Andrew Sharp, CEO at Bobux
25 Aug 2020 | BusinessNZ
The story of Bobux and their shift to digital
In this week’s newsletter Andrew Sharp, CEO of Bobux will share their journey to digital and becoming the brand that Kiwis know and love.
Bobux started, like many great Kiwi businesses in a garage. In 1991 our founder Chris Bennett was trying some shoes on his daughter Chloe and every time he got to the point of pulling the laces tight, she kicked her feet out of the way and giggled. Chris got frustrated and walked into the kitchen and cut the shoe laces out with a pair of scissors then put a rubber band through the eyelets – the shoe went on easy and stayed on. Chris and wife Colleen then started researching what a good shoe for a child should be – lightweight, breathable and flexible. None of Chloe’s shoes were like that and so Bobux was born.
We are deeply science based with how we design and build footwear and that was our main focus for a long time. When I started in 2015 I could see the massive potential if we were able to get the story across to people in bigger numbers. I think like many cool Kiwi businesses or brands, people that knew us loved us – just that not enough people knew us. We had a good product and a good supply chain set up that was scalable – so early on we just focused on our structure, our strategy and in particular looking at how our brand and marketing came across to our customers worldwide. This meant taking Bobux digital.
When people talk about going digital, they often only talk about websites and online sales - it is so much more than that. In 2015 we were quite a paper based organisation with filing cabinets everywhere and ring binders that held our vital documents like sales contracts with distributors or retailers. We were also still doing a lot of ‘old school’ marketing – magazines, trade shows and the like - the issue with analogue marketing is that it has low reach, hard to quantify attribution and it wasn’t going to help us scale Bobux at the pace we wanted. I am not saying it doesn’t have a place, just that for us at that moment we needed to shift to new means. While we had started looking at digital marketing and had a website – under 5% of our sales were coming from online – we were really just learning how to talk to our customer in a different medium so our effectiveness wasn’t that great.
One of the things we found early was that just shifting part of the business to digital was no good – we were trying to run digital marketing with analogue everything else – systems/processes etc. Now, everything we do in the office is cloud based (with the exception of one piece of the stack that will be there shortly) – which has made the last few months a bit easier! To do this, we built out a tech roadmap and then started building the stack to suit who we are and want to be. One important thing here is that if you start doing this – change and fit your process to the tech, rather than fitting or building the tech to your process! We used design thinking and a complex systems framework to map out the customer journey and then look at what elements of technology could assist the customer to have a better experience before we spent any money. You don’t necessarily need to start with the biggest, most expensive thing – but you do need to know the full interactions of the whole system (which is where complex mapping frameworks come in).
After looking at the tech stack and roadmap, we knew we couldn’t afford most of it without more sales, so we started with how we were talking to customers – as you probably already know everything starts and ends with your customer. Are you talking to them on the platforms they want to hear from you on, about the things they want to hear about, and making them feel the way they want to feel when associating with your brand? Are you designing the product that they most desire/need? We had started on Facebook, but we weren’t great at it. We launched our Instagram account shortly after that and started pushing hard on Google – we tried other platforms, Pinterest, twitter, LinkedIn etc. but they were not our platforms! Knowing where not to be is as important as knowing where to be – too many platforms may weaken your ability to service them well and possibly dilute your messaging. So start with one, then build up from there – however, it is a bit easier these days with products that can help you post across multiple platforms and aggregate the conversation back and forth.
Through trial and error, we figured out how to speak to our customer on FB and IG, and what AdWords would work – we did this pretty cheaply then ramped it up and started spending. We shifted the majority of our marketing budget to digital in 2016 and stopped doing a lot of the analogue stuff.
When we started with our digital sales journey, we focused on Australia. At the time, 30% of our marketing budget was spent in NZ and 20% in AUS though the sales split was actually more skewed to AUS. Given Sydney has more people than NZ, we immediately changed the strategy to 45% spend in AUS and 5% in NZ. Basically all new marketing spend in NZ was stopped and the 5% was used to boost posts we set up for our AUS market into the NZ FB groups. This has now balanced out a little.
Our mantra was think big, start small, move fast – we wanted to dominate AUS for kids’ shoes (we are now number 1 in our category) – but we didn’t have Nike’s budget. So we started by researching the suburbs in Melbourne that had the most disposable income overlaid with the most kids under 5. And we then targeted certain retailers that we needed to be in in that suburb (ones that fit our brand, would give our customers the best experience and that wanted to grow with us) – the likes of Shoes and Sox. We got our product into that retailer, then focused our marketing through geo-location to within 5 km of their shops. We built out a better lifestyle image library – shots and videos taken with Aussie kids in iconic Aussie locations and then hit the social media channels hard and worked with some awesome local influencers – influencer marketing can be as big or small as you want it. When we started out, we mostly used what they call micro influencers – i.e. we can’t afford someone with 10 million followers, but someone that has 5 – 10 thousand can still get the message out for us well within our budgets – often just free product. Then when we saw the trend going in the right direction, we moved to the next most affluent suburb, then started the process again in Sydney and so on.
We hired a local agency in Melbourne to ensure that what we said in our Kiwi English made sense to the Aussies. I think most people think that AUS is an easy market if you are doing ok in NZ. It isn’t – you need to show them respect and learn about them. Kiwis and Aussies are similar but not the same. The only reason we could push the AUS based ads into NZ was because we had good brand recognition here already.
The results were really positive with an 80% jump in sales in AUS in a year across all channels (retail and online) and our online sales started growing quickly, which gave us more close contact with customers so we could continue to improve their experience no matter where they bought our shoes. Next we repeated the strategy in the UK, starting with London – which has worked and the UK is now our main market and Aussie number 2. Then we did the same with Germany starting in Hamburg, and working on the US focusing on LA and the north eastern corridor – NY, Boston, Washington.
COVID has dramatically accelerated movements. If it was going that way, it just went that way faster – this is true for many things including the shift to online sales. While our offline sales have held their levels for this year to date – just slightly up on last year, our online sales are up 65%. Something to be aware of though is that online sales doesn’t necessarily guarantee higher profit. There are costs to it – just be aware that gross margin isn’t profit or EBIT so deeply understand all of your numbers.
Offline, due to COVID we have had to get creative for our retailers – and that looks like it is here to stay. I.e. we are less likely to drive out to Orange or Dubbo now, when we can do this online (unless they need us to). You can set up a really professional looking demonstration studio for your products without spending crazy money – our sales team got creative and spent about $150 to set up a full at home studio and the feedback has been very positive. The retailers that seem to be doing well right now are the ones that have also jumped online – and our digital set up works really well for them, with a solid digital asset library (posts, imagery, videos) that they can grab at no cost and push out via their own social media feeds to get customers engaging with them, and hopefully buying from their stock!
I have little doubt (and a lot of gratitude that we did) that had we not shifted to a much more digitally focused strategy, we would not be in such a strong position today.
Andrew Sharp, CEO