CSA Exclusive: Daymond John keeps a shark’s-eye view on e-commerce
Behind the scenes of the popular television show “Shark Tank,” Daymond John has a methodical and customer-centric view of e-commerce.
Chain Store Age recently interviewed Daymond John, founder, president and CEO of vertical fashion retailer Fubu and featured investor on ABC TV’s “Shark Tank,” about his advice for success in e-commerce. John, who built Fubu from an entrepreneurial venture running out of his mother’s home in Queens, N.Y., to a global, omnichannel enterprise which has earned more than $6 billion, stresses heavy focus on customer service and a slow but steady growth plan.
What do you look for in an e-commerce business as an investor?
I look at how they are retaining customer data and their analysis of their customers. How are they growing year-over-year and do they continue to improve their supply chain? Are they improving on getting goods quicker to the customer? Do they provide content to people and get them to be affiliate marketers?
What is the best e-commerce investment you ever made on Shark Tank?
Bombas Socks. When I invested, they were generating $800,000 in annual revenue, and five years later they are generating $100 million in annual revenue. Bombas mostly sells products via e-commerce, though they sell some in partnership with The Gap.
They’re [the founders of Bombas] are laser-sharp entrepreneurs who didn’t spread themselves too thin. Bombas’ data didn’t show they were ready to expand yet. Five years later, they are starting to sell t-shirts, and will probably eventually sell some other things. They over-supported their customers for five years and grew their market.
For every pair of socks Bombas sells, they give a pair to the homeless. Today’s customer wants to know how buying your product is helping. Charity taught me a lesson. I used to give to charitable organizations, but didn’t want to tell anyone. Now companies are marketing their charitable activities and saying, ‘look what I’m doing.’
What is the biggest single business lesson from your own career?
There are really two lessons – grow slow and find mentors. You should always grow slow and take your time. Also, find as many mentors as you can, there will be more than one. People don’t know what they don’t know. This is true in life too – take it slow and find people around you who you can ask for advice, because they have been there.
How can a small retailer benefit from entering e-commerce?
A small retailer has the advantage of having the touch and feel of their customer. You get to know them in a tight sense. You can spread that globally with e-commerce, once you have the proof of concept of dealing with people directly.
You can analyze data from people you’re selling to on the e-commerce side, and can see how many units of a product you sell at this number compared to that number. Customers won’t sign up for your mailers at the cash register and you don’t get to see where they go after they leave. However, with e-commerce, you can easily offer products that match or go with the products being purchased because you have data on what other people who bought that product also bought.
Hopefully, in a store, you are too busy to get to every customer. But e-commerce lets you convey a message to customers easily. It provides an easy way to follow up with content that pushes people to the store. You can say, ‘We’ll open a store and make a product available only to you at this price.’
How can a smaller retailer effectively compete with major e-commerce players?
Some of the big boys and girls are doing creative things. You need to know your strengths and weaknesses. Because you’re smaller, you can over-support with customer service.
Get people to want to work for you. Run a promotion where customers can submit 30-second videos, and the one with the best video gets special product pricing. Make customers your ambassadors through affiliate marketing.
Each challenge is different. The challenges will be different for a drug, fashion, or grocery retailer.
Editor’s Note: Daymond John will be hosting a special virtual conference on Instagram Live, “Daymond John x eBay Power Talk,” to offer small business owners tips and advice for success. On May 9 at 6:30 p.m. EDT, John will answer questions via his Instagram account that focus on e-commerce growth.