Navigating E-Commerce Challenges in Sexual Wellness Industry: A Discussion with Charlie Ganzen of Lovehoney Group

Ever wondered how a global leader in sexual wellness and happiness navigates the challenges of the e-commerce world. 

Charlie Ganzen, the director of Lovehoney Group, offers a wealth of insights from his career journey, his daily routines, and his personal approach to maintaining growth and profitability in these testing times. 

Drawing on his experience at YouFoodz and his momentous win of the Run With the Bulls Award, Charlie walks us through the resilience, planning, and strategic thinking required to steer a ship in rough waters.

We delve into the sexual wellness and happiness industry, discussing the merger of Love Honey and WoW Tech and the potential for expansion into physical retail. We uncover the growing acceptance of sex toys in our COVID era, and why understanding the barriers consumers face, beyond the category of the product, is pivotal. 

Charlie shows us how Lovehoney is leading the charge, providing a discreet shopping experience and using innovative methods like research, quizzes, and post-purchase emails to gain consumer insights.

As we press forward, we unlock the secrets behind the Lovehoney group's marketing strategies. 

Charlie highlights the role of Live Shopping and explains how it helps break down barriers for consumers. He divulges their tactics for effective marketing, including the use of influencers and above-the-line advertising. 

We also discuss the financial side of the business, exploring Love Honey’s approach to profitability and how they attribute the success of their campaigns. 

Tune in now for a rare chance to see behind the scenes of a global leader in a fast-evolving industry. Remember, the journey to sexual wellness and happiness starts with a single click!

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Transcript

Ryan Martin: 0:01

Welcome to the Ecommerce Australia podcast. Welcome to Ecommerce Australia. I'm your host, ryan Martin, founder of Remarkable Digital. This podcast is aimed at those who have their own online business, e-commerce professionals looking to keep current on the trends, and for anyone interested in learning more about the world of Ecom. For those of you seeking direct assistance, remarkable Digital is just a call away. Our mission is to be remarkable, doing great things for great people and great businesses. I understand how much choice you have and how many podcasts are out there, so I'm truly grateful you've tuned in. Please let me know if you have any questions, comments or topics you'd like covered. Let's get started Very excited. This week we're joined by Charlie Gansen, currently director of Love Honey Group, who are a global leader in the sexual wellness and happiness space. Before this, charlie was in Ecommerce for YouFoods, which we'll touch on, and I noted that he won a Run With the Bulls Award. So looking forward to hearing more about his journey and insights into what's working for Love Honey at the moment and the background. So welcome to the podcast.

Charlie Ganzen: 1:06

Yeah, thank you very much, Ryan, for having me. I actually have been listening to the podcast for a while and it's interesting that you've got a trend of getting Collingwood supporters in. I saw that you had Ben Anderson in the previous episode and well, you've got me as well.

Ryan Martin: 1:20

Oh no, how did that happen? From a boy from the Gold Coast or?

Charlie Ganzen: 1:23

a quick yeah from Brizzy. It's funny, I was a Brisbane Lions fan back in 2000, 2001. They had the three Pete and Collingwood got beaten twice and a lot of my family Collingwood supporters and there was some kind of I don't know syndrome that I absorbed and then ended up being a Collingwood supporter ever since and I'm very grateful that I am, especially this year.

Ryan Martin: 1:44

Well you've done well. You might have both your teams into a grand final potentially, so, yeah, okay, well, geez. Yeah, I don't know how I seem to attract Collingwood supporters, but as I said, duando, you're probably a hard team to dislike at the minute. So, looking pretty good, got some good characters in there and a good coach, so it's looking all right so far.

Charlie Ganzen: 2:04

Yeah, I think good depth as well. It's an exciting period, I think, for Collingwood fans or in touch on it any more, but I think there's a few good years to come.

Ryan Martin: 2:13

Yeah, 100%. So, mate, before we get into, I guess, your journey into e-commerce and where it all began, I can't just ask have you spent the morning so far, or what's a typical morning like for you before you get into the office?

Charlie Ganzen: 2:27

Oh, before the office. Okay, well, typically I do like to have a sleep in, actually and this is probably an important point, because we are an international business, so my boss, for example, is over in Germany, so I would typically start the day around nine or 10 o'clock in the office, sometimes 11, depending how late I need to go into the evening for our different meetings. So depending on the day of the week it can vary. But I would like to have a sleep in and then I'm up late at night, so I'd sleep in, get ready, go to work. I don't think I'd do too much else in the morning, unless I can fit in the gym, yeah, okay, nice, and then what's a typical day look like for you?

Ryan Martin: 3:05

Then, obviously you set it to start late, but then goes into the night a little bit more.

Charlie Ganzen: 3:10

Yeah, so directing to me is the finance, hr and the commercial team, which comprises of both marketing and e-commerce, so I'll generally be working with those different teams throughout the day on different projects or looking at different aspects of the business that we need to either improve or make changes on, and that will be throughout the day, so I like to try and give my team on the ground as much time as possible with me, but then leading into the afternoon, that's where I can have different higher management meetings with different C-suite people, or.

Charlie Ganzen: 3:41

The other thing to note as well is I do have staff that are in both our US sorry, not US our UK and our German offices who help me on different marketing channels too, as well, as we have a larger finance team over there who help me with other forms of analysis. So, yeah, it can very much vary day to day. What I'm primarily focused on, though, is the P&L and the health of the business. Especially this year, I think you've got to be so sort of stringent and strict on all of your costs. That's probably something we'll touch on a lot within this episode, but that is probably the primary focus. So what can we do as a business to maintain a good bottom line health, as well as trying to maintain the top line given the economy at the moment.

Ryan Martin: 4:28

Yeah, yeah for sure. So obviously an interesting time. I think a report come out this morning saying that e-commerce businesses are not expecting much growth in 2023, so I sort of skim read that a little bit, but I'll dive into that a little bit later. But yeah, it's obviously a challenging time and before we started recording, we touched on COVID and how that sort of affected the business, given you know, victoria, new South Wales and a lot of the world was in lockdown and you joined sort of halfway through, I think, covid. So how did you firstly navigate that whole area and then how have you seen it since we've come out into some normal normality, I guess.

Charlie Ganzen: 5:08

Yeah, it's an interesting thing because I joined the business sort of toward the end of COVID, so my KPIs were based on COVID consumer behavior and so, heading into the following, into the next year, it was like, okay, now maintain that growth. That's a huge challenge, right. You don't have the same and we probably won't see the same type of consumer behavior for a while, until maybe something like that happens again. Hopefully not, but the pain point was to maintain the growth into that second year.

Charlie Ganzen: 5:39

You didn't really during COVID and I'm also talking about you foods, and I particularly remember when I was at you foods, that first week where I think lockdown said began we had to turn off all marketing like, and we had to turn off every single discount like we actually couldn't produce the amount of food that was coming through in orders, which was a remarkable thing.

Charlie Ganzen: 6:00

And all of a sudden your AOV targets that you've been trying to hit for forever are just easily being hit, your conversion rates through the roof and you can, in a way, you kind of sit back, right, you don't have to do a whole lot. But then when you come out of that it's like, okay, well, back to work really, and you've got to be, like I said, so strict in particular, on all the different aspects of the business now, and so that's what we're now really focused on, because we've had 2022, which was still a good growth year for Love Honey and now coming into this year with the economy, with interest rates and cost of living, we have to be mindful of our expenses in the business. We also have to be mindful of the return on investment in all of our marketing activity as well, because it's not the same as what it used to be, so we have to look at either turning off or adjusting different types of channels so that we can again maintain good health.

Ryan Martin: 6:57

Yeah, A lot of questions. We could go down different paths on that. So when did you finish? You finished while COVID was still going on in New Foods, didn't?

Charlie Ganzen: 7:05

you. I think it was September 2021. Yeah, I'm far recall. Yeah, yeah, okay, it was still around but it just wasn't so impactful on consumer behavior at that point once I joined Love Honey.

Ryan Martin: 7:17

Yeah, what was the run with the Bulls Award that I've seen?

Charlie Ganzen: 7:20

on LinkedIn mate.

Ryan Martin: 7:20

Yes, what was that before we moved on to Love Honey?

Charlie Ganzen: 7:23

Yeah. So each year YouFoods has an award ceremony for their staff and they do make a really big deal about them and it was. I was really happy to have won that award in my first year there and essentially that was based off me having a big idea and going and executing it. And the idea was around the growth of our app. So we had an app on both the Apple, the App Store, and also the Android Store or Google Play, and our rating on the App Store was, I think at the time, a 3.4 star with about 130 reviews, so pretty bad.

Charlie Ganzen: 7:55

And Lance at the time, who's the founder and CEO, he wanted to grow that and he wants to grow that through marketing means and fair enough. And I sort of had said to him at the time I don't think it's effective right now for us to put money towards that, considering how poor that app looks. And there are a few key fundamental issues within the app. For example, discount codes don't work. So what I did was I worked with the tech team. We found out where the problems were coming from within that app, because back then the focus was on where that was the main sales channel, that's where a majority of the income was revenue was coming from.

Charlie Ganzen: 8:28

So what we did was is something kind of I don't know if I can say ballsy, but I did some changes to the way in which we ask for reviews on the app so that we could try and have a higher percentage of five star ratings. And so what we did was, instead of just randomly sort of throwing out a request for a review, what we were doing is, after your second order with you foods, we knew at that point you obviously liked it the first time, and now you're coming for the second time and after that purchase you're pressing pay. You're probably out of high at that point. And so what we did was is we put the request for a review at that point because we knew that would typically be happy, and so what we did as well is do a reset on the review. So we went back to zero, which was a very scary day for me and high risk, because if they all started coming back at a one star, then I wasn't going to, I'd be in trouble. Essentially, yeah, 100%.

Charlie Ganzen: 9:17

And what ended up happening is we ended up at, over the course of the thing, about a year. So remember that 130 reviews over the lifetime of a think it was about two and a half years, 130 reviews, which isn't that much. In the course of 12 months following that, we were at a 4.8 rating at around 2000 reviews, which completely boosted the app presence on the app store within our category as well, which in turn produced more users through the app and then therefore raised the revenue by I think it was about 400% on the app for that 12 month period. So that had happened. It was very exciting, I was relieved that it had gone to plan and, yeah, that was a really fond memory at UFIDs.

Ryan Martin: 10:00

Yeah, fantastic. I wonder what an award for that. That's a, yeah, as you say, a ballsy move, but it's no risk, no reward.

Charlie Ganzen: 10:08

That's it.

Ryan Martin: 10:09

Yeah, love it. And then so you moved into Love Honey, which is a vastly different channel product with its own sorts of challenges. How have you found the transition and what have been some of your challenges that you had to overcome early days?

Charlie Ganzen: 10:25

Yeah, it's interesting. There's obviously the stigma around our product in general, and I'd be lying if I also didn't have some sort of hesitation when I was first talking with Love Honey. But I spoke with my friends who are quite senior in their respective industries and they said go for it. This is probably one of the best opportunities you'll have, and I'm so grateful that I did take it, because the opportunity is being fantastic for myself individually, but also, too, I've got a newfound passion for our industry and this is a really important sort of subject for us not just myself, but also all of the team here is we don't just come to work to work in e-commerce. We don't just come to work to put products on our website. We've got a genuine passion behind what we do here, and that is around opening up the conversation around sex and say pleasure in Australia and around the world. We are an international business and that's where we get. Our. Satisfaction is seeing the impacts that we're having in the community, even with working with our sexologists as well, and seeing the impacts that Love Honey, the brand, is having to help support people on their sexual wellness journey is something that we just absolutely love here.

Charlie Ganzen: 11:39

So, yes, obviously new toys. I wouldn't say they were new to me back then. I was a consumer of Love Honey or a customer sorry of Love Honey prior to it. But it's incredible how big the product base is. There's so many categories that you wouldn't know about and then still sometimes there are products that I come across that I'm like I didn't realize that existed and that's two years in, you know. And there's also new products that are constantly coming into the market. We recently merged or not recently, but about a year and a half ago. We merged with WoW Tech, which is the largest sort of portfolio of premium brands of sex toys, including Womanizer, wevib you some you can probably see behind me if you're watching the podcast and we now get the best technology patented technology, you know in suction toys, as well as the best retail experience in the industry as well. So the two worlds merged. It's formed incredible partnership between the two and now we're able to also provide our customers the best possible price.

Ryan Martin: 12:43

Yeah, perfect. Are you pure play ecom, or do you have bricks and mortar stores, or has there been any sort of a conversation around expanding to bricks and mortar?

Charlie Ganzen: 12:53

Yeah, we are pure play at the moment. I can't give away too much, but physical retail is definitely something that I'm interested in. I think what we were talking about before the podcast was the acceptance that COVID brought to our industry and around Sigma, and just the social acceptance, and what that does is open up opportunity for businesses like Love Honey to potentially enter the mainstream space more aggressively with our own branded stores. I think that is something that it will be really interesting to look into. What I can say, though, is that mainstream growth in the B2B side of the business has been fantastic and phenomenal. We're seeing so many mainstream retailers now engage with us and now stock our products, which is again adds to breaking down Sigma not just with consumers, but now with retailers who are comfortable and see the opportunity in stocking sex toys and also our other ranges of products.

Ryan Martin: 13:52

Yeah, brilliant. It's always interesting to kind of yeah, here, you know, I think everyone was trying to go Econ Focus and then COVID hit and obviously it was a great time to be in e-commerce. But now it's come back and the you know, I guess, the various conversations around opening physical stores still keeping the e-commerce play. So it's interesting here you say that what are you seeing in e-commerce generally from a trend viewpoint over, you know, say that, the calendar year so far of 2023?.

Charlie Ganzen: 14:20

It's a good question. I think there's a few like sort of topics here. I think that Omni Channel is definitely back now. I think consumers want that full experience, whether it be to shop physically, in store or online or with other means of different channels. Which sort of leads into another point of around live streaming commerce, which I think will become quite important and crucial in the next sort of 12 to 24 months in our industry.

Charlie Ganzen: 14:47

It's one thing to be the leading, trusted brand in the industry, but consumers also need to hear it from humans. They need to be able to engage in conversation with, particularly with, sex toys. The problem with sex toys is a lot of our consumers actually don't know what they need or what they want. And it's one thing to put a quiz on your website and ask the user are you male or female, or are you, you know, looking for a vibrator or a dildo? But the consumer still at that point doesn't actually know what they need, and we know that from the research that we're conducting. So what we're looking at is sort of understanding what are the true barriers that consumers face beyond the category of the product. So these can be things such as I live in a busy household. You know I need something that will vibrate but is quiet at the same time. So understanding these barriers that consumers have can really help us actually tailor a better experience for our consumers. And I think, if you're a retailer listening, I think you need to look beyond just what your product does, but also to what are the barriers and needs that your consumers have that they solve essentially. So I think the other factor is that consumers need a discreet shopping experience.

Charlie Ganzen: 16:01

When it comes to shopping for sex toys or the majority do anyway there are some consumers that don't mind and that's great. But for the consumers that do need the discreet shopping experience, that's everything You're talking about billing details being discreet, so not having love honey on the shipping label. You're talking about the actual box that it arrives in being something completely discreet so that if it is left on your doorstep you're not going to have a nosy neighbor come over and you know question why you've got a sex toy or something like that. Not that that's a problem, but you know the stigma hasn't yet been completely broken down.

Charlie Ganzen: 16:37

But then also, too, when we talk about omnichannel experience, it's how can you understand the product just by seeing it on a website. There's different things, such as the size of the product and how can we, you know, put a hand next to it so you can understand scale. Do we need to move into an augmented reality space and actually have a 3D model of our toys so that you can have that, you know, on your phone, or is it going into physical retail and having a really discreet shopping experience, but, you know, an inviting shopping experience, so that you can come and actually understand the product before you go and buy? So there's a number of different barriers, particularly in our industry, but I assume for many other industries as well, that we can be putting focus on, so that we're not just reliant on discounts and, you know, lowering our margins?

Ryan Martin: 17:27

Yeah, brilliant. So just on a couple of those points how do you gain that insight? What do you do from a research point of view? You mentioned quizzes on there, but is that sort of post-purchase emails? What's the communication channels? Obviously you have to be kind of wary with advertising around Meta and the cans and canots, but what's the sort of main communication that you have with your customers and what does that sort of two-way conversation look like?

Charlie Ganzen: 17:55

Yeah, so we employ internally with our insights team, who will engage with customers but also to general audience, to understand all of these different types of things. We obviously do NPS as well, but when it comes to these types of surveys which they are surveys we really try to understand the different segments within the different regions that we have. So Australia, uk and the US, which are our top three largest regions globally. And then what we do is, yeah, we try to understand from a barrier perspective. We also try to understand from just a who would you prefer to shop with from a retailer perspective and why. We know that just looking at my notes here that discrete delivery is extremely important to our customers. They want a trusted retailer.

Charlie Ganzen: 18:45

You're talking about a very sort of sensitive product that I sometimes liken to a mobile phone. It's a very discrete product that is private to you, but there's also an extension of you. It's almost got a bit of personality to it, like a phone does. You would never go and give someone your passcode on your phone and say, hey go, it's all my phone right. It's a very private thing and it's the same with the toy. So we I sort of like to liken it and simplify it to the mobile example. And then there's there's various other different things that consumers want, and the good thing is we can understand that in from a ranked perspective as well. It's not just a here are the things they want, but we actually understand per segment exactly what it is they require the most and in what order.

Ryan Martin: 19:29

Yeah, brilliant. And then, from a you touched on live shopping, really interesting live shopping. From my take I felt like it was going to get big, and then it sort of hasn't quite got there yet. But given you know, given what I understand about your industry which would be a you know a hundredth of what you understand, but and with the struggles of advertising on some of those traditional platforms, using influencers, I guess would be a big part of your strategy, and then so live shopping would feed into that nicely. How does that then go with the discrete version of you know like, what does that look like and what are your thoughts on live shopping as you, as you sort of touched on?

Charlie Ganzen: 20:08

Yeah, I think it's.

Charlie Ganzen: 20:09

It's important to our industry because you know the consumers, as I mentioned before, they do need a trusted brand to shop from, but they also need to hear and have a conversation with experts in the field, and we have a number of sexologists, particularly Shanta Lawton and Cam Fraser, who are our leading ambassadors in Australia, and the idea would be to be able to position them to a one to one or a one to many audience, that is, with an audience that are actually wanting to engage in a shopping experience with love honey.

Charlie Ganzen: 20:41

They just don't know how to, they don't know what they need, they don't know the barriers as well, and so I think that from that perspective, we can really help people enter the shopping experience, even if it is for the first time. So we want to help sort of break down the barriers there and give you know users and sorry, consumers as much information as they possibly can. I think the adoption of it will take time, though, sort of touching on what you said, I think with the emergence of you know what has been TikTok and other forms of live streaming or video format social media, I think that it will become much more accessible. It just depends on the technology integrations of those different platforms to enable the live stream shopping experience. So that is my current take on it, but it is an area that we're looking at.

Ryan Martin: 21:30

Yeah, yeah, I've had a few clients that are looking at it as well and how to implement it, how to build an audience to then, because there's probably nothing worse than having a live stream and three people are on there. So how do you build up enough through influencer marketing and then building up enough of an audience to go online? I guess the other thing too, and in more that one-to-one space, would be, you know, an ability to book 15-minute chats with your influencers, you know, through Callendly or something simple like that, and have that one-to-one. Obviously, it's a lot harder to scale, but yeah, I feel like, yeah, there'd be a number of ways it would be open to it. So, yeah, it's an interesting take.

Charlie Ganzen: 22:10

Yeah, I think just on that point too. It's. You know, LoveHoney does sell products, but the other interesting point of that is what services can you also provide customers that isn't just a transaction, but like a 15-minute session, like you said, with various sexologists and other forms of health specialists as well, that can assist you in starting your sexual wellness journey or continuing it. There might be different hurdles and barriers that you've faced whilst being a part of that. So, yeah, how can we provide that full experience for you so that you can engage in it?

Ryan Martin: 22:45

Brilliant. What, in terms of sort of different channels that you market in currently, can you explain to our listening audience what sort of channels work for you? Are you investing in I'm assuming you're investing in SEO and Google ads? What are the challenges and what are some of the obstacles around sort of advertising on the social platforms with a product like Love Honey?

Charlie Ganzen: 23:07

Yeah, there are challenges with advertising on social platforms. It's something that we've engaged in a little bit more in the last 12 months and have been doing well at. However, we typically can't just display a sex toy, for example, so we will utilize our lingerie to bypass that so that we can at least get the presence of our brand in front of the audience, but we still have restrictions placed on us. I think what we're looking at doing is well, the dependency on Google is something you don't want as a business, and that's something I'm very much focused on at the moment. So there's a number of different sort of strategies that we can employ and that I can touch on, but we don't want to be dependent on Google ads essentially or sorry, search ads and whatnot. So we are looking at how we can have effective above the line. We're looking at how we can have really effective PR.

Charlie Ganzen: 23:59

So recently, the RBA cash rate went up. So what did we do? That went up to 4.1. So we put up a billboard around the country that said if you're getting screwed by 4.1, you may as well enjoy it, with an inches rule next to it in the outline of a toy so that you could understand. Okay, well, you can enjoy four inches, but 4.1 on the RBA is not so fun. So we are looking at different ways that we can engage with audiences that are cost-effective for us. I think what another sort of strategy that you can touch on is going back to influencers. I think what a lot of businesses do is they will pay for their CDM or the influencer content and they expect conversion or they want to at least get conversion, or it could be a bit of brand awareness as well.

Charlie Ganzen: 24:48

But I think what you can do in between is really look to at least capture the audience that is coming to your site from that channel, whether it be on Instagram or TikTok, so that you can capture the emails.

Charlie Ganzen: 24:59

Essentially, I think that's so important. I think that's what a lot of businesses are currently missing is they're not actually investing in just getting the details of those that are coming to the site. Instead, they're allowing them to bounce for free and typically, unless the product or the influencers add is or content sorry is really effective, you're not really going to get huge immediate uplift from that. So, and then going into sort of CRM or database growth is going to be really important if you're a business that is looking to remove the dependency of spending money in performance marketing, so that's definitely a strategy that I would look at if you're not already doing so. And what you can do, too, is incentivize the sign up. The barrier to sign up and put your email in is much less than having expecting them to go through the entire shopping experience on your website and then also to make a purchase. So I think that you can really utilize, if you are using influencers, utilize that to grow your database.

Ryan Martin: 26:00

Yeah, yeah, brilliant. And then how does love honey? From an Econ point of view, how do you incentivize sign up? Is a purely a? Do you play around or the A B test, some different kind of metrics, whether it's, you know, dollars off, percentage off, exclusive VIP, and then that probably also builds into a bit of a loyalty discussion as well. Do you have any insights or metrics in terms of, like, how many of those people are signing up per per 100 to your website? I'm not sure if you can even give that away, but yeah, what do you find is the most effective way of doing that?

Charlie Ganzen: 26:32

Yeah, so, to answer the question, we do split test all of these. At the moment we're looking at a pretty aggressive approach in terms of trying to acquire that email. So we're looking at things like $40 off $100 spend, for example. But then we also like to play with percentages as well. So our typical sign up is 15% off your first order if you do sign up with us, which is pretty generic across, I think, most of the industry, whether it's 1510 or, you know, even 20%, but it's an area that we're looking at now, sort of to delve into more. The other aspect is around utilizing shipping as an incentive. So we know that our consumers love express shipping. About 45% of our orders are placed on express shipping, which is a high amount. It's above average in the industry. You can maybe make some assumptions why some shoppers buy in the moment and want something immediate, whether it be for themselves or, you know, if they're a couple. So we also look to explore utilizing that value add of free express shipping as part of a sign on tactic.

Ryan Martin: 27:40

Okay, and then of those first time purchases, what's that returning user look like? Is it higher? I mean, eufoods is probably a tough example because there's more subscription. But yeah, you know your first time buyers and through their communication and the email sort of automation that you'd have in place, I'd imagine they're coming back again and again. So that lifetime value would obviously be would be well offset by that. You know, $40, $40 off, I'd imagine.

Charlie Ganzen: 28:06

Yeah.

Charlie Ganzen: 28:07

So within comparison between EuFoods and Love Honey is that, yeah, eufoods, you would typically either be on a subscription or you're just new to shop every week or two weeks, so the return rate was is really large for EuFoods.

Charlie Ganzen: 28:22

For Love Honey, though, you're buying a product that you can typically use for a few years if needed. Now, the reason why our customers were typically return is for sort of the other products, such as lubes, cleaners those types of things that do run out quickly and that you would need to stock up on. So we also try and understand how can we utilize that behavior when returning to then go and upgrade your product. You know you might have initially bought a sort of lower end product because you're first time interested in sex toy, but then how can we as a retailer actually help you understand what the next step up is within the different sort of shopping constraints that you as a consumer might have, whether it be price point, or there could be other types of barriers as well. So that very much sort of is. One of the problems that we face in our industry is that it's not a product that you need regularly.

Ryan Martin: 29:16

Yeah, interesting. You're obviously kept up late at night by a global business, but what's the biggest challenge that you're facing at the moment? What's the biggest area or what you know what sort of keeps you awake at night in terms of sort of an e-commerce play?

Charlie Ganzen: 29:32

Yeah. So I think just costs in general. You know you got fixed costs as a business that don't change with the economy. You might have rent of your office space or you know your warehouses. That typically doesn't like matter as in it's not going to change because you're having a tough time with revenue. So I think just managing our margin and our bottom line is the one thing that is the most important thing to my role anyway, to maintain health and we are very fortunate to be in a very healthy position in comparison to our peers, but also to with our international peers. So we're doing a good job.

Charlie Ganzen: 30:10

There's a number of different things you know that we're doing, whether it be looking diligently at our discounting rates, looking at other things too, such as we have our own brand but we also have third parties. Do we need to try and increase our own brand proportion of sales so that we can up our margin there? Yeah, there's plenty of things there, but I'd say margin and costs. Again, you know how effective is our marketing? Are there channels that just aren't producing a good enough ROI and therefore we need to look at pulling back on? There's no point blasting marketing if the consumer like right now, especially for a shop that requires consumers with discretionary spend. There's no point us just hammering out a bunch of marketing and, you know it, not turning into anything. So we have to be really mindful of that, and the reason why is because when we come out of this valley which we inevitably will, the, you know, the economy will turn around. We want to be, you know, in the best position possible to go back out and go hard at what we do. Yeah, interesting.

Ryan Martin: 31:11

And then how do you attribute? So, going back to that sort of above the line with the advertising that you did on the billboards and the displays, how do you attribute that as a success or not success? Do you have any kind of systems or software that you use that helps you attribute whether that's successful or not?

Charlie Ganzen: 31:30

Yeah, so we're. Typically we like to measure everything through sort of CPM, so cost per 1000 impressions, and that's for all of our above the line, including PR. So when we are doing PR activity, if we were to deem it a success, I think this particular stunt got us I can't remember about 18 million impressions or something across a bunch of syndicated news outlets, which is fantastic, and so the cost of the billboards I can't remember, but let's pretend it was 10,000. So you can assume that that kind of awareness built from that campaign was very effective. So we want to be doing more stuff like that. I think PR, though for any business, is such an important channel to have, and if you're not already working on PR or have someone doing that for you, I would very much recommend looking into it and applying that as part of your marketing strategy. Especially right now, performance marketing is so costly. It's really important that you have other means to get out to broad audiences.

Ryan Martin: 32:34

Yeah, fantastic. We've never had anyone on that sort of has pushed PR as one of the more effective ways of marketing. So really interesting, and I know a lot of companies doing that well. I guess if you've never started PR, it's an interesting way to how do you start to get involved in that. But yeah, obviously you can get that message sort of syndicated out to a lot of great news articles quite quickly if you have the right message.

Charlie Ganzen: 32:57

That's it, yeah, and it's about being prepared as well. So by having either a team member that is working on that PR or outsourcing to an agency, which is equally fine as well and we do, we do both, actually you can be fast, reactive and effective and get your brand associated with different forms of news. And then also, too, it gives you the ability to really relate, I guess, your brand's messaging to either that news piece or, you know, just in general, to the wider audience. So very, very effective right now, and, I would say, more cost effective than a lot of other marketing channels.

Ryan Martin: 33:32

Yeah, interesting. So just on that, I guess, with Google and SEO, that's right. So more so, content marketing in general. Where does content marketing fit within your sort of spread of channels? Are you doing more content? Do you feel like content now is as important as it's ever been? I guess with PR as an extension of that? Is Google ads still playing a role? Is SEO working for you? What is it? What is the sort of the content side of things look like?

Charlie Ganzen: 33:59

Yeah, I'll quickly touch on Google side. So there's a number of changes going on with the algorithm at the moment that are impacting us from an SEO perspective and that sort of constraints around our industry and different search terms that relate to us.

Ryan Martin: 34:12

Really.

Charlie Ganzen: 34:12

Even from an organic.

Ryan Martin: 34:14

Yeah, yeah.

Charlie Ganzen: 34:16

Yeah, so, and we've seen more impact actually in our US market than in Australia. But the other part is, too, we do get heavily restricted on our ads as well with Google that we are working with Google on to try and get a better understanding how we can be more proactive in what we do market. The biggest problem is that when consumers click an ad and they land on a love honey website around the world, there can be imagery on there that Google doesn't seem, you know, fit for purpose or for their audience. So we have to sort of adjust our landing page experience to accommodate that when we are, you know, taking the click through to a particular page. So we have to work extremely hard to get Google to work for us as a business. And again, it still is costly, especially when looking at it from the performance marketing side, I think. Does that answer your question, or was there another aspect?

Ryan Martin: 35:12

No, and just on content content marketing. Are you sort of going? Are you investing heavily, I guess, given the issues with Google and Meta, producing your own content and then, you know, I guess, using PR but using other forms of mediums, influences and yeah, so we definitely use influences a lot.

Charlie Ganzen: 35:29

That would be one of our largest sort of content markets or channel sorry is yeah through our CDM, but we also have to be careful that it's very easy to be shadow banned on any of the platforms, and then it's also easy to be banned, so we have to be really careful. We can't, say, put the word sex on TikTok, so you know you'll often see people spell it as SEGG to get around it. So we always really careful. And the other thing, too, is, you know, sometimes influences can be also careful on their end with who they work with, because they don't want their accounts to then be subsequently banned and another. We've had that problem before, luckily, but it's just one of those things that we always have to consider. The great thing about content, though, is that we can help drive the conversation piece around sex, which is what Love Honey is all about, and so that is why we we do content as well to be a really useful platform for us.

Ryan Martin: 36:26

So you know we do content for you to be a part of our podcast. Have you gone down that path? Obviously you're appearing on this one, but you know, from a brand point of view, is podcasting and is that sort of an area of growth or or it's worked for you in the past?

Charlie Ganzen: 36:39

It's a new area that we're jumping into now. If we do another catch up in six months, I'd say there will be a number of podcasts that we as a brand have jumped on board. There will be a few podcasts already and we're looking to to dive more into that, particularly even in the male audience space. So you know, you've got SCN, you've got, you know, the ashes coming up, the World Cup with the women's FIFA World Cup. So we're looking at ways to tap into new audiences through podcasts. It's just all. It's all a matter of managing the CPM on that podcast Right now. You know, just got to be conscious of costs. Is it the most effective spend right now? Some would say yes, some would say no. It's a matter of how you judge it.

Ryan Martin: 37:21

You've got to run with the bulls, mate. You know you just back yourself in, which I'm sure you would. Yeah, do you mention CPM quite a bit. Is that how you justify? Or, apart from revenue, obviously, and profit, is that a real key indicator for you when you look at CPMs on a daily or weekly or monthly basis and go, yeah, where you know this is reason, this is you know, this is what we've got from it. We need to adapt and need to change.

Charlie Ganzen: 37:46

Yeah, before any typical above line activity is signed off, it needs to fall within sort of a CPM range that we expect depending on the channel. So TV, radio podcasts would be sort of the three key ones, and also now out of home activity that we're doing with billboards. So, yeah, we do typically use that metric before we sign off on the activity to ensure that we can get the best ROI on that investment. But then there will be things such as PR that we can't predict depends on how effective the story will be. But then we can use that to measure its effectiveness. Post PR event or activity activation.

Ryan Martin: 38:24

Yeah, brilliant, mate. One last question before I let you go. It's been a crystal ball thing. So you mentioned, if we catch up again in six months time, you'll probably have a few more things that you can announce and some sort of more content channels that you're going after. What's your future predictions for e-commerce and you know the next 12 to 24 months, and how do you think to win the game of e-commerce? You know those that are doing well, what do you think they're going to be doing?

Charlie Ganzen: 38:50

One of my hopes is that there is micro fulfillment services available across the country for retailers.

Charlie Ganzen: 38:57

You know, particularly retailers like our Love Honey, which has a distribution center only in Brisbane that we ship out of nationwide. I think that our micro fulfillment and speed to delivery is really important, so I'm keen to see a business pop up that is some type of Airbnb for warehousing model that allows retailers to store their stock around the country in Metro City, which is linked up to different, you know, same day or same hour delivery services like Uber and what they're doing now with Uber Direct and other ones as well, so which would enable retailers, small to big, to stock, you know, their top 20 to 50 products in any major city around the country with the same day or same hour delivery, which I think would be great, especially for a retailer like us who's not yet in a physical presence, or for consumers that don't want click and collect, who don't want to have to drive in to a store to go and collect their goods. They could literally Uber it to their home within an hour.

Ryan Martin: 39:55

Yeah, interesting. It's a great business model If someone can get it up. I think there's a few trying that, or if you sort of going down that path. I'm not sure where they're at in that journey, but yeah, that would be interesting.

Charlie Ganzen: 40:06

Yeah, I might have just given someone a unicorn idea.

Ryan Martin: 40:10

There you go, 100%. We'll have to take that off the off line and I see what we can do. So that that's sort of one area. And then, in terms of from an e-commerce and marketing point of view, by the sounds of it, you know you're probably aligned with a lot of some of the other guests I've had on that that your email is your sort of. You know your database is the most important thing to to be able to grow over this period where, as you say, performance marketing is very, very expensive or not as cost effective Anyways you can, to build that email. This would be probably, you know, a good strategy that anyone can implement.

Charlie Ganzen: 40:47

Yeah, that is really key, I think, is growing that effectively and looking to put towards some of your marketing budget towards, like, getting the sign up as opposed to the conversion. I think you know retailers want the conversion and it's very understandable, but you know it may only take that low barred entry you know sort of 30 seconds for them to sign up hopefully less and then a week later they place an order but at least you've got them, whereas you know the alternative is the edge bounce and they never come back. So I think doing that and then also to looking into your automation strategy and how effective you can be with the emails that you want to automate following that sign up so that you can get them to purchase, yeah, brilliant.

Ryan Martin: 41:28

What do you guys use Clavio or what do you use them? An email point of view.

Charlie Ganzen: 41:32

We are a Metria, which I think is a UK based tool, but we are about to change. But I don't think I can say who to just that.

Ryan Martin: 41:43

Do you want to edit that last bit out?

Charlie Ganzen: 41:45

No, no, no, no, that was fun. I think in a month I can tell you. Okay, yeah.

Ryan Martin: 41:50

I'll look forward to the exclusive. So thank you for sharing your insights and your thoughts. Obviously a fascinating industry, to say, one that has gone through immense growth over the COVID period and then probably come off a little bit. But yeah, hopefully things can settle down. It's a nice sustained period of success for you guys going forward.

Charlie Ganzen: 42:10

Yeah, yeah, that's exactly it, and I hope that there's been some information that I've shared today that will help a different retailers listening, and thank you so much for having me. It's a pleasure to be here you.