Online Shopping mall
The Light and Shadow of Beauty Supply Online Shopping Malls
Interview with SoGoodBB.com’s director Ryan Won
Along with COVID 19, the consumption pattern in the industry has changed significantly. During the pandemic, non-face-to-face online shopping increased dramatically. Although the beauty supply market is still mainly run by offline retail stores, it has come to a point where we can’t just ignore the big trend of expanding the online market.
Well then, how are online shopping malls in the beauty supply industry operated? BNB visited the product delivery site of “SoGoodBB.com,” a successful online beauty supply mall. There, we met Director Ryan Won, who is in charge of shopping mall operations, and heard about the lights and shadows of the overall online shopping mall operation.
Director Ryan Won(age 42)
The next-generation leader who will lead the future of the beauty supply industry with youthful passion, cleverness,and sincere work ethic. He is a likable type with a gentle attitude, an honest way of speech, and a warm personality that comes from a good smile. On top of that, he has a strong muscular body trained in Jiu-Jitsu and tennis. Although he is still young, he is an expert in the beauty industry. He has been in the beauty supply industry for 22 years since his early 20s. Online beauty supply store SoGoodBB.com was founded in January 2018 by him and his father. SoGoodBB.com, which has just passed three years, is growing into a fairly stable business after passing its “infancy”. He is the father of three children: two daughters and one son.
How did you start an online shopping mall?
It didn’t start out as an independent shopping mall. About five years ago, when of starting an online shopping mall in our industry was in trend, I first experienced online sales by selling products on eBay and Amazon. Then, we opened a simple and small independent shopping mall.
Did your business go well from the beginning?
No. At first it failed terribly. Based on my brief experience in the e-commerce world while selling things on eBay and Amazon, I immediately built my own online shopping mall, but it was just wasted time and energy. It soon closed down.
What caused the first attempt to fail?
Anywhere is probably the same, but the beauty industry is a world where you can’t survive by doing “okay”. You can’t touch and check products in online stores like offline stores do. You need to earn consumers’ trust to make a sale and turn that sale into a loyal customer. Customers test out at least three times if a website is trustworthy. You have to do your best in the little details so that your store can become trusted. Also, you have to invest money and time. However, at that time, I underestimated the whole process.
Why did you start a larger store after your failure?
This is because I thought that the online market expansion was an irreversible trend.
How’s the situation now?
t’s been 3 years since we’ve opened, and it’s going on the right track for now. I’ve also experienced offline stores, but I think it’s never easy to survive in the online world. In this industry, there are many online shopping malls that have started and closed.
What are some difficulties?
The investment is larger than opening a large offline store. Although the incurred cost is also an expense, it fails if you don’t really carefully manage all aspects of marketing, customer management, delivery, and product acquisition. In particular, the cost of marketing and shipping is really high. Most important of all is to communicate with customers kindly. Make sure that customers aren’t dissatisfied. Delivery must also be prompt and accurate. You can’t neglect anything.
Marketing online stores is said to be particularly difficult.
Yes. It costs a lot. How would our website get widely known and how people visit our website if we don’t advertise it? For offline stores, people might walk in just by noticing the store sign. Online shops aren’t like that. You have to spend money to get known. Although we do various marketing, the most representative ones are marketing through influencers and Google search marketing.
Influencer Marketing and Google Search Marketing? Please explain.
When we first started, we focused on marketing using influencers who were active on YouTube and Instagram to promote our shopping malls on the Internet. We paid from $1,500 to as much as $3,000 per time for influencer marketing. I used this kind of marketing strategy especially on the first 1-2 years. The frequency has decreased now, but I am doing it steadily. The investment cost in this part is high.
Another marketing that costs a lot is the Google search. When a customer searches on Google for a particular item we sell, we need to make sure our online store is exposed earlier than our competitors. For example, if you search for Bobbi Boss’s Lu Locs on Google, several online shopping malls are immediately displayed at the top of the search results screen. We need to appear directly on the search screen, too. Customers often come in by clicking on our store on the Google search screen. Every time a customer clicks on our store on the search screen, we have to pay Google. Internet surfing has no borders. People click from all over the world. You don’t pay much for a single click, but guess what happens when one click becomes thousands?
Still, recently, online sales have increased a lot due to the pandemic. Aren’t you earning much more than you spend?
Not really. Of course, sales increased a lot last year, but due to the structural characteristics of online shopping malls, costs were incurred so much that the profit from the increase in sales was not as large as expected.
What do you mean there’s not as much profit as the sales?
This is because when the number of online buyers increases, the marketing cost of online shopping malls also increases proportionally. Marketing costs are proportional to the number of online searches and clicks. In addition, the cost of the free shipping service is high.
How do you handle customer complaints?
You have to pay attention to customer service 24 hours a day. Offline stores deal with customers face-to-face, so if you have a complaint, you can solve it on the spot by providing additional services. But you can’t do that online. In a word, the problem-solving process is very difficult. If complaints are not resolved well, they leave the worst ratings and reviews. This will take a big blow, so even if the job is complicated, you have to solve it. Many shopping malls probably shut down because they weren’t able to resolve this problem.
Securing popular items on time is also the key. How do you manage your inventory?
If you don’t have a product, you can’t sell it. That’s why I try to predict trends and secure them in advance. Fortunately, online shopping malls are convenient to analyze because all records are automatically saved as data. I do the sales data analysis myself. Through data analysis, items that are expected to sell well can be extracted. When I see such an item, I take a dare and place a large order to secure the quantity in advance. Because predictions can go wrong, there is a bit of gamble. My data analysis prediction seems to have a high hit rate.
If there is a product that has been ordered in large quantities and is not selling as expected, do you return to the supplier?
No. Even if there is no profit, I sell everything through events or discount sales. Wouldn’t it be necessary to build a good and credible relationship with the supplier so that you can receive good products in the future?
Which items sell well?
Currently, we are selling mainly wigs, which create quite a profit. Cheap braids and chemical products are difficult to handle online because shipping costs are high, considering to the products’ price. In the future, addition to the wigs, we are planning to diversify items by looking for items that will sell well. It would be possible if the warehouse size was larger than now.
It must be really important to manage data systematically.
Yes, in the aspect of inventory management. However, above all, it is very important in terms of securing a lot of information about customers and using it for marketing. We use it to notify customers of events or discounts through the saved email list.
Online or offline business- which do you think is better?
From both experiences, offline business seems to be more attractive because you can meet customers directly. However, the advantage of an online store is that it can be operated more systematically through data. Also, because people around the world who use the Internet are potential customers, you might be able to hit a “jackpot”. Of course, it is very unlikely.
Many say that offline business has become difficult because of online shopping.
Online is often said to be the trend these days, but I think offline retail stores will be here forever, although there is a premise that it must change to provide better service. One needs to see, touch, and experience beauty products directly, so when the pandemic ends, customers who have left will return to the store. That’s why, even if you don’t necessarily use the online homepage, Facebook, or Instagram, you should secure email addresses of customers who come to the store and at least try to send email coupons once or twice a month or provide discount information. Email promotions can be done without spending money and it’s easy to do.