February 25, 2015
If you had to pick a fashion item perfectly suited for online sales, ties would be one of them. A customer doesn’t need to try on a tie to ensure proper fit. Ties are lightweight and not fragile, and therefore inexpensive to ship and store. Styles and tastes in neckties are diverse, leading customers to want a wide selection of options. All of these factors influenced the founders of Tieroom, a Swedish eCommerce company that has since expanded to Finland, Norway, Denmark, the UK, Germany, and the United States.
Tieroom was founded in 2008, after Christian Andersson visited China with his brother Niklas and Niklas' wife Louise. A serendipitous conversation with some Chinese tie suppliers they met in their travels sparked the idea for the company. Christian, whose former career was in computer science and gaming, felt that his skills would complement those of his cofounders, whose experience was in the retail and fashion industries.
What began as a simple eCommerce site marketed to Swedish consumers today sells 500 different tie designs, many of them from Tieroom’s house brand, Notch, to more than 50,000 customers in Europe and the US. More recently, the company has begun selling ties to small retail stores in the United States and Sweden. Tieroom has been self-funded since its founding. Launched with $50,000 in loans, the business achieved profitability after 18 months in business.
Balancing price and quality
In the early years, the company focused on product development, says Andersson. “Getting a perfect product was a priority, and we worked hard with our suppliers on quality.” At the same time, Tieroom worked to pinpoint its target the audience. Today, the company sells to a diverse customer base, advertising through mass-market channels such as daily newspapers. “It’s hard for any physical store to compete,” Andersson says. “We don’t necessarily have the most cutting-edge fashion, but people come to us for our wide selection.” Competitive pricing was also critical. Tieroom’s average price of $30 for a tie is less than that of major department stores, yet not the cheapest on the web. Explains Andersson, “We set a price that accurately reflects the time and effort that we spend on construction and quality.”
Upgrading the eCommerce system
Tieroom launched its first eCommerce site on an open-source platform that ultimately couldn’t support a growing business. “It was an immature platform that wasn’t professional at all. It was hard to set up workflows or get customization or localization,” says Andersson, “and the community wasn’t very big.” Tieroom moved to Magento Community Edition in 2010, on the recommendation of its IT consultant. Beyond the advantages of Magento’s more flexible platform, the company benefits from easier access to customer and order data from multiple systems, including its ERP system and web orders from other eCommerce websites. This is important, says Andersson, “because we are very data-driven with our marketing. Now we can write our own scripts to automate the data management.”
Going global with Magento
A significant factor in moving to Magento was the need for a platform that could support sales to customers in multiple countries. Magento CE gives the company what it needs through currency support, localized storefronts, a vast choice of extensions, flexible customization, and the large Magento user community. “Since we do our own technology, we need a forum to learn from,” Andersson says. “I really like innovation, and Magento allows us to try whatever we want.” One customization he developed created an easy-to-use navigation for customers searching across hundreds of designs. The top benefits of Magento for Tieroom include a highly customizable platform and multi-store and multi-currency support, Andersson says. “The fact that we can add a new country within weeks is fantastic.”
Keeping pace with customer demands
Tieroom wants to keep growing its business, which requires developing new services and features while continuing its history of excellent customer support. The company is planning expansion to both Spain and Canada, locations where it has many existing customers.
Andersson attributes much of Tieroom’s success to the company being uber-responsive to customers: answering questions quickly, providing same-day shipping regionally and two-day shipping to other countries, and, more recently, launching a mobile-friendly shopping site through Magento version 1.9. “For me, the best part of this business is having happy customers,” he says. “At Tieroom, 99% of the time customers tell us how pleased they are with the products, our service, and the website.”
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