How Selby Acoustics became an omnichannel success story

Mark Freidin

6th Jun 2016

NORA’s June e-commerce expedition included a visit to Selby Acoustics in Hallam, Victoria, following a tour of Catch Of The Day’s impressive new distribution centre.

Selby Acoustics is a retailer of audio and home theatre equipment. The business was started by Shaun O’Brien on eBay in 2003, the first sale being a set of banana plugs. The business has evolved to a simple yet robust and efficient business. 80 per cent of volume sold is imported, yet 80 per cent of the range of products is sourced locally, there are no grey market goods sold, and the business has always been self-funded. O’Brien defines his leadership style as “average” and positions himself as a humble uncomplicated guy, yet in his conversation he appears savvy, intuitive and not prone to suffering fools lightly. O’Brien remarks that in his days at Bunnings, where he incidentally learned everything he applies at Selby, always felt he was right in his opinions and his bosses knew it.

Currently, the company’s online sales and eBay sales equal those of the two stores based in Geelong and Hallam. O’Brien suggests the retail stores were born based on customer requests for a physical location to view and test audio equipment. Customers in store spend three to five times in store what they spend online.

Shaun O’Brien explains his business model to Paul Greenberg

Customer service is the key ingredient. O’Brien ensures his team instils this thinking with every interaction that takes place in store and online. “We give people what they need and if we think they are spending too much we will tell them. We want people to feel they are getting a true all round value experience,” says O’Brien.

Originally O’Brien tried to have everything in the store that was advertised online but now the store manager intuitively chooses what he feels will sell based on historical sales. “By having stores we were able to get Krix, an Australian speaker manufacturer on board. After this, the floodgates of supply opened up,” says O’Brien. The company doesn’t export as its goods are too heavy and too cheap.

In-store layout – big box outlet style

The eBay customer especially is a value-driven customer and is easily unsettled. As one of the first to sell HDMI cable online, O’Brien identified a gap in the market. The only lengths of HDMI cable available were in 1, 3, 5-metre lengths. Selby stocked every length from 1 – 15 metres so obtained a competitive advantage for searches in specific length cable.

Selby sold hundreds of a certain length HDMI cable for $29 on eBay without any complaints for an extended period of time. Competition by other sellers forced Selby to then drop the price to $6, suddenly complaints went through the roof on either delivery complaints or that it was a cheap product.

“Buyers are conditioned to buy online with tunnel vision,” says O’Brien. “They doggedly will hunt down a tea cup, buy it and then complain on receipt of their order that there was no saucer,” he said. This frustrates O’Brien immensely.

Interestingly, eBay dollar sales are 13 per cent higher than online sales. All prices are the same across the board ie: in-store, online and eBay, and free shipping is included. Customers do ask for a discount in store if they don’t buy online and suggest there are no shipping costs so they should be entitled to a discount. O’Brien jokes that he is happy to do that but tells the customer he cannot serve them as the cost of service equates to the cost of shipping the free parcel. eBay sales are declining, and with the latest algorithms on eBay, to do better on eBay the team would need three more people to work on this which would erode any profit made. O’Brien further eludes to the conclusion, “Online is just as expensive as traditional retail, don’t be fooled.”

Technology has been challenging. O’Brien has battled to understand many aspects and took way too long to appreciate the value of tools such as Channel Advisor to automate listings. Once adopted, these tools accelerated the business because of time freed up for O’Brien. On the topic of Magento, O’Brien feels it was a bad choice, it is complicated, couldn’t integrate into his POS and has overall frustrated him, although he has managed to find a developer offshore that has given him some confidence. The company uses WISE for its warehouse management system.

Home Theatre demo room

O’Brien is no longer in store on a regular basis and leaves the running of the stores to his general manager and team, finding it more beneficial not to be in the store as O’Brien finds fault with so many things and distracts the staff to fix these issues up. Instead, O’Brien remotely tinkers with numbers and figures to strategically plan the business forward.

In summing up his thoughts, O’Brien points out that they have had glorious fat and margin for 10 years but this is now changing, the dollar is weaker, it’s getting more competitive and elections are hurting sales.

“We are not even doing Adwords well. ‘Selby’ is the biggest converting keyword which is 60 per cent of our organic traffic, so why pay to achieve what we already rank for, organically?” says O’Brien. He also points out that he never earned more the $50,000 a year himself while on a job, and is generally humbled.

To see more images of Selby visit the photo album on Facebook