- Player: Nicholas Haralambous
- Company: NicHarry
- Launched: 2013
- Visit: NicHarry.com
When Nicholas Haralambous launched his online men’s sock store, NicSocks.com, his plan was to build a lean, online start-up. It worked. He built his e-commerce site on WordPress, an open source platform. It took him R5 000, 30 days to build, and six weeks to find traction.
That’s the beauty of tech. You don’t need to be a tech company to make use of all the free and inexpensive tools available to start-ups today. Haralambous understands the difference. His previous business, Motribe, was a tech company. It took over a year to develop the tech, and VC funds were required prelaunch.
His latest business has been very different. But while the magic of online and modern technology allowed Haralambous to launch his idea inexpensively, he’s achieved real growth by moving out of the digital sphere and into traditional retail.
Related: From Telecoms to Socks and Back
A Growth Path
In a world of tech and e-commerce, why is Haralambous finding his next level growth by blending an online presence with a traditional retail footprint?
“We’re five to ten years away from e-commerce becoming a real thing in South Africa,” he says. “Germany’s ecommerce market is $74 billion per year. Ours is R10 billion.
“My goal is to be a R100 million company in the next three to five years. That’s never going to happen as an online company. Even if we capture the entire market of people shopping for socks we won’t make it.
“There’s no doubt that tech has lowered a lot of barriers to entry. Everyone wants to build an app, and many businesses have been incredibly successful on that front. It’s also simple and cost-effective to open an ecommerce site. All you need is R400. But then how do you get found? After you’ve sold to your friends and family, and tapped into your entire social network, what then?
“SEO, Google ads, social media, cost per conversions — this all becomes important, and it’s an art form. I’m a savvy e-commerce user and builder, and I’m still so far behind the major players because I haven’t spent enough time in this market, and I don’t have the volumes that Superbalist, yuppiechef and takealot have — and all of those sites have spent a lot of time in the market paying their dues. We’re a niche player. I have 400 products.”
Choosing A More Traditional Route
Once he was set up, Haralambous chose a different growth path. He found stores in Cape Town and Joburg who would carry his range, and then he started branching into other men’s fashion accessories, including pocket squares, scarves, ties and tie clips.
He rebranded his online store as NicHarry.com to encompass the ideal of a luxury men’s fashion brand, including but not limited to stylish and colourful bamboo socks.
And then he made the big move into traditional retail himself. This is the exact opposite of e-commerce: High barriers to entry, much higher set-up costs, and much more to lose if it doesn’t work out. But Haralambous had already tested his market, and discovered that he most definitely had a product range that customers would buy — if they knew his brand existed.
“80 000 people walk through the V&A Waterfront every day,” he explains. “When I opened our second store there people asked me why. ‘The Waterfront is so expensive,’ they said. Yes. But 80 000 people. Imagine if 80 000 people visited your website a day!
“The first day 9 000 people walked past my store. I counted. That’s 9 000 people who probably didn’t know about NicHarry before that day. Imagine how many have walked past since then.
“Retail has travelled a journey the last few years. We’ve gone from retail stores, to online, to a multichannel blend. The swing is coming. People still value the experience of retail. There are some things that suit online well: Books, music and throw-away products. But if it’s something you want to touch and feel, then retail still has a big role to play.”
The Best Of E-Commerce And Retail
This doesn’t mean Haralambous has abandoned e-commerce entirely. Quite the opposite in fact. He’s created a model where his online and physical stores form part of the same NicHarry experience.
“I believe an online presence is essential, but it takes years to build a community. Yuppiechef has taken ten years to develop its brand and presence. Wine of the Month Club has thousands of active wine subscribers who purchase wine every month, with an additional tens of thousands who are once-off buyers, but it took them 30 years to build those volumes. It takes time.”
On the one hand, Haralambous and his partner, Jen Wynne, are in no rush. This is a minimum ten year project for them. But they’ve also realised that real local market awareness will be built through their retail stores, and not a purely online presence.
“We’ve linked the online and physical store experiences in small but significant ways though,” says Haralambous. “For example, we use a branded scent in all of our stores. It’s a unique fragrance that our customers associate with us. When you purchase an item from our range online and open the packaging, the scent is the same. We want to tap into all of your senses, whether you’re an in-store or online shopper.
“We want to be crisp, clean, accessible and fun. That’s our focus, and it needs to be clear and distinctive in our retail stores and our e-commerce site. Our customers must have one brand experience.”
NicHarry’s sales are currently 70% offline and 30% online, with five retail stores situated in Cape Town and Pretoria.
Haralambous’ eventual growth goal is the European market, however. “92% of retail spend happens north of the equator. That’s the big market. My growth focus is on Europe, but first we need to build a solid foundation in our local market.”
Retail Lessons From Nicharry
1. Your staff will break rules, so be careful what rules you set
I’ve found it’s better to educate my team on a few base judgement calls. For example, if you’re in a store and the music is too loud and full of swearing, does this make you want to purchase socks? When everyone agrees it wouldn’t, you have consensus, and it’s much less likely that they’ll break the rule you ‘didn’t’ set.
2. Just in case, remember that staff also get bored
I subscribe to Google Play Music for R50 per month and I’ve created an extensive play list. In-store staff can pick anything they want to play, as long as it’s off that list. This may sound pedantic, but it’s important. Staff get bored of the same music day in and day out. We have a range of 4 000 songs.
3. Listen to your employees
When we hire people in this sector we often hear that they’re leaving their current employer because ‘no one hears us or listens to us’. Besides losing trained staff, there’s a bigger issue at stake here: Listen to the people who sell your products. They are the ones interacting with customers day in and day out. They know what stock people are interested in, and what isn’t doing well and why.
4. Create a strong team spirit
When you have dispersed retail stores and your staff work shifts, a lot of people don’t know each other. We wanted to create a strong team dynamic, so we use the app Slack, which is basically whatsapp for teams. It’s an amazing app.
It’s allowed us to get rid of email, and to create groups for different themes: Ideas, what happened in the stores that day, and so on. The more your staff know and like each other, and the better they get on with each other and enjoy their work environment, the more they sell.
5. Use tech to create a better in-store experience
We use iPads to run everything in our stores, from the music to paperless invoices.
6. Content is king
This is true no matter what industry you’re in, but especially in retail. We want our sales staff to be able to have interesting conversations with our customers that aren’t all just sock-related. Everyone has to read a book a month and give me a one page summary. We’re all becoming the best versions of ourselves, together.
If you want to grow you need to adjust your business model to suit market needs.