For over 35 years, the Caval family have been part of the bulky white and brown goods electrical industry, an industry that was cluttered with so many players that there were mass closures between 2011 and 2013. Household names such as Clive Peeters, Retravision and Warehouse Sales all closed down.
In 2012, as a Retravision franchise we were finding it difficult to differentiate from the big players, our margins were eroding, sales were down, times were tough.
We knew the Retravision retail formula was not sustainable. We had to do something different to differentiate, something to increase margins, something to survive.
My brother George Caval and Robert Soek had been friends for years. Robert was the original Stan Cash, a brand that 25 years ago had 20 electrical retail outlets across Melbourne.
It was synonymous with value for money, quality product, and a large variety of home electrical, homewares and bedding. It was exactly what we needed; we could continue in our core competency, home electrical, while expanding our offering with a brand that still resonated with customers, well in Melbourne anyway.
In early 2012, we started planning the new business, we thought it would be easy, find a location, fill it up with a variety of goods, put the Stan Cash name on the sign, build a website, do a bit of advertising and the customers would come running, so we thought.
Retravision collapsed in May 2012, which expedited the Stan Cash launch, by September we had a new store established. The store was set up beautifully, our product mix included home electrical, bedding and homewares, we were very different from the other players.
We had a unique brand that was fun, colourful and playful. Our store felt relaxed but professional, our merchandising was neat but untidy, all we needed now was customers.
We located ourselves somewhere where we had a very large space and the rent was reasonable, this meant though that we would become a destination store as we were not located in a retail thoroughfare. We started advertising through local paper and letter box drops, we set up a Facebook page and started development on our website.
When things don’t turn out as hoped…
However, the phones were terribly quiet, customers slowly came trickling in, a far cry from the stampede we thought we’d get just by placing the Stan Cash name on the door.
Fast forward to May 2013 we were ready for our official launch, balloons, massive catalogue drop, text messages, a publicist, we even scored Daryl Braithwaite. Robert dressed as Stan and rode a horse through the store.
For those customers who came they loved it, we had the formula right, product, price, and entertainment, we achieved our goal, sold product, re-introduced the brand and generated new customers.
What we couldn’t stop asking ourselves though was, “Why aren’t there more customers today?” We expected more, we had been working so hard. We were hit with a certain reality, this was going to be hard work.
In October we finally launched the Stan Cash website, this enabled us to generate another income and increase our brand awareness online. We could market economically to the local area, greater Melbourne and Australia.
Now in 2015 we continue to work hard, we ensure our store always has a good variety of product but never moves too far away from its core competency of home electrical.
Our marketing initiatives continue to be unique and stand out, you’ll never mistake us for a competitor. We have opened a clearance store and now dispatch out of Sydney and Brisbane with a team of 30, we look forward to further growth.
Here are five key lessons we have learned about surviving in business on our journey.
1. Going online is not a license to print money
A myth out there is that having an online business means your overheads are low, margins are high and you’ll make a fortune.
The truth is marketing online is considerably difficult for those (like me) who are not technically savvy. I’m a good retailer, not necessarily a good online retailer.
Set up a website that functions, you can add lots of bells and whistles later as time goes on. Once it’s up, iron out the bugs, continue to improve your site and also combine your store and online database.
Do something small that the customer was not expecting with their order. For example, at Christmas we include a Christmas lollypop.
2. Stand out and build a brand with a difference
Everything we do is reflective of a brand that wants to be different. We offer lots of identical product so it is imperative that we differentiate ourselves from the major players.
Our store is not neat and proper, we’re a bit untidy with character. Our catalogues are colourful and western styled, we have a kids corner, we give all our customers fridge magnets, our staff wear western shirts and we have “Bucking Bargains”.
We also do promotions like “Guess the magnets on the car” to create interest.
3. What goes up comes down but stay positive
After the excitement of setting up the business passes and the reality hits, you will sit and down and think to yourself, “Now I have to make this work.”
Some days you are on top of the world having huge successes with either a sale, a new customer, a great product buy or whatever else.
Other days you wonder if you’ll ever make it, you’ll doubt your ability, you’ll think about going back to working for someone else.
I have found that these are all natural and talking to people in business who understand what’s going on in your head will help you stay on the right path and keep you motivated
4. Always build your database and market to them
Out of sight, out of mind. It costs a lot of money to gain a new customer, so when a customer shops with you, make it a point to always capture their information, especially email, so that you can continue to contact them after the sale.
Contact your customers regularly (not too regularly) of any promotions, offers, new arrivals, specials and events. Especially in the beginning you may not get a great response to your communication however it keeps your brand front of mind with your customers.
Continue to post on Facebook and encourage likes through locally targeted competitions.
5. Anyone can set up a business, can you run one?
As strange as it may sound anyone can probably set up a business but not everyone can run one.
In the beginning you’ll have a set of tasks that need to be completed: the lease, power, telephone, EFTPOS machine, merchant facility, ABN, ACN, bank account, register, accounting software, accountant, lawyer, signage, business registration, URL, business name, trademarks, patents, printer, computer and POS just to name a few.
After all that is done, here’s the hard part, making it work.
Before you set up your business think about and plan out what you’ll do to promote and market your business after that.
We now have a marketing day at the end of each year to establish our marketing events for the following year. We continue to work on the Stan Cash brand ensuring that it’s core values of good service, good prices and good product can all be part of good fun.
Enjoy yourself and ensure your team enjoys themselves in turn your customers should sense this and enjoy themselves.
As an entrepreneur you’ll always want to do more, look at ways to improve and build your business, you’ll never be fully content with where the business is at but every now and then you need to step back, look at what you’ve achieved and pat yourself on the back and then get back to work.
Mark Caval is the owner of Stan Cash