Shopify Case Study - SoYoung Inc.
Marketing begins with product design. Unless you have a truly unique product, it will be very hard to differentiate and gain brand traction, especially online.
Introduce your business and tell us your story: How did you decide on what to sell, and how did you source your products?
A few years before I became a parent, and subsequently started SoYoung, I was unfulfilled in my career and had no idea what to do about it. My job, being in the financial industry, offered a measure of status and security that at least my parents could brag about. I had no other real skills that I could transfer to another field. Basically, I could leave my job but my only other options would really be to start at the bottom somewhere else. My then boyfriend (now husband) encouraged me to follow my interest, whatever that may be. I didn’t even know what I was interested in. So I started with Zen Shiatsu, studying with a Zen Buddhist teacher for a year. During that year, I found the courage to leave my job without being certain about what my next step was.
For the next couple of years, I struggled, trying different things, never really feeling a fit. Then I had my first child, Noah. While that was of course a huge event in my life, it was really the fact that my life was suddenly consumed with everything associated with having a child that gave life to the SoYoung line. I had repeatedly found myself in the same frustrating situation of holding a squirming, crying baby in one hand while digging through my deep, dark cavernous bag trying to find my keys that gave me the epiphany that I was going to design a diaper bag.
Initially we approached a bag maker in Montreal. He was very good but it would be far too expensive to work with them over the long term. It did allow us to do a small test run however that showed the products were viable. Next we worked with some local partners who helped us create specs for the designs and source reliable manufacturers overseas – primarily in China. We continue to work with North American based agents who assist with factory negotiations and quality control – especially with our more complex products. However, we are starting to build direct relationships with factories overseas.
How did you earn your first sales? Which channels are now generating the most traffic and sales for you?
We got started the traditional route by selling our bags at local retailers. We then extended our reach across North America by attending trade shows and finding sales reps to work new territories. By the time we got our website set up we had a bit of momentum, which made it much easier to get bloggers and press interested in our products, which ultimately led to increased sales through our website.
Retail is still our biggest channel – we have over 400 stores across North America selling SoYoung Products. We see retail at least in part as a marketing channel, because it gets our products and brand out there in front of our target audience. This in turn builds our online channel which has grown to represent over 25% of our revenue, and an even higher percentage of our profits given the increased margins of selling direct. We also have distribution agreements in 8 territories and growing – which is a good, low risk way to get our products into new markets. One great thing about being on the Shopify platform is that we can offer to quickly get a local store up and running for distributors, giving them an out-of-the-box solution and allowing us to ensure our brand is represented appropriately in foreign territories.
Tell us about the back-end of your business. What tools and apps do you use to run your store? How do you handle shipping and fulfillment?
Our goal is to automate anything and everything that can be automated so that we can focus on designing and marketing great products. Shopify's reach as a leading platform means that many of the other software products have built easy to use Shopify connections, allowing us to tie everything together. For instance, having Mailchimp integrated with Shopify has been great because it allows us to send segmented email blasts to customers based on purchase history and geographic location. We also have a couple of automated sequences that are triggered by a purchase or email subscription event.
Helpscout, our customer service software draws contact and purchase history directly from Shopify making it easy to address and track inquiries from a single view. The Google Shopping App has made it simple to keep our products up to date for search based marketing. Finally, we are in the process of switching our accounting over to Xero which, as a cloud based solution, will save us a ton of inputting as it will draw all of our sales data (both retail and wholesale) directly from our four Shopify Stores.
We used to handle Canadian fulfillment ourselves while outsourcing US orders to our warehouse in Los Angeles. Prior to moving our online store to Shopify, the latter still required us to manually enter each order into their system. We have since outsourced all of our fulfillment. So, when an order comes in now – whether through our retail or wholesale store – we don't need to touch it. The only exception is when a retailer phones or emails in a request, which we then enter into our Shopify wholesale site for them.
What are your top recommendations for new store owners?
While having an integrated online store/brand is the ultimate endgame, unless you have a lot of resources at your disposal, launching a pure online play is extremely risky and challenging. For us, retail has proven to be a great launchpad that has allowed us to grow awareness of our brand and build our online presence. Marketing begins with product design. Unless you have a truly unique product, it will be very hard to differentiate and gain brand traction, especially online. Getting out to trade shows has allowed us to get a better idea of where the market is headed, what products are doing well and where the potential opportunities lie. It's also been a great place to make friends with like minded entrepreneurs and learn from their experience. One of the most valuable things we've done is build a network of relationships through mastermind groups and shows. We try to help out other business wherever possible and have benefited tremendously from our friends.