Project Start-up: Why Rock & Roost opted for change
by Dan Matthews / 2/13/2018 12:43:47 PM
Change projects happen because of one of two factors: necessity or opportunity. Rock & Roost, formerly known as Apparel Systems, is moving in a new direction despite being established and profitable for several years – simply because there’s scope to do things differently.
Apparel Systems has been and still is an excellent business, accumulating profits approaching £500,000 and a long list of big name clients. Most business owners would stick with that, but Jennie Rourke, the re-envisaged company’s CEO, has decided to twist.
“Our business is a software product that helps designers and manufacturers who supply the High Street become more efficient and profitable in the supply chain. Our customers are mainly fashion manufacturers supplying major brands like John Lewis, Debenhams, ASOS and Top Shop,” says Rourke.
“My idea was to take this platform, which is road-tested and proven, and apply it to a new in-house online retailer selling furniture and homeware products direct to consumers. The idea is a made-to-order model, meaning factories in India ship direct; there a few middlemen and very little waste, so we can price items lower than prestige high street shops.”
The Size of the Opportunity
According to David Lloyd Co-founder of the company, Furniture/Homeware is a £20bn market in the UK alone and only 6% of sales are currently made online, which means that 94% are sold via traditional bricks and mortar retailers. He says there is a “massive opportunity” to move for more online selling by any measure.
“Ecommerce is really about the fundamentals of the proposition across price, service, range and delivery. Technology is about the fundamentals that add value and create disruption in the market adding value to the customer, enabling lower prices but with less risk,” he says.
“Our single minded objective is in creating an online experience for the customer that is as good if not better than the traditional experience and in this regard, technology is our friend. Putting the focus on giving customers the confidence to buy online, without the need for stores, and on educating them on the benefits across design innovation and price.
“There is now a wide spectrum of very exciting emerging computer tools across areas including virtual reality, A.I. and visualisation which need to and will become commercially viable very soon.
“Rock & Roost is not encumbered by the old bricks and mortar business model and we will blaze a trail by adding tools and technologies both to our website and back office systems in this exciting furniture design and retail space.”
A delicate transition
Seeing an opportunity is one thing, grabbing it without upsetting the apple cart is another. Since 2015, Rourke and her team have built up the new business concept while ensuring that existing customers continue to be happy with the service. It was important to devote time to the new brand, says Rourke – including most recently devising a crowdfunding campaign on Crowdcube – while keeping existing customers in the loop and continuing to satisfy their needs.
“It was really important to communicate the changes to our customers,” she explains. The important thing was to reassure that we were not starting a competitor, but a retailer occupying a different space within the retail sector.
“In terms of the structure of the business, the change of direction isn’t disruptive in a negative sense. I have worked in the business, which my father founded, for 12 years and it has adapted to overcome challenges and seize on opportunities throughout that time.”
Rourke says it was a tough call to tell existing customers about the new direction, because it risked causing unnecessary worry. But customers were receptive to the idea and, in the event, it gave Rock & Roost the chance to spread the word about its fundraising to a network of partners.
The idea to source from India and supply direct to customers in the UK was inspired partly by the efficiency of the system, but also by Rourke’s perception of waste in the retail industry.
“People want to furnish their houses nicely and many want something a bit different to their friends. Ikea is great for the basics, but it’s good to inject a few more quality and exotic pieces to make your home individual. This is where we come in.
“The other point is that we want to disrupt the discount-dominated furniture sector in which companies make vast quantities of products. They sell some a full price and some in sales, with the average margin making them a profit. The people paying full price supplement sale purchases.
“By definition, under the made-to-order model, factories only produce what each customer explicitly wants, so there’s zero waste. The customer gets exactly what they ask for and the suppliers make only what is needed; everybody wins.”
Rourke enjoys working with suppliers in India because they are enthusiastic, skilled and flexible. She also relishes the opportunity to visit the country, because of its sensory delights and endless diversity.
David Lloyd, who is Jennie’s father, is in charge of procurement and is also a regular visitor to India, checking out factories and agreeing new supply lines.
Part of the in-crowd
A major project within a project was getting the crowdfunding campaign together. Contrary to myth, the process of acquiring crowdfunding involves as much due diligence, or more, than going through a business angel or private equity house, or even acquiring debt finance via a bank.
The pitch must be on-point, not overly ‘salesy’ and every claim has to be backed up with hard evidence. Even the CVs of company advisors have to be fact-checked and accompanied with proof. No strings are left untied.
Then there’s the pitch video, probably the most important part of the campaign because it’s the best opportunity to connect with the investor community. For Rourke, it meant putting herself in investors’ shoes and working out what information to include and what to put aside.
“We’re so enthusiastic about the business so at the start we wanted to mention everything from the intricate details of our software to the incredible story behind many of the factories in India. But really investors’ main concern is that their money will be looked after and has scope to grow,” she says.
“The video has to simplify the offer. That was quite tough for us because we have quite a long back story. The transition is not easy to explain quickly and in a way that draws attention and gets people excited about the business. Hopefully we have managed to do that though.”
Eyes on the future
The future for Rock & Roost is potentially exciting. If the crowd-fund is successful, the team plan a large investment in a website upgrade. A test site already exists but this will be developed into the sort of polished platform that reassures customers about making substantial purchases.
“From the customers’ point of view the website is the business, so we will focus heavily on getting it just right. Then it’s a case of spreading word about Rock & Roost. Once the site is fully operational we plan a major marketing campaign to drive early orders.”
Such a major transition from one business model to another is a daunting undertaking, but reinvention is in Rock & Roost’s blood and the team are well used to change.
Disrupting the furniture retail sector, a multi-billion pound industry, will not be straightforward. But with the systems already in place to get the job done, Rourke is well positioned to take advantage of a brave new world in online retail.