Creating online marketing places: Loubilou

Online marketplaces are a phenomenon which has taken hold for online retailers. For a long time the sector has been dominated by a number of big players like Amazon and eBay but as the model proves itself, smaller businesses and start-ups, like Loubilou, are entering the scene.

Heath Kane and his online marketplace for childrenswear are one such example. eSeller caught up with Kane to find out how online retailers can benefit from Loubilou and how he intends to help other entrepreneurs set up marketplaces.

Where did the idea for Loubilou come from?

We started setting up the business around two years ago. I had worked as a design consultant creating digital strategies for people like Jamie Oliver and my business partner was a senior developer working for brands like BetFair.

Having worked with lots of entrepreneurs and seen their success from the work I had done – I had one of those moments when I thought why aren’t I doing this for myself?

We came up with a loose idea of what we wanted to do and decided to go with the concept of a marketplace. I’m Australian and our initial idea was intended for there as they didn’t have things like Amazon there at the time and there is such a limited choice. They are about ten years behind in ecommerce and it is a huge growth area.

I came to the idea of childrenswear after buying my daughter a t-shirt from H&M, going to a playground and seeing three other children wearing the same one. As parents we try to stress the importance of people having independence and as a designer I put a great deal of effort into making sure my children have their own identity.

Childrenwear is a £6bn market and when you look into to 80% of the market is dominated by less than 100 companies. At the same time we realised that this was a global problem and decided we wanted to try and put convenience and choice back into the market.

So what made you want to attempt a marketplace?

Well it helps small businesses. Often they can exist and make sales but people don’t like the inconvenience of jumping from one site to another. They want everything to be in one place – hence the convenience of Amazon.

We will be a virtual shopping mall – bringing all of these independent businesses together. A one-stop-shop, very much focused on choice and value, with the added message that you are supporting local businesses.

We decided to start in the UK but thought it was dishonourable to stop here – it is global problem let’s treat it like that and open to the rest of the world. At the moment the site just focuses on the UK but in time what you will see us branching out.

How has the launch of Loubilou gone?

We went live at the beginning of May and it has been incredible. We are getting a lot of sellers and brands together – we didn’t realise it would take off so quickly. The difficulty is getting people to shift this mindset of buying cheaply.

High quality things last longer and with many of our products you won’t see them elsewhere – we need customers to make that conscious decision that it might cost more but it is worth it.I have a great affinity with the UK and helping small businesses is something that I have tried to go after.

What kind of challenges you have faced so far?

The biggest challenge at the moment is capital. I had a fairly successful career running my own agency and I’ve put my money where my mouth is with this. Having worked for many years with a big marketing budget, now it is my own cash and if I come up with a concept I’m digging into my own pocket.

We are certainly having to think on our toes about how we are going to get ourselves out there when we don’t have the money for marketing.

We are reliant on spreading the word via different channels and of course on having the best possible SEO. We are constantly surprised how this is working – we’ve recently had five sales from Europe which is fantastic given that we’ve done zero marketing there.

Social media has been fantastic we’ve been working across all three main platforms of Facebook Twitter and Pinterest. We have built up big followings already and are feeding the sites with competitions to win our items – the word is certainly starting to spread.

Why should other retailers think of using your platform?

We’ve made it as transparent as possible and we try to operate as fairly as we can. Looking at other sites out there – they are less friendly. I don’t want to point any fingers but Not On The High Street charges a signing up fee and then takes further fees depending on how you are marketed – for example if you get featured in its magazine.

We are straight-forward – you pay as you sell with no sign-up fees. We are doing the hard work of investing in marketing without initial returns. It’s important for us to make it a very friendly brand – we want to create loyalty and people like to be treated how they would treat others.

Is your site optimised for mobile?

The site works on all platforms – it is responsive. We are constantly working on it in the background, adding extras and building it up. We have built things like this for clients over the years – my business partner built the whole thing from scratch.

What is next for you?

We are looking to get more traction with this and build up the story and momentum. Getting people to buy into the idea of supporting small business is not a hard job when she see how lovely it is discovering how many unique and fantastic things there are out there – things that usually go under the radar.

When we go global the site will become even more of a treasure trove of things people have never seen before. We are opening everybody’s eyes up to the fact that we have been herded into these conglomerates and their products.

Do you have any other revenue streams?

If you look at the bottom of the page on Loubilou you will see we are powered by a parent company Marketplaces Inc. This is our marketplace building service which we are offering out as white label to retailers wanting to create marketplaces.

We really believe in the concept of the marketplace – they are a great way to foster social commerce and can bring a flood of different products to market and change the dynamics of online shopping.

We are currently talking to a number of retailers, one wants to create a marketplace for chocolate, one for Swiss design and one which will act like AirBnB for food. It’s an exciting time and we want to help to launch as many marketplaces as possible while looking after our own.

www.loubilou.com