Shoes of Prey co-founder Jodie Fox on scaling one-off products, going offline and maturing a startup
Breaking even two months in, Shoes Of Prey co-founder Jodie Fox explains why the company is now chasing customers offline.
Technology has divided retailers into two buckets: Those that are trying to find their place in an online world, and those born online that are attempting to figure out the offline market.
Both markets have a strong set of consumers that companies wish to capitalize on.
And it’s this opportunity that’s given birth to a new type of omnichannel retailer — one which merges both worlds to maximize its potential market.
But it isn’t an easy strategy to execute, as Shoes of Prey Founder, Jodie Fox, told Xero recently.
In-store technology is transforming the customer experience and merging bricks and mortar with online stories.
“Launching online was cost efficient, it allowed us to test an idea, it was a good way to collect solid data on how our customers were behaving, and learning who our customers were as well. It also had the upside of if it worked, we could easily scale,” Fox told Xero.
And it did work. After launching with just three people in a lounge room in October 2009, Shoes of Prey had broken even within two months. Since then, more than 5 million pairs of shoes have been designed on the platform and it’s grown to hit multi-million dollar revenues.
Shoes of Prey has since landed a deal with global department store, Nordstrom, and has been busy rolling out in-store boutiques right across the US.
“We always had organic online interest in the US and that’s because when we launched ShoesofPrey.com we launched it globally, we never thought of ourselves as only focussed on the Australian market,” Fox said.
“We’ve always had healthy financial backing out of the US. One of our first investors was TechCrunch founder Michael Arrington and Mai Tai founder Bill Tai. We’ve got a really amazing base in the US, especially with Nordstrom coming onboard.”
Real world interactions are changing online businesses
But it wasn’t just the bright lights of the US the team was chasing, figuring out the real world version of its e-tail business delivers not only a new revenue stream but also a raft of new customer insights that can mold its online platform.
“Going into bricks and mortar teaches us a lot the other way as well. Our engineers do shifts in store to see how someone will buy when they’re talking to a salesperson,” Fox said, adding the first thing customers looked at in store was heel-height.
Shoes of Prey was able to use these insights to adjust the customer journey — both online and in store.
“We adjusted the homepage so there was more heel-height range when you land,” Fox said.
By having an offline presence, Shoes of Prey can show customers what their shoes will look like in real life.
“Digging into the why, the insight or the human need, what we realized was that customers wanted to be able to try their shoes on. They wanted to touch the materials, to understand the texture, to see what the colors look like beside each other. At our office in Sydney, people would often turn up to see a pair of shoes before they made a purchase,” Fox said.
Making the decision to grow up
Having customers show up at the corporate office, while flattering, wasn’t a long-term solution. So ahead of the latest funding injection, the Shoes of Prey team took some time out to work on its overall business strategy, smoothing out some of the kinks.
Streamlining the financial management and accounting side of the business was one area Shoes of Prey focussed on, an essential task which Fox said was critical as the company expanded its manufacturing operations in China and pushed ahead with its US growth plans.
“We realized that it was time to grow up, but we had to do it in a way where we didn’t lose our urgency or speed of execution. It was about doing things more properly and less scrappily. Still with urgency but with more care. We are now paying much more attention to setting up processes and automating where we can,” Fox said.
Part of that journey to becoming a more mature business is hiring the right talent. Fox explained the mass customization business has always had a bookkeeper but only recently made several senior financial hires to manage the numbers and ensure they were investing wisely.
“With these types of people coming onboard, they have an incredible knowledge around how to build a well-oiled machine. If we want to consider the kind of expansion that we’re aiming for in the next 12 to 24 months, we’ll break the company if we don’t have those systems and processes in place,” Fox said.
In the early days the startup had a very flat structure but as it’s grown, natural hierarchies have started to form.
“Because you’re so scrappy, people often stretch across many roles. As you grow, you can hire people with deeper levels of expertise in the business. We’re finding we’re having to put some structure around who has the final decision on various aspects of the business,” Fox said.
Delivering unique, at scale
Customization en masse is what Shoes of Prey is delivering to its customer base. To do that well, it’s really had to nut out how to deliver one pair of shoes at a time, at scale. In other words, balance two opposing forces. Fox said the key to scaling this type of operation has been to simplify all its systems, cut out any duplication and hone in on what the business critical tasks are. This exploratory mission was what landed Shoes of Prey on Xero.
“One of the things that was really important was to find a business platform that was simple to use and accessible, especially as many members of the team are constantly on the road,” Fox said.
“I’m able to log expenses using the app and not upset my accounts department with hard-to-read, crumpled receipts, fished out from the depths of my handbag.
“On the finance side, Xero plugs in with our reporting systems. It’s really important, especially as we’re growing, to have real-time insight into our operations. It’s one part of the business where we don’t want to be mucking around with processes, we want to be fully focused on the numbers and ensuring they’re correct.”
With an eternal optimism, a personal mantra of jumping in before she’s ready, a plan to invest in her people and forecasting for the dream, Fox has managed to establish a global business from Australia while bridging the gap between online and offline retail.
