Parag: Hi, everyone. I’m Parag with Webgility. This video is being recorded as part of our series called Beat It. I’m talking to entrepreneurs and experts in retail on how they’re beating COVID-19. Today, I’m excited to chat with Vishal Wadher. He’s an e-commerce veteran and fellow entrepreneur. He ran an agency called Atmosol for over a decade, helping Amazon sellers grow online. After exiting that business, he worked with a couple of other startups, and earlier this year, he joined as the VP of e-commerce for an accessories brand called Reshoevn8r. I should also mention that Vishal is my buddy from college. We’ve known each other for about 22 years, but today we’re going to keep it really professional. Welcome, Vishal.
Vishal Wadher: We’ll try.
Vishal: Thanks, Parag. I appreciate it.
Parag: Great. Welcome to today’s show. First and foremost, we’re going to be talking about Coronavirus, certainly, and the impact that it’s had in your business, but tell me a little bit more about what is Reshoevn8r? Who’s your target audience? Where do you guys sell? Just give the audience a little bit of an overview about the business, please.
Vishal: Yes, absolutely. Reshoevn8r is a premium shoe cleaning and shoe care brand. Our target audience, primarily, are definitely sneakerheads and anyone really that cares about their sneakers and their shoes and wants to make sure that they’re kept clean and pristine and make sure that they’re able to show them off when they’re stepping out with their shoes and take pride in what they have as far as their sneaker collection goes.
Parag: That’s pretty cool.
Vishal: That’s generally the high-level overview in terms of what our products are.
Parag: Excellent. I imagine Coronavirus has had an impact on your business, but before we talk a little bit about the impact, did you see the Coronavirus coming? Can you give us a sense of the timeline that you applied for your business, anything you did to prepare?
Vishal: No, we definitely didn’t see it coming. Especially here in Arizona, I feel like, on the onset, wild things were brewing in other parts of the country. Arizona, I felt was a little more on the lack side, obviously, based on the numbers of the stats, which I know that there’s a lot to be said there in terms of accuracy. Nevertheless, initially, the numbers on the stats were definitely on the down-low. There wasn’t as much concern as, obviously, in hindsight, they could have or should have done a bunch of things.
It definitely hit us with a surprise, in terms of just within a couple of days, we started seeing a lot of sales decline on multiple channels that we sell on. It definitely hit us with a surprise, much like I imagine probably happened with a bunch of other retailers.
Parag: Just to rewind the tapes a little, are we talking March, February? When did you start to see a change in business?
Vishal: Late February, I would say probably mid-February.
Parag: Is your brand selling only through its own e-commerce channel? Do you also sell on Amazon? Can you talk a little bit about the channels that you have? Also, do you do any retail?
Vishal: We do not do retail yet. We have our Shopify store. That’s our primary bread and butter if you will. We definitely have a bunch of different channels in terms of marketplaces. Amazon being the majority of the share in terms of the other channels, and then a little bit of here and there in terms of eBay and stuff like that.
Parag: Since you didn’t see this coming, pretty much most people didn’t, but once you realized that there was going to be an impact on business, can you share a little bit of what are some actions you took in order to combat what could be a pretty significant decline?
Vishal: If I were to summarize the areas that we had to tackle, first of all, obviously, on our primary storefront, Shopify store, revenues and conversions just started doing a nosedive. Amazon revenue was pretty much wiped out at the onset of- especially when things started picking up in terms of the cases in the US. We had almost non-existent revenue from Amazon and that was because FBA was prioritizing only essential items. We took a big hit there just on the Amazon channel. Essentially, those being the two major areas of our sales channels. Immediately the steps that we took were on our Amazon account. We definitely switched from FBA to FBM, which is fulfilled by merchant.
We were lucky enough that we didn’t rely solely on Amazon in terms of Amazon FBA with regards to our inventory and warehousing. We definitely have a few other areas, warehouses that were basically stocking up and have inventory located. Therefore, we were able to just make that switch really quickly and easily and start fulfilling even the Amazon orders from those other channels. That’s as far as Amazon goes. In other areas, we just took a look at our business as a whole and started doing a lot of cost-cutting measures, as I imagine most businesses probably did and are doing. Review all the vendor relationships, ask for discounts, there’s no shame in going back to existing accounts and vendors and being like, “Hey, look, we’ve been hit and we’re in this together. Can we get a break on certain things?” Try to renegotiate some of the terms. If you’ve got a purchase order, try to renegotiate in the net 30, 60, 90 terms or whatever you have in place, and delay those payments, if you can.
Those are some of the areas that we started paying a lot of attention on. As an example, we did an inventory of a bunch of different apps that we have on our Shopify store and vendors that are integrated and connected to those. One example that I can give is, we’ve got this- I’m not going to name any vendors, but essentially, we’ve got a fraud protection company plugged in, and they take a pretty decent chunk of the revenue to offer that fraud protection service. Well, after doing some quick analysis, we realized we didn’t have that much of fraud that needed to be protected against. Like net-net, even if we didn’t have that in place, we probably wouldn’t lose that much money compared to what we were paying them.
That’s just a quick example. That was definitely still in the six figures with regards to what we save annually. That was a quick one. It’s like, “All right, well, let’s not have that in place. Instead, we leveraged a bunch of automations.” For example, we had Shopify’s fraud detection, that’s already built into Shopify. We had those orders be Slack-ed to us automatically, in terms of like, “Hey, here’s a Slack message on this fraud channel.” My customer service team was able to look at that, and then mitigate those issues as soon as we saw those messages coming in, as an example.
Parag: Of course. A couple of things that stand out to me from your comment there, one, it seems like having that diverse portfolio across channels, having your Shopify, Amazon in multiple channels when Amazon changed its rules on you, certainly led to a decline, but you’re able to maybe adapt and be able to fulfill yourself, diversification is something that I’ve heard time and time again in a lot of these conversations I’ve had, is that the more diversified you are, the more prepared you are to pull those toggles. It sounds like you also had the capacity and the infrastructure to be able to do fulfillment in-house, which is pretty challenging for a lot of merchants who are locked into an FBA model, maybe shipping even directly from outside of the US.
To just get a sense of magnitude here, can you share in terms of just percentages, maybe, what decline you had in revenue or volume, and have you since making those changes been able to recover? Or what sort of changes are you seeing in some of those key metrics?
Vishal: I would say as far as the decline goes– There’s an interesting story I want to share with regards to this whole thing, in terms of how things collided in terms of our worlds with regards to what we’ve been working on. I’ll share that in a minute here because it’s very relevant to the numbers and the metrics that you’re asking about. Essentially, prior to March 30th, we were probably down by- I want to say about 30% to 40%, just in general, across the board. Percentage-wise on Amazon itself was a lot higher when you take into account just the Amazon revenue, per se.
That said, a couple of pointers here. One is, definitely diversify. We don’t have more than- I would say probably about 20% of our revenue is probably dependent on Amazon. I would not advise anybody to be anywhere beyond that, dependent on Amazon in terms of- as one of your channels. That’s probably a good number to focus on as far as diversification goes. I think that helped a lot because we just de-risked ourselves right from that perspective. It’s like the most 20%, which is not insignificant, but nonetheless, the most that we would have lost out on is 20% and we did.
Vishal: That’s that in terms of the initial decline. The reason why March 30th is very important in this whole equation, for us, at least, is that we’ve been working on a rebrand for two years. This is such an amazing story that I just feel like- it’s one of those things where I’m not very spiritual, but I just feel like the universe and everything just came together for us, in a certain sense, and this is a positive takeaway from this whole situation. For two years, we’ve been working on this rebrand initiative. Everything is different now about the brand in terms of packaging, and the products and the website, et cetera. All of that initiative that had been put together for the last two years, we essentially launched this rebrand on March 30th, in the midst of all this stuff happening, in the midst of this pandemic.
Parag: That’s a bold move, but perhaps a necessary one given there’s not a lot of choices out there. It’s great that it all culminated at the right time.
Vishal: Exactly. Speaking of choices, one issue was that we didn’t have that much inventory of our old skews. We’ve got to launch, you know what I mean? We’ve got to do what we plan on doing. Now we were sitting on a new inventory, that needs to go. All of that put together with the fact that we were just like, “Look, not the best time given the pandemic and the just the economy and whatever is happening,” we’re like, “Hey, we got to do this.” First of all, we don’t have too many options. Secondly, we were all actually really excited about it. Amongst this whole pandemic, this whole situation that was happening, it really brought our team together. It couldn’t have been better, in terms of making sure there’s unity within the team to focus on this unified goal of this new brand, this new website, the new skews, the new messaging, et cetera.
That was just incredible on its own in terms of leading up to that, then we launch. Over the next few weeks of our launch, we saw a drastic increase in revenue, the average order value skyrocketed essentially. From that nosedive, we started seeing it going uphill-
Parag: That’s fantastic.
Vishal: -from that perspective. It was a great time for us to rejoice from that perspective. Our CEO sent an amazing letter of hope and business continuity and unity to our customers in the midst of all this. We need good stories and this was definitely one of them.
Parag: That’s right.
Vishal: Parag, I noticed that we had such an amazing brand following and fanatic customers that the customers that I previously approached- [crosstalk]
Parag: I should point out, I believe your YouTube channel has over a million subscribers.
Vishal: Yes, that’s right, and growing. The customers are so fanatic about the brand that they actually repurchased, even though I saw- a bunch of them had purchased the old skews, but they’re like, “We need our hands on the new skews. We need our hands on the rebrand.” It’s also based on them just wanting to support us. We’re still a small business here in Arizona. They just love the brand. There’s a whole community around it, we call them– It’s a “Reshoevination” is what we call it. This whole community, they really helped from that perspective and people re-upped on our new brand. That was just incredible to see that spike.
Parag: That’s fantastic. Is it safe to say then that you’ve gotten past the hurdle now and you’re back to your previous revenue levels? Or are you seeing, in fact, an increase from there onwards?
Vishal: I would say we’re back to where we were, maybe a little bit of an increase, but that little bit of an increase to our prior revenue and conversion rate is probably because of what’s happening with regards to the checks that are coming in right now, the stimulus checks. Because of the stimulus checks, across the board, just in retail, there’s a spike. That’s definitely- [crosstalk]
Parag: For context, it’s April 20th today. The check started rolling in last week. Yes, it’s something we’re seeing across our customer base, and also through a lot of merchants that I’ve talked to, they’re starting to see pretty significant increases in volume. It sounds like the shock factor of the coronavirus and all the lockdown is finally- we’re getting past that. Maybe we’re starting to look at the light at the end of the tunnel. There is an acceleration. I, in fact, just posted earlier today on LinkedIn, a stat we saw about a 54% increase last week in order volume compared to the first week of January. We’re starting to see an acceleration as consumer behavior changes towards a move towards online.
That’s fantastic news. I think in terms of the rebrand that you just talked about, something that’s also stood out in other conversations I’ve had, is brands finding creative ways during this pandemic and utilizing this time to fuel either a rebrand, to double down if they have the funding available, to accelerate on new ideas and strategies. I’m sure this rebrand took up most of your capacity, but are there some other creative things that you’re doing right now to fight and overcome this downturn? Especially, given your brand and your businesses is, unfortunately, it falls in what’s being termed as a non-essential category, but it’s fantastic that you’re able to see that growth. Any other creative ideas you have that you’re currently employing?
Vishal: I’m not sure how creative it is per se, but obviously, the general things along the lines of fire up other channels if you haven’t been already because if Amazon is deprioritizing your non-essentials, then go into eBay more so than you had before. There’s still demand. Here’s the important thing. There’s still demand out there, which is obviously very clear based on the spike in e-commerce sales as soon as these stimulus checks hit. There’s still demand out there. People want to spend. Get in front of them via other channels, via other areas that you may not have done before. eBay is one. Try to get localized, like Facebook Shop or OfferUp. OfferUp is very localized, and you can inject ads in there and just inject your products in there. That’s another way of getting in front of customers.
With regards to us specifically, the rebrand was great also in the sense that we were actually able to capture other demographic that we previously had not. I’m saying this is what we did, but my message here is that try to figure out how to capture other demographic. Try to capture other audiences that you may not have considered or may not have been targeting previously. For us as an example, again, everything just came together so well in the sense that our rebrand was supposed to be much more on the neutral side to appeal to a broader audience.
Even though the sneakerhead community is our primary audience, we wanted to appeal to more broader segments and audiences. As an example, prior to the rebrand, our ratio of male to female audiences was about four to one. After rebrand, we are at two to one. That’s a huge spike in terms of women that are interested in our products now. Along with that, even the age group. We used to be at between 18 to 34, as far as the majority of the audience that we’re buying from us. Now, after the rebrand, we’re at 18 to 54.
Vishal: Just by doing that we have captured additional markets that we didn’t have access to before. Now we’re able to leverage that as far as, just think about the lifetime value from all these new customers that we’ve acquired. Speaking of acquiring customers, the cost of customer acquisition is, in my opinion, at an all-time low because we’re seeing that you can afford a lot more than before to spend money on Google ads, Facebook. Just light up those channels and fire those things up. Instagram, all these channels, because there’s definitely companies that are not able to spend money on those channels. If you’ve got the funds, spend that money and time in acquiring your customers today, because your cost of customer acquisition is low, lower I should say, and the lifetime value of those customers is going to pay back umpteenth amount of times down the road in the long term of this whole thing.
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Parag: -That’s right. You touched upon on some pretty critical factors here. One is the ability to test a lot of different marketing campaigns and ideas because advertising broadly is on the decline. You have the ability to spend less but target new audiences. It does sound your business has the sophistication with both Shopify and a lot of the behind-the-scenes tools you’ve put in place to measure a lot of these detailed demographics. Having that level of analytics and something that of course I’m very passionate about, is knowing and having control over your detailed insights about your business so you can take critical action, I think that’s really key.
Since you are, again, a more mature, I would say business, and I think very fortunate to have both diversification and a much smaller physical footprint without any retail locations, I wonder if you think about a retailer out there that maybe hasn’t started selling online yet. In your opinion, what do you think, is now a good time to fire up that e-commerce store? If so, what would be some advice that you might give to a brick-and-mortar retailer that’s perhaps in a more dire situation and really needs to find a way out?
Vishal: I would definitely say, if they have the assets, if they have the funding available, obviously physical retail right now is just not in a good place. There’s no foot traffic, so to speak. That’s a lot of money and real estate that is not being put to use per square foot. I don’t want to prescribe people shutting down. Depends on each person’s situation, but I would say, redirect a lot of that funding, a lot of that money towards spinning up your online store.
I’m definitely a fan of Shopify, because of just the ease of use and the vast app marketplace that you can do a lot with. That would be my advice very specifically, which is to redirect a lot of that funding, get an online store up and running. Start focusing on customer acquisition strategies across the board, social media, SEO, Google, pay per click, fire up all those channels, whatever money you’re spending on your local physical retail presence, all of that should be redirected to all of these online channels, marketplaces as well as ad networks and get those customers, acquire those customers is really going to be my key message here.
On your website, be fanatical about customer service. If you’ve got a little chatbot thing, don’t wait till someone clicks on it, you can definitely have something in a place where if someone’s been on your site for more than 60 seconds or something of that. You initiate this chatbot. Initiate and say, “How can I help you? What can I consult you on with regard to whatever the product ist?” That engagement is going to, again, payback in massive returns by having that customer being a paying- that prospect being a paying customer today, as well as that lifetime value of that customer.
Parag: Sure. I think the key to spinning up online, of course, there’s a number of choices and we talked about this in another video, but Shopify is definitely a key winner here. In fact, their stock and the top traffic to Shopify stores is at all-time highs right now, with all of the momentum that they’re seeing with these channels. If I go a little bit to the behind-the-scenes, as you think about the physical operation because retailers really are very much those folks that like to touch and feel their product and work closely face-to-face with their customers, I want to ask about two things.
One, in terms of procurement in terms of the manufacturing side. Do you guys manufacture locally? Do you import from international locations? If you could talk a little bit about that. Also, in terms of fulfillment, now that you’re balancing away from FBA to in-house, any pointers you might have for retail businesses now getting started? Is this the time to consider reaching out to other markets, or thinking manufacturing locally? Are there things happening with China that you might be aware of, any things you can highlight in terms of both manufacturing and the fulfillment side?
Vishal: Yes, absolutely. With regards to manufacturing, yes, we manufacturer internationally. Again, just going back to the whole universe coming together and everything just fitting in this whole chaos, we got lucky that our shipment of the brand new skews right before we launched were already in. We got in one of the last shipments I feel like before there was a whole cut-off in terms of that supply chain. We were good, at least for our launch. Obviously, we need to replenish now, and so we’re getting back into it in terms of that reorder. But China’s open. From what I’m seeing and from all the signs I’m seeing, China’s already opened up as an example, and a lot of these other places in terms of getting products out. I don’t think there’s a concern from that perspective for us. Like I said, we got lucky right before everything hit.
With regards to fulfillment, I want to clarify, we do have a 3-PL, so it’s not in-house per se. My advice there is, again, de-risk in terms of- if you’ve got a good company you’re working with, then de-risk in terms of making sure they have at least two warehouses spread apart because again you never know what might happen. Maybe one goes offline because of the virus or other disasters, I feel like all the other disasters and other issues have been pushed aside because of COVID. There’s other stuff happening, there’s earthquakes still happening, there’s hurricanes still happening, and if that happens–
Parag: Yes, just having that diversification.
Vishal: Exactly. We’ve done that, and that’s definitely helped us significantly. Again, the sophistication with the systems in place needs to be there where we’re able to do that. We are able to flip the switch in terms of- all right, well, based on the inventory that’s available or not available in certain places, we’re able to reroute the order automatically versus having to manually reconcile and be like, “Well can’t get from there. Now, let’s go ahead and shift this over there,” et cetera. We’re definitely able to do a lot of those things on the back-end with the different platforms we’re using.
Parag: Nice. It sounds like, again, timing has been serendipitous for you, even though it’s very unfortunate about what’s happening for so many businesses out there. Of course, I will say that it’s great to hear these positive stories, and it’s all the crap that’s going on. Has this pandemic and the impacts changed anything fundamentally about the way you operate your business? Are you thinking differently as a company about the future? Are there some takeaways that you can share about the future and how it’s affecting your thought process?
Vishal: Yes, absolutely. For one, clearly, it’s made everyone remote working experts. We actually were not one of the companies that we’re doing a lot of remote work just because of the day-to-day interactions and everything that we’re doing, as far as our brand and different strategies that we need to discuss, it’s just so much easier and better for us, at least, to do that in person.
Again, historically, we’ve not– That was something that was a learning curve and a challenge for us to get ramped up on that. But we’re there, we’re doing a good job, everyone’s plugged in, and we’ve got all our remote working tools in place. It just took a couple of weeks to get into that routine, but we’re in it now. I think from a future state perspective, this has definitely helped us figure out what happens in a disaster situation and what do we need to do to better plan for-
Parag: A trial by fire.
Vishal: Yes, exactly. I have started a disaster recovery business continuity document based on this. COVID is stress testing that plan, that’s for sure. I think that’s one of the biggest takeaways in terms of how do we make some changes and improve moving forward. Getting a lot of these systems and processes in place so that if something like this ever happens with any other disaster, maybe the office gets flooded with water, whatever. At least we should be able to execute the plan based on this.
Parag: Sure. I wonder just in terms of final thoughts about the future of e-commerce, it’s fantastic that you in in the business have been able to adapt, and the timing has worked out incredibly well. Is this an opportunity you think for you to– Are you leaning into this moment and investing more? Are there some things you can share about what do you feel about overall e-commerce, and how’s consumer behavior going to change? I’d love to get your final thoughts.
Vishal: Well, I’ll talk about us in a minute, but on a broader sense, I definitely feel like this is now yet another reason for merchants to get online and in fact be more so online than having that offline physical presence. That’s right off the bat and the trends have already shown. That’s already the case. Retail shops have been closing down regardless of COVID. This just further solidifies that and hopefully, merchants can take away from this in terms of like, “Okay, we need to focus on online more than ever before.” Outside of that, trend-wise, I feel like there’s definitely gonna be a massive trend and spike in just supplies for hospitals and any of these shortages that we’re seeing in medical supplies right now.
I feel there’s a whole another sector that has spun up right now in terms of people pivoting and offering these sorts of supplies, medical supply, gloves masks, those sorts of things. I think there’s something there in terms of if you can manage to pivot, then it’s fine.
Parag: When you get a chance, check out the video we just did. Actually it goes up in a few days here. A veteran entrepreneur, she added buttons to these headbands so that it’s more convenient for you to wear a face mask and you’re not shredding the back of your ears. Just creativity, incredible.
Vishal: Yes. Exactly. It’s going to be a lot of innovation there.
Parag: That’s right. Any other thoughts, Vishal, on what you seeing for your business in the future?
Vishal: For us, I feel like we just entered our next phase with the rebrand. One thing that I’m also excited about in terms of– I shouldn’t say excited, but essentially the fact that we’ve already expanded our target audience in terms of the age group and then in terms of the demographic, I think that’s exciting. With everything that’s going on right now, the other thing that I see happening is that people are a lot more conscious about just hygiene in general and that’s also caused another spike in our business because now people are adding shoe cleaning to their normal hygiene ritual, right?
Vishal: Obviously, it’s not like we’re curing COVID or anything like that, but you’re being so much more careful about every single touchpoint, right? You’re wearing gloves, you’re wearing masks. Well, what about your feet? That’s touching all that stuff on the floor. We are definitely seeing–
Parag: Capitalizing on the tailwinds, yes, certainly.
Vishal: We’re definitely seeing that being a trend in terms of the audience where it’s like, “Okay, even if they’re not sneakerheads or they don’t necessarily care about their shoes from a looking good perspective, they just want to clean them,” and obviously our products allow people to do that. To make sure that they’re adding that into their normal washing clothes, shoe cleaning rituals.
Parag: That’s fantastic. Well, Vishal, this has been one of our most professional 30 minutes ever.
Vishal: Yes, sir.
Parag: We’re going to try to keep it that way. Your business is thriving in what’s a very very difficult situation. Our thoughts and prayers to all the frontline workers and to all of those retail businesses who are going through a really really tough time right now. I hope this conversation was really able to provide some insights on them because there is opportunity out there. There is consumer demand even in a variety of different categories and I think entrepreneurs and creative thinkers like yourself who can really find opportunity at these difficult times, is what’s going to carry this economy forward.
I want to thank you for your time, I really appreciate it. Good luck with your business and we’ll hopefully hear back from you in the near future about how you’ve been able to beat the crisis. Thanks again, Vishal, for joining me today.
Vishal: Absolutely. Thank you, Parag. I appreciate it, and if anybody needs any help or assistance that I can provide, happy to do so.
Vishal: Obviously you have my contact info, so feel free to forward that to anybody that I can help.