15 Minutes With

15 Minutes With Tony Preedy

June 29, 2022 Eclipse Season 1 Episode 11
15 Minutes With
15 Minutes With Tony Preedy
Show Notes Transcript

In our eleventh episode of 15 Minutes With we're talking to Tony Preedy. Tony is the Managing Director of Fruugo.

Tony has years of experience in Marketing and Managing eCommerce and Home Shopping experiences, long before eCommerce was a thing. Having previously worked with Littlewoods and Lakeland he understands the home shopper better than most and knows how to talk to them in a way that gives them what they're looking for and allows them to take action. His work now with Fruugo is in the world of Marketplace. This is an area of huge growth and many businesses are investing in expanding their offering through this medium.

In this episode, we talk to Tony about the rise of Search Driven Shopping and the Marketplace and why it has had such an impact on the world of eCommerce. We also talk about the things that should be considered when thinking about venturing into the world of Marketplace and ask if it is right for everyone.  

Graham:

On this episode of 15 minutes with we're talking to Tony Preedy, the Managing Director of Fruugo. Fruugo allows shoppers to buy from retailers across the world in their own language and currency using recognised payment methods without needing to calculate exchange rates or shipping costs. This global online marketplace supports ecommerce transactions in 42 countries, 31 currencies, and 28 languages. It houses over 1800 retailers, has processed over 7.9 million orders and had 240 million site visits in 2021. Tony has years of ecommerce experience that stretch far beyond just marketplaces. And we asked him how he has seen consumer behaviour shifting towards Search Driven purchasing and discuss the benefits of adding marketplace to your business strategy. And what it might look like. Hi Tony, welcome to the podcast.

Tony Preedy:

Hey, Graham, thanks for having me on.

Graham:

Yeah no, you're very welcome. What sort of consumer shopping behaviour shifts have you seen in your time kind of within the world of marketplace?

Tony Preedy:

Well, I think the way I look at the way the retailing is evolving Marketplace is a sort of like the natural evolutionary answer to the way the retailing is going. And the way I look at the world nowadays is that once upon a time, if you wanted to sell to people, you opened a shop, and you typically then sold to the people who walked past that shop. And then if you wanted to sell more, you open more shops, and you put those shops in different places. So you got to sell to different people. And that's how retail chains grew. And that was the model. And then the Internet has come along. And people have tacked on websites to the brands they created through those physical retail stores, then over the last maybe five years, the way the consumers shop, particularly online has really started to change. So instead of seeking out a retailer and shopping their range in perhaps the way they would have done if they'd walked into a store to look at what was there to choose from that day, they're using search engines, and they're using search engines either on the retailer's own website, or they're using Google to look for a specific item because they've got a need or a problem that they want a solution for. And they're becoming increasingly agnostic about where they buy it from, they just want the thing and they want the thing now, and in some respects, they've been taught that by Amazon. Amazon makes it very easy to simply go and buy one thing. Whereas perhaps five or 10 years ago, when I was sort of managing online shopping businesses, you talked about building a basket, and there was a minimum order value for free shipping, and you'd expect to get multiple items per order. Well, that's all gone now. People are typically buying a single item. And then when they want the next thing, they go and search again for the next thing. And I think marketplaces have both encouraged and now are accelerating that trend. What marketplaces are doing is leaning into a trend that's at the consumer level, which is what I call atomic shopping. So it's where you're buying the lowest possible unit that satisfies the need, you've got.

Graham:

And that's an interesting trend, actually, because and there seems to be the story about the demise of the department store. And to me, I kind of rightly or wrongly think of a marketplace as kind of a digital department store. And it's interesting that people are not shopping well, they don't appear to be shopping in department stores on the high street, but their entire digital trend is to do the exact thing that they're not doing in person.

Tony Preedy:

I do get the analogy. And I think there is some truth in that digital department store concept. But I think what's different is how you shop it, which is primarily about search. And whereas perhaps in the department store, you walked in the ground floor and you walked past the perfumes you weren't interested in buying and you went up the escalator and then you went somewhere else, and then you hunted down the thing you were looking for, and then he got there to discover that they didn't actually have it anyway, now what you're doing is you're typing something in on your phone, that is a pretty good approximation of what you're looking for. And then it's as if you've been teleported directly to the shop that contains that item. And you're stood there right in front of that item ready to buy it without you actually having to do all of that physical searching. So that Search Driven shopping really is where the world has gone. And for retailers wanting to take advantage of that. Then clearly, if they have their own website, they're going to want to optimise it for ecommerce and making it available for search and findable by Google and all that good stuff. But then you still have to get people to come to your website. So then a lot of what ecommerce managers do is worry about traffic generation. Well, marketplaces are where the footfall is online. And the other beauty of the marketplace model is you don't usually have to pay to get in, you simply join the marketplace and you pay when you get a sale. So it's like performance marketing on steroids. So you're getting access to a huge volume of consumers actively looking to buy the products you're selling, but it doesn't cost you anything unless they buy from you. And that's a really attractive retail model. But there I think it's then important to look at whether you're adding a marketplace that takes in or brings you a different type of consumer to the one that you you gained, if you were on, say Amazon. A lot of retailers are wanting to diversify from their use of Amazon as a sole marketplace. And then they're looking for what other marketplaces are out there. And eBay is an obvious one. And some brands will be comfortable with the environmental rules of selling on eBay and many won't. But then you get into more specialist marketplaces. And that's when you tend to get into cross border. And that's, that's where Fruugo really specialises because 95% of the orders that are generated on Fruugo are typically export orders. So we're bringing to retailers in one country customers from lots and lots of other countries. And consequently, they're selling to people they wouldn't otherwise have been able to sell to

Shelley:

Tony, you talked about the trend towards marketplace with respect to consumers being able to be in control it a little bit more of their own shopping habits and what they're trying to seek in their shopping. But you've also talked about expanding that radius. And you just kind of touched on it again there. I wanted to know how do you use data to sort of expand and take it to the next level, again.

Tony Preedy:

Data is a bit nerdy as a topic, but it is super vital when it comes to ecommerce. Again, to take a physical retail analogy, if you were a brand selling to grocery, what you really cared about was shelf presence, the number of facings whether you were eyeline that ultimately was a big influence of how you get seen. And if you have to get seem to get bought online, it's the same principle you have to get seen to be bought. But how you get seen is all about data management. And for most ecommerce businesses, it's about how the data is structured. But then it's about content, I still find it amazing how many ecommerce businesses attempt to sell products with next to no description of what the item is, why you'd want to buy it or why they as a retailer picked it for sale in the first place. I've spent a long time working in the catalogue industry. And for us, it was always about storytelling. It was about sell the sizzle, not the steak, you know, what can you do with it? Why do you want it? What are the benefits of doing it. And so that old school copywriting discipline that goes back, I mean, centuries, there's a book by a guy called Claude Hopkins called Scientific Advertising and he wrote it in the early part of the 20th century, it's super relevant to today's marketers, and it's got great tips on how to optimise your copy to sell more. It's a much overlooked aspects of ecommerce and and of marketing.

Graham:

The one thing that I can see it's like a true benefit for the marketplace pieces around the convenience. And this is something that keeps coming up time and time again, convenience has to be a core factor of kind of your offering. And it feels like the marketplace is kind of a quick route to convenience, right? Because certainly when you look at Amazon, that seems to be the key point of differentiation is the convenience piece, you get to a single place, I've got all this stuff, you can get it delivered tomorrow, if you've got prime, if there's any issue, you can get it return really easily that offering seems a little bit more difficult to replicate on your own site.

Tony Preedy:

So would I agree with that statement? Yes, I would, they'd look at what Amazon is good at, it tends to be what I would call low emotional content products. So Amazon is not great in health and beauty. It's not great in high end fashion brands, other web businesses are far more effective at selling those categories than Amazon is. What Amazon is fantastic at is the stuff that you don't really care about very much. It's like I need a cable for my laptop to connect it to a monitor is not a silver bullet that it simply means that by being accessible you you win. So there are other factors. And I've already talked about storytelling and emotional content around the product to encourage people to want to buy it. But then you get into the other old marketing dimensions of price and availability and so forth. Fruugo is a business that connects sellers and customers all over the world. And in many cases when they're searching in for the sake of argument Sweden, they're not just therefore able to shop from Swedish companies, they're able to access retailers on Fruugo that are placed all over the world. So it could be a seller in Germany who gave the data to Fruugo in German and that product price in euros but the customer in Sweden is buying it in Swedish and priced in kroner and for them it could well be that what the Fruugo marketplace has done is brought to Sweden a product that otherwise wouldn't be there. And so it's the availability of that product that is the key to getting it sold in that particular context.

Shelley:

Are there any products or industries that you think are particularly unsuited to marketplace?

Tony Preedy:

Pretty much anything you can put in a box and give to a parcel carrier to ship can be sold? We sell a lot of garden furniture which is like really bulky big product, but if you can ship it, we can sell it is the short answer. And then there are some product categories that are prohibited, that can't cross borders or the search engines won't allow the sale of but apart from that, no, pretty much anything is good for marketplaces. The stuff that works best is going to be relatively small, relatively light and relatively expensive. I mean that's perfect for marketplaces because there's plenty of margin in the product, but it doesn't cost a fortune to get it to where it needs to get to. But there are lots of lots of examples of products getting sold, which don't conform to those sorts of small light and expensive parameters. And, you know, our most popular category on the Fruugo marketplace is clothing. And there's a great volume of clothing being shipped from one country to another, and increasingly, directly from the manufacturer in China to the consumer in Western Europe. That's another trend that marketplaces I think are accelerating, which is cutting out middlemen and allowing the customer to benefit from the price saving.

Shelley:

Sure, almost anything goes and actually what's more important is making sure that brands are aligned to the right marketplace for their needs.

Tony Preedy:

Now use the word brand, and I think is worth just pulling that apart to say, Okay, well, when is it a brand and when is it a retailer. Retailers typically stock goods, sometimes their own, often those they've bought from other people, usually brands and so a brand can find that they are already on marketplaces without sort of realising it, because the retailers to whom they've sold products are listing those products are marketplaces and a lot of brands are wrestling with that and trying to figure out whether they should actually be the supplier of product into those marketplaces and sort of own that relationship and the product content. And there are a lot of direct to consumer brands that only exist as brands being sold directly to the consumer, they don't sell to retail, they are just DTC. And in many cases, those are international. So there's a lot of US brands selling to European customers directly through marketplaces.

Shelley:

I wonder if I could go back as well to when we were talking about convenience and convenience with respect to the customer. But what I also wanted to touch on was this convenience for retailers and how you were saying pricing models are much more convenient to retailers as well. And so actually, the convenience of marketplace isn't just for the end consumer, but it's actually for the businesses themselves and how they conduct their business.

Tony Preedy:

Marketplaces are frequently a way of providing sales growth with very little risk and very little capital. For most retail businesses, I would say to them, unless you're solely going to concentrate on marketplaces, get your own house in order first and concentrate on having a good website and all the operational processes necessary to be efficient in driving traffic to that website and fulfilling those orders. But having done that, adding those products or extending that operational facility to one that is able to process more volume, because you're marketing those same products through marketplaces for me is a bit of a no brainer, because the only extra work you need to do is the data work to integrate with those marketplaces. It's a one off project, it usually takes a few weeks, if you sort of apply yourself to it. And then you've got a stream of orders coming directly to your door, you're only paying for those on a per order basis. So it's a way of extending the investment you've already made in operating a website for yourself, you're just getting more volume for it, I guess Fruugo is then doing that, at enormous scale, we're providing retailers the ability to sell to consumers in over 40 countries, those are highly unlikely to be consumers that would have been reached otherwise. But Fruugo is doing all of the heavy lifting, we're doing the marketing, we're doing the translation, we're doing the Foreign Exchange Management, we're doing the payment services integrations, we're doing the fraud detection, all the retailer has to do is receive the order, put it in a box, stick a label on it and ship it.

Shelley:

Are you seeing many barriers for retailers in that scaling process?

Tony Preedy:

Inventory management becomes a challenge if you are operating your own website, and then multiple channels to market. Order management systems matter because it is in nobody's interest for a product to be marketed that can't be sold. But now generally speaking, most of these things do scale pretty well. During the course of the pandemic, we were in some cases selling more units than our retailers could keep up with. But even then there are if that if that becomes a sustained problem, then there are third party service providers that can solve that problem. So we work with a company called Huboo who are a third party logistics organisation that specialises in providing warehousing and order picking services for retailers. If a retailer were to find that they needed to expand and or they'd reach an operational constraint then overspill into a third party is very straightforward, nowadays.

Graham:

You've given us so much insight already. But if somebody is wanting to do this or add the stream to their business, what kind of tips or tricks or advice can you give them to build into their strategy as they start to look at marketplace as an option for their business?

Tony Preedy:

So if you're going to be serious about the use of marketplaces, you're probably going to want to use more than one. And if you're going to want to use more than one marketplace, you're going to want to use some form of orchestration software that helps you so you've got a single user interface in your business and a way of write once, published many times, to all the places it needs to go. And then in the other direction, you've got all the orders coming in and being consolidated, and you've got inventory being managed across all of those different marketplaces. So those software systems have real value if you're planning to develop a marketplace strategy seriously. And you choose one of those to meet the needs of your business, depending on scale, and how sophisticated you want to get we work with many of the big companies ChannelAdvisor and Len Gower at the sort of top end of the the industry, I suppose, both in terms of functionality, but also cost. I would also recommend a company called Linnworks, who also do an excellent job in terms of providing these sorts of systems to retailers. And indeed, there are many others around North America and Germany as well.

Shelley:

Tony, thank you so much for your time today. It was really, really interesting to learn all about marketplaces, I know that there will be a lot of people listening who will be able to apply everything that we've discussed. And take that first step, you know, dip a toe in the water and try something new and and see where it takes them in business.

Tony Preedy:

Yeah, I mean, the the truth of the matter is start selling on marketplaces start on Amazon and list one item, you know, it doesn't have to be an enormous great project. I'm a big believer in testing and small scale experimentation is a great way of learning, you know, sort of the Agile method sort of frequently iterate and adjust based on feedback. Now clearly there comes a point where you do need to put some systems in place to do it at scale, but don't feel like there's an enormous great barrier to leap over in order to get started because the barrier to entry is generally speaking very low.

Graham:

That was Tony pretty Managing Director of Fruugo. There was little doubt with a growing trend of Search Driven purchasing is here to stay. Putting yourself in places where people are looking is a smart strategy. The marketplace is a natural next evolution of E commerce. And with the high levels of traffic, placing it into consideration for your business might just be the right thing to do. But you need to make sure that you own houses in order first, you're able to set up systems that allow for growth and you're creating content that gives people a reason to pick your product not only for marketplace, but for your own website. Start small and experiment. And if it works for you, you may have found a new channel that will drive a new audience and as a result, new business. Thank you for joining us on this episode of 15 minutes With and we look forward to having you along on the next one.