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CASE STUDY – Birdsnest, one of Australia’s most popular online retailer. How?

Jane Cay (BCom 2000) is the founder and CEO of Birdsnest, one of Australia’s most popular online retailers for women’s clothing. Jane discus​ses the growth of Birdsnest and what it took to build an online retail business with a personal touch.

When you launched your online store in 2008, the Australian online retail marketplace was still fairly small. What early challenges did you face? How did you drive online sales and traffic?

When I started researching taking our store online back in 2006, Australia was lagging behind the rest of the world - where I saw opportunity, others thought I was crazy to pursue the idea – "no one is going to buy jeans online Jane!". Even though there were less customers shopping online in Australia when we launched in 2008, the landscape had far less competitors so it was easier to stand out.

One challenge we faced at that time was no ‘off the shelf’ software solution for building the type of user focused e-commerce website we were striving to achieve. We recruited a software engineer in his second year to build our site in ruby on rails, the bones of which still runs our site today.

Our strategy at the beginning was to look big, even though we were tiny. Our store stocked 80 brands and hundreds of lines so while there was breadth, what you couldn’t see online was that we had no depth, each style usually only had one garment in each size. Our physical store therefore provided a huge leg up at the start, it was our warehouse!

From the beginning we understood the value of each customer; their experience was the best marketing tool we had. Our primary driver of online sales was organic traffic through Google and most importantly, word of mouth. Once people discovered us they kept coming back and they very kindly told their friends; 80 percent of our sales now come from return customers.

I’m an avid online shopper, and having recently arrived in Australia from the U.S. I’ve noticed online shopping is not as customer friendly here as it is in the U.S. Most U.S. online retailers now offer free shipping and returns, and many of the larger retailers aim to have packages delivered within a 2-day window. It was great to see Birdsnest has a very customer centric business model, which sets it apart from other Australian online retailers.

Can you talk about the decision making process to offer customer friendly policies such as a 365-day return policy and 2-day shipping? Do you see the business expanding into free shipping and providing other customer perks?

One of our eight business values is ‘Surprise Her’ and this guides our customer service team. We try and understand the things that are most important to our customers and to be as generous as we can in delivering on those.

When a girl buys something today, she actually wanted it yesterday, we’re girls and we get that so we try to send our parcels out as quickly as possible. Any orders that come in before 1pm are sent out on the same day - no exceptions. Ever. We have done this from the beginning and I think that this consistency is important.

The 365-day return policy was born one day after I heard a member of our customer service team on the phone politely saying that she was sorry however she couldn’t return that item because it was past the return date. I realised our policy did not reflect our guiding 'Surprise Her' principal of ‘if in doubt, be generous’. This is our last touch point with this customer and we strongly believe that if you don’t love that dress in your cupboard, it will only be a burden for you when someone else out there might love it. We try to ensure our customers never feel guilty about returning items to us, it is just a natural part of shopping - you rarely take five items into the change room and all of them turn out to be winners.

We are always exploring options to improve our perks for customers while maintaining a sustainable business model, for example, we recently launched a free postage threshold. As soon as we can afford it, we trial it. We are about to launch a trial of your first return free until Christmas.

While we are constantly striving to improve, we must be doing something right as the Net Promoter Score from our customers is 91 and earlier this year we were awarded the Online Retail Industry Award for the best online customer service in Australia. I’m very proud of our team!

The online shopping experience at Birdsnest is very different from most online retailers. Customers can shop by a variety of categories: body shape, occasion, brand, personality, collection, colour, size. You also offer free style guides. You aren’t just selling clothes, you’re selling an experience. How important is the shopping experience for the customer, especially when it is online?

I am delighted that you observed this, I really got excited by this business when I was working on the shop floor styling women and had first-hand experience of the power of ‘retail therapy’, it was real. We could change the way a women was feeling about herself through great styling support. The lightbulb moment was when I realised we were not in the business of selling frocks, we were a service business, solving the never ending wardrobe dilemmas of women. These dilemmas vary and we studied the different motivations a woman brings to the purchasing decision, many of which centred on her body shape. In store, we were her style support team and wanted to replicate that personal experience and service online.

This led to the creation of our shop-by options, our style guide, styled outfits and it has impacts on every aspect of our business - the way we buy, photograph, promote and communicate with our customers. We feel like we are the match makers between the girl and her perfect outfit. It is the whole experience that we are interested in so at every touch point we try to ensure that the Birdsnest journey is personal and encourages the customer to find the best style for them.

Birdsnest began as a small shop on the main street in Cooma, NSW. When you moved online you kept the store open and eventually expanded it. As more and more retailers leave brick-and-mortar behind for the online marketplace Birdsnest is not. Just this past winter you opened a pop-up store in Thredbo village. Why is Birdsnest bucking the trend? Is there still value in the brick-and-mortar retail model?

I think the tide is turning - retailers who have a strong physical retail footprint and a great integrated digital presence are going to be able to offer customers the best of both worlds. Real life touch points are still very important to many customers and to our understanding of our customers’ needs. We see pop-up stores as a way of having those tangible connections with our customers without rolling out lots of stores.

Part of Birdsnest’s mission is to empower women – both as customers and employees. With Sheryl Sandberg’s ‘Lean In’ movement sweeping the world (24,000 Lean In circles in 117 countries), where does Birdsnest fit into the lean-in narrative?

Our vision is to inspire confidence in women, this starts with our team and extends to our customers. We employ 100 people (in a town of 8,000) and 96 of those are women. I see the most important part of my leadership is to create an environment where the Birdsnest team can thrive. If I can create that culture of trust where our team feel that they are heard, recognised and can make a valuable contribution, then every woman that touches our nest will have a positive and empowering experience.

In 2015 we entered the BRW best places to work study to learn more about how we could improve, to our complete surprise we were placed 8th in Australia for a business our size.

Theodore Roosevelt’s quote that ‘no one cares how much you know, when they realise how much you care’ rings true when you consider that less than 10 percent of our team have a university degree. I feel incredibly privileged and grateful to work in a team that cares so deeply about their roles and the impact they are having on women’s lives. It is not that we take ourselves too seriously; there is a strong culture of dagginess, but what is not to love about putting smiles on girls’ faces?

When I read Lean In and Sheryl Sandberg asked ‘what would you do if you weren’t afraid’? it made me very afraid and excited about the possibilities of where Birdsnest could go if we continue to lean-in.


You mentioned in a profile piece with Westpac that your business runs on a no-debt model. Why have you chosen such a conservative financial strategy? What are the benefits? What are the challenges?

As the daughter of a management accountant, building a sustainable business model was always our number one financial goal. We were profitable in our second year of operation and have been able to fund our growth through those profits. Yes it is a conservative strategy, however, I went into this business as a personal challenge to create a fulfilling career in a regional location, not to become the biggest online fashion retailer in Australia. I am far more passionate about creating a great place to work and consequently the best place to shop online for Australian women. This requires authentic and personal connections with your team and customers that can be easily lost if you grow too quickly. This is a long distance race for us.

The majority of Birdsnest customers are located in Australia. Do you have plans to expand your customer base outside the country?

No immediate plans however now we are manufacturing our own ‘bird’ labels we feel like we have a more exclusive and unique product to market overseas.

One of the hottest buzz words at the moment is Big Data. With both an online and brick-and-mortar retail business you must collect mass amounts of data. Are you harnessing Big Data to inform your business decisions? How central is data analytics for Birdsnest?

I don’t get too carried away with the latest buzz word however I do believe in the fundamental principle of understanding your customer intimately. If you gain insights that will help you solve your customer's problem better than anyone else, you have a competitive advantage. We are always trying to leverage the data in Birdsnest to gain insights that will enable us to solve women’s wardrobe dilemmas more effectively. We are currently trying to hire graduates with a passion for analytics.

 

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