E-commerce has become a competitive field in the past few years.
Anyone can start selling goods online. You don’t need to make a lot of upfront investments to set up an online storefront, source decent vendors or to create the initial marketing campaign.
What is hard, however, is to stay afloat and claim your spot in the crowded market. Stellar customer experience can be one way to outsmart your competition. After all, up to 80% of US consumers are ready to pay more for a product/service, which comes with a superior customer experience in tow. And the same is true for all global markets.
I had a chance to talk with Eetu Raudas, CEO and co-founder of Broochy – a promising new Finnish startup on a mission to introduce more men fashion brands to the global audiences.
In this interview, we are talking about the Finnish startup ecosystem (and why it may be the best country to launch a startup today), how great customer experience is built, how to market to millennials and the future of e-commerce.
What was the inspiration behind Broochy? Why did you decide to launch a fashion marketplace?
Actually, it wasn’t a planned career switch. I had just left my operational responsibilities in another company that I founded some years ago and was open to new opportunities.
A good friend of mine was kickstarting a new project at that time – a shirt brand for busy people. He planned to manufacture all the goods locally and already had good traction with selling those shirts to close friends (me included) while working on the online storefront.
His project was launched in Helsinki, Finland, and the local market isn’t that larger. So it got me thinking – “The product is great. Why other people around the world aren’t discovering these goodies right now?”
I talked to a few other friends and got two more co-founders on board. Basically, that’s how Broochy was born. We didn’t exactly choose to go into fashion. We just spotted this opportunity and decided to harness it.
Your startup comes from Finland. What can you tell about the local startup ecosystem? Is it a good base for starting out or opening a second office?
Of course, I’m biased, but I think that Helsinki is currently the best city in the world for finding talented, motivated and committed software developers ☺
After the fall of Nokia, a lot of people had to switch careers. The mobile gaming industry started booming first. In just seven years it grew from $94 million to some $2.4 billion by 2015. You’ve probably heard that Finnish studios have developed Clash of Clans and Angry Birds. This huge industry growth has attracted a very international vibe of investors and entrepreneurs, which started shaping up the initial startup community.
As a result, the government started catering more towards the entrepreneurial mindset. We now have the Finnish Funding Agency for Innovation (Tekes) that actively invests in competitive local companies. They offer lucrative funding rounds for startups at different stages and invested over 610 million euro in some 1.928 projects in 2011 (the latest data available). Along with that, they’ve created a great mentorship and advisory service. Now they are the go-to hub for newbie entrepreneurs to refer to.
Apart from that, the government has significantly cut down the amount of red tape required for company incorporation. The entire process can be completed online.
The only problem I personally see right now is scaling business development. That’s when you many need to set up another office somewhere closer to your customer base and with a better access to international business talent.
Sweden is one successful example of how a country with a small domestic market can master the art of international expansion. Do you think Finland will catch up and become the next Northern unicorn hub?
We have this popular saying: “Finns know technology really well and Swedes know how to sell products”
There are more billion-dollar unicorns in Sweden right now, but I think Finland will bypass them within this decade ☺
Let’s take fashion market for example (as that’s where I’m most knowledgeable). One of the biggest European retailers, Zalando, has recently opened a new tech hub in Helsinki. Again, that speaks a lot about the workforce quality. And folks now working for them can learn from their platform strategy and develop a more global mindset, which could be later applied to other businesses.
The biggest problem tech startups are facing in Finland right now is the lack of proper testing ground for product launches. Again, it’s the small domestic market to blame. Startups need to start learning about their target customers since day one. But this is really hard when you aspire to sell to the international crowd, yet you’re testing your product with Finnish customers. There’s a big difference between these two customer segments.
So, knowing your customer is really important. Some even go as far as saying that great customer experience will become more important than the price factor by 2020. At Broochy, how do you cater to meet your customers’ needs?
I’m a huge believer in the power of a great customer experience too. It resonates across our entire team and we all take it very seriously.
Customer experience can never be good enough. You constantly need to collect actionable data from your customers through various channels and apply those findings to the new product.
At Broochy, we collect crazy amounts of data on our website performance. Our goal is to remove the slightest frictions from the shopping experience. So we are constantly launching new features that we think will move the needle for this goal. It helps a lot when you have real-time data on your customers. Then you can quickly see if a product feature you just launched is actually being beneficial for the customers. We also talk to our customers face-to-face to better understand their needs.
I think every startup should use the accumulated user data to their advantage, not just pile it up somewhere in the CRM.
Wow, that sounds really awesome! But what about the brands you work with? How do you choose the vendors and make sure that the customer expectations are met?
We have Mikael, a great chap who’s heading our merchandise team. They go through all the vendor applications individually, handpicking only those, which are consistent with Broochy’s own brand positioning.
We have also approached the coolest brands individually and offered them to sign up for our platform. Afterwards, we partnered with Shopify as their first official global sales channel in the fashion context, which has lead to an increasing number of inbound applications from brands.
All the companies we choose to work with must ship worldwide and have a Shopify storefront for our sales channel integration. If they get thumbs up from Mikael, we sign the deal and add them to our portal.
Your brand is geared more towards millennial consumers. Any special tips for marketing to this audience segment?
I won’t surprise anyone by saying that targeting these folks with traditional paid advertising is useless. I’m a millennial myself and I hate ads ☺
What worked for us is staying true to our values and being present where our audience is. That is Facebook and YouTube. Partnering with influencers such as micro-bloggers or vloggers is another good option to consider.
But the single best marketing tip I can give is – build a stellar product and a great customer experience. Those are the best marketing dollars when reaching millennials, who recommend products and services to one another on a daily basis. Get the word of mouth marketing work for you, not the opposite way.
The last question, let’s speculate a bit about the future of e-commerce. What new technologies do you think will make the most impact in the retail/e-commerce space?
Ok, so I actually think that marketplace platforms like Broochy will become the new global retail model ☺
Better personalization, in general, will also be the most important thing in e-commerce. As I mentioned, most startups already have the data to create better customer experience and make each and every shopper feel “special”.
Virtual reality is a bit hyped right now. But I believe that it will have a bigger impact in the space within a longer timeframe (e.g. 10 years) as the VR gear is still far from going mass market among the consumers.
This post is part of our contributor series. It is written and published independently of TNW.
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