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Showpo’s pureplay focus pays dividends

After an early flirtation with bricks and mortar stores, Jane Lu, the 29-year-old founder and CEO of online fashion retailer, Showpo, believes the strongest position for her business is online only.

Lu quit her full-time corporate job in mid-2010 to run an ultimately unsuccessful business running pop up clothing stores in bars, called FatBoye Group.

Determined to make her next business venture a success and avoid past mistakes, Lu co-founded Showpony in September 2010.

She has since bought out her partner and shortened the name to Showpo, to avoid any potential trademark issues that may arise as the brand entered new global markets.

At a recent NORA e-commerce expedition to Showpo’s rooftop headquarters in Sydney’s CBD, Lu spoke candidly about PR, recruiters and mistakes to avoid when starting an e-commerce business.

Three months after launching Showpony, she opened a bricks and mortar store at Broadway in Sydney on a 12-month lease.  

“I was still kind of stuck to the idea that bricks and mortar would work, because traditionally that’s what did work,” Lu said.

In August 2011, Showpony opened a kiosk with three racks of clothing in Pitt Street Westfield as part of the centre’s designer markets. Lu said the Westfield set-up was “a cash cow” to reinvest in Showpo and grow the business.

Sales from the bricks and mortar locations dropped off and two and a half years ago Lu decided to focus her attention solely online and close off what was still a profitable revenue stream.

These days Showpo’s bricks and mortar presence is limited to a sample sale every six months to clear old stock, one of which takes place in Martin Place, with all the proceeds going to the charity, Project Futures.

Minor adjustments
Lu bought out her business partner in January 2012 and began tweaking elements of the online business; buying Google ads, removing the shipping fee, posting more on social media and providing faster customer service online.

Soon sales doubled month on month.

“I couldn’t believe the growth we were getting,”  Lu said. “At this point I was operating out of my parent’s garage.”

Lu moved the business to a bigger premises and began to hire staff, but operations were still lean. In 2012 Showpo had its first million dollar month with just four staff.

Last year Showpo turned over $10 million in sales.

Today the Australian startup operates in 45 markets globally and has 11 employees, having recently hired the first two male members of staff, who will both join the team shortly.

Early wins
Lu said two big wins in the early days of the business ultimately helped Showpo get off the ground – securing stock on consignment to keep costs down and, nailing social media engagement to grow the customer base.

Lu credits her social media expertise back to her days at Ernst & Young, when she worked with two screens – one with an Excel spreadsheet and the other open on Facebook.    

Showpo used social media to directly communicate with customers and to reach a new audience at a low cost. For example, inspired by America’s Next Top Model, the business ran a Facebook competition searching for the “next face of Showpo”. Entrants had to encourage their network of friends to vote for them to win the prize, unpaid modelling work for Showpo. 

“Within the month we went from 3000 to 20,000 followers, which back then was huge because that elevated us beyond our competitors at the time, and it was all for free,” Lu said.

Looking ahead, Showpo has its sights set on becoming one of the largest online fashion retailers for women aged 14 to 30 and, growing its market share in key international geographies.

On Lu’s “long-term business bucket list” is establishing Showpo’s own garment factories which set the industry benchmark for offshore fashion workers.

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