How one of the fastest growing jewelry brands in the USA increased ecommerce revenues over 700% with Soulpepper.
Fred Magnanimi is founder and CEO of Luca + Danni, one of the fastest growing jewelry brands in the United States. In May 2012, Fred’s younger brother Danny was diagnosed with cancer. Through that difficult year of chemo treatments, Fred and Danny would often talk about the things his brother dreamed of doing with the company once he got better. Danny’s dream was to create a unique line of handcrafted, American-made jewelry that inspired others through their journey of life.
In April 2013, Danny lost his difficult battle with cancer – he was 33 years old and left an incredible mark on the world. Inspired by his brother’s desire to help revive the family’s jewelry manufacturing business, Fred left a lucrative career on Wall Street as a successful investment banker to reconnect with his roots. Fueled by his brother’s passion and a burning desire to carry forth his vision, Luca + Danni was born in 2014.
You’ve grown Luca + Danni exponentially in 22 months with little resources and no experience. What advice do you have for others?
You have to believe the way you’re doing it, while not perfect (because nothing ever is) is the right way to do it and you’re doing it for a specific reason. We’ve always tried to be innovative and, in a way, disruptive with our business from the very start. So from day one the plan was that the plan was going to change! We knew that we were going to make mistakes along the way but we’d be fluid enough to change things and adapt as the market grew.
How does digital marketing play into your growth strategy?
It’s hard for me to justify spending money on traditional advertising when the results we’re getting with digital marketing are so spectacular.
We do very little, if any traditional marketing. No billboards. Very little in the way of print ads. Nothing on radio or television. Everything for us right now is driven digitally and it makes perfect sense because it’s so quantifiable. As a business owner deploying capital, I have a great deal of control over what we’re getting back in terms of returns and what our needs are.
And most importantly it works. When we look at our year to date numbers of online sales relative to the same period last year we’re up over 500% and a big part of that is led by the digital strategy we put in place and spearheaded by Soulpepper. It’s hard for me to justify spending money on traditional advertising when the results we’re getting with digital marketing are so spectacular.
What is your ecommerce strategy?
Our business is set up a little differently than the traditional ecommerce company. The bulk of our business is still wholesale. We’re probably about 24% -25% ecommerce so we use digital to drive brand awareness. We see it as an area where we can build out a client base. So instead of putting a billboard up we’ll run Facebook and Instagram ads. People see it and the feed and they start talking about it. We have store owners who email us or come up to us at trade shows and say “My daughter saw your Facebook ad and we want to open up a wholesale account”. We might get a 5K order from an ad that we ran but there’s no metric of conversion so to speak. And because there’s no metric to quantify it, it may not look like money that was well spent. But because we are also looking at the wholesale side, it was actually great money spent because it was clearly helping build up that area of the business as well.
What Key Performance Indicators (KPI’s) you are looking at?
We look at anything from return on ad spend – what type of traffic we’re getting, what percentage of that is coming from mobile. Conversion ratios are super important to me so we’re looking at how can we get an extra 50 or 100 basis points out of the conversion ratios. What are they buying? When are they buying? How much are they buying? Probably the basic stuff that most people look at. But for us, I think the big difference to traditional ecommerce companies is that (and this is where I think it’s a bit innovative) we’re using the digital strategy to build out a wholesale client base. It’s working really well because either the clients have stores or the stores themselves are now spending more and more time on social media, and it’s quickly becoming a good way for us to reach the customers we want to reach.
What do you find particularly challenging?
As a start up business there’s a lot to understand. The back end, the algorithms. Especially with Facebook and to a lesser degree, Google. We don’t have people dedicated to that full time so I rely on Soulpepper to make sure everything is set up in the correct way. But just having that basic understanding of how those things are set up, and probably more importantly when they change and why they change, is at times frustrating for us because it’s shrouded in secrecy and complexity. I think it’s something you have to have a real interest in to understand.
What advice would you share with other business owners?
On the platform side, I think for a new business, it’s deciding when do you scale up and spend the money in terms of the bells and whistles you want on your ecommerce platform relative to the actual sales that you have. We’ve taken the approach that we have a glide path from where we are to where we want to go and we’ll scale in either different platforms, service providers or different apps when we reach certain milestones in terms of revenue. I think as a business owner the difficulty is in what you want, and what you have the money and resources to spend on are two different things. We’ve been lucky that we’ve found some really good platforms that allow us to do the things that we want to do without having to shell out 100 grand to build a website. So I can use that money for ads or other things.
In talking with other business owners, finding people that understand the brand and how to digitally tell your story, is a difficult thing.
In talking with other business owners in similar situations, finding people that understand the brand, understand how to curate the ad content, how to write the ad copy and how to digitally tell your story, is a difficult thing. For us, I feel we have it the way we want it. When you come to our website it’s basically telling you the message we want in the way we want it told. But for people looking at their own brand who haven’t quite figured it out, it can be quite frustrating because there is a lot to take in especially if you don’t have the experience with it.
How has Soulpepper contributed to your success?
We couldn’t be happier with our experience with Soulpepper. From the initial discussions through the strategy implementations, their team has been a pleasure to deal with and – most importantly – they’ve provided fantastic results (+777% year-over-year increase in e-commerce revenue!). I’d recommend them to anyone, except my competitors!