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Awesome
Ewe
A Case Study
by e-Business
BC |
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| Awesome
Ewe: Mail-order Formula for Success |
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Company: ShopSmart Online Inc. |
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Industry: E-tailing / Online mail-order |
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Employees: 2 employees + contract workers when
needed |
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Year Established: 1999 |
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| Company Description |
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| Launched in 1999 by Len and Marge Stalker,
Awesome Ewe, an online mail-order business selling fine wool to the knitting
community, began simply as a test site for a family of e-commerce software that
Len had been developing since '98. The company opened its virtual doors with
4,000 brand-recognized products, operating on traditional mail-order
principles. In 5 years, Awesome Ewe's product line has grown to 18,000 products
from the top 50
mills and fashion houses in the world. The company's email newsletter has
14,000 opt-in subscribers, and their website gets between 400-600 unique
visitors a day. |
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| At Awesome Ewe.com, clients can purchase wool and
patterns in a couple of clicks and redeem gift certificates and discount
coupons in a secure, user-friendly online environment. Questions and concerns
are readily addressed via email, toll-free telephone and a live online help
system. |
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| Awesome Ewe's success is a testament to Stalker's
ability to model himself after the big guys and make tried and true business
formulas work to his advantage. |
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| e-Business Objectives |
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| Stalker's e-business objectives were
twofold: |
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| 1. Create a fully functional test website to run
the software package (shopping cart, email and Customer Relationship Management
software) that he'd created and show people it worked. In order to do this
successfully, he needed to find a niche market and a target population hesitant
about using the Internet. |
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| 2. Build a million dollar online mail-order
company. Financial success would require Stalker to research, research,
research. And, build his company on true, tested and traditional business
formulas. |
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| Implementation: |
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| The product: |
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| Testing his software in the real-world meant that
Stalker needed a niche market, identifiable brands, and a target audience not
accustomed to computers and the Internet. |
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| He chose to sell fine wools and patterns for the
knitting community -- a market made up of women over thirty-five. Knitting was
an ideal choice -- a select group of
traditional glossy
magazines were devoted to the community with a circulation of approximately
1.2 million. 100% of readers are active knitters. This meant that Stalker had a
highly targeted advertising medium at his disposal. |
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| The rules: |
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| Next, Stalker had to learn what he calls "the
rules of the game" -- rules in mail-order, advertising and marketing. What were
the formulas for success in the online market? |
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| 1. Find a successful, working business models
that you want to emulate, scale it down and adapt it. |
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| In Stalker's case, the successful business models
were, in his own words, the Cadillacs of their industry and included one for
mail-order (Hanover Direct), one
for software (IBM) and one for overall
presentation (Land's End). |
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| 2. Create Awareness and Build
Relationships. |
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| Stalker's initial step was to create
relationships with his customers. The rules say that you need to make contact
with your potential customers 5 to 9 times before you gain a measure of
credibility in the market (call it the "Sales Cycle"). So, Stalker designed a
marketing strategy that gave people something before expecting something in
return. Create awareness, create friends and develop an audience, then create
shoppers; if you create a relationship and give people a reason to care. |
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| Awesome Ewe's relationship building
strategies: |
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| · Email
newsletters that tell stories,
provide discount coupons and tie back to features on the website. Current
opt-in subscribers: 9,000 (March 2005) |
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| · Surveys and contests that tie back to
the website Current unique visitors: 300-500 per day; survey response rate:
7-10% |
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| · Knitting cruises where customers travel
together, to build community and allow Stalker to render stories for his
newsletter. |
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| · Smart, glossy print catalogues designed
as coffee table conversation pieces. |
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Advertisements in select
knitting magazines that don't sell anything but instead say, come explore. |
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| 3. Use technology that works for the purpose.
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| Stalker's advice? Take technology that is working
in the market place and adapt and improve it to create a better user
experience. |
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| Make it easy to buy: At Awesome Ewe
there is no fussing with registration forms and no need to click through a
multitude of screens to simply view, purchase and redeem discounts on your
item. Purchases are quick and easy, and allow customers to use the online store
as they would a bricks and mortar store. |
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| Provide high security: Stalker
claims his shopping cart is as secure as 'Fort-Knox.' Product and customer
information is kept separate and customers deal directly with the bank to
process their credit card payments online ¨C Awesome Ewe never sees
customer credit card information. |
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| Give customers more than one way to reach
you: The Awesome Ewe website not only offers email and telephone
contact, but provides a live helper system which allows customers to chat
online with staff by text or voice over IP in real-time. |
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| Use email to its fullest: Stalker
uses simple email techniques to build relationships and grow his customer base.
His email server software, which is able to ship up to 10,000 emails per hour,
features customized auto-responders that allow Stalker to automate initial
contact with his subscribers/customers. For example, introductory letters and
discount coupons are automatically generated when a user subscribes to the
newsletter. |
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| This collection of user-driven software allows
clients to control their shopping experience by using the Awesome Ewe website
in a way that suits their personal shopping habits. Similarly, it allows
Stalker to build relationships with his customers by communicating with them in
a multitude of ways. |
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| Lessons Learned -- On how to build a
Cadillac! |
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| Do your research!!! Stalker's
biggest challenge was research -- getting the information in the first place;
tested numbers that would be his formula for success. |
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| When we got to the Internet there was nothing
written. So we built the business plan around the numbers that I had received
from all sources including a successful business model, a mail-order company,
software development companies, advertising and marketing companies. |
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| So, Stalker returned to his working model, a
public companies that published all their reports, financials and executive
summaries online. And, he used that as a guide. |
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| Follow the rules!!! The mail order
business hasn't changed since it's inception in 1847. That's all we're doing is
mail order. And the rules haven't changed. If you understand and follow the
rules, then the Internet business is easy. |
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| Presentation is everything!!! From
its inception, Awesome Ewe copied the Cadillacs of the retailing industry. And,
Stalker has allocated a significant percentage of revenues to presentation
alone, the web site, the ads in Vogue, Family Circle and other major knitting
publications, online advertising, the coffee table catalogues, and so on. |
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| The message? If you look like a winner you are
closer to being a winner. When you go online with the best in the business
there is no question you will succeed. |
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| The Future |
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| Grow the business to a million dollar company:
Stalker expects his sales to increase 30 to 50 percent yearly. By the time he
reaches a million he estimates he will have invested $500,000. |
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| Our business is formula and numbers driven. I
went online with 4,000 products and quickly realized that 80% of my sales were
from 20% of my product. Therefore, the ideal way to expand the business was to
expand the product line. And then you'll always have something fresh to talk
about. Awesome Ewe now carries over 18,000 products. |
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| It's back to basics, Business 101: Know what
you're dealing with (audience, products and presentation). Create a business
model, find out if it works and then follow the model. Period. |
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| Background: |
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| Len Stalker has had the good fortune of being
involved with many successful projects including Online Advertising for a Major
Credit Union, the Online Promotion of a Wall Street Journal / New York Times
Best Seller and the Online Promotion of several Charitable Organizations and
many Commercial Ventures (including retail and real estate). |
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| The ShopSmart Group now includes:
ShopSmart Online - Building Your
Business Online Merchant Services & More ,
Awesome Ewe - The Internet's Biggest
& Most Awesome Knitting Superstore , Save On Yarn - Brand Name Yarns &
Patterns 20% - 60% Savings and Knit
Purls - Knitting & Crochet Magazine What's NEW & FREE
Patterns. |
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