The Top 10 Reasons Why a "Design Your Own" Business Makes Sense (Listen to the The Sisters from UpperStreet)
Nike does it, Adidas does it, and Upperstreet does it: Design your own Shoes.
Julia Grinham is Co-Founder of Upper Street (with her sister Katy Chandler), the luxury shoe label where you can design your own shoes. The business was launched in spring 2010, and has since gone on to win hundreds of loyal customers, has won huge support from the media and fashion industries, and has been shortlisted for the Drapers Smaller ERetailer of 2011.
Here Julia gives us her Top 10 of Why Customization as a Business Model is a Great Route to Take:
Top 10 of Why Customization as a Business Model is a Great Route to Take:
1. You give customers what they want.
Sounds obvious, doesn’t it? But it’s amazing how traditional retail models don’t give consumers the choice they’re really looking for. How many times have you been shopping on the high street on a fruitless search for something to wear? By allowing the customer to create their own solution, they can finally get what they want. And this makes your brand really stand out. At Upper Street we offer women 4m shoe design options, with over 150 different colours and materials, across a much broader range of sizes than traditional shoe brands offer. For women who don’t like being dictated to or feel marginalized by the fashion industry, this is a seductive experience that makes them feel special, important and individual. Our customers write us the most gushing emails and phone us up in tears because they finally feel like we are allowing them to have the shoes they’ve always wanted. It’s very powerful.
2. You build deep and lasting customer relationships –
When your customer is involved in the design process, their engagement and commitment to your brand is high. When you couple that with an incredibly strong customer service ethic, and allow your customers to build relationships not only with the brand but the people behind the brand, that relationship is even stronger. This brand loyalty leads to high repeat business. Everyone knows that women love shoes, but even us girls at Upper Street have been surprised at how many of our customers are coming back so regularly, and we’re doing everything we can to nurture that.
3 You engage through the experience –
It’s increasingly tough to win consumer mindshare when people are bombarded with media messages left right and centre across a multitude of platforms, whilst they are busy trying to multi-task their lives. But a product purchase that involves active participation is highly engaging, and gives consumers an experience not just an end product. Upper Street is an online business, and the engaging consumer experience predominantly comes through using our innovative 3D Shoe Designer. However, we’re also seeing increasing demand for private shoe parties that we host either at our London studio or at external venues. It works really well for corporate clients looking for a unique way to reward employees or engage female clients, and also for girlfriends looking for a fun evening together.
4. You create social buzz –
Today’s consumer loves to share; it’s an important part of how they validate themselves with their peers, and demonstrating their creativity is a fantastic way to do this. Social media of course makes sharing easier than ever, facilitating word-of-mouth recommendation. At Upper Street, we find Facebook to be a great platform for our customers to engage, either by sharing their experiences and shoe designs on our page, or indeed sharing their designs with their own network of friends. So far, we’ve found that Twitter is a stronger platform for us to build relationships with people in the industry, and the social element of this is helping us grow awareness of our brand exponentially.
5. You open the door to brand collaborations –
It’s not only the end consumer who loves being able to customize their own product, but also other businesses. In the fashion industry, independent retailers and small brands can find it hard to add new lines when they have to commit to minimum volume orders; that means cash-up front and risk. At Upper Street we’re not looking to build a business as a wholesale supplier, but we do work with other brands that would like to have a shoe line on a bespoke basis. We co-brand the shoe designs we create for these clients, which allows us to reach out to new audiences. For example, we co-created shoes for Jasper Garvida’s LFW catwalk show in 2010, which was great publicity for both brands, and gave Jasper a shoe line at very low risk.
6. You can reduce fixed costs through online retail -
When you want to offer your customers hundreds of different design options, it makes total sense to use technology to help them with the process and visualise the end result – it lends itself to online. This means you can do away with the need for expensive retail stores and open up your offering to a wide geographical spread of consumers, which you may well need to do if you offer a niche proposition. Having said that, in our experience, developing and maintaining a high-quality web experience isn’t cheap, and you still need to invest in the best employees to service your customers. We’ve also found that some customers like to come and visit us by appointment in our London studio, to try on shoes, see materials up close, and have a personal design consultation. They like to feel that there is a real business and real people behind the brand.
7. You can manage cash flow more easily –
It’s not rocket science. When you’re making product to order, the customer pays in advance, suppliers are paid down the line, and you are cash flow positive on your production. On the flip side, there is little opportunity for volume discounts on production, so the cost-of-goods-sold is much higher. This of course means you need to charge a higher retail price; as long as customers perceive the value in made-to-order then the model works. At Upper Street, we have a 4-6 week lead time to make each pair of individually designed shoes by hand, and our suppliers invoice us at the end of each month with 30d payment terms. This means that we have cash in the bank for around 90d, which is a good position to be in.
8. You take the risk out of stock management –
Again, when products are made to order, it takes away a lot of the purchasing risk. The need to predict which styles will be popular, what sizes will be required, what materials will be needed is significantly reduced. At Upper Street we do hold limited stock of some shoe components, in particular those materials and embellishments that are exclusive to us, but most of our production inputs are bought at the market on a just-in-time basis. What I also love about this is that it means we don’t need to discount stock to shift it when it hasn’t sold at the end of each season, which I feel can really devalue your brand if not managed properly.
9. You build close supplier relationships –
Bespoke production needs bespoke supplier relationships; it’s so much more complex than simply placing an order for a hundred or a thousand items in one go. But on the plus side, that means you can build really close relationships with your suppliers, as you both invest significant time and energy getting it right. For Upper Street, it’s been a major challenge finding suppliers that are willing to work on a one-by-one production basis, but by working closely with them to develop this new progressive way of working (strange that I say progressive as of course in times gone by all products were made this way!), we have built a high level of trust and co-operation.
10.You let consumers lead product development.
When customers are so involved in the creative process and engage with your brand, they also want to participate in longer-term product development, indeed they feel it is their right! This input takes the risk away from development decisions. Although we started out with only high-heeled shoes, our customers pushed us to quickly develop lower heel options, so we knew they would be commercially successful. Our next major development was the launch of a ballet flat; the style options for this were developed hand-in hand with customers via a Style Lab that we set up on Facebook. We can also see every shoe that is designed on our website, so we know for example that if snakeskin is really popular we might look to extend the choice of colours and finishes with this material.
Julia adds: "Reading the above, of course it all seems like a really positive story. I will say though that the consumer move towards customisation is still very much in it’s infancy. At the moment, it’s the early adopters who are embracing the opportunity to play a part in designing their own products"
The question remains as to when (and if) this phenomenon will tip into the mainstream. At Upper Street, although we’re only at the beginning of our journey into building a really successful ‘design-your-own’ brand we strongly believe that this is the future."
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