Lessons Learned: Working Mom Applies Science to Online Toy Business
Kelly Brough is no stranger to the online world. She worked for 10 years at AOL and Lonely Planet, the travel-guide company. Nonetheless, this high-powered working mother, with degrees in science and engineering, — and an M.B.A. from Harvard — found it surprisingly difficult to locate fun, attractive and unique children’s toys online. This led her to launch a toy website, Oola.com.au, in Melbourne, Australia.
“As a full-time working mother, I struggled to find the time to discover great toys. The best products were sold in small bricks-and-mortar boutiques. I have always loved toys and games, and could do puzzles, build things or play games all day long! Unfortunately, one of the hardest parts about being a working mum is that you can’t do as much with your kids as someone who’s not working or working part-time.”
After Brough left Lonely Planet in December 2010, and had taken some time off to spend with her family, her husband Andrew encouraged her to start her own business.
Armed with just $25,000 AUD, Brough was determined to launch her toy website before the 2011 holiday shopping season. From starting preparations in August, she launched Oola.com.au on October 31 — in time for Christmas. The website received over 1,000 visitors in its first month and achieved a conversion rate of over 4 percent.
Oola’s growth in sales, conversions and visitors continue to rise.
“Since January 2012, Oola has achieved 77 percent compound monthly sales growth, 30 percent monthly growth in conversion rate, and a 30 percent compound monthly growth in visitors,” she says.
Brough says Oola is on track to break even by 2012 year-end, following the holiday sales period, and anticipates her business will recover the initial investment of $25,000 AUD. She expects to quadruple sales in its second year, yielding the website’s first profit.
“Oola.com.au sells the type of stylish, fun toys-that-teach, which encourage open-ended play that are typically found in local boutiques. As we’ve grown, we’ve discovered that families want ongoing ideas to make playtime at home fresh, fun and interesting. Oola is becoming the most recommended destination for play-based activities to entertain young children. Our product offering is currently being expanded to deliver on this vision.”
One of the projects Brough led at Lonely Planet was a complete rebuild of its online shop.
“I was already familiar with many of the market’s scalable providers, having thoroughly reviewed their offerings. I looked at a couple of software-as-a-service providers because I didn’t want to do my own hosting until I built up a sizeable business.”
Brough planned to use one particular provider but became concerned after a long gap in communication. Prior to this, she had read about Shopify on some tech blogs.
“I didn’t consider Shopify seriously because it was based in North America. But I tested their 30-day free trial while I was waiting to hear back from my selected provider. I was hooked by the ease of use and super-helpful customer service. Within a few days I was ready to test transactions, which would have been sooner except that I was waiting for bank approval from my merchant account. Basically, Shopify has everything we need: a secure shopping cart with best practice checkout flow, best-of-breed user experience architecture and navigation, flexible design options, a clean, modern user interface, and robust customization potential via APIs.”
Brough said Shopify also reassured Oola that it could achieve the tight time frame with no external dependencies for hosted cart setup or design.
“Their APIs allow us to add features as our business grows, and the SaaS model means we pay only for what we use each month, avoiding costly development before launch. Plus they offer exceptional customer service. The passion for their platform comes through as they work hard to help shop owners like me, find solutions to our goals.”
Credit Card Payments
“I have worked with online payments since 2001 when I was at AOL managing business-to-consumer businesses. I knew we had to have a very secure and trustworthy payment gateway that would remain on top of all of the industry security developments like the PCI DSS. We were also delighted to find local provider eWay that could meet our needs in a comprehensive way.”
“Shopify includes order management capabilities as part of its software. There have been few things that I’ve needed to change, making this component of building an online retail business a non-issue.”
“Using a SaaS model for its shopping cart, Oola relies on Shopify for hosting.”
“We are just looking for our first employee, in marketing. Ideally, I’d like to find another mother who wants a flexible, part-time role. Because I’m based at home, I need someone who could work from her home, but co-work with me one day a week. I found a local freelance designer at a local networking event who understands the Oola style. She works to my budget; we outline what needs to be done each week. It takes longer that way, but allows me to manage cash flow effectively.”
Brough tried using offshore designers, but prefers to discuss requirements and goals with the designer in person to get the best outcome.
“I was not particularly satisfied with the offshore designers that I hired. However, I use oDesk [a site to help locate contract services] for nearly all of my technical work and recently brought on a virtual assistant who is much more than an assistant.”
Search Engine Optimization
Brough says it takes time to build up the links, credibility and content that will provide a page-one natural search result.
“At Oola, we have a content marketing strategy with its roots in our SEO goals. We are already regularly guest blogging on two parent-focused sites: Connect2mums, and Babies & Toddlers Directory. Over time, we will increase both our regular contributions and one-off guest posts.”
Brough says shipping has caused her the most heartache.
“Logistics in Australia is not very well developed. Costs are high, service standards are low, and flexibility to meet customer needs is virtually non-existent.”
Brough admits that at first, she knew nothing about fulfillment as she wasn’t involved in the distribution of Lonely Planet’s physical merchandise. She soon discovered the challenge from having toys come in many shapes, sizes and weights.
“This becomes the most difficult thing to plan because our customers all choose different items. Initially, I focused on cost because from a brand perspective, I wanted to offer flat rate shipping across Australia, to make it easier for people who live in the country to access online shopping. I also thought that $10 was too much, and still do. I will generally abandon my shopping cart when I see a $10 shipping fee.”
Brough chose a local, low-cost courier, and relied on Australia Post for the rest. However, the courier did not deliver what was included in its sales pitch.
“So I had to use a mix of providers to minimize unit cost of delivery and opened a business account with Australia Post and started to use its online ‘Click and Send’ process. However, as our order volumes grew, we spent valuable time selecting the right packaging to meet the different providers’ requirements.”
She also considered outsourcing fulfillment, knowing that Oola had to maintain sufficient orders to receive reduced shipping rates. But she doubted this would provide the level of customer service tantamount to her brand.
“To make things more difficult, the Click and Send software on the counter of my local post office, where I lodged my parcels, did not work with a business account. It was heartache all around.
“I’ve simplified my shipping practices now and send everything via an Australia Post satchel. I’ve just started to use Australia Post’s eParcel service, which will further simplify my processes and save me precious time and money.”
Brough says selecting products is by far the most fun and exciting part of Oola.
“We seek toys that are stylish, high quality, and have enduring value to allow kids to discover and grow through play. We source our products from around the world, but purchase them through local suppliers.”
She began to select products for Oola by asking her friends to provide feedback on the toys they liked.
“At the San Jose Museum of Tech Innovation [in the U.S.], I spent lots of time taking notes on brands that offered really interesting science and technology toys that I hadn’t seen in Australia. Some of these I’ve managed to find locally and others are on my list for when I am ready to tackle my own direct importing.”
Oola currently carries 250 SKUs from 22 brands. It is expanding its product range rapidly, having quadrupled the SKU count since the launch only six months ago.
Brough says while Shopify tracks units in stock, it doesn’t offer additional reporting or insights.
“I export my sales data and manage this manually through spreadsheets. Shopify has a robust app store with many add-ons to its core CMS, including inventory management. I can still handle things manually for a short time longer. But I will want to have installed and tested better functionally before the Christmas rush. We will soon have enough stock to require a more robust solution and will begin researching this area. Fortunately, there are a number of applications in the Shopify’s app store to handle this.”
“We don’t use accounting software. The order records available via Shopify provide everything we need on the revenue side and our cost items are manageable through careful manual bookkeeping.”
“Oola has dabbled in social media over the past three months. We are active on Facebook and Twitter, yet find social media helps us maintain contact with our community between sales, rather than drives new customers to Oola. We are experimenting with photography and inspiration, and look forward to building a community around issues affecting busy families that juggle work, family and life commitments.
“Because we are in a massive customer acquisition phase of our growth — being only six months old — we focus on direct channels like email marketing, comparison shopping, and paid search marketing.”
Oola offers free gift wrapping and low flat rate shipping Australia-wide, and free shipping for all orders over $50.
“We work hard to provide as much value to our customers as possible. If a customer call goes to voicemail, I respond within an hour. If they email, I respond as soon as I receive it. This can be at all hours of the day and night, though I do put my emails away for family time.”
Brough received an order from a customer who lived in the same neighborhood as her mother-in-law, in Adelaide, 726 kilometers — 451 miles — from Melbourne.
“Coincidentally, we were driving there the next day so I packaged up the goods and took them to the customer myself. The order certainly would not have arrived that fast by any other means.
“We’ve also had customers email us looking for a specific crossword puzzle, and specific games they haven’t found in local stores. We’ve tracked those down and added the products to our range. We love the feeling of making people happy!”
Brough says choosing a courier that had cheap shipping rates, but an inflexible booking system, has been Oola’s biggest mistake to date.
“The sales team told us that pickups could be arranged at any time, with two daily runs through the area. But it turned out calls to collect an item had to be placed between 8:30 to 9:00 a.m. Before 8:30 a.m. there was no answer. After 9:00 a.m., they told you to call again the next morning at the appointed time.”
“Google AdWords has been by far our greatest success. I was initially intimidated by AdWords, knowing that it could eat away my marketing budget. But having worked in digital media for 10 years, I have run many AdWords campaigns. I knew from experience what was best practice in this area, so that my campaigns started delivering effectively right away. These campaigns are my major source of conversions and they provide an attractive return on investment.”