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Johnny Russo Interview

[1] Explain to us the need for online merchandising

There’s a need. Everyone knows there is a need for it. Especially for the brick and mortar world, that is the world I come in. You have all this stuff that might not sell well on the web, but you just put them on there anyways. They collect storage space. They could be sold in the stores instead of sold on the web.

And then there is the opposite of stuff that is sold offline that sells better online. Like the T-shrits, the kids items, instead they are stuck in some stores where – let’s say, and I am just using this as an example, Laval. Let’s assume that Laval is a territory with no kids and you have a bunch of kids items in there. Not good.

There is not a great level of merchandising on online sites as  I find for most retailers. Because there is not that specialized skill set yet.

I am hoping schools are teaching this more and more. This is becoming a more and more of a need, there is a merchandiser in Europe who is half dedicated to online and half dedicated to stores. It’s not enough though, it’s just to say that is half – she is only supporting Canada because Europe is not transactional yet. And already in the last two weeks she has helped us.

Our allocation people are all buyers and merchandizers are not specialized online. It’s completely, different. For example: what to showcase, what to markdown that’s a big thing – price file because there are certain items that you need to discount and move out quickly.

For students if you want to go in to ecommerce. Like if they want to be a merchandiser and they don’t really care that’s fine. But if they want to go in to ecommerce and develop that skill set there is going to be a need for it 100%.

[2] What three pieces of advice would you give to people who are not making any to very low sales online?

#1 Test: If you launch a site and sit there and wonder why it is not working you probably have not tested different things. Let us say your conversion is 0.10 – you got that just by launching the site- you have not done anything to test it our develop it.

#2 Grow your email list: Email is a huge part of Mexx’s revenue it is always a top 3 revenue earning channel like most retailers. Email is not dying, email is not dead. Grow that list, grow that customer base, and then focus on retention once you have those. Once you have customers coming in, treat those customers the best.


#3 Affiliates: In terms of acquisition, affiliates is a good one – a site that’s just starting and you need some traction what better way than to actually pay for performance. I think that C.P.A. model is very attractive to startups and will help you get some leads. There are coupon sites you could be on – if you are not afraid to discount your product a bit that is probably the first thing you need to do.

#4 Know your analytics: Let’s say you have a small budget for ad-words spend, and all your traffic is coming from Eastern Canada, focus on Eastern Canada, do not waste the budget on Western Canada. Time part, location parting, so that you are not wasting money.

[3] What is the most effective email marketing strategy for you?
Personalization and cart abandonment emails are effective.

For cart abandonment – remind them once remind them twice, maybe in the third give them a free shipping offer. Test cart abandonment emails. Our conversion rates are really high from the cart abandonment emails.

In terms of email what’s worked is personalization – segment it as much as possible, if the customer bought this – send this, those types of scenarios and work flows are great. We are getting an even better tool than we have now. We are about 2 months away from launching and that is the type of stuff we are going to set up. You know 100’s of work flows to make sure we are not mass emailing people (maybe you can mass email people once a week if you want, like your summer sale) – but it’s really about that personalization. Just like Amazon does, Amazon sends me an email that not many other people get, as more and more people get better at this – there will be sends of 15 here 200 there, 1500 there – just because they qualify in different buckets. Of course, predictive is going to come on top of that. We have to be very ready for that, the U.S. is doing that now and Canada, I hope, catches up quickly on the predictive side. Which will be a very big part of the predictive strategy.

[4] Why do gift cards work so well?

For gifting! No seriously, you’re not buying a gift card for yourself – especially for Mexx we have a kids brand. Sometimes you don’t know the sizes – say you live in Saskatchewan and you have family in Montreal, let’s say you want to send a gift you are not sure of your nephew’s size, a gift card is very easy. Guys like spending on gift cards too. That’s why we see the spike in the holidays spend. I think having that option there, as an add-on, is really effective. Someone will go shopping on the site and remember they have a friend’s birthday or something coming up and they will get a $10 or $25 gift card. We offer $10 – $-25 – $50 – $100 gift card increments and they are always the same levels, not one outsells the other. You would think that the $10 one and the $100 one would be the highest – we are always replenishing them at the same rate.

I have never bought a gift card online but I know they absolutely sell and I think a big part of that is the kid’s business. I think having a physical store where you have to spend the gift card is useful too. Where you don’t want to go out and buy a gift card, but you want to give one, you can just order one online.

[5] How do you prep for Christmas sales?

After Back-to-School. Probably another three weeks or so Back-to-School is going to go on. After that Christmas and holiday prep goes on. Online is a more ahead than brick in mortar stores in terms of being prepared for this – in our case we do have to hold off. We cannot go in there, for example during Black Friday, at 40 and have our stores be at 30, it is a main event for us, we definitely merge with the marketing and promo strategy of the stores, so when you are in brick and mortar and an online retailer it is a bit different because you should have the same strategies at these big events – you do not want that confusion, you want to be merged.

In terms of time I would say you would probably need at least 2 months ahead of that season – should be more though.
[6] 3 things everyone should be doing for Christmas promotion?

1. Have exclusive offers for your affiliates, might be a good idea – a lot of people are bargain hunting around that time. There is a gifting aspect, but I think that a lot of people are shopping for themselves at Christmas time – to get good deals.

Look at your best affiliates, those that are sending you the best traffic – and maybe give that select group a deal. Let us say you have a main offer of 30% off maybe give them 30% off and free shipping. Or free express shipping. Or something special. Because you want to treat them well, they have loads of traffic around the holiday time.

2. It might be a good idea for bounce back offers – just cause it is a high traffic time right now- you know January will be a struggle, so offer might be valid from January 15 to February 1, for your slower periods right after the holidays.

3. Do not chase your competition. If your competition goes 40 and you’re at 30 – don’t chase them. Have the right strategy at the start, be able to be flexible a bit, but don’t necessarily just chase them – because their business model and their profit margin might be a bit different. And we have seen that a lot, someone goes on 50 and the next day they are going on 50 – does not work that way, the profit margins are a bit different.

[7] If I sell pricy higher ended garments, should I invest in a branded video like True Religion?

That is where an online merchandiser comes in. It is easy to look at the list and say – hey! That is my top style. But why is it your top style? Maybe there was a sale behind that – did that style only sell when it was on sale? You do not want that product on your video. You want top sellers that are there at regular price and they have a branded element – that is where the online merchandiser will come in and say – here are my five products I need these in a video. Perfect we can afford to shoot five images in a video.



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