We speak with Dylan Bland of Mighty Ape, one of New Zealand’s local online success stories. Mighty Ape is a leading local e-tailer, selling computers and electronic games, books, movies, home and office products, toys, music and a range of other goods. Mighty Ape shared their thoughts on a wide range of online retailing issues and we present these below.
Many large international players have substantial resources and scale advantages. How does Mighty Ape successfully compete in this space?
We find that the majority of international e-commerce players have not focused on the New Zealand market and don’t have distribution centres located in New Zealand. Local e-commerce retailers including Mighty Ape have an advantage in this area. Stock warehoused locally can be delivered overnight anywhere in New Zealand. High service levels and fast, reliable delivery is an area where all local companies can effectively compete.
What have been the main market developments impacting on your business over the past 1-2 years?
We’ve seen New Zealanders become increasingly comfortable shopping online at various different online stores - and this increased comfort benefits the entire industry including Mighty Ape. We have also seen traditional bricks-and-mortar competitors respond to online shopping with mixed success. Some have competed head on and built websites of their own, while others have used their market power to lure customers in store with lower prices. Overall though, the market we operate in is quickly maturing and becoming more competitive.
What do you see as the key online retail trends for 2015?
Distribution networks will continue to improve with more products being made available to New Zealand consumers in a fast, reliable manner. Local retailers, both online and offline, will continue to put pressure on local suppliers and distributors to reduce the pricing arbitrage that exists in many categories. New Zealanders will continue to spend an increasing amount online and local players will work hard to keep as much of that spend within New Zealand as possible.
How does Mighty Ape use social media to engage new and existing customers?
Mighty Ape has always preferred to talk directly to customers rather than through a proxy like the media. For this reason we’ve invested early in Facebook, Instagram and Twitter - to ensure we are where our customers are. We don’t rely on the media or other 3rd parties to communicate important information about our business to our customers.
We’ve built our social audience by engaging with customers on topics that are relevant to their interests - and not strictly on a “selling” basis. For example, our Games Facebook page informs our customers about the latest gaming rumours, product announcements, competitions and giveaways - without the pressure of a hard sell. This daily interaction with our brand, in an environment that is comfortable, helps us to build an authentic relationship with our customers.
What are the critical success factors for retailers establishing an online presence?
Don’t bite off more than you can chew. Online shoppers in 2015 have higher expectations than they did 5 years ago. If you build a website and showcase your products - customers will expect to be able to buy them and have them delivered in a reasonable timeframe. This means all your products need to be well photographed. It means you need to have accurate stock data. It means having a reliable distribution system that can pick, pack and ship your orders quickly. These systems take time and resource to build - and if you’re successful - they’ll have to scale.
If you’re not ready for that - take a step back and use your website to solve easier problems ie. perhaps use your website as a showcase of what customers can expect to find in store. Showcase your store with beautiful photographs and entice customers to visit in person. Make your phone number and email address easily visible. Publish your opening hours. Whatever you do - do it well and build from there.
People get a lot of emails these days. How do you keep promotional emails effective?
Despite the growing number of digital channels available to online retailers email still remains the primary means to communicate and maintain relationships with customers. Ensuring email is relevant and interesting is more important than managing volume or frequency. Keeping email content relevant to their order history is key to maintaining effectiveness. This is challenging for online stores that offer a wide variety of products.
How essential is it for retailers with established physical stores to also have an online offering?
It depends - some products are more suited to selling online than others. Physical stores selling small, easily transportable products are more open to disruption than stores selling large, difficult to ship products. Price is also a factor. Customers have less comfort purchasing high value items they cannot see or touch. The important point for retailers is to understand their particular market and the options their customers have when making a purchasing decision. These insights are best achieved by being a shopper in that category yourself, and talking to your customers about their shopping habits.
Is there much room left in the market for new New Zealand online retailers to establish themselves?
It’s difficult to get scale in the New Zealand market but there are still opportunities for niche players to use online to reach more customers both locally and internationally. There will always be room for new players offering different products at better price points and with a higher level of service. Technology costs are lowering and distribution networks are becoming more efficient and more accessible - which opens the door for more retailers to embrace online and do it well.
Does Might Ape have an eye on the Australian market?
Australia is an important market for Mighty Ape. We have a dedicated website in Australia and dispatch orders from here in New Zealand. Australia is a big market with lots of opportunities for online businesses like Mighty Ape to offer a compelling service from here in New Zealand.
What sort of development do you expect in the areas of “click and collect” and e-tailers opening physical stores?
Online retailers who can offer a fast, efficient delivery service will have less need for “click and collect” than those who don’t. Click and collect is more important for retailers who struggle with multiple stores or distribution points, and who can’t make a consistent stock or delivery promise to customers. That being said - some customers will always prefer to pick up in person, whether it be to inspect a product, or perhaps their address is inaccessible by courier - so it’s an area that will no doubt grow as the market matures.
With competitors only a click away, how do you drive customer engagement and loyalty?
Mighty Ape drives engagement and loyalty with a strong, repeatable delivery promise. Our website provides real-time stock statuses for each product, and estimated delivery times based on the customer’s delivery address. We work very hard to ensure we meet those promises - and when we do - customers reward us with their loyalty and are more likely to purchase from us again in the future. Online can sometimes feel like the wild west - a lot can go wrong. Ensuring customers get what they want in the timeframe they were expecting to get it - you are most of the way there. This level of reliability and predictability is more valuable than any off-the-shelf loyalty programme or other incentive based programme.