Sometimes the Way Forward is to Go Back

by Marc Levin, an EO Sydney member and co-founder and financial director of Jason.L

Bricks-and-mortar retailers have long understood the need for an online presence to move forward, but what happens when an online business turns offline?

When my brother Jason started selling office furniture, he did it through eBay while he put himself through university. The platform had a low barrier to entry and it allowed him to qualify the demand for office furniture purchased online. When he graduated in the middle of the Global Financial Crisis (GFC) he started JasonL in the back office of our father’s business and together we developed an online drop ship program in office furniture as it meant we didn’t have to hold our own stock—perfect for brothers with no capital and nowhere to store the items.

This was a great fit for Small to medium enterprises (SMEs) that wanted to furnish a small office quickly without needing minimum orders. Over the past few years we’ve established ourselves in this seemingly inexhaustible niche as one of Australia’s fastest growing businesses. Something else happened; something we didn’t predict when we began our purely online business: we needed to open a bricks-and-mortar location.

At a time when many bricks-and-mortar businesses were moving to online retail, we were going to add a bricks-and-mortar facility to our online business.

Show and tell
About three years ago, we noticed an opportunity in a related area: customers had, for some time, been asking for help with office fitouts. The more involved we became in the process, the more customers wanted to come and see us and understand the product they were purchasing. We needed to have something to show them.

Having a warehouse and showroom is a greater expense than an online store, but we found that when customers were able to visit us, it engendered greater trust in both the products and our business. It has also enabled our sales team to demonstrate their expertise and provides a platform for a more robust conversation about customer needs and possible solutions we can offer,

What’s the result? Higher value orders and continuing repeat business. By number of orders, online still provides us with about 70% of our business. However, the opposite is true for the value of sales. It may take more time to discuss fitout, layout and ergonomics with customers, but it will result in a higher lifetime value because they better appreciate our expertise and knowledge.

For example, we helped fit out Dyson’s new offices. Because we invested our time and expertise in understanding and meeting their needs, they now call us for all things office related.

Bringing it in
Because JasonL started with very little capital in our dad’s back office, we had to outsource everything. We didn’t have the capacity to do everything ourselves nor the financial capacity to hire specialists. This is a common situation for startups and works well in the first few years.

As the business and our sales grew, we realised the value of having more control. Bringing things inhouse allows us to provide a level of consistency we could not previously provide, as well as enabling us to control all aspects of our brand.

More control gives us the ability to change quickly. As we identify more pain points for our customers, we can develop complementary products and services to relieve them and maintain relevance in a changing market.

The agility of our business is one of the keys to our success, achieving an average of 63% growth year on year for the last four years.

If you are considering if you should change your business offering, here are four ways to do it well:

• Listen to your customers: Customers communicate their ‘pain points’ and each of these can be an opportunity to take your business in another direction.
• Evaluate opportunities: Not every opportunity leads to a switch; you need to think about whether or not it fits with your target market.
• Consider the long-term value of your decision: Some paths may seem to take longer or cost more but may lead to a higher lifetime value. Factor this into your evaluation.
• Look at what you shouldn’t change: Your customers should feel comfortable remaining loyal during change, and change costs money. So don’t change everything! We haven’t changed the products that we offer, and our primary target market is still, and will always be, SMEs.

Marc Levin is co-founder and Financial Director of Jason.L, a third generation provider of office furniture as well as office fit out services for SMEs. Jason.L is an Anthill Cool Company Finalist and ‘SMART 100′ Index Runner up, and has been named in BRWs fastest growing companies, achieving an average of 63% growth year on year for the last four years.