The UKs biggest flash sales site, founded by brothers Nish and Sach Kukadia in 2007, has just racked up its first ever profit, added one million new subscribers and launched deliveries to the EU.
The London based group, which holds 2-4 day long flash sales of clothing and accessories from 1,500 brands such as Vivienne Westwood and Dunhill, was also chosen in late 2013 to be part of the government-led Tech City UKs Future Fifty programme.
You would expect the brothers to be quietly content with their lot but there is clear frustration that their pace of growth is being hindered by a dearth of digital technology graduates wanting to begin their career in an SME particularly in the retail sector.
One of our biggest challenges is the speed in which technology is advancing and the innovative ways that customers can search for products,” chief executive Nish said. We want to be ahead of the curve with these movements such as improving access and communication speeds for our mobile users. We are doubling our technical team to 30 by the end of this year, a third of total staff, but we are struggling to hire at the speed we need. It is not enough to meet our growing ambitions.
He added that digital graduates are tending to flock to pure tech groups rather than retail and ecommerce businesses such as SecretSales.
A lot of work needs to be done to educate the tech talent of the UK to move into ecommerce. Once they realise that retail firms such as ours have strong technical cultures using data and insight then it will change,” he commented.
Both Nish and buying director Sach work with universities and talk at employment fairs to spread the message. But they believe the education and careers sector can do much more to help growing businesses.
I don’t think there is enough representation of startup opportunities to high calibre graduates, many of whom get snapped up for corporate roles. Personally, I believe their learning curve, not to mention career satisfaction, would be much better at a high growth startup,” Nish stateed. I’d recommend that careers guidance personnel offered by schools, universities and other places of higher learning work more collaboratively with entities like the governments Tech City UK. They should help promote entrepreneurship and educate those bright graduates about the diversity of roles available at many of the innovative British businesses that are scaling fast. A career in a growing business can be like an accelerated MBA.
The brothers see technology as key to landing its maiden profit in the three months to December 31.
Although declining to provide the actual figure Nish said it marks an important milestone for the group and leaves it far outpacing flash sale rivals. Fourth quarter revenues surged 43 per cent with annual sales up 40 per cent to 25.4m.
Subscriber numbers jumped by one million to four million over the year with a raft of major brands signing up including Converse, Theo Fennel, Beats by Dr Dre and Stella McCartney lingerie.
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Sach revealed the rise in customer demand has largely been driven by mobile purchases, accounting for 60 per cent of sales, and resulting from the groups major ramp-up in technological development around 2012.
Back then we had developed a lot of competence in building relationships with brands. Initially it was as a clearance mechanism where brands which do not normally discount sell excess inventory up to 70 per cent in a discreet manner. But we found that as we grew the brands began to work with us to introduce new ranges as well,” he said. However we did not have the technological competence we felt we needed. We have accelerated our growth since then by innovating in this area.
That has meant developing a data and insight team and creating a data warehouse to ensure more personalised offers to its subscribers.
They all have their own email address and personalised password and through better insight we can see all of their unique journeys. We see their behaviour including the channel they have come from, pages they have checked and what they clicked on,” Sach explained. We can then tailor their preferences so they get the brands they might like and the pricing ranges. We are already sending out 70,000 variations of our morning email. By being more tailored to their preferences our users will become more engaged.
Nish told us that a lot of firms are talking about using big data to personalise service and offers but with little concrete action. “We are now ahead of more traditional ecommerce firms. Nobody in the UK is doing this in fashion,” he said.
The brothers believe its retail model, use of technology and customer personalisation are also creating more exciting online shopping experiences.
Our time limited campaigns encourage people to shop very quickly and impulsively,” added Nish. Its like going into a high street shop on the Boxing Day sales. You go in and see great brands on offer and you are not sure what you are going to walk away with. We are recreating that rush every day online.
Despite this and intriguingly for an online retail business it has glowing words for the traditional and somewhat down-trodden UK high street.
I think our high streets are amazing. There are some great brands there doing very high quality fast fashion giving customers iconic British styles,” said Nish. Our accessory products such as handbags, watches and jewellery compliment that fashion. We dont see it as competition.
It expects further growth in 2015 backed by the investment of its three institutional investors Partech Investors, 123Venture, Pentech and Doughty Hanson.
They are all customers and are very bullish about our prospects,” said Nish. The UK will remain our main focus as there is a big opportunity here with more brands set to come on board.
The brothers are cut from strong entrepreneurial cloth their father was one of the shareholders in famous Pepe Jeans brand and their mum runs a care home for children with emotional and behavioural difficulties.
“We were raised in a spirit of entrepreneurialism and our parents are still there to lend us advice,” added Sach. We were told that we will always have a better career working for yourself than for someone else.
That even includes working with your brother.
Nish laughed. We look alike but we have different strengths which dont tend to overlap. We talk every day and there is unreserved support between us.
Thats another nice secret to share.