QLD retailers find secret to success is worth millions
Paul Nieuwenhuys started his fishing gear online retail business in his garage a decade ago. Now he receives more than 200,000 orders a year.
QLD Business
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Local online retailers have enjoyed an exceptional six months of trading as COVID-19 restrictions saw consumers change their shopping habits.
There have been some bumps in the road but many of these businesses are now ramping up their expansion plans to take on the world from home offices in Queensland.
Queensland Business Monthly spoke to some of the state’s best online retailers in a bid to find out the secret to online retail success.
Hooked Online
Paul Nieuwenhuys started his Gold Coast business Hooked Online a decade ago in his garage. It is now a multimillion-dollar operation that receives 200,000 orders a year for everything from fishing rods to lures.
“The first thing I sold was a packet of sinkers,” says Nieuwenhuys. “I was working 20 hours a day on my computer selling online and we had soon expanded into a three-space garage.” By the fourth year, the former house painter had moved the business into its own warehouse at Jacobs Well.
Nieuwenhuys, who at one stage had owned a boat hire business, says he wanted a product that would result in a lot of return customers.
“If you are selling golf clubs online, you are not going to have someone come back regularly,” he says. “But people are always losing or breaking fishing tackle or rods.”
Nieuwenhuys says COVID-19 has been a huge boon for the business as brick and mortar outlets closed and fishing took off as a safe pastime. “Initially our sales ground to a halt and it was not looking good,” he says. “But at the Easter break, fishing became something you could do again with things like cinemas closed. People came back to fishing because they had lots of down time.”
In April, sales were up 60 per cent and by May they had surged 120 per cent. “People who had never shopped online were coming to us and then becoming repeat customers,” he says. “This was particularly true of elderly or retired people. Why would they drive to a shop and spend 20 bucks in petrol when they can order online and get free delivery.”
Biome
Having started out as Australia’s first online eco-retailer 17 years ago, Biome founder Tracey Bailey has since seen it all. She has gone from having to create bespoke e-commerce software to get her dream off the ground in 2003 to competing against upstart websites that can set up in minutes.
She puts the continued success of Biome, which has a projected turnover of $10m for the coming financial year, down to the heavy product research it does as well as always staying ahead of new technology.
“I’d say it’s about constant learning, keeping on top of or ahead of technological changes,” she says.
Biome employs about 100 people and now has six physical stores — four in Brisbane and two new shopfronts on the Gold Coast and in Melbourne which were opened late last year.
The online operation makes hundreds of sales a day to customers all around Australia, as well as New Zealand, Singapore, the US and UK although overseas online sales have taken a hit due to the pandemic.
Bailey, who still owns the business with her husband, says online sales accounted for about 50 per cent of trade. That figure went up when COVID-19 started and people were stuck at home but then dropped once people could shop in stores again.
“Our integrity is what sets us apart. We work hard to live up to it,” she says noting decisions like removing all palm oil products which meant destocking some top selling items.
“Customers trust we do research for them and look at every aspect of a product and not just selling it for the sake of it.
“We are still alive, we are still here. We are doing something right.”
Beginning Boutique
Online fast fashion retailer Beginning Boutique was quick to pivot when founder Sarah Timmerman realised her prime market, 18 to 24-year-old women who loved to go out and party, were now looking for a different kind of wardrobe.
“Everyone needed a pair of track pants now,” she says. “Working from home has a totally different uniform.” Her customers were looking for comfortable clothes that also looked good on a webcam.
Timmerman says it has been a tumultuous six months. “We had to redefine and reassess everything we were doing,” she says.
The 12-year-old Queensland-based online retailer was this year planning a big push into the US market, which was to be headlined by a series of promotional events for the now-cancelled Coachella music festival.
“We had to change everything we were looking at and were able to pivot ourselves to sell something more relevant in the COVID age,” she says.
Beginning Boutique still plans to launch “on the ground” in the US with a warehouse and office next year. And then make a similar push into the UK.
The company currently employs 59 people, the bulk of them at its Brisbane warehouse.
Timmerman won’t reveal sales figures but says her business has achieved 50 per cent growth year-on-year for the past two years and is on track to do that again this year.
“If you are a good retailer you can survive anything, as long as you can pivot fast enough,” she says.
MTB Direct
This is one of Queensland’s fastest growing retailers but has no shopfronts or head office and all of its 20 or so employees, scattered around the country, work from home.
It is a model the MTB Direct business, which sells mountain bike parts and accessories, adopted years ago.
The two families who own the business also live hundreds of kilometres apart. Jen and Michael Geale are based on the Gold Coast while Mel and Tim McCullough live on the Sunshine Coast. And like many online retailers, business has skyrocketed over the past six months.
“Everyone wants to buy bike parts and everyone wants to shop online,” says Jen, the head of MTB Direct’s marketing and customer experience.
“We had been forecasting growth but we have seen probably 50 per cent growth (year on year), on what we had anticipated.”
While the company won’t reveal its exact figures, Jen says revenue is “well over” $10m a year. The sales are coming from a combination of shoppers new to buying bike parts online, repeat customers, new mountain-biking enthusiasts and people who have dusted off their old gear and realise they need parts.
“I think in the past six months, online shopping has been normalised,” Geale says.
“There are people who probably haven’t bought certain things online before but once you start doing it and if you have a good experience with the service then you probably will continue to do it.”
In the past month MTB Direct has “quietly launched in New Zealand, representing a major milestone for the company and a potential road map for further global expansion.
Geale says “knowing your niche” is the biggest key to success for online retailers, especially in the early years.
Verge Girl
Sisters Daniella and Natalia Dionyssiou’s Verge Girl has found the move away from physical stores was a boon for the Brisbane-based fashion business.
“When we first started our business 13 years ago, we actually started in a physical store and not until six years ago did we start our online store, and since then we have moved to purely online,” Daniella says.
“We had two physical stores in Brisbane and I think a big part of moving to solely online was due to the amount of our time, money and effort that was put into the physical stores.
“Between rostering, visual merchandising and training staff we figured out that time was much better spent on the online part of the business, which had better growth potential.
“At the time online was booming and we wanted to be at the forefront of the action.”
Daniella says the women’s online fashion brand is now selling worldwide with its main customers in US and Australia.
“We currently have 30 employees with that number growing by the week.
“We’ve been growing at a rate of 100 per cent year-on-year and we are currently an eight-figure business and have our sights set on a $40m target for FY20/21.”
She says the brand uses influencer strategies and is now putting more focus on its own exclusive label.
“We find that being in the online world we can leverage a much larger customer base using a fraction of the capital,” Daniella says.
“Traditional retail does have the benefits of the customer being able to physically inspect the item and take it straight home after purchasing, however all these things can be overcome with well thought out e-commerce strategies and great customer service.
“Our growth has been pretty organic. One thing we do have is a very specific influencer strategy that works for us, we incorporate influencer marketing seamlessly into so many aspects of our business.”
The outlook:
Grant Arnott, the managing director of online shopping event organiser Click Frenzy, said in April online retail revenue across Australia grew 76 per cent, according to his company’s Power Retail index.
“We’re expecting to see around 60 per cent year-on-year growth maintained right throughout the remainder of 2020,” he said. “The pandemic has created a massive influx of new online shoppers and the retailers who are well set up for online fulfilment are going to see massive sustained growth over the next few years.”
QUT online retail expert Gary Mortimer said the impact of COVID-19 has forced retailers to accelerate their investment in their online platforms and encouraged more consumers to try online shopping.
“We are now seeing retailers report very strong increases in online shopping,” he said. “It is estimated the proportion of online sales will reach 12.5 per cent of physical retail sales (in Australia) by 2021.” Dr Mortimer said on average, Australians currently spend $28.5bn online each year, which represented 8.5 to 9 per cent of physical retail sales.
