Talking shop: Justus Wilde, TheMarket
Welcome to Talking shop, a weekly series where we interview the head of a New Zealand retail business about their growth plans and challenges, and get their thoughts on the latest business trends.
This week, we’re featuring our interview with Justus Wilde, the chief executive of online marketplace TheMarket.
Inside Retail New Zealand: What have you been working on since TheMarket went live?
Justus Wilde: We’ve been really focused on developing the range further. We launched a minimum viable product.
We’ve got just over one million products, and we want to increase that dramatically.
We’ve onboarded about 138 partners, we’ve got another 230-odd signed that we need to onboard, plus we want to sign and onboard a further 200 after that. [It’s an ongoing process of] identifying brands, signing them on, onboarding them, and getting them trading.
That’s a really big part to improve the liquidity of the product offering, and then also the liquidity of the content offering, [so we’re] creating more content, and filling out our influencer network.
And then on the marketing side we managed to roll out our marketing program, which we are doing progressively, leveraging a combination of partners, group performance marketing and content marketing.
There’s a lot of work there that we’re doing.
And then other than that it’s standard trading activities. Spending a lot of time looking at the data, analysing the behaviour, finding opportunities to optimise the experience and our merchandising and content. There’s a million things to do.
I look at it as, “there’s 2000 things I’d like to improve today if I could,” so it’s just a constant task of looking at that and prioritising it, and then executing it.
IRNZ: TheMarket has been quite a while in the making. How does it feel to finally have it out there for people to use?
JW: Great, of course! It’s been 14 months of work, but prior to that [we] worked on a similar project, so for me it feels like a continuation for nearly four years, but this particular project was 14 months.
And it’s been at a pretty aggressive pace. We started, hired just over 60 people in that time frame, onboarded them and signed over 350 merchants.
It’s been a lot of work to get the team to work together, find all the merchants, a lot of travel, a lot of discussion, there’s been so much talk about it with the different partners.
It’s so nice to have it up and running now, and now working with real data – it’s exciting.
Everyone has a million opinions on how it should work, what it should look like, and what content is important, and what products are important, but now we’ve got real data to work with.
It’s a great place to be at.
IRNZ: All the prices are in New Zealand dollars. It seems tailored to New Zealand. Does this give you an advantage over some of your competition?
JW: I think New Zealand is a patriotic country.
People here definitely look out for each other, and [tend to use] the local platforms. The Warehouse has done well as a retailer, they came in 36 years ago and democratised access to product in a physical retail sense, and created a lot of brand equity through that.
Being a local player is quite an advantage here, in terms of trust from the community, and local infrastructure to support that will give us an edge over some of the international players.
There have been some international players that have tried to enter the market and have not succeeded, and it’s a very small market so the level of investment some of the international players to enter a market like New Zealand is somewhat irrelevant.
But being a local player definitely has its advantages in terms of consumer trust, brand equity, excess customer service. Removing some of the uncertainties around shopping internationally, we’ve had quite a convoluted cross-border system here which is going away in December with the new GST legislation, which we’re quite excited about.
IRNZ: Is that part of why you decided to go down the marketplace route, rather than a more specific online store?
JW: For sure. There’s no marketplace focused on New Zealand right now that has a predominant new goods assortment.
You’ve got Trade Me here, which is still two-thirds second-hand goods [that they] turn over, and they have a smaller assortment of new goods.
So there’s no one doing that here, there’s no eBay, there’s no Amazon, there’s no local Iconic, or any platform like that, so we saw a gap in the market and we wanted to address that.
If we were just doing a retail platform then we would be limited in the range we could offer, so the objective was create more convenient access to a broader range, which necessitates the model.
And then, from a group perspective, we have a huge share of the eyeballs in New Zealand. About 74 per cent of the population shop with one of the group brands on a monthly basis, so we’ve got really deep penetration in terms of eyeballs and audience, but we don’t serve all the categories.
So for us, leveraging the customer access and the marketing ability in getting to all of those eyeballs, but exposing into a broader category set commercially, makes a lot of sense.
Alternatively, we would have had to acquire a lot of businesses, stitch them together and make huge inventory investments, which would be challenging.
IRNZ: You touched on your influencer partners earlier. TheMarket has something called the ‘shop social’ feature. Can you run us through where this came from, and why you think it’s important for the business?
JW: We’re somewhat inspired by the Chinese platforms. They’ve done quite a good job there blending content and commerce.
I think a big part of that is that in effect [they] had to educate the consumer on a lot of new brands that weren’t in the country before, and while we don’t have quite that same level of education, it’s still a requirement because there are far fewer brands available in New Zealand, compared to Australia, the UK or US, for example.
That’s a function of New Zealand being so far away.
So having an experience where we can educate consumers about the brands, and tell a bit of a story beyond pure product images, was quite important to us. And the idea of using a network of local influencers to tell that story then came into play.
So the idea is, if you’re a brand and you want to tell your story, you can work with us to create specific content.
They can give us access to their latest product. We then match them with influencers that are applicable with their audience, depending on the personas for that product. The influencers then create that content, and load that into the social networks, and these days the social networks have almost no organic reach – you kind of have to pay for everything.
We then invest in boosting that content so the influencer gets exposure, so everyone wins. The brands get unique content that has a New Zealand angle to it, we help the influencer become more famous because we invest in their reach, and in return we get traffic.
IRNZ: So, you’re almost acting like a middle-man [between influencers and brands]?
JW: A little bit, but that’s our role anyway. We’re a platform that intermediates transactions between many buyers and many sellers, and marketing is a pretty essential part of that.
IRNZ: Do you have a team dedicated to this?
JW: Yeah, but it’s small. We’re fairly nimble, as I mentioned before we have about 60 people.
We have an in-house content team that helps with the selection of the influencers. We also use some third parties to help us with that, and then that team also curates the content.
We aggregate brand content at a ratio of about 10:1, so 9 out of 10 pieces of content would be created by the brand, and we aggregate and display in a different context, then one out of 10 would be something that we create for the brand using influencers or our in-house content team.
IRNZ: It hasn’t been live for very long, but have you seen a difference in terms of engagement, in terms what a brand would create and what you would create?
JW: It’s super early. What I have seen is that segments of our audience that engage with our social in the discovery process spend more in terms of average basket, and they convert at a higher rate.
But it’s such a small data set that it’s dangerous to come to any conclusions.
I think we have to observe that and push more traffic down those paths. We’re not pushing everyone down that content path yet, we’re developing it and testing, and learning our way around it.
IRNZ: What are your plans for the next year or so?
JW: I think our physical network is interesting in terms of pick-up and return locations, we’re going to continue doing work on that.
There’s been a bit of talk around a subscription offering, which we’re looking at quite closely.
That’s an area that will be quite important to us, because we’re seeing quite a bit of cross-shop between merchants which is encouraging, but also has challenges in terms of the shipping rates. So that’s an area that we’ll put effort into.
Other than that, it’s really about content and range [and] doubling down on that. Ultimately, that’s the most important thing, if we have the right range and the right content, the rest will largely follow.
If you run a New Zealand retail business and would like to be featured in our Talking shop series, please contact the editorial team.
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