16 minute read
We Are a Family Start-Up with Massive Experience
Susanne Tebartz, Susanne Botschen, and Christoph Botschen deep in conversation with style in progress. Interview: Stephan Huber, Martina Müllner-Seybold Photos: Yorick Carroux, MarthaLouisa.com Location: Lovelace Hotel, Munich
or three years, a non-compete clause prevented Susanne and Christoph Botschen from returning. But now they are back! The founders of Theresa and mytheresa.com have launched MarthaLouisa.com, an online shop dedicated to luxury shoes. The niche they serve is not the only new angle. MarthaLouisa.com is also keen to open its platform for new talents and a contemporary price range. In an interview with style in progress, the two retailers and their CEO Susanne Tebartz, the former Amazon Fashion Europe director, reflect on how the industry they have now returned to has changed. It’s clear to everyone who knows the dynamic couple that MarthaLouisa.com is much more than just the “plaisir” of two businesspeople who can afford to do what they want. 50 employees, almost all with plenty of experience in their respective fields, are working on repeating the success from the headquarters in Munich.
Three years off sounds like a dream for many of your col leagues. Many have told us that they wouldn’t have returned after such an exit. So why are you back?
Christoph Botschen: We did a lot in these three and a half years. We travelled, dabbled in construction projects, and tried to develop an interest in art. Susanne Botschen: We tried, yes… (laughs) CB: My wife would have loved to go back to work two or three days after the exit. It took me a while longer. I was delighted and greatly relieved after the exit. SB: During a trip around the world, my husband’s watershed moment finally came. He just turned around and said that enough is enough. CB: We came to the realisation that what we have been doing for the last 30 years is still in our blood. The industry, the job - it’s great fun again. SB: At the end of the day, that’s the secret of having a contented life. You need to really enjoy the work you do. CB: And work that you are actually good at…!
What came after you realised you wanted back in?
CB: We started a road show in February last year, just like in the old days. We approached our long-term companions and brands, mostly in Paris and Milan, and asked: “What if?” They were delighted to hear that we were thinking about coming back. That was the first wave. The second wave was more complicated. The world doesn’t stop turning. Distribution has advanced. Today, all major brands are very widespread online. So we had to start going from door to door after all. But we managed to get almost everything on board that we wanted. SB: Our approach of specialisation was welcomed with open arms and ears. Since our exit in 2014, the industry has changed incredibly. Like a sound of a gong... The disruption, the whole drama about See-NowBuy-Now and its subsequent dismissal… I could talk about all this for half an hour: the challenges faced by brick-and-mortar, as well as the development of the big players in our field, including our former company, Net-a-porter, Yoox, and Matches. Everything has become so big; consumers no longer feel that there is someone who chooses items for them. That’s the famous not seeing the wood because of all the trees, a flood of products. Once you’ve been away from the industry for three years - naturally always with a certain interest in the industry you love - you return to seeing many things through the eyes of consumers.
The promise of 1,500 brands is not a feature for consumers, it’s a bug.
SB: And that’s exactly the point we’ve come to realise. When you talk to women who are willing to spend good money, they say it’s a burden. I can’t even count how often I heard: “Just pick out the best shoes of the season and I’ll be the most grateful person.” The willingness to buy is there, but if customers are bombarded with newsletters every day, in which every brand, every model, every heel height, and every colour are featured, then how should they know on Tuesday whether there’ll be another, better shoe on Wednesday? Susanne Tebartz: It is precisely this stationary experience, this pre-curated and personalised range that customers are increasingly expecting online too. Our claim in terms of customer orientation, service, and aesthetics is a top priority for MarthaLouisa.com. In terms of usability, fulfilment, and customer approach, we unquestionably need to offer what the successful players offer - and more. Personalisation plays an increasingly important role in this respect.
Your task is to guarantee all these processes and operational excel lence while the Botschens focus on products and strategy?
ST: In a way, yes… That’s the experience I bring to the table. CB: We learned some valuable lessons from our former company and strengthening the management by hiring a third person is a sensible choice, as has been proved in the past.
By focusing on shoes you’re kind of picking the raisins out of the cake.
SB: Just think of the past. Remember those wonderful multi-brand shoe stores. They were a highlight and someone had PICKED those shoes! But they hardly exist anymore. Instead, the shoe departments of all major department stores have
grown from small corners into an entire floor. It’s the only department that has a high customer frequency - always.
Why is that so?
SB: That’s very easy to explain. We’ve just found out there was a disruption, a huge change in terms of fashion in general. Consumers are incredibly unsettled by this rapid and steady change. There is nothing left to cling to. On the one hand everything is becoming faster still; on the other hand the stores are dying. Then there’s cross-dressing. You can shop wonderfully at Zara without anyone batting an eyelid. But certain items simply have to be of high quality. And shoes are at the top of that list…
Once again, the concept of democratic luxury is reduced to absurdity.
SB: Democratic luxury is utter nonsense!
Luxury cannot be democratic.
SB: Shoes determine a look. You can change your look, your mood, and your spirit with shoes, even if you don’t change anything else in your wardrobe. If you wear pumps today, but sneakers tomorrow, then you’re making two completely different statements. It changes your look, reflects your attitude, and shows how modern you are. Shoes need to have a certain quality level.
Because shoes are a craft product, the prices are easier to understand too.
SB: You can use a shoe in a variety of ways, whereas you only wear a patterned blouse for 1,200 Euros once and then you’ve been seen in it. In proportion, shoes are much more affordable. Prices for ready-towear products in the luxury segment have risen enormously.
Is it imperative for a specialist to serve a global market or could MarthaLouisa.com also be a store?
SB: With a store, you reach fewer people. It’s more satisfying to reach people on a global level, especially when you’ve done it before. But of course that could also work in the form of a store, but certainly not in every location. The retail industry will survive wherever there is tourism. After all, shopping is a leisure activity. Retailers will always persevere in cities and holiday resorts. CB: Yes, but the industry is undergoing a concentration process. Concepts are changing dramatically. The online segment is subjected to leverage, because change will happen even more swiftly there.
However, there are still some online players who don’t earn money.
CB: Most of them aren’t real retailers. We are thoroughbred retailers and can’t help doing what we do. The combination of retail thinking, an understanding of technology, and an understanding of organisational aspects makes the difference. You need to focus on your customers; they are the top priority. IT and technology have to make possible what customers want. SB: It’s a fallacy to think that you should have an online shop as an addition to your store. Either you do it the right way, or not at all. CB: Doing it the right way has become so complex. During our three years of abstinence, the complexity has increased even more. ST: Not everyone is prepared for operational excellence, especially not those who simply want to sell offline products online. The entire logistics chain and all the processes behind it have to be perfect. You don’t even see that part of the business.
What’s the big difference to the first successful project?
SB: Let me start here, because this is my role: the goods. Of course,
we have all the important fashion power-houses and large shoe brands from the luxury segment on board. But we are keen to ensure that at least 50 percent of our range consists of newcomers, which we call New Talent, and contemporary price ranges. That’s a decisive difference! We used to focus on luxury only, even though it was always important to me to also have pieces at entry-level prices. Even 25 years ago, Theresa also offered a t-shirt for 45 German Marks to ensure that the customer of tomorrow can also leave with a Theresa bag, thus being part of our world.
Very simple psychology…
SB: That’s right. I may not be able to afford it today, but maybe I can afford it tomorrow? However, I am still keen to be part of this world
“We allow a dialogue between the new and First Lines.” Susanne Botschen
by buying something small. The beautiful thing is that there is - once again with the sound of a gong - so much new stuff. There are so many new brands spread out all over the world. But nobody has combined them under one umbrella as part of a curated range. What we strive to achieve is to start a dialogue between new brands and First Lines.
You’re back in the trenches; you’re hands-on. That’s what you missed most, right?
SB: Yes, I missed that most. I have never been a person to attend shows to be photographed. I’ve always been committed to the product.
But to forego listing the brands completely also wouldn’t have been an option.
SB: Today, the major brands understand the Internet much better. When we launched myTheresa.com, they didn’t exactly know what they were doing. Today, they know that you need to see online distribution on a more global scale, including topics like geo-pricing. I’m sure many gave us the benefit of the doubt, because we have proven that we deliver what we promise throughout our 30-year history. We are capable of displaying the brands in a setting that is compatible with their respective DNA. CB: That’s all industry knowledge - insider knowledge so to speak. Who we are is completely irrelevant to consumers. What counts for them is our portfolio and operational performance. SB: That’s where Susanne Tebartz comes into play. ST: Customers have high standards and it is our ultimate goal to offer the best possible customer experience. That starts with the product range, but naturally also includes the entire buying process, the delivery of goods, and returns management. We have to be in a position that allows us to scale and our structures need to be perfect. Our standards in this respect are extremely high. We will learn a lot every day and never stop learning.
A huge investment…
CB: We had a team of 50 people before we even launched - with zero sales. When it comes to publicity, we pursue several, parallel strategies. The classic strategy is online marketing. In this context, the large brands are a blessing, because when you search for them online you’ll soon find out that there aren’t that many suppliers worldwide. In addition, we teamed up with Karla Otto PR for global press work and a launch event in Paris. The next level is social media.
So who is Martha Louisa? The Botschens’ fourth child?
SB: (laughs) Our history has always been connected to girls’ names. The origin of everything was and is Theresa. And the name Theresa was special, even back then. Martha is special too. Today, you can’t register a “.com” domain for a single name, so we added a second name. Louisa can be sexy at times. Actually, every woman has a bit of both names inside her, depending on her mood or the time of day. CB: The biggest challenge we have to face is the high expectations of us as founders. It is important to make clear that we won’t reinvent the wheel in terms of e-commerce. There are certain well-established standards, especially as far as the usability of a website is concerned. SB: The only revolution, for want of a better term, will be the clear focus on shoes. We will, of course, offer a wide range suitable for many markets and depth in terms of range. Even in the offline world we can see that customers are turning their backs on corporations and department stores. They are bored of seeing the same mono-brand stores everywhere. The only solution is to counter with specialisation and personality, which we attempt to convey online. Customers want to feel like they are perceived individually… ST: … and still see reliability regarding processes. That’s the challenge.
Now tell us about your personal challenge. You have left your job at an industry giant to run a - what exactly is it? - a family business.
ST: It’s a family start-up. Sounds presumptuous, but maybe it isn’t. We call ourselves a start-up, but boast massive experience. Most of the employees we hired have done this before. It’s fun. This isn’t a start-up from scratch. I come from an incredibly efficient and professional environment, but the idea of building something excites me. Of course, I believe in the concept and the specialisation. Regarding the challenge in terms of processes, I hope that my seven years of experience can help.
After seven years at Amazon, which skills can you transfer to this start-up?
ST: First of all, the structures… You need to build up processes first and define how the different areas need to intertwine in order to offer the very best seamless customer experience and to maintain it permanently. It’s not as trivial as it sounds, because all the little cogs need to line up perfectly in the background.
At the end of the day, that’s decisive to the outcome of the war. Harsh term, we know…
CB: Yes, but anyway: if we offer boring goods, then it wouldn’t make a difference if everything works in the background.
What’s the situation regarding returns, certainly the biggest drawback of e-commerce, in the footwear segment?
SB: It’s definitely better than in the ready-to-wear segment. CB: In our experience, shoes have the lowest return rates, even less than bags. Most customers know approximately which size to order.
As shoe specialists, one of our assets will be that we describe fits very accurately - and clearly visible. SB: We select carefully from within brand worlds. Every brand has its DNA and does certain things much better than others. That’s our angle.
But there are many brands that aren’t exactly eager to let buyers decide for themselves what’s the right choice for their stores…
SB: People tend to give me the benefit of the doubt in this respect. I am also experienced enough to voice my opinion. If a brand tries to sell something that isn’t good, then I tell them it’s no good. A good buying process is based on self-confidence, numerical understanding, a certain level of gut feeling, and a knack for products. And you need to be allowed to learn from mistakes. CB: We have an advantage in this respect. As a family business, we can react much quicker. SB: And, of course, we make mistakes at our own expense.
So this time you are venturing out without any numbers? Only armed with your gut feeling and your own flair…?
SB: Right now, we are still fishing in murky waters. I have never been a numbers person, to be honest. I have ignored numbers in favour of my gut feeling fairly often. CB: We have invested a lot of our own money and are ordering into the blue - in the truest sense of the term and for the second time. So yes, we believe in our concept, but we will learn a lot too.
What’s better: having too little stock in the first phase or having too much?
SB: Well, I think not having enough is terrible. ST: If a customer returns multiple times and her size is always sold out, we run the risk of frustrating her. So I’d rather have too much. We can optimise and improve with experience. SB: That products sell out sometime during the season is a completely different matter. In these cases, you have that psychological effect that makes the customers feel they were just a little too slow and will hurry a bit more next time. That’s beneficial. CB: We used to buy more than we needed, that’s a fact. Online availability is a huge issue. If customers can’t buy a certain product from us, they’ll switch to a competitor within nanoseconds.
Wouldn’t it be logical to expand by adding another category in the medium term?
SB: Not at the moment…
So there are no bags on the horizon?
SB: No! CB: We’re committed to being specialists - specialists in shoes. We’d be very happy to shift the same volume of shoes as our competitors in a few years time.
You were quoted as saying that the first thing you would rescue from a burning house is your handbag. Would it be the shoes now?
SB: I’d probably still opt for the handbag, mostly because it contains some crucial items. What would I rescue first now? Probably… CB: Me! SB: You! Of course!
Last question: when do you expect MarthaLouisa.com to be profitable?
CB: You have no empirical data when starting a business from scratch. We intend to reach breakeven in 2019. It won’t kill us if we don’t achieve that in 2019, but we should by 2020 at the very latest.
That’s quite ambitious in itself…
CB: Do you think so? Why? myTheresa.com was never in the red. SB: That’s my husband’s strength. He has an unerring gut instinct for numbers. And I have an unwavering belief that we three are an incredibly good team. I really want to put that out there now.
Thank you for the interview!
THE PRICE IS RIGHT!
The cashmere blazer sets you back 1,500 Euros, while the silk blouse burns a hole in your pocket at 800 Euros apiece. Within the premium segment, top brands and top products have their price. However, only very few customers are willing to pay such prices without care - assuming they even enter the store. To what extent does the premium retail sector need to rethink in order to avoid dying in beauty and loneli- ness? Is a stronger price base the solution or would that merely dilute the product range? Can it be an instrument to ensure more frequency? And is it better to sell two jackets for 399 Euros each than a single one for 799 Euros? Industry experts share their views. Text: Kay Alexander Plonka, Nicoletta Schaper. Illustration: Claudia Meitert@Caroline Seidler
