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NicHarry’s R100 Million Business Plan

From lean e-commerce start-up to sophisticated retail brand, NicHarry’s growth focus is blending modern tech with traditional shopping experiences.

Nadine Todd

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Vital stats

  • 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

traditional-route-for-socks

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.”

Related: 5 Ecommerce Myths That Are Sabotaging People’s Businesses

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.


Take note

If you want to grow you need to adjust your business model to suit market needs.

Nadine Todd is the Managing Editor of Entrepreneur Magazine, the How-To guide for growing businesses. Find her on Google+.

Lessons Learnt

(Podcast) ‘Bizarre Foods’ Andrew Zimmern: ‘I’m Addicted To The Hustle’

How this week’s ‘How Success Happens’ guest overcame personal struggles and built an empire.

Dan Bova

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I didn’t know what to expect when we scheduled an interview over breakfast with today’s guest Andrew Zimmern. As you may know, the chef, writer, restaurateur and TV personality made a name for himself traveling the world and eating some, well, bizarre foods on his hit travel/food show, Bizarre Foods.

Turns out our breakfast was pretty normal – we didn’t dig into a fresh plate of scrambled brains or anything – but the conversation was anything but typical.

Over the past couple of years, Zimmern has built a true empire around his name with books, TV shows, restaurants (including his new Twin Cities joint Lucky Cricket), and a production company, but as he very candidly told me, the road to success has not been easy. He has gone through a lot of personal pain on his journey, and he says it is a daily endeavour to keep himself moving on the right track.

As Zimmern explained, over the course of his life, he’s had problems with substance abuse, depression – even homelessness – and he was very open about sharing the lessons he’s learned along the way about coping and finding redemption. We also spoke about his dear friend, Anthony Bourdain, and about the struggles of feeling overwhelmed that most of us face.

Related: Gareth Cliff Shares His Tips For Starting Your Very Own Podcast

But don’t get me wrong, he’s really funny, too! There’s nothing “normal” about Andrew Zimmern. Hope you’ll enjoy our conversation, thanks for listening.

This article was originally posted here on Entrepreneur.com.

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Lessons Learnt

How BrightRock Is Disrupting The Insurance Industry With These 2 Pivotal Strategies

Developments in technology, and clear communication are positioning BrightRock to disrupt their industry and transform the consumer experience.

Monique Verduyn

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Vital Stats

  • Players: Sean Hanlon, Leopold Malan, Schalk Malan, Suzanne Stevens
  • Company: BrightRock
  • Est: 2011
  • Visit: www.brightrock.co.za

BrightRock was started around a dining room table in 2011 by four people with years of industry experience and — importantly — a diverse set of complementary skills.  They wanted to make changes to an industry with an age-old methodology by allowing customers to co-create a solution that precisely meets their individual needs, and adjusts as those needs change. Today, BrightRock is the fastest-growing insurer in the intermediated individual life risk market. It also provides underwriting management services to funeral parlour businesses and, more recently, has entered the group risk insurance market, offering its needs-matched approach to employees.

The founders of BrightRock, established in 2011, knew the life insurance industry all too well, and they found its methodology wanting. “Traditional life insurance lumps all the individual’s needs into one policy,” says CEO Schalk Malan.

“It’s a methodology that has been around for centuries. We started afresh and looked at how we could design life insurance based on individual requirements. Our cover is designed to exactly match each specific financial need. Because there is no waste, it’s more cost efficient and sustainable. And if circumstances change and our customer needs more cover, it’s easy to get it because needs-matched design enables the policy to change in line with changing needs.”

1. Embracing digital technology to provide needs-matched insurance

Suzanne Stevens, marketing executive director at BrightRock, points out that this type of innovation achieves efficiency (cost savings) and effectiveness (higher returns). “By harnessing digital technology, we have made our operations more efficient, and aggressively lowered costs by up to 30% for our customers. Every rand they spend with us works harder for them. That’s the benefit of a solution designed around the customer.”

BrightRock’s founders took a similar approach. ‘We ditched legacy thinking in favour of creating a product that is intuitive and easy to navigate. An enormous amount of time and effort went into writing and designing that system, and creating the optimal customer journey.”

Related: How BrightRock Is Rocking The (Industry) Boat In Only 5 Years Since Launch

Unlike clunky legacy systems, BrightRock’s platform is modularised, and was built according to the agile principle of rapid delivery cycles. The result is a technology stack with longevity, that is also flexible enough to be tweaked when needed.

“The advantage of the technology available today is that you can plug things in and pull them out as required,” says Suzanne. “That’s one of the enablers of a truly disruptive mindset. To step away from accepted norms and find new solutions requires curiosity and creativity, as well as a lot of courage to go up against large incumbents in the market. There is always resistance to new technology, although we are fortunate in this country to have one of the most innovative insurance sectors in the world.”

2. Effective communication is critical

These disruptors have set themselves above the rest through one surprisingly simple tactic —  effective communication. They agree that it simply doesn’t matter how world-changing your product or service is if you don’t communicate it to the right audience at the right time. New companies that fail to communicate their remarkable new development will quickly be pushed aside by other disruptors. Without a clear communication strategy that reaches the audience in the industry you’re trying to disrupt, you’ll set yourself up for failure. A key question to ask when you are developing your communication strategy is simply whether people understand what you do.

“Because the premise for our product was fundamentally different from anything on the market, communication and clear messaging were critical to convincing our clients to put their trust in us,” says Schalk.

“It was especially important to educate insurance advisors so they would understand what we were doing, why we were doing it, and how it was better than the other options available. That was key to disrupting the individual life market.”

Currently, BrightRock employs 380 staff, has experienced 40% year-on-year growth, and has an annualised premium income of more than R1,3 billion. The company has recently entered the group risk environment with a similar offering that addresses many of the same shortcomings of traditional group risk products. “The inefficiencies of the structuring of group products has meant that, to remain competitive, insurers have cut the benefits offered to employees, undermining their sense of financial security. Change is needed, and we believe our needs-matched philosophy positions us to change the group risk market too.”

‘We ditched legacy thinking in favour of creating a product that is intuitive and easy to navigate. An enormous amount of time and effort went into writing and designing that system, and creating the optimal customer journey.”

Unlike clunky legacy systems, the BrightRock’s platform is modularised, and was built according to the agile principle of rapid delivery cycles. The result is a technology stack with longevity, that is also flexible enough to be tweaked when needed.

Related: BrightRock’s 5 Entrepreneurial Tips For Start-ups

This iterative, modular approach typically begins with defining the strategy and programme plan upfront, delivering a core capability fast so it can provide benefits immediately, and then continuously improving with regular, incremental capability improvements to achieve the objectives of the strategy. It’s an approach that fosters closer collaboration between stakeholders, improved transparency, earlier delivery, greater allowance for change and more focus on the business outcomes.

“The advantage of the technology available today is that you can plug things in and pull them out as required,” says Suzanne. “That’s one of the enablers of a truly disruptive mindset. To step away from accepted norms and find new solutions requires curiosity and creativity, as well as a lot of courage to go up against large incumbents in the market. There is always resistance to new technology, although we are fortunate in this country to have one of the most innovative insurance sectors in the world.”

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Lessons Learnt

The 9 Obsessions You Need To Have To Become A Self-Made Millionaire

Here’s how to stay focused on your millionaire goals.

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The ones who succeed weren’t handed a golden ticket; it wasn’t chance that helped them cultivate their fortune. To reach millionaire status, you must be driven to reach your dreams. You must be obsessed in order to be successful.

These are the nine obsessions that give every self-made millionaire an edge in creating success and wealth.

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