The Department of Science and Innovation (DSI) has announced that it will help fund the development of an affordable, alternative internet solution for low-income…
Recently launched RunwaySale is a new and exciting flash-sale website that brings high-end designer labels to the consumer at hugely discounted prices — all at the click of a button.
Although this concept is already entrenched in the minds of European, American and Australian fashionistas, the idea is relatively new to the South African market and RunwaySale has hit the ground running, taking the South African public by well-dressed storm.
We spoke to founders Elmien Smit and Karl Hammerschmidt about some of the challenges they’re facing in the South African market:
Ventureburn: Hey guys, how does this work?
RunwaySale: Once signed up, a member is alerted to all current and upcoming sales via email and social networking sites. Each sale is given an allocated run time ranging from a few hours to a couple of hours. The fashion savvy consumer can then browse the sale catalogues at their own leisure in the comfort of their own home or office desk and view detailed images of items in a range of designs and sizes. Once the buyer has all their selected items in their basket, they follow the checkout process and pay for their items safely and securely via EFT or Credit Card. Then they sit back and wait for their parcel to be hand-delivered to their front door within a few working days. It allows for a consumer to bring the high-end, lust-worthy international and local brands into their homes at affordable prices, without leaving their sofa.
VB: What motivated you to start RunwaySale?
RS: Admittedly it was a bit nerve wrecking moving from a well-paying office job to a start an ecommerce company in a market that is still very immature and yet to prove itself in the fashion vertical. One has to try to see what has worked internationally, consider the South African environment (and why SA might not respond in the same way the international market has) and take and educated leap of faith. At the end of the day there were two deciding factors — SA consumers love branded fashion and (even more so) they love a good bargain.
VB: What’s your advice for new startups?
RS: The ecommerce world can be incredibly overwhelming. There are so many options when it comes to building the site, choosing payment partners, logistics suppliers etc. and the costs vary dramatically. Having friends in the industry helps: we try to meet with 2 industry contacts a week, just to share thoughts and issues. Silicon Cape can help in this regard — some great talks are organized.
VB: How has your relationship with our suppliers panned out?
RS: For the local guys ecommerce is still a very new concept. It’s a slow process because the speed of online hasn’t quite filtered through into their structures yet. One has to understand what is just going to take a while and what is a lost cause. The majority of our stuff is international though which means they are completely on board with the online idea — it has made them huge amounts of cash already. The problem here is you start competing with large international players like Gilt and Vente Privee who are ordering 10 000 times what we are. Trying to develop deep relationships with these people is key though – you have to convince them of the possibility.
VB: Without giving too much away, give us some vital statistics, how is RunwaySale performing at the moment?
RS: Unfortunately I cannot give any sale specific stats away as we have restrictions in place with the brands we work with. That being said we’ve been very happy with the progress so far. One thing I will say is we have been pleasantly surprised by the high ticket items — it’s great to see that South Africans are willing to buy a R2,000 dress online.
VB: How are you getting users to the site? Or is it just he case of “build it and they will come”?
RS: We’ve playing around with a few things but honestly most channels are just too expensive when your margins are as small as ours are. A lot of online companies seem make profitability their last objective which I think leaves you very exposed. We’ve been very measured in everything we do and our built-in referral channel is our main source of new traffic. Seeing this we have focused inward on providing the best possible user experience — so far it seems to be working very well for us.
Building a massive mailing list is not our number one priority at this point though. One can buy a list, but the churn is so high that you’re basically getting one or two interactions before they drop off. Our focus is on building a valuable community — quite a few of our top customers buy every second week.
VB: What does the future hold for RunwaySale?
We are going to try to partner up with bigger brands and get greater amounts of inventory, hopefully we’ll get a lot more users and we plan on offering even greater discounts.