In the last quarter, EGO's cost of customer acquisition has fallen by 70%, with conversions rates nearly doubling, and monthly orders tripling. This makes Ego's online store its best performing store (offline or online) on a Sales AND ROI basis. These outcomes are of course no accident. Renowned game designer and performance marketer, Hamaad Ravda (formerly Howzat Cricket; Shopistan.pk), has been driving e-commerce and online marketing efforts at Ego and is the force behind creating a rapidly growing revenue stream for EGO. Hamaad was kind enough to share the keys to achieving these results.
What's the uncomfortable truth here?
Offline is more amplified online, given resources are in place. Like for bricks-and-mortal retail, online sales are a function of selection, allocated store inventory and marketing/ foot-traffic/demand generation. The main reason why fashion retailers are not getting the ROI they expect is that they have set up online stores without allocating the bare minimum resources towards it.
Can you add more color on resources and ROI expected ? One question we often hear is "How big can this get" ?
There is evidence worldwide that online retail now accounts for up to 15% of total sales for top fashion retailers like Gap. When you look at our next door neighbors India, it is being projected that the e-commerce market will be $22 billion by 2019—comparable numbers for Pakistan could be as high as $2.5 billion by 2019. Even today, there are players in the local market running online stores with sales volume of PKR 2 crore to PKR 8 crore monthly (including 2 leading bricks-and-mortar retailers!).
However, the majority of retailers are failing to allocate enough inventory or paid marketing spend to generate adequate demand. Most retailers I have worked with have been able to achieve sales equal to their top A-class store (2000 sq ft. and above) with the requisite inventory and some online marketing spend (some beat average offline store sales by upto 2-3x).
But this is just the low hanging fruit. They should be setting their sights much higher; with the right investments, it is possible for top retailers to create a new channel through which they can drive $1 million in monthly sales over a 9-18 month time frame (smaller retailers can do $100K-$300K in sales). To achieve that kind of scale, retailers will have to make investments in online demand generation, allocating the right inventory for the expected scale, and by implementing operational processes and software that allow for efficient and fast fulfillment of orders.
What are you doing that others aren't?
I utilize strategies that are data-driven rather than guesswork and that gives me a significant advantage over competition. It's just the little things on the customer decision journey that matter, for instance, an ad where the model is looking at the camera (as opposed to looking away) has comparatively higher conversion rates. People can draw multiply psychographic guesses as to why that is the case, but the data backs it up. If I explore my store search data and incoming keywords from search engines, I can find that my target audience is using search terms like "long kurta
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