How can retailers ensure increased sales and profits in today’s precarious economy? Here, we catch up with digital guru Robby Yarbrough to weigh in. A graduate of Emory University in Atlanta, Robby mailed his first catalog in 1986, which became Phoenix Big & Tall that was ultimately sold to Edison Brothers where Robby stayed for three years. When Edison went chapter 11, Robby began consulting in direct mail, soon adding fulfillment, warehousing, e-commerce and creative services. In 2005, he started Phoenix Direct, specializing in D2C but including in-depth digital services such as web design, digital marketing, email expertise and web photography. The company now has 30 clients and about 100 employees.
MR: There are so many web consultants out there these days; how are you different?
Yes, numerous companies handle fulfillment, direct marketing, or photography. Our unique proposition is that we are truly an end to end solution that offers all services under one roof. We specialize in apparel which many fulfillment companies shy away from because of the returns, refurbishment and high SKU count. We can take a retailer or manufacturer direct to consumer with a quality website in six to eight weeks. Our clients benefit from our experience without additional fees for our insights and ongoing advice. Having spent years in the apparel industry, we can prevent clients from making costly mistakes.
What are some of the most common costly mistakes?
The number one mistake is chasing margin instead of dollars. If you need 300 units to get to 80 points of margin and have a plan to sell only 50, you have a big problem. It’s amazing how often I’ve seen this.
The second most common mistake is not having enough merchandise to launch a catalog and by default not being able to offset the costs. Of course, at the end of the day, it’s all about merchandise selection. Without a good merchant, the chances for failure are very high.
Our business model requires almost no capital investment and minimal, if any, additional staff. It’s virtually all variable costs. We’ve recently added Amazon to our services and will be able to ship Amazon Prime out of our facility. We also have a fulfillment partner in Canada, which allows us to ship directly inside Canada.
Many great luxury merchants still don’t believe in ecommerce; should they?
There’s really no reason why any apparel company should eschew the ecommerce world. It’s not nearly as expensive as one might think. Today’s savvy customers expect an apparel company to have an online presence. Lack of a website suggests a dated approach to doing business. Even if a customer does not make the purchase online, he/she is likely to go to the retailer or manufacturer’s website to browse before deciding to visit the brick and mortar store. In today’s world, a modern, user-friendly site is critical.
From Google Data, 63% of all shoppers begin their journey online. And a bad web experience means customers might never make it to your store. A retail store without ecommerce is giving up at least 15% of its annual sales.
Could you give us a specific example of a company that’s benefited from your services?
Linksoul is a company with roots in golf and then surfing. Its mission is to create, sell and participate in its community as a socially and environmentally responsible business. Linksoul headquarters on the Pacific Coast Highway in Oceanside includes a design center and community event space, in which the team hosts art shows, concerts, benefits, teaches workshops and screens local documentaries. In 2014, after they launched their D2C, they partnered with us to outsource fulfillment and customer service, and to help them launch a website and catalog.
We worked with them to create a catalog strategy, using cooperatives to obtain lists of names that fit their desired demographics. We built their first website on an inhouse platform; several years later they moved to Shopify and we initiated their marketing and social media strategy using a platform fully integrated with Shopify. More recently, we’ve been growing their sales with Google ads and email marketing; we do their D2C and B2B fulfillment and returns. I’m particularly proud of our program for managing returns: we inspect, steam, refold, re-bag, refurbish and repair according to Linksoul’s stringent criteria. If it can be fixed or refurbished, we do it. Today, Linksoul is one of our largest and fastest-growing customers.
What’s the biggest mistake you’ve personally made in building this business?
Trying to implement a new, complex ERP system. We were not big enough at the time and did not have the personnel, resources or finances. (As it turned out, we did not really need it.) Our other mistake was being so focused on our customers’ success that we never took the time to market Phoenix Direct. Until very recently, we’ve grown exclusively through word of mouth.
For more info, Robby Yarbrough can be reached at firstname.lastname@example.org or 404-291-3007.