My piece on the Conversation has generated a bit of interest from business reporters. Here’s a piece from the Brisbane Times that resulted from a phone interview. I got to bandy around terms like “disruptive technology” and delve deeper into the scope for bricks and clicks to coexist (for some).
Just over two years ago I posted about the potential of (and possible pitfalls associated with) launching an online design-your-own boardshorts operation (a la T-shirt phenomenon Threadless).
I was intrigued today when I stumbled upon a magazine mention of just such an entrepreneurial endeavour. A mob out of California (now that shouldn’t surprise) called Shortomatic have been building up a portfolio of user- and guest designer-provided shorts through a pretty nifty website.
They have a number of similar elements to Threadless, although users cannot vote on prospective designs (instead the firm is the complete gatekeeper once artists submit). There is a revenue stream for successful designers of up to $1000 per design ($5 a pair up to the maximum run of 200), and a feel-good pledge to donate a similar amount to a charity.
Contrary to our discussions/expectations, all the materials are sourced and stitched together in the US (rather than China), which does push the pricing a bit higher than I expected ($US a pair).
The operation also suffers from a pretty slow turnaround from order-to-shipping – 21 days or so – which would seem to narrow the potential customer base a little (to those explicitly seeking a rare item of clothing). Again, you might argue this is a move away from Threadless’ model, as the t-shirt vendor’s speedy delivery (obviously built on an ability to print and warehouse shirts confident of sales from their much bigger customer base) allows for pretty spontaneous purchase, while Threadless’ policy of limited runs also encourages a “buy while you can” attitude.
Nevertheless, this looks like a pretty neat play at this considerably smaller and tougher fashion segment. Again it does beg the question what other design-your-own, crowdsourced interfaces can we foresee (remembering we’ve also looked at custom bicycles on here too)?
Aussie shopping centre powerhouse Westfield (the world’s biggest shopping centre operator) announced a curious brand extension last week. The firm is reportedly planning to use its website as a virtual shopping mall, hosting e-commerce interfaces for a variety of retailers (with fashion being the rumoured kick-off).
So, is this a good move for Westfield?
As I’ve argued elsewhere, Westfield has five particularly powerful competencies: (i) property selection; (ii) redevelopment; (iii) financing; (iv) retailer relations; and (v) branding and marketing . The first three have no relevance to this venture, so the firm is only left with retailer relations and branding/marketing.
Source: Daniel Austin (d)Not
The retailer relations is partially about Westfield’s capacity to offer a more extensive suite of locations relative to rivals and the resultant bargaining power they wield as a landlord. It is also about Westfield’s extensive monitoring of tenant sales and sophisticated contracting processes.
Westfield already carries some information about tenants on their website, and because of their prominent landlord status can certainly attract the attention of these firms. I would be stunned if any of the retailers would grant Westfield exclusive rights to host/direct traffic to their e-commerce portal. Indeed, e-commerce is a substitute to the physical interface, and a mechanism these retailers can use to more effectively negotiate with Westfield as a landlord. Westfield will need to tread much more carefully in these e-relationships.
The counterbalancing angle may spring from the final competency – branding/marketing. Westfield was a global pioneer of using a common brand for their malls (indeed, my post title reflects the reported source of this brainwave – a founder heard a shopper saying they were “heading to Westfields”, and saw the scope for differentiation).
It may well be the case that online shoppers welcome the ‘browsing’ capacity of a virtual Westfield mall. New/small retailers with limited capital to expand their bricks and mortar footprint across Westfield’s 119 malls, may relish being next door to Zara, The Gap and Gucci on the Westfield website. It may also be a mechanism for virtual internationalisation. This could be a chance for Aussie retailers to test the waters in the US, UK and NZ without crossing an ocean. Presumably solely e-commerce retailers could also tap into this spillover effect. Getting this right could also extend consumer awareness of Westfield beyond their current whitebread Anglo markets.
The big challenge is making the site sticky enough. Westfield will need to fill the competency gap in build a user interface that is engaging, exciting and innovative. If they don’t get it right quickly someone could easily build a rival (Google perhaps?).
The uspide for Westfield is that there isn’t much downside here. I wouldn’t think there is an enormous investment required here. It is just a mechanism to augment an already profitable business (and perhaps distract some investors from the firm’s exposure to property price and finance risk).
Verdict? Interesting experiment that could conceivably secure some first mover/network effect advantage.
Happy New Year all. Over the break I was wandering around a great website for seeing new business ideas at work – Springwise and came across an idea screaming for local adaptation to the Australian market.
This post of from August last year highlights the hook-up between US fashion retailer Urban Outfitters and a custom bike builder Republic Bike.
Urban Outfitters are allowing their online customers to order custom-designed bikes (>500 combinations of those trendy fixed gear types) that are then delivered by Republic Bike.
There would appear to little risk for either party here. Republic Bike get a big boost to customer awareness and presumably gain more from economies of scale than they lose in a cut of the revenue to the retailer. Urban Outfitters get a nifty new offering that they wouldn’t be able to produce themselves (thus differentiating themselves further from other youth fashion houses – something they’d started by offering op-shop style homewares).
Presumably it wouldn’t be hard for Urban Outfitters to also offer the bikes in-store (or at least the ordering process).
Surely there is scope for such hook-ups in the Australian retail space? While not many Aussie retailers have a strong e-commerce interface (probably reflective of our terrible broadband and our highly urbanised population compared to the US), there should still scope for innovative folks like Crumpler and Haul to offer design-your-own while tapping into an existing but underutilised customer base of a more generalist retailer.
Who else would be a candidate? As producers? Retailers?
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