element with my consumer. And that's simply not the case. Because in the instance of omni channel, you are connecting with them with their data. You're connecting with them with personal preferences. And so that connection is actually enhanced through the tools and tech you use."

"There are only three ways to measure your omni channel strategy: revenue, profit and market share. That's it."

[edited for clarity & length; emphasis mine]


4. Invest in logistics

Quite a few speakers in this segment:

Bias notwithstanding, Parcelit's Alex Schmitt made a good case for the benefits of outsourcing: partnerships, partnerships, partnerships. Aside from the reduced unit costs and the specialist management of inventory and returns, a partner like Parcelit strengthens you with their partners β€” Parcelit plugs into accounting tools (like Sage, Xero), last mile partners (like Courier guy, Aramex, DHL) and marketplaces (like Amazon, Takealot, Superbalist, Gumtree) to make the trip from order to fulfilment as short and simple as possible. Those connected services offer a much more powerful machine than you could or should build on your own.

πŸ“•
If you're wondering when it's time to make the switch, it's probably just before your unit costs start looking like what a partner would charge you, around the same time your order volume approaches average market minimums for those unit costs.

Last mile delivery is hard for everyone. According to Wumdrop's Simon Hartley, you can make a big difference to your success by choosing a partner that focuses on their drivers.

Simon Hartley on driver wellbeing:

"The driver is the only stakeholder in this chain (client/you - pick up location worker - delivery vehicle owner - driver - customer/end user) who touches every single other stakeholder reliably with almost every transaction. So how are drivers doing? Not so good. They face on-road danger, interpersonal danger, they could get mugged on the street, there is fairly consistently poor address data in South Africa and inconsistent road infrastructure because of the Group Areas Act, so it's tough to navigate. They have tenuous employment status, low wages and rising costs."

"Often things are not seamless in a delivery. Why are we surprised that that's the case, if these are the working conditions of the majority of people who are affecting the deliveries? If you're trying to solve for frictionless delivery, you have to solve for the driver, primarily for the drivers sake, and therefore for everyone else's."

"You start with being curious about what it's like to be a driver. Have empathy for what their life is like; field trips and ride alongs matter. Assume that sustainably growing driver earnings and sustainably falling input costs are the beginning of success for drivers and therefore for everybody else."

[edited for clarity & length; emphasis mine]

Embrace new tech. You don't have to start delivering by drone (like Jumia wants to for rural addresses) but as your volume grows, you do have to think about efficiency as a competitive advantage and proactively look for ways (and tech tools) to achieve it.

Loop founder Kimberly Taylor's presentation on the efficiencies their delivery insight tool has achieved for customers got the whole room excited: 20% reduction in kilometers driven, 96% accuracy on client order prediction, and 5 hours saved in planning & control every week. You can't spend all your time optimising and none actually running your business, but don't avoid onboarding time and learning curves for new tools so much that it keeps you stuck, either.

Get a handle on returns. Returns are a problem for everyone, but fashion has it worse than most, thanks to the deadly combination of the rise of fast fashion and the prevalence of 'free' shipping offers that make more sense for some products and less sense for others.

UAfrica's Neo Madiba on handling & reducing returns:

  • Start with a returns policy that provides as much information as possible: what qualifies, what the time window is, rules for damaged items and packaging, the collection and delivery process, how voucher/discount purchases are affected. Make it easy to understand, add and remove as relevant, and compare to the competition.
  • Don't stop there β€” invest in a returns management system (on its own or as part of a logistics solutions package) as soon as you can afford to. Automating the principles in your policy is infinitely better than executing it manually.
  • Make it convenient. If that means a longer window or allowing customers to initiate a return on WhatsApp, do it. Not to encourage more returns, but to encourage more sales β€” it's easier to commit to a purchase with a smooth returns process as a safety net. Convenience for them doesn't have to mean chaos for you if you bring all your input channels together at the returns processing point and you don't offer more than you can realistically deliver.
  • Make data your friend. Always collect a reason for a return and respond to patterns by improving your channels, maybe with more accurate sizing charts or better photography so the fabric isn't a surprise. 

5. Remember that even though building in Africa is hard, it's worth it.

The bad news? We've got problems. The good news? Every successful business on the planet exists because it solves them. The best news: Africa therefore has more opportunity (for wealth building and poverty alleviation, yes, through your fashion business) than anywhere else, because the number of problems we have left to solve mean that a lot of new value can be created. As an added bonus, we get to learn from the rest of the world's people and planet mistakes while we do it, to build better.

David Donde on building in Africa:

"Africa is by definition opportunity. It is still an untapped market, it is an underdeveloped market, it's reeking with opportunity."

"You've got to know why you're around. It's back to the purpose. 'What's in it for me?' That's not the question you ask yourself, that's the question everybody around you needs answered. If you can't tell the customer 'what's in it for me,' if you can't tell the investor, or your team, you have no right taking up our air."

"Do not think small. If your idea is worthy, if the product is worthy, think how big it can be and then double it and triple it and double down on that. The problem with thinking small is there are a lot more people trying to do it. When you try to do something extraordinary that nobody else is prepared to go that far for, you stand alone, you get noticed, you have something to say."

"Be careful where you incorporate; it really matters. If you want US investors you do have to incorporate in the US. There are lots of IP problems that are fraught here, and people are very concerned with not getting their IP out of South Africa. They're also concerned with, if they do make money, can they get it out. I'm not suggesting that we don't build our companies in Africa; we really should, but you can build in a subsidiary. You can pay the profits here, you can pay the taxes here. I'm not talking about cutting out Africa; I'm talking about fighting tactically. If you want to raise European money, incorporate in Europe; if you want to raise American money incorporate in the US. These things are no longer hard to do."

"People are going to tell you, 'it's too difficult here, you can't,' but we are. I'm a mountain biker; I'm not particularly fast but I know I'm faster than everybody "riding" on their couch, every single time."

[edited for clarity & length; emphasis mine]


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