PODCAST EP 105
How AI can help inform marketing and branding strategies with Liza Nebel
Simon Dell discussed with Liza Nebel, the founder of Blueocean, about how AI can help inform marketing and branding strategies.Listen Now
Simon Dell: So, I’m here with Laz Smith from Apéro. Laz Smith is the founder and co-creator of the brand with his wife. The bravest man alive, working with his wife I guess. Tell us about the brand, about the business.
Laz Smith: So, my wife is a designer by trade. She did a short stint after uni in New York doing costume for film. So, she’s always been passionate about design, and clothes, and her approach is to see that the clothes can really change the way you dress yourself can really alter the way you see yourself and people see you. They can have a massive impact. So, she’s always been passionate about that.
She came back from the US, tried to get into film but it’s a very small market here. Living in Brisbane, obviously, Bris Vegas should be good but, long story short, she ended up working back in fashion. She was working in production for some bigger brands, helping design clothes for them, and just got to a point where she wasn’t feeling as fulfilled, not being able to stretch her creativity. So, we were looking at buying a house. And being from a banking and finance background at a time and sales, I was like, “Ah, no return on the house. Let’s just start a business and give it a go.” If everything fails, just go back and get normal jobs and try again.
So yeah, we literally – she designed the whole first collection. We saw a niche for embellished T-shirts, so embroidery or beads. She saw the trend happening with the higher-end brands, you know, Chanel, all those kinds of guys. So, she’s passionate about making really good fashion attainable. So, yeah. So, we kind of did that. The name kind of – that’s a longer story, but…
Simon Dell: Can you condense that down?
Laz Smith: We were looking for a brand name, and we were at her brother’s wedding up in Noosa. And she saw it on the board, like a menu board, and it said, ApéroChic cocktails. And she was like, “Apéro? That looks like a really cool word. What does that mean?” Somebody Googled it and it’s actually a French word, but it doesn’t mean like frog or sock. Apéro in France is like that time of day where you have pre-dinner drinks. It’s like hanging with friends and having some drinks.
And we love that. It’s a word that captures a lifestyle and an approach for life, so we thought that was perfect. So, we did designs and she only did one tee with the brand name on it because we weren’t intending… We were just intending that to be the brand name. And long story short, we did a release and all of those tees sold out straight away. And we were like, “That’s weird. Why didn’t all these other designs…” You know. And it just took off. And luckily enough, when your brand is on your clothing, it grows really quickly because of the brand recognition there. So, yeah, 2 1/2 for nearly 3 years later now. It’s actually coming up to 3 years since it launched now. And we’ve gone from the bedroom or the lounge room to a proper office, just under 10 staff, and crazy.
Simon Dell: Obviously, you sell directly to the consumer through the website, which is aperolabel.com.
Laz Smith: Yes. So probably, a lot of people looking for spritzes end up on our websites and they’re like, “This isn’t alcohol. This is women’s fashion. What have I done?” I can’t answer that, you know, or they end up with a shirt and not with a spritz. But yes, so direct-to-consumer. We’re on The Iconic as well, which is a big online platform, and we went down the boutique route.
We wanted a wholesale channel, but we didn’t want to stock with David Jones and the like because you kind of get lost in small brands. So, our strategy was kind of work with boutique store owners in Australia and small businesses. We’re working with small businesses and we felt like you can build a better relationship with those guys. It’s worked out really well because of that, yeah.
Simon Dell: How is it split then? Iconic, wholesaler, and then direct to the public itself. How’s the business split roughly?
Laz Smith: Fashion is very seasonal and very cyclical. There’s no hard and fast rule. I can’t look at our metrics and go, “This is what the split is.” It just depends on the month. Because if you lead into… There’s two big trends, seasonal moments. It’s like spring/summer and autumn/winter for fashion is big. Because people are kind of buying stuff for the new season.
So, the weird thing is, it led up to that all the wholesale customers buy a bunch of stocks so they’re ready to sell. So, they’re two really big periods. And then obviously, on the back of that, Christmas, Boxing Day, all those kinds of things are huge for the direct-to-consumer. And the split in the business, it does change depending on the month.
But when we were a new brand, Iconic probably made up 50% of our revenue, because how are you supposed to find a new brand? You know, like every day, I’m coming across a new brand on Instagram or whatever, but you know, they’ve been around for two years and I’ve never seen them. So, when you’re on a large platform like Iconic, people just come across you and end up buying.
So, that’s changed now. I’d say Iconic are probably 10% of our revenue, but that’s over time, brands just develop that, yeah.
Simon Dell: So, taking you back to right at the start. Because there’s a lot of people, including myself, that sit there and go – they want to create something online, especially I think COVID has taught everybody that having different revenue streams for their original business, or even being able to create a secondary income stream for yourself, people that were thinking about it are now taking that kind of thing much more seriously.
And fashion seems to be an obvious one because you can create brand loyalty in it. People will come back and buy multiple things from you, you know. It’s not like some products that are just bought once and never buy again.
Laz Smith: Yeah, it’s not like a home installation.
Simon Dell: No, absolutely, no. Unless it’s a builder, then they do come back, but that’s that. Anyway, so I guess there’s a lot of how-did-you questions that I’m about to ask, and I think the first one is going… You’ve had the luxury of a partner who does fashion design and has the resources or the contacts to know where to get things made. But did you ever sort of sit there and go,” How do we get this stuff made?” Or was that already kind of… You already had that sort of solution in your head?
Laz Smith: Yeah. Rachel already knew. I mean, she spent years doing the production side for other labels. So, you know, the one thing I think I’ve said to you when we first caught up, I said the only reason… One of the main reasons I think we’ve been so successful in such a short period of time… Because I believe that business, if you stick it out long enough, you can probably just blunt force trauma into submission, you know.
Even watches, correct twice a day kind of thing. But I’d say that the ability to have the end-to-end supply chain and distribution and sales channels, expertise kind of already covered by both of us separately… And we were able to work in our niches. So, I knew that I know nothing about production, so I don’t put any input into that because I’m a male and I have terrible fashion sense and that’s just that.
And she, on the flipside, doesn’t have to worry about all the business side or marketing channels because I’ve kind of got that covered. So, yeah, we didn’t need to know how to make the T-shirts because that was already a level of subject manner that she was an expert in. So, that’s what I would say.
Simon Dell: When you did that, did she sort of design one T-shirt and then send it to the factory in China, and they’d go, “Yeah, we can make this. This is how much it’s going to cost.” How does that kind of stuff work when you’re there?
Laz Smith: In a general sense, everyone thinks fashion is so simple, but there is like an art form to creating something that fits right, you know. Like, if you buy something from a really nice label, why does it fit really well? Why is it flattering? And then you go to – I’m not even going to say a brand name because I’ll probably get destroyed by someone for defamation, but…
Simon Dell: Like H&M.
Laz Smith: H&M, right? If you’re paying $5 for a T-shirt, there’s a certain quality and thing that you expect. And the tags scratches all the time, and that’s just what it is. So yeah, generally, you have to get it right. And the more time you spend developing and knowing your craft as far as designing goes, the better the product comes out in the back-end. So, you know, there’s a lot of sampling that happens, you know, Rachel designs something.
And I’ve seen, before we’ve released something, 5 or 6 samples, and we have to pay for those samples. But it’ll come back, she’ll try it, something will be quite wrong. You have to get it resampled.
Simon Dell: How many times is she going back through? I mean, I presume the factory you’ve got now knows a bit better about the quality that they should be sending back and things like that.
Laz Smith: As we’ve been working with them, they tend to know because that’s another thing. China especially isn’t used to manufacturing high-quality garments. They’re more geared to fast fashion, so I don’t know for the people listening that don’t know what fast fashion is. It’s like the H&M’s. It’s cheap, volume-based stuff and we don’t consider ourselves that. We’re more of a boutique retailer, I guess.
So, we do try and have quality, and it’s a more bespoke feel. But it really was hard because we’d be like, “Oh, you guys can’t have stitches like that because it looks cheap.” And they’re like, “Yeah, but it costs $0.50 more per garment.” And we’re like, “We’re fine with that.” And they’re like, “What?” You know, like they’re – that’s hard to manage that perception because they’re kind of belted into… It’s thrashed into them by the factory owners that you need to make it as cheap as possible, as quick as possible, so it was hard to find a good one.
Simon Dell: So when you started off, how many go’s did it take for them to get it right?
Laz Smith: Oh, I don’t even know how many samples each had. The lucky thing was, it was only a T-shirt, so there’s only so many ways you can make a T-shirt. But with the fashion pieces, because eventually we went into some more fashion, which is what Rach was really passionate about. So, you’re talking about tops, and things with ties, and whatever, and buttons, and all that kind of stuff. That’s the hard stuff because…
Simon Dell: And were you travelling over there? Was she travelling over there?
Laz Smith: Obviously, we haven’t been to China since… We’re actually supposed to go when Corona blew up, so we had to cancel that. And it’s hard because you go to China and they’ve got this fabric market. It’s not just fabric, but imagine Suncorp Stadium, which we’re kind of close to. Imagine something the size of that with about 12 levels, 12 stories, 12 floors. And each shop is about the size of the room we’re in, so it’s probably like 5 meters deep by 2 or 3 meters wide.
And one shop will be all different types of buttons. The next shop is all different types of zips. And you know, so one floor may be buttons or zips. The next floor is cotton. The next floor is nylons. The next floor is checks, stripes. So, we go over there and we spend a week, 10 hours a day literally walking around markets, picking out fabric samples. And Rach knows in her head what she’s wanting to design with those.
And we’re literally just getting swatches. So, it’s not like…
Simon Dell: So, she’s getting ideas from them as well rather than her taking preconceived ideas there?
Laz Smith: No, they’ve got no idea. They just sell fabrics.
Simon Dell: But would she be picking up ideas from the fabric she’s picking up?
Laz Smith: Yes, correct. So, she gets inspired by knowing what she can work with. But it’s hard when you’re not there, but it’s amazing to watch. So, I just had no appreciation for fashion before meeting Rach because, as a guy, you’re like, “I’ll just buy a shirt, just wear it, whatever.” But when you see someone that’s truly passionate about it and knows how to make something out of nothing, it’s amazing, and yeah, it’s pretty cool.
Simon Dell: So, when you started off, what was it? You’re doing T-shirts. That first run when you launched, how many pieces did you launch with? Was it 2 or 3? Was it 20?
Laz Smith: I think we had seven tee designs.
Simon Dell: Different sizes?
Laz Smith: Yeah, different sizes.
Simon Dell: So, three or four sizes?
Laz Smith: No, I mean, extra small to standard is five sizes. Extra small, small, medium, large, extra-large. And there’s like, as Rach knows, as a particular breakup of usual what sizes sell more than others. So, it’s kind of like a pyramid. So, the sizes in the middle generally sell more than the extremes. But you know, that all helped as well. Because otherwise, stock management is super hard with fashion because if you don’t know that stuff, you just order 50 across each size, and then all of a sudden, you’ve got piles of extra smalls and extra larges.
Simon Dell: Going off on a tangent there. What I find still funny is that you walk into someone like Kmart, who you expect to know this stuff, but it’s still amazing how many major retailers are still sitting there with XXLs and smalls that haven’t sold. I can’t understand how somebody hasn’t built them an algorithm somewhere. And maybe they have the algorithm shit, but who knows. But they can predict that a bit better across their stores.
Laz Smith: Problem is, people are fickle, too. So, you know, we go off our intuition. And then half the time, we’re like, “Why isn’t this size selling?” And for no reason at all. It just could be that people that are that size don’t like that style on them. It’s not flattering, or it doesn’t work. So then all of a sudden, you’re just stuck with whatever. So, fashion is not easy… It’s not a silver bullet.
If people are sitting there, going back to the original question, “I think it’s a good time to start a fashion label.” I would totally recommend against starting a fashion label. We’re like a unicorn. Like, it’s not an easy thing. There’s many more things that you could start that would be way less stress, way less import required. Yeah, so even though we’ve had a success story in relative terms, it hasn’t been an easy thing to do.
Simon Dell: So, getting yourself out to the marketplace in those early days… Obviously, social media, Instagram, Facebook, so on and so forth. How were you building traffic around the brand then?
Laz Smith: Purely social. I was a marketing manager for an IT company, so that’s obviously a different market, but I was a big proponent of Facebook marketing. I still believe that it had a very good return on investment compared to other marketing channels, things that you could spend your money on. So, I just thought, “Well, it’s my own money so I don’t need to justify it to anyone.” So, if I waste it, then it’s on me.
So, when we started the brand, I think I committed to spending… It might’ve been $2,500 in a month on ads. And the crazy thing is, that’s a startup. And most business owners wouldn’t even commit to spending $500 a month on ads and social for an established business. So, I’d throw it out to them and just go, “Just harden up and do it.” Because you don’t know what you’re leaving on the table by not giving it a go, because it’s not a risky strategy. It’s a tried and true strategy.
But we did that, and that was literally it. So, I just had a very basic cyclical marketing thing in place where anyone that had hit our website or our socials gets retargeted by the Facebook pixel, and I just wanted to create this thing where people found out who we were. Just a lot of brand awareness stuff and just trying to build our brand awareness out there and influence our marketing as well, reaching out, gifting people things.
Simon Dell: Tell me about the influence of marketing. Obviously, that gets a relatively bad name depending on who you talk to. Influencers tend to be the butt of many jokes. For every person like yourself that says, “We achieved some growth and success through influencers,” there’s 20 businesses out there that have a different story and say it didn’t work for them.
If a business out there is thinking about influence as a strategy, what are golden rules for you? What are the things that they ought to make sure are happening or aren’t happening?
Laz Smith: I mean, for me, I think this stuff is obvious but a lot of people just don’t think about this stuff. For us, we’re super careful of what influencers we use because they have to align with our brand aesthetic, our values. Personally, we’re more elevated brands about empowering women, so I don’t use influencers like insert-go-here who just posts half-nude pics on her Instagram, because it just doesn’t line up. So, we’re very careful about what they say, what their values are, and so, we’re very targeted.
That’s one thing, and that weeds out a lot of bad influencers. And personally, I don’t like influencers that are out there just to get a free living. So, we usually try and use influencers that have built a following because they have been successful, and not because they know how to take a good selfie. And there is a big difference.
Simon Dell: So, they’ve achieved this success somewhere else, and then this social side has come secondary, perhaps.
Laz Smith: Yeah, it’s just social fame, let’s call it, has been a result of some kind of success that they’ve had. And they’ve become a style icon because of being an editor somewhere, or whatever it may be. I believe those influencers are worth their weight in gold because they’ve engaged audiences. That’s another thing. If you see a person with a million followers and all their comments are like, “cool pic babe” and a bunch of emojis…
And like, they’ve bought their followers, and it’s probably just a bunch of dudes perving on a girl, like, if we were completely honest. Fashion, you can imagine, the girls hit us up trying to influence for us, and I’m just like, “Sorry.” We’ve got a girl that manages that, but she knows that it’s probably not those people that we’re going to be dealing with, and it’s more the other ones.
Simon Dell: Any other major channels? So, social media influencers, that seems sensible. Any other major channels that you’ve found successful in terms of generating new awareness, and new leads, and new sales?
Laz Smith: Oh man, so many. Massive-wise, we hadn’t done any PR. We did one massive PR thing, and that’s it, because as a marketer, I don’t like doing things that I spend craploads of money on that there’s no guarantee of return on. So, PR usually scares me a little bit. Because I’m like, well, you know, you’re paying to abuse someone else’s relationships. You know what I mean? I’m not a huge fan of PR purely for that reason. I think there’s a big space.
Let me just side note something, because you’ve touched on it before with the Kmart thing or just in general. I think retail in general, just businesses in general, there’s a lot of paradigms where people have gone to market under, like David Jones and big retailers that we have been doing things the same way for so many years now. Let’s talk about Westfield and the way they do their rents, blah-blah-blah.
I think one thing that COVID has done has completely forced that whole paradigm to be turned on its head, and thank God. Because it’s just… This thing that was just trundling along, that had no value, and everyone’s taking their cut, and we see brands like Gymshark and all of these guys that are direct-to-consumer brands like we are. We’ve got no overheads. We’re direct-to-consumer. We’re able to build a really loyal fanbase just purely from online and our channels.
We don’t need the Westfields of the world to get that. I think that’s a good thing. It’s a healthy thing.
Simon Dell: I think it’s a fantastic thing. I think when you say that, you go… And I wrote when you said the words David Jones, I wrote that down just to come back and look at that. I remember when my grandmother used to work in the department store in Suburban Southeast London called Bromley. And she used to work at an Allders, which was an old, long-gone department store in the UK. And I think about the times that I used to go and see her work, with my mother and my brother, and just drop in and say hello. And she would do family members, that kind of thing.
And I go, “That Allders department store just didn’t look that different from what your average David Jones and Myers looks like today, especially Myers.” Layout, offering, service levels. And this was the mid-80s.
Laz Smith: Yeah, so we’re 30, 40 years.
Simon Dell: 30, 40 years beyond that.
Laz Smith: And nothing’s changed.
Simon Dell: And the department store offering is still… And I think that’s one thing. The other thing that always makes me smile, laugh, maybe sad, cry inside a bit, is the David Jones and the Myer department stores for men is exactly the same model as it is for women. And we know through decades and decades of study that men shop in a vastly different way to women, but we’re offering exactly the same experience to both.
Laz Smith: Men are like, “I know what I want. I want to spend the least amount of time in the store as possible. I want to go in, find it, get it, get out.” And you know.
Simon Dell: Why nobody in my home David Jones hasn’t sat there and gone, “Let’s…” Because they only have to do it in one store to test it out. “Why don’t we reconfigure everything in this store just servicing the manner in which men shop?”
Laz Smith: This sounds really bad. I think it’s laziness because why, if it’s not broke, don’t fix it. And they have capitalized on it for years. The model does work, and it’s only when something like COVID happens that people have to rethink stuff.
Simon Dell: I would say to you, I agree. I think it’s proportionally laziness. The other thing I think it is is people like my own David Jones and other big retailers… And I talked about a pharmacy company here the other… Again, I shall not name but they were still in this model where they are putting, getting brands on the shelf and then charging brands this coop money to promote their product within their own magazines, despite the fact they’re already getting a deep fucking discount on the retail price, but they’re saying, “Oh, now give us $5,000 to appear in our magazine or our promotional merch.” That kind of stuff.
I think it’s laziness, yes, but I think it’s this traditional business model that they’re sucking on the teat off that’s gradually giving them less and less milk, but they can’t let go of that teat.
Laz Smith: It’s the golden goose.
Simon Dell: Yeah, they can’t because they don’t know where to go next. And brands like yourself and all the others, and even The Iconic, are showing them how it could be done, but they just… It’s fear of the unknown for them.
Laz Smith: Well, I’ll give you a good example. I won’t name who he is, but a major retailer has recently been chasing us to stock with them. They’re like a household name. And we said, “Sure, let’s have a conversation.” So, they sent through their proposal for what would be required to work with them and to stock with them. I think people have the assumption that if they get stocked in a major, they’ve made it.
Because it does increase your revenue vastly, like it would change our bottom-line or top-line. We would look amazingly… It would probably add millions of dollars to our revenue. On the flipside, they still have such a rigorous process. So, we would have to implement so many overheads like EDI, things like barcoding. We would have to pack our stuff differently. So, we would have to hire, probably, four staff just to be able to cope with dealing with them as a customer under way less margins than even dealing with The Iconic, because they want – because of who they are – they want a massive discount.
And I just said no. I just said, “You know what? It’s not actually worth it… Great for vanity, terrible for our business.” And I think that is fundamentally an issue, and they’re not going to survive if they keep that up because they’re already struggling. And if they don’t let go of that business model, they need to have a compelling reason why brands like us would need to partner with them. And there is none.
Simon Dell: When you go back to what you said about how men buy things, you go… You go into somewhere like Myer and you go, “I want a business shirt.” And there’s a section for business shirts, but there’s also business shirts over there, but there’s also business shirts over there. Sometimes, you just want to go in and you want someone to say, “What do you want?” And you go, “Business shirts.” And then you go, “What color? What’s this?”
You always want someone to bring them to you. You probably still want to do it face-to-face. You still want to look at them, and touch them, and feel them, and see the products, and go… But you know, you just go… I always remember the story of Harvey Norman. So, for those people who are not listening to this in Australia, Harvey Norman is a big electrical store.
And again, the butt of many jokes, Harvey Norman is just because of the way that it sells. Anyway, long story. And I remember going in to buy a washing machine, or a dryer, or something like this. And if you go into Harvey Norman, there’s this range. So, probably 15, maybe 20 different washing machines there. Maybe more than that. And I remember saying to the guy, the sales guy, “What do you recommend?”
And he pointed at one and he goes, “That one.” And I said, “Why that one?” He goes, “Look, it’s the best washing machine.” It’s not the cheapest, but it’s the best value for money, best economical, bla-bla-bla. Just rattled off all the things that it was best at. And it’s a well-known brand, you know. So I went, “Alright, I’d like one of those.” And I walked out and went, “Why the fuck are they even stocking the others?” I mean, what’s the point?
If that one is the best one and it wins hands down against all the others, maybe they should have three or four in different price points. But why bother selling all the others?
Laz Smith: I haven’t even thought about that. You’ve just given me an existential crisis to deal with. What even is life?
Simon Dell: But it comes back down to the original business model that the pharmacists use, is that they’ve put 20 of them in there, get discounts, and then squeeze the…
Laz Smith: That’s the best model compared. Like, in that salesman’s bias, in their own contextual viewpoint. So, you talk to someone else that’s selling the same thing, and they’ll be like, “Oh, actually, it’s this model” because they have a difference – they may think that brand is rubbish or whatever. So, yeah. I don’t know. That’s probably why.
Simon Dell: This conversation could go on for a long time.
Laz Smith: Yeah, I’m seriously going to reconsider my life this afternoon.
Simon Dell: Based on the washing machine story. Okay, fine, cool, wow.
Laz Smith: Never thought that would’ve been the trigger.
Simon Dell: What an impact I’ve made here!
Laz Smith: There we are.
Simon Dell: The best question I wanted to ask you about was stuff that we were talking about before we started this podcast. I want to understand the stack of things that you’re using in the background there, because…
Laz Smith: As in steroids?
Simon Dell: No, no.
Simon Dell: That’s another podcast entirely. You use Shopify for the website?
Laz Smith: Mm-hmm.
Simon Dell: Why Shopify?
Laz Smith: It’s just the easiest platform. Everything’s plug-and-play. There’s a lot of plugins. There’s a huge ecosystem. We didn’t start on Shopify. We started on Squarespace because it was easier to build an aesthetic website, but we soon found there were big shortcomings with fulfilment on the e-commerce side of things. So, we moved to Shopify at a bit of a cost, only 6 months in, and it’s the best thing I ever did because… Yeah.
Simon Dell: Do you not find that a bit restrictive? I mean, I love Shopify. We’ve got a lot of clients in Shopify.
Laz Smith: Design-wise, yes. But I like to think that I’m fairly pragmatic about most things, and I would say that – I would love our website to look way more beautiful and artistic. But I don’t think people care. So, there’s always a balance between functionality and just making your life easy. So, the problem is, if we move to something like WooCommerce or whatever, you spend thousands and thousands of dollars on customer development, and it wouldn’t be any better.
So for me, I was from an IT background as well, so I just make sure that everything has very simple integrations. I don’t like going outside of the box because why reinvent the wheel if there’s already a nice car sitting there?
Simon Dell: You also mentioned some other stuff, Klaviyo in the backend. What other pieces of software are you using?
Laz Smith: We’ve got a review platform. We’ve got a loyalty rewards program.
Simon Dell: What are they?
Laz Smith: Reviews.io, and then we’ve got Smile.io, which is a loyalty program. We’ve got an inventory management system as well, which is really important.
Simon Dell: What one’s that?
Laz Smith: Cin7 it’s called.
Simon Dell: Okay, so I guess there’s – read a lot of conversations with clients, things like that, around inventory management. How do you find Cin7?
Laz Smith: It’s great. We were on DEAR Inventory. I don’t want to throw anyone under the bus, but yeah. Look, we were on DEAR, which was kind of, at the time, probably a lot of companies our size don’t use inventory management. But I wanted to make sure that we were scalable if we were successful. Being the IT person I am, I know that it’s much harder to shoehorn something into, once you build something, that you just do it right from the start.
So, if I – and this is another tip for people who are looking to start something – you need to basically decide how big you want to be when you start and choose the platforms that will help you to get there on the path of least resistance. If I had been really price-conscious and gone, “Well, I’m just going to do what will do the job now.” The opportunity cost of then having to do a project to migrate platforms as we grow, like I would’ve probably aged about 50 years by the time we get to this point. You know, it’s hard to move platforms.
So, you know, be very careful who you marry yourself to when you’re looking at tools, because it could be your downfall if you’re not careful.
Simon Dell: What about overseas sales? Do you have the capacity? I guess having dealt with a Shopify site and trying to make sales in the US is almost, for a site that has been built in Australia, one of the challenges I have with that is to see when a customer from the US arrives and they see an Australian site. They don’t know it’s Australian, do you know what I mean?
Laz Smith: Yeah. So, Shopify, that was one of the shortcomings of Shopify until late last year. So, they released native currency checkout, which was good. So before, you could do things where they could see, say, US people shopping on an Australian site, they would see US dollars until they checked out and it would come up in AUD. And there was huge cart abandonment because they’re like – a lot of Americans are super patriotic, “I don’t want to shop in AUD.”
Simon Dell: And even if they’re not patriots, and they go, “How long is this going to take to get to me?” Because they kind of think it’s coming from Australia.
Laz Smith: Yes, but with Shopify now, they can natively check out in their currency. You can have multiple instances. So for instance, we’re in a completely opposite season, so we can have a localized version of our store operating in the US, and they check out and they do everything, that’s all siloed and it can still sync with our inventory.
That’s only a relatively new thing, like about 12 months ago, but that was a game changer. And at the time, we weren’t really pursuing international. We still made international sales, but the inventory management system is very important for that because you can imagine, if you want to stock wholesale overseas, we need to be able to control wholesale stock in different…
Simon Dell: Yeah, track what’s in the warehouse in the US and track what’s in the warehouse in the UK.
Laz Smith: Exactly, so I’m super glad we did that. We went through the pain of doing that. Things like reporting are way easy for us and we work with agencies locally for wholesale. So, being able to report on commissions and sales, yeah, it was painful at the time, but we’re seeing the benefits now down the track.
Simon Dell: What’s next for you guys? What’s the long-term goal?
Laz Smith: Look, we’ve been pretty lucky to kind of build a brand that is… Not everyone would’ve heard of us, but you got Melbourne or anywhere really in a major city now… Luckily, there’s probably a chance that one of – a girl would be wearing one of our shirts, which is pretty awesome. Like, it still freaks me out when I see… We call them seeing them in the wild, you know.
We just walk down to local shops and somebody would be wearing… Some people’s execution of wearing our brand is a little bit scary.
Simon Dell: I had the same when I’ve done branding work for clients in the past. All of a sudden, you see a truck go past with your logo on it, you designed it.
Laz Smith: Yeah. It’s a bit of a proud moment. I had a moment where I was working with Porsche doing some photography stuff, and one of the customers, very luck – great, smartly dressed lady, obviously very successful, was wearing one of our T-shirts with a blazer, just killing it. And I was just chatting, and then it came up and somehow she found out that I was one of the co-founders.
And she just chaffed. It was one of those moments I was just like, “This is so cool, to see someone that is successful outwardly wearing your brand. It’s cool.” So I guess to answer your question, that was a very big thing. We’re just going to double down on trying to really make ourselves a household brand in Australia because obviously, I don’t think we’ve really saturated the domestic market as much as we could. Purely because we said no to going into big retailers and things like that.
So, I still feel like there’s more of the pie that we could do. And I didn’t want to go internationally too quickly because we’re too young. I don’t want to make a big mistake, and when you’re going international, it does present you with a lot of big expenses. So, I didn’t want to bite off more than I could chew. So, I really want to make sure that everything we do is locked down and optimized before we try and enter another market.
Because every market is different. Where locally here, we know the language and the different things that we do. So, if we can be successful here in a larger capacity, then I think we’ll be ready to go overseas.
Simon Dell: And I know we had this conversation when we first met, but Amazon is not an option for you?
Laz Smith: No, purely because we’re very careful about our brand. Because for us, it’s not about price, it’s more about brand and building a community around the brand. So, we personally looked at it. I mean, I always look at new channels that are coming up, and The Iconic works because it’s a curated kind of retailer. But Amazon, I just feel like it’s more for the mass-market stuff, and it just has a different feel for us. So, we can’t really control our brand as much there, so it’s a no for us at this time.
Simon Dell: Last question. Back to the very first point that I made, someone’s out there sitting, thinking about starting a business. And not necessarily just an e-commerce business, but maybe focused on e-commerce because that’s where you guys have been so successful. What are your tips? What are you telling them to be aware of to make sure they’re doing properly? What’s the Laz Smith advice for starting an e-commerce business?
Laz Smith: You have to know something really well. I’m not the type of person to say, “You can’t do this because you don’t know this.” I mean, I now get paid to do photography and video work by clients, and two years ago, I’d never even picked up a camera. So, I’m not saying that that’s necessarily a limitation on what you can do.
But I do say that, for instance, if Rach didn’t know the supply chain like she did… You know, there’s always… You’ve got to know something other people don’t. Because otherwise, you’re just copying or you’re doing something that other people have tried. And then it’s a race, it’s a price thing, or it’s something else. So, you’ve got to choose what you want to do.
But I would say find something that you’re really good at, that you’re passionate about. Because if you’re in it to make money, money motivation isn’t going to last past all the… You know, I’ve done 20-hour days, multiple 20-hour days, and it’s not because I wanted to make a buck. Like, our motivation isn’t to make a buck. It’s to enjoy what we do. I felt like I was making good money. I’m happy to say I was like mid to high $100,000 salary in sales, living a comfortable life, whatever.
But I had that feeling of like… I didn’t feel like I’m contributing to society very well because I’m literally a glorified relationship holder. I just kind of broker relationships between my business and another business. So, I am intrinsically motivated by feeling like I’m doing something that actually contributes something or makes a difference in the world. And we’re able to support charities with our stuff, and we feel really good about that. And yeah, it was awesome. We got to visit the charity in Sydney that we work with, and I think there needs to be a bigger motivation than just having a side hustle. I just think there’s too much glorification of the entrepreneur these days.
I think you need to be kind of someone that’s willing to get your hands dirty but has a bigger motivation than to be a baller and fly in private jets. That stuff doesn’t matter.
Simon Dell: I like the point that you say there’s a bigger motivation than just that side hustle. And I know everyone’s been kind of tainted with this Gary V side hustle kind of thing.
Laz Smith: No offense. I actually like Gary V, but other people I do not like because all these business coaches and whatever else, and I’m like… None of them have actually done anything of note. They’re literally people that have failed at other things, and they’ve gone to a Tony Robbins conference and been told they’re epic. And all of a sudden, they’re a business coach.
And I’m like, “Mate, you haven’t run anything. You haven’t done the time of the tools working for someone to understand it.”
Simon Dell: I think people need to focus on building a sustainable growth business that is certainly now resistant to the big challenges. I’ve had the conversation with somebody who was panicking about… One of our clients. Great little business, but when I first met them, they were panicking about COVID. They were going to have a really bad year and the business was not going to make any profit, and they had to make people redundant, blah-blah. All the kinds of things that a lot of people went through in the last 6 months, right?
And I said to them prior to this year, I said, “How has your business been?” It’s been great. They’ve had 6 years of owning the business. They pay their salary. They don’t get enough time off, but that’s another matter entirely. They were paying off a decent chunk every year of their mortgage. Suffice to say that the mortgage would’ve been gone in another 6 years or something like this.
And they were panicking and they were worrying, and I said to them, “Look, 12 years’ time, or another 6 years’ time, you’re going to look back on this and go – you won’t even remember this year.” I mean, you may remember it.
Laz Smith: I’m pretty sure everyone will remember this year.
Simon Dell: Yeah, but in the great scheme of things, you’ll sit there and go, “We’ve been running the business for 12 years and we have one shit year.” And I said, “Would you take that if I gave that to you now?” And they go, “Yeah, absolutely.” I said, “Well, this is what’s happening. This is a shit year.” It’s batten down the hatches, build a more resistant business, build some new revenue streams, spend the money that the government’s been willing to grant you to help do these things, and building something that, in this next 6 years, can make enough profit that’s going to compensate for what you’ve lost this year.
Laz Smith: Let me wrap up what I was saying with probably this particular thought, because you helped solidify it. I guess you’ve got to be willing. As stupid as this sounds, you’ve got to be fulfilled in doing what you want to start as a business even if you had no income from it. Because when it comes down to it, even when COVID hit, a lot of people just have to choose, “Do I shut up shop or do I just continue doing what I’ve been doing purely because I really love it?”
And I think that’s a good indicator of where your motives are and whether you’re going to be long-surviving your business or not. Because I mean, if you were in it to make money… Everyone’s in business to make money, but realistically, all the money does is give you options to choose what you want to do in life, when it comes down to it.
Simon Dell: I have a good friend called Simon and he sold a business a couple of years ago.
Laz Smith: Is he yourself?
Simon Dell: No, another Simon. Ironically, he’s been on my podcast. Ironically, his surname is Bell.
Laz Smith: Oh no.
Simon Dell: We do tend to get confused. As he will admit, I’m much better looking than he is. But the point I was making is that he said something to me a couple of nights ago about going into film production. So, he’s sold the business. He’s fairly comfortable, and he’s going to build a film business. And he goes to make films that only he would want to watch, that he would love so much that he would want to watch it.
And that’s the important thing. He goes, “If you make something that just one person wants to watch, and you spend so much time and dedication doing that, you will naturally find other people that will want to watch it.”
Laz Smith: Yeah. I mean, look at all the people – I was listening to your podcast, one of my friends has a podcast, and she interviewed Matt Sinclair. So, the guy runs a restaurant. He was on Masterchef and he got a restaurant up Sunshine Coast. So passionate about food.
Simon Dell: He’d cook for one person. If one person goes to the restaurant, he’d cook for them.
Laz Smith: And all that happens is, his success is just a side effect of the fact that he just loves food. And that could be said across all industries, across all things. I think you just got to be willing to risk it within reason if it’s something you’re passionate about. If you have to try and think about something you’re passionate about, you’re already on the wrong foot.
So, Rach just knew that she loved clothing, she loved design. She knew that she loved the way clothes make people feel and perceive. And that’s been a constant. Like, you have days where you don’t make sales and you don’t want to give it up. But that’s the stuff that keeps you in the game versus, “I’m going to be driving a Bentley one day.” Because as COVID’s shown, that stuff doesn’t really matter anyway when you really think about it.
Simon Dell: Mate, thank you very much for your time. We’ve gone on way longer than we should have, but that’s gold. Last question: If anybody wants to get a hold of you, they want to find out, chat to you, ask you questions, where’s the best way?
Laz Smith: Carrier pigeon.
Simon Dell: Break through the window with a note tied to it.
Laz Smith: Yeah. My Instagram’s all really weird, like fashion photos, but I’m @laz.smith. And LinkedIn, I think I’m Lawrence Smith. I don’t know.
Simon Dell: I think you’re Laz Smith on there but I have connected to you on LinkedIn.
Laz Smith: Oh, I’m Laz Smith on LinkedIn.
Simon Dell: When did Lawrence become Laz?
Laz Smith: Oh, school. Aussie, there’s just… you know, it just happened. People think I’m European because of Lazlo or something. I’m like, “No, it’s just my name just got butchered.” Lawrence? Nah, too many syllables. And that was school, and then my mum calls me Laz. It’s way too far gone now. I’m never going to be Lawrence unless I’m in trouble. It is what it is.
Simon Dell: You know you fucked up with the wife when she called you Lawrence.
Laz Smith: Oh, yeah. I don’t think I’ve ever been called Lawrence by Rach, so it’s good. I’ve never been in that much trouble.
Simon Dell: Mate, thank you very much for being on the show. I really appreciate your time.
Laz Smith: No worries, thanks Simon.
PODCAST EP 105
Simon Dell discussed with Liza Nebel, the founder of Blueocean, about how AI can help inform marketing and branding strategies.Listen Now