20. May 2014–
The online shop URBANARA opened its Pop Up store at BIKINI Berlin last Friday. VentureVillage talked to Co-Founder Claire Davidson about going from the online to the offline business, building a brand, how they see competition, and what the future holds.
URBANARA is an online brand for high quality homeware. By cutting out middlemen and foregoing a high marketing budget, it wants to make superior items available for everyone. After getting started in 2010 with a VC round and business angels, it raised €3million on BERGFÜRST in 2013. With another 1,000 private investors on board, the overall investment can be calculated between €7 – 8 million, the company states. URBANARA launched in Germany, Austria, Switzerland and Great Britain in 2011. By the end of 2014, the company wants to be profitable.
While many stores are still building their online shops, URBANARA is doing it the other way around. Do you expect more brands or shops to go your way in the future?
Belief in the brand is part of our DNA and has been from the very start. Whilst in some ways it is definitely the more tricky route, we believe building a brand that resonates with our customer base will be our strength in the long run. We have built tangible value in URBANARA. Our customers have an emotional attachment to the brand – it is not just a transactional relationship (at least this is what we strive for!) that a competitor can take from us. We see already that there is a shift towards our model – and we’re pretty sure there are lots of cool brands waiting in the wings! And we welcome that. We are brand obsessives. We would love more people to inspire us and push us forward in the market. It has felt a little lonely out here up to now!
Do you feel you are missing a large number of customers by being, until now, an online shop only?
Online is the future. There is no doubt. Even our grandmothers are shopping online now. The challenge is simply building brand awareness on limited budgets. Traditional online marketing tactics are less relevant with this business model. Once customers are aware of us and trust us most have no problem in us being an online shop only. But we do invest heavily in our customer service who are very knowledgeable and happy to guide the more timid through the process.
This is why we have been testing more traditional channels such as offline to understand the key levers for us to grow.
BIKINI Berlin seems to be the perfect match for your Pop Up store! Smart move. But you already have a showroom in Berlin. Is it something about the city or do you plan to expand soon?
Berlin is our “heimat” – and the majority of the company is headquartered here. So it makes sense to start our plans in the city we love! Our showroom will remain open and gives a more personalized service to our customers. They can book appointments and we will tailor the products we have to what the customer is interested in. BIKINI is all about brand building, and we can’t think of a better place to kick off our offline activity. We are extremely excited to be part of such a cool concept! We will take the learnings from BIKINI and look to roll out the idea both in other cities across Germany as well as London.
On URBANARA’s website, it is said the company can provide good prices because it doesn’t spend big amounts on marketing. But you do invest in online ads, TV-spot, print campaign, and a Pop Up Store. Have there been discussions about it, or is it clearly a step that needs to be taken to grow?
It is not a secret that some of our advertising – such as TV – has been through a media-for-equity deal. These channels would be very difficult to justify without this type of support from the media houses. We invest in a range of channels, and are very ROI focused. We test continuously and, if it works, we reinvest. But to be honest, we have been lucky as one of our most powerful channels has been word-of-mouth – and that doesn’t cost us a penny. If you have great products and a strong brand, people will talk about you.
Can you talk about some KPIs you expect from the Pop Up Store? What are you expectations?
It is a bit of a leap into the unknown. The URBANARA box will be open until the end of September. They have a huge footfall at the moment. I think they received 300,000 visitors on their opening weekend and, with partnerships with people like Berlin Fashion Week, we expect the hype to continue. How that will translate for us we don’t know, but if we take the KPIs from our pop-up shop last year then we are hopeful that is will be very successful. Feel free to ask us again in a month!
Personally, what is your favorite piece on URBANARA and why?
I have to say, I love the Uyuni cashmere blanket! It’s one of the first products we launched on the site, and I just never get bored of it. I like to think of it as the perfect investment piece; a little bit of luxury that will last forever!
Any advice for those who are building a startup right now?
Be passionate about what you are doing. This business is tough. Be sure that this is what you want to immerse yourself in fully. There can be no half measures. And then, a bit more practically within the business, understand what you are good at and then surround yourself with people who carry the same vision and passion to round out the rest of the team. There is no founder that can do everything. And when things are going brilliantly, its nice to have friends around to share it with!