KAPSULA of happiness. Business Analysis of Apparel Marketplace
In our country, more than 47% of entrepreneurs are women, and their share is increasing. At the same time, stereotypes about "women's" business are more than enough. On the eve of the "professional" holiday on March 8, they were dispelled by the founders of Alps Mirza, the country's first marketplace for local KAPSULA brands.
“It all started in 2015, when I quit my job and was“ in search of myself. ” Prior to this, my activity was related to marketing, sales, management in various companies. A few of my friends ended up in the same status, also with their corporate experience, ”recalls KAPSULA co-founder Alena Myrza. History could be called typical, if not for the circumstances. This was a period when the country lived under the threat of a full-scale war. Society mobilized and was as patriotic as possible, and this wave affected the consumption of domestic goods. Then Julia Savostina and her project Made in Ukraine became famous. Fairs and festivals “All Own” began to take place. But at the same time, there was no online platform where Ukrainian designer clothes could be bought at any time, and not just “caught”. It became clear to future entrepreneurs: here it is, our niche. “The puzzle has converged. We believed that Ukraine has a future and that in this future people will increasingly buy good, stylish things online, ”recalls Natalya Gordienko, co-founder and buyer of KAPSULA. As a result, the friends created a very “feminine”, but manly thought out and systematic business.
KAPSULA has become a marketplace for niche Ukrainian brands of clothing and accessories. However, this project differs from the classic model. “We have a hybrid model. We don't just post photos and product descriptions, provide advertising, and collect customer requests. When we receive an order, we serve it ourselves, ”says Natalia. Logistics, warehousing, packaging, accounting, delivery by courier and so on - these are all typical Fulfill companies. These options are also complemented by sales, vendor billing, return and replacement work, and complex client communications traditionally provided by designers and brands themselves. Such a complex scheme has helped the business to happen, but its high cost has a big impact on profitability.
“We can call ourselves an omniscient business. At first it was just an online site. Then it became clear that there was a category of buyers we couldn't reach online, they didn't want delivery, they wanted to come to the store and think. Contrary to all digital trends, their number is increasing over the years. So two years after the start of the business, we opened a show room, ”adds Alona Mirza.
KAPSULA differs from other online stores or marketplaces by a number of services that are of value to customers. The first is free delivery with a fitting. You can order home a wide list of clothing of various sizes and manufacturers. Buyers who do not like shopping, have the opportunity to buy, as in the market, to form at least an entire seasonal wardrobe, all without spending time and effort on shopping. There is little to no avail of this service because of the operational complexity and cost of the service for the company itself. After all, without a large inventory base, the variety of positions in the client's order is a lot of work for managers in its processing and assembly, the cost of complex logistics. But these hidden costs are justified because the products sold in KAPSULA are often exclusive, at least premium, that is, not cheap.
But the main value-added service of the project is the opportunity to get personal advice from a stylist who will help you find your style, pick a "capsule" wardrobe or individual items. This is mostly done in the show room located in the center of Kiev. But it can also be on the spot, on the client's territory. Stylist services are a good opportunity to increase the average check, additional and emotional sales.
KAPSULA Clients are economically active women who are often in business or in middle and upper management positions. It is important for them to have a good look, but time is a resource that is also priced. Many market players are ready to fight for such an audience. “It is very difficult to accurately identify who your competitor is. Our customers can buy both premium Tommy Hilfiger, Marco Polo, and more, and more affordable items at Zara, Mango. There are online stores selling Ukrainian designers, although we have no direct competitor in either the price segment or the range. In addition, each of our brands and designers sells their own clothing at the same price as we do. Our competitive advantage is that we give more than all of them ... This applies to everything: the range, additional services, the level of customer service », - states Alona Mirza.
Relations with suppliers - a strong trump card for the company in competition. When KAPSULA was just getting started, Ukrainian designers were also starting out, and they needed to find sales options. Therefore, they were quite flexible, went to new sites, gave commodity loans. All the things that we have in the showroom or received under the client's order are the property of the designers, KAPSULA does not buy them, which is why the company needs much less working capital. Some brands may be able to afford a full-season product credit. And those who sew only a few copies of the same model, have to return the clothes after trying, if not bought.
“Now we are no longer looking for suppliers, they are turning to us. In five years, we have built a reputation and gained the trust of both customers and suppliers. New marketplaces that focus on a similar scheme of work are likely to emerge in tougher conditions, ”Natalia Gordienko predicts.
Building a sales system and attracting buyers is the basis for the success or failure of any marketplace. “Marketing is the most difficult in our field, it is constantly rising in price. In the last year alone, these costs have increased by 30%. This is due to increased competition. The stores have decided that it is easy to shop online. When we started, there was no need to invest in content promotion in social networks. You just post an interesting post with a good photo, and clients are coming out of that post, ”Alona Mirza remembers.
According to the founders, their atypical business is also atypical in advertising. For example, advertising on Google, either direct or contextual, almost doesn't work. It is more targeted at the audience of the mass market and medium + segments, good for stocks and discounts ... But in the premium segment the most effective were the social networks: Facebook, Instagram. And also - work with the customer database, recommendations,
"We are constantly advertising on social networks. We do not promote brands, but specific things. We work with thought leaders and bloggers. We conduct test drives of our services. For example, a stylist dresses, takes a photo, something from the wardrobe is given to the participant. Well, we expect him an interesting post with photos about the experience gained, ”- describes Alon's promotion tools. The online sales market in Ukraine is growing by about 20% annually. KAPSULA is growing faster than the market, which means the approaches are right and the model is working.
Interestingly, the online channel shows a steady increase in final sales, ie in the number of checks. But the most expensive purchases, the biggest checks remain in the showroom. Another observation - the site is more active in the warm season, spring and summer. But dress for the fall-winter ladies prefer in the show room. The logic is simple: coats, coats, warm suits are expensive and a serious purchase, so customers still want to come to the store and try many options live.
Seasonal peaks in this business are March-April and September-November. Approximately 300 transactions per month are made, at peak times this number can increase 1.5 times
As in any format of online or hybrid trade, the site is important for the success of the project: its design, ease of navigation, sorting directory positions, ease of ordering, payment options. And also - invisible customer technologies: cloud systems, telephony, CRM or other order management solutions.
But even more important - orderly processes, say co-owners of KAPSULA. This women's business inside is very manly structured and logical. All processes are described. Each of the founders / executives has clear areas of responsibility and functionality. Strategic issues are resolved collectively. Each department is assigned and prescribed functions, there are even job descriptions and regulations for specific positions. What are the duties of the employee, what is the priority of tasks, priorities, deadlines. This approach makes the business less dependent on staff rotation. In addition, it gives entrepreneurs the opportunity to rest, travel, devote time to families and children, each with two.
Incidentally, the founders of KAPSULA were not faced with the notorious gender issue in business. Maybe because light industry and trade in themselves are quite "female" areas of activity. And maybe because the business culture in Ukraine is at a fairly high level. There are national and international programs of support and financing. In short, Ukrainian women should not be afraid of additional obstacles, however, as to expect special preferences - too.
“Business is exactly a marathon, it takes patience. Planning is important for success. Take steps every day in its development, hone processes, notice where things are not working, improve. It is an endless process and it requires tremendous patience. This is similar to parenting. So the entrepreneurial potential of our half of humanity is considerable, and many women should think about their business, "- summed up the conversation about the" women's "business of Alona Mirza.
