April 04 2007

Interview with serial e-retail entrepreneur Quentin Griffiths

Internet Retailing stopped by for a cuppa and a chat with serial entrepreneur Quentin Griffiths. Known for co-founding Asos.com, EBTM (Everything but the music), yourschooluniform.com and becheeky, his latest project brandclear.com takes him into a slightly different e-market. He is also non-executive director of ethical clothing retailer Adili.com.

Are all the sites your idea? Some are his idea and some have been thought up by other people. He was co-founder of Asos, while lingerie e-retail site becheeky.com was thought up by someone else - the success of figleaves.com has shown that lingerie can be successfully sold over the internet.

He has been involved with all of the companies from founding stage and all have been self-financed, initially. Since his background is marketing-based, he always looks for the marketing angle and unique proposition when deciding whether to invest in a company.

Why e-retail? The internet is great for allowing new retail propositions to be brought to market. The cost base is lower and people are only limited by their imagination.

There would be no point setting up a company like yourschooluniform on the high street. The company deals directly with schools to offer school uniforms at a lower price point than existing suppliers. As Quentin pointed out, most school uniforms are one of a small number of colours (blue, brown, green, red), so by buying in bulk the company can shake up the existing incumbents. Negotiations are made directly with each school and the aim is to have 250 schools on board by the summer. (Going back to school time is the company's equivalent to the rest of e-retail's Christmas.)

Once parents have bought school uniforms online - a proposition which for many parents must be better than the usual traipsing kids around the local high street - they can then be offered other items such as lunchboxes.

Is e-retail formulaic? With internet retailing as an industry still on a growth curve can a certain amount of financial success be achieved from following a set of processes or does it need innovation? Starting any business is a calculated risk. With e-retail you have to start with a good idea and then as the database builds sell customers what they want.

In simple terms, find the right proposition, the best team, throw money at it and make sure that all areas of the business are working efficiently and together. "If they are not, it's the management's fault."

You have to beat customers' expectations. If you tell them that their purchase will be delivered in three days, deliver it in two days.

The biggest challenge is acquiring customers. He now has a marketing formula which seems to be working across the companies. While he wouldn't give away too much detail, balancing PPC and natural search tops the list, followed by affiliate marketing.

He gives companies 18 months to 2 years to prove their sales curve before looking for finance - a company should be successful after a couple of Christmases. Raising finance is the same as anything else where a track record helps: the more you succeed the more likely you are to get investment.

It took five years before Asos broke even. "EBTM will take two," he said. This is due to the learning curve he went through with Asos "you only make a mistake once," and the fact that the market has moved on.

He predicts that the online shopping growth curve has three to five years left in it - "at least".

Brandclear is a different proposition to your other sites. Do you think the industry has reached the stage where suppliers can grow faster than e-retailers? ie. selling shovels during the gold rush. Brandclear is still in the embryonic stage and will launch in the summer or later this year. The site will offer retailers and brand owners a way of "getting rid of overstock". The proposition for the consumer is branded goods with 30, 40 or 50 per cent off. "The TK Maxx for multiple brands."

Eventually, the site will have tens of thousands of skus across a wide range of products - electronics, jewellery, electricals and accessories for example.

Social networking - can communities be monetized by retailers or are they just a marketing channel? When the community reaches a critical mass the site owners are in a great position. Since most social networking sites are built around a particular subject or activity it would be pretty hard not to monetize the site whether through selling the list or offering product to the community.

Social networking can be integrated with a great retail model. Myspace, for example, is driven by music so could be linked with EBTM (his music site), into a great CRM-led business. Where people are talking about a specific band, they could be offered a big discount on merchandise. Retailers have to be clever and make sure that their messages are targeted and relevant.

Another option is co-branding with magazines. It's not definite yet but EBTM is working towards a co-branded site with heavy metal music magazine Metal Hammer. The site would include a Metal Hammer shop with products from EBTM.

What is your next step? "Marketing and online will always be part of what I do. I have another two or three years left in this space with the retailers I'm working with now," he said before musing about the job of expanding each one globally.

Emma Herrod