Run by Greg Smith and his family, Lollyology is a specialty chocolate and confectionery bricks and mortar shop located in Australia’s 7th biggest retail destination, Westfield Knox in Victoria. Almost two years ago, Greg left his career in finance to start Lollyology, his dream since he was a kid. Selling over 300 brands from overseas and local retailers, Lollyology is the destination for all your lolly or sweet-tooth needs. Being a long-term resident of Knox, Greg’s focus is on the local community. “I want to service my local community. That’s my niche,” he said.
Before COVID, Lollyology was doing well with the bulk of its business through foot traffic sales with a small but growing wholesale client base. Digital transformation was on the list, but a low priority. According to Greg, when you’re renting somewhere like Westfield, “you want to make your shop work as hard as it can for you.” Greg and his family recently completed a massive refurbishment of their shop and were working on increasing sales through improved availability of stock, and expanded offering.
At the time, Lollyology had a small online presence on Facebook and an active Instagram account but no ecommerce platform or website. When COVID hit, Greg didn’t close his shop, but foot traffic decreased by 75%. Interestingly, cart sizes increased for the few shoppers who did venture inside, with the average sale increasing by 40%. Still, this wasn’t enough to meet previous revenue targets, and with Easter just around the corner, Greg knew he had to move fast.
While Greg and his family had talked about going online for years, it wasn’t until COVID happened that they felt the need to accelerate the process. Easter is when confectionery shops do their biggest business for the year. With $30K worth of Easter stock ordered 6 months prior, and very few customers coming in, it was time to start making the move online.
In fact, the impact of COVID has accelerated the rate of digital transformation so much, it’s anticipated we’ve matured ecommerce the equivalent of 5-7 years in the space of just 8 weeks.
How they did it
Taking on advice from his extended family, Greg set up an ecommerce shop on Shopify while his staff photographed all their stock, focusing on the Easter chocolates first. Within four days they had their store set up, just three weeks before Easter. They made their first online sale on the 27th of March. While Greg had his ecommerce capabilities set up, he still had two problems:
As a small business owner, already grappling with COVID and limited resources, neither of these tasks are particularly easy to tackle. To make things easier, Greg and his family decided to focus their marketing and delivery on their local Knox community, advertising a low $5 delivery fee for their area.
This was a smart move. According to Greg, “during COVID no one wanted to go far from home. Everyone stayed local and wanted to buy local.” When you are trying to get up fast, shipping nationally can be complicated. You also need to be cost-competitive”, so keeping costs down and ensuring reliable delivery was a priority for Greg.
There were five different, low-cost ways that Greg reached out to customers:
- Posting on social channels – while this can be very effective for some kinds of businesses, Lollyology had a small online presence and growth via social media management can be time-consuming and costly for a small business.
- Activated friends and family networks – proved very effective for the crucial Easter sales, but has its limits in its longevity.
- Activated local networks – as a long-term resident, both Greg and his family are heavily involved with clubs and the communities in their area, such as the local tennis club and Calisthenics club.
- Facebook advertising – while relatively inexpensive, it did not have an immediate quantifiable impact.
- Personalized SMS campaigns
Greg’s brother suggested using SMS to help him market. Unlike email, according to Greg, SMS is hyper-targeted and gets attention, especially when the timing is critical, and you want results fast. To start using SMS, Greg needed to collect his customer list first.
While in his shop, Greg would personally ask customers for their name and numbers to send promotions and specials via SMS. Within the first 3 – 4 days, Greg already had 100 numbers. More than 90% of customers were happy to exchange their details, with less than 2.5% opting out of messages over the whole journey.
While SMS is useful, Greg respects his customer’s needs and uses it sparingly. “I can’t send a message every day,” he says. That said, when Greg sends a broadcast, two things always happen. There is always “immediate activity” on the website, Greg says. He finds about 10% of his customers are going on the website within 5 minutes of a promotional text message campaign. Only 3% of his customers drop off at that point, with 7-8% of customer base converting to purchase.
Despite all their efforts, Easter sales still saw a 58% drop from last year and 65% drop throughout April. However, in the weeks leading up to Easter, Greg was able to move 20% of his existing stock that was in his store, just from online sales.
Why it worked
“SMS was targeted to consumers who signed up, and the effect was immediate as measured by activity on the website within minutes.”
COVID has forced many businesses to move fast, especially if they, like Lollyology, do not have ecommerce capabilities ready to go in the first place. It can be daunting making the move because it can create more challenges, such as figuring out how to market your online business and organize home deliveries.
For the most part, SMS can support your move online by extending your communication and marketing capabilities in ways that other channels and tools cannot. In Greg’s experience, while he was using multiple marketing channels, SMS was effective in helping him:
- Prompting quick sales from promotions
- Reminding customers his store is now online
- Moving Easter stock quickly in the lead-up
- Turning store customers into repeat online customers
Like Greg, we recommend always using SMS as part of a bigger marketing push or as one of multiple communication channels. However, it can be an effective add-on when compared to the ROI of other digital channels.
While we start easing out of COVID, and bricks and mortar shopping resumes, Greg is still eager to keep his online shop going. “Now that we have a website,” he says, “it’s an opportunity.” The family and in-store team are now actively maintaining it and setting out to improve it where they can. Greg still faces a few ecommerce issues, such as settling on a third-party shipping provider. The family continues to do deliveries themselves, and Greg believes it adds to their impeccable customer service.
However, he is realistic in acknowledging that online sales will never account for the bulk of his sales. If he had 150 Lollyology stores across the country, serving customers online would be far more fruitful but not as a one-off small business shop where people are less prone to pay for shipping for confectionery. SMS messaging, however, has proven advantageous for Greg. In his mind, it has shown far more ‘targeted’ than using a channel like Facebook advertising, and it gets results.
“We will use SMS to advise of specials, special events and any changes to our store operating.”
Greg wants to keep Lollyology’s focus on the local community going forward, with plans to start getting Lollyology out into the community through fundraisers, sports clubs and the like when restrictions ease entirely. He says, “That’s what I want to do most.”
“The challenge for small business is, how do you get your online presence out there, because it’s a very loaded space. It’s very hard to be seen and heard. But being able to communicate directly with customers who care, who are interested, who signed up willingly, is actually a real benefit.”
Greg Smith, Lollyology