In Depth

Big Retail, Small Magic

Operating an artisanal retail business: as easy as riding a unicycle backwards and blindfolded atop the edge of a razor blade. That’s the challenge of scaling custom-made merchandise in a way that creates magic for consumers and profits for retailers. Custom furniture startup Joybird Co-founders Christopher Stormer and Alex Del Toro talk about what it takes to achieve such a feat – and master the art of artisanal commerce.

The digital age has allowed consumers to be more hands-on and particular about the items they buy, whether it’s organic food, clothing or home decor, just to name a few product areas.

This drive has created a boon for customer-facing startups that specialize in custom-made goods. Their being small-scale by necessity drives them to treat each customer on a personal, individual basis — which is not something that larger retailers who desire to “capture the magic,” as it were, of the custom-made retail space can (by nature of their infrastructure) do on that same level.

Or is it?

The more established players in the retail space have two options in that regard. They can simply buy a startup that offers custom-made products that overlap with the retailer’s (as many of them do) and absorb their operations, but that ostensibly “easy” solution comes at a massive cost. Their size aside, not all big retailers are looking to throw down that kind of money, and not all startups, depending on where they are in their development and how much of a personal stake their owners have in the brand vision, are necessarily looking to be bought out.

Not to mention the fact that running a specialty retail operation is no easy task.

Just ask Christopher Stormer, Cofounder and CEO of Joybird, a Los Angeles, California-based maker of handcrafted, custom-built furniture. The company has experienced explosive growth over the last 18 months and recently expanded its workshop capacity by five times to keep up with consumer demand.

Stormer tells PYMNTS that, although he very much loves what he does, operating a 130,000 square foot factory and its 200-plus employees is a 24/7 job that he describes as “kind of like riding a unicycle backward and blindfolded over a razor blade.”

Considering that, perhaps a larger retailer might not want to take on the task of trying to operate that “controlled chaos” around the clock.

How, then, can a more established, big-name brand get a piece — figuratively, if not literally — of the entrepreneurial, customer-centric spirit that startups like Joybird possess?

Instead of going all in on a major investment, large retailers can follow a few key tactics of the more successful startups that flourish in the custom-made space, expanding their customer reach while staying true to themselves.

 

Involve the Customer

“Sharing how and where a product is made, including details about the quality of materials used and what is unique about the finished product, should be a major part of your brand story,” another Joybird Cofounder (there are 4 in total), Alex Del Toro, tells PYMNTS.

A core element of the custom-made retail process is involving the consumer. As Del Toro illustrates through his experience with Joybird, a retailer needs to “place the customer at the center of the design process,” offering as large an amount as possible in the way of product design options. Del Toro adds that, in the case of Joybird, it sources its materials from local and environmentally responsible suppliers whenever possible.

For a retailer to express its enthusiasm with the individual customer about his or her order will earn them that same amount from the shopper.

“It’s a differentiated process,” says Del Toro, one that has led to customers playing a major role in his company’s early success.

 

Be Upfront About Timing

“On-demand services are booming,” observes Del Toro, and the connected customer expects “just about everything, from hamburgers to hairdressers, to be delivered to their door on their schedule with just a few clicks on an app or website.”

It’s a model that is presenting new opportunities for companies and decreasing the need for them to invest as much in brick-and-mortar locations as more businesses move towards primarily selling online.

That said, Del Toro acknowledges the fact that the connected consumer doesn’t like to wait. He cites a recent survey, for example, showing that nine out of 10 millennials want more delivery control when making orders online and that twice as many (60 percent) millennials have “higher expectations of retailer delivery performance” than consumers aged 45–54 (33 percent).

“Bearing these figures in mind,” he advises, “being transparent about how long things actually will take to be made, dispatched and delivered to a customer’s door is key.”

He also recommends that retailers compare their service with their competitors’ offerings and “make sure [they] aren’t being beaten too dramatically.”

Building from that point, retailers ought to encourage client feedback on their websites and advertise their delivery with clear time guarantees wherever they can.

Referencing Joybird’s aforementioned large growth in a short span of time, Del Toro says that the experience forced the company to solve new operational and customer service challenges.

“By having a strategy for proactively communicating about our growth,” he remarks, “we were able to convert what could have been a negative situation around longer-than-average wait times into more orders than ever.”

And if a retailer ultimately cannot make the delivery within the agreed time, it would behoove them to offer a discount or a free gift to the customer to sweeten the deal.

“Setting realistic customer expectations,” says Del Toro, “could be the difference between securing a long-term customer who will then spread the word to countless friends or being stuck with a cancelled order and a client lost for life.”

 

Updates, Updates, Updates

Retailers in the custom-made space can take advantage of the fact that the modern, connected consumer has a smartphone on hand at all times by keeping them involved in their order “from the day they place [it] until the product arrives on their doorstep,” comments Del Toro.

He shares his perspective that using photos, videos, email and text to update a client on the progress of their order keeps them involved in the process and decreases the number of support calls a retailer’s customer service team needs to field.

“Images and videos,” says Del Toro, “are worth millions of words and can get three times more engagement and impressions than just plain text.”

Social media is a valuable tool in this regard; Del Toro attributes Joybird’s 17,000 Instagram followers in large part to the photos its customers send the company and allow them to share on the social network.

“Regular photo updates,” he adds, “also create anticipation for the end products,” as can a delivery tracker provided by a retailer that allows customers to “keep tabs on exactly where their precious package is and when it will be delivered.”

 

Hidden Charges = Unhappy Customers

A retailer plying its trade in the custom-made space would hate to get this far down the line only to ruin the experience for the customer by revealing hidden charges at the close of a transaction.

“Total transparency,” which also applies to pricing, Del Toro notes, “is essential.”

Information related to taxes, shipping and credit card processing all very much matters to the end consumer. Del Toro advises that it “should be readily available to clients so that they don’t get a nasty surprise when the credit card bills come rolling in.”

Despite the fact that delivery fees are an expected cost for the on-demand generation, a retailer needs to clearly advertise and include them in the checkout information.

Custom-made retail is, by nature, an “experience” more than “just about acquiring ‘stuff,’” says Del Toro. Building a unique experience is a key way for retailers to differentiate themselves from everyone else in the market.

“Providing clients with full transparency into your product, pricing and business practices from the first click to the final delivery will guarantee returning loyal customers and help spread the word about your company via the eternally valuable client referrals,” concludes Del Toro.

Though those customer recommendations now come in the form of tweets, posts and Snapchats, connected consumers — particularly those of the younger generation — are still willing to base buying decisions on the opinions and comments of their peers, most of whom they’ve never met in real life.

That’s a truth to be kept top of mind for established retailers seeking to express a smaller-scale, entrepreneurial spirit, as their proper handling of it can customize their way to a larger consumer base.

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out our April 2019 Unattended Retail Report. 

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