Michelle Lomas
Commission Factory.
Anthony Nappa
No worries. Thanks for having me.
Michelle Lomas
So for all the listeners out there, why don't you give a bit of an intro to yourself and a little intro to Oz Hair and Beauty?
Anthony Nappa
Yeah, so soon to be omni. You know, historically we've been mainly online retailer. We do have one shop, but you can't have one shop and call yourself an omnichannel retailer. So we've got three launching by June this year, which will take us to four. And yeah, if they go well, then it's on for young and old.
Michelle Lomas
So you've got one of those really unique stories, launched a business when you were fresh pup, 19 years old.
Michelle Lomas
Tell us what happened. How did it all get started?
Anthony Nappa
You know, the plan was, you know, do a business degree, work part-time, and just do it undergraduate, um, postgraduate work and build yourself up like that.
Anthony Nappa
I was working as a laborer and he went away to Italy to organise some family affairs, as he said.
Anthony Nappa
And so I had no work.
Anthony Nappa
So my dad had like a warehouse, you know, my parents are hairdressers,
Michelle Lomas
And quite successful, right?
Anthony Nappa
Yeah. Yeah. So for 30 years, 35 years now they've been in business. So back then they had, you know, four hairdressing salons.
Anthony Nappa
Where they'd, you know, they sold retail as well, but they did, you know, hairdressing services. And while I was at uni as, as like a part-time job or like a hobby, really, not a part-time job, a hobby, I'd sell their products at, you know, at the back of his warehouse, you know, I'd put it on eBay as they sold.
Michelle Lomas
So you're basically doing it all yourself. I love it as a hobby too. Seems like a pretty big job for a hobby.
Anthony Nappa
Yeah. My dad tried to go online. There was like a little crappy site on the side.
Michelle Lomas
And what year are we talking about?
Anthony Nappa
2012. February 1st.
Michelle Lomas
2012. Yeah. So e-com was definitely on the up.
Anthony Nappa
Nah. So that came five years later.
Anthony Nappa
Which changed everything for us. So they had a, you know, crappy site and, you know, not being a web guy at all, not knowing e-commerce at all, like I just naturally gravitated towards eBay.
Anthony Nappa
And just working that out and the titles that you've put free shipping, but put this price a little bit higher or maybe, you know, put the price cheaper, but charge shipping, just working that out and how to do different thumbnails because end of the day we're selling similar things to other people.
Anthony Nappa
The same product, but just find ways to differentiate yourself. So, we were doing that and you know, from doing it from full-time uni 10 months later, hired my first employee. Yeah. Who was a friend at uni with me couple days a week to help me, you know, pack some orders. Pretty much from there it started growing, you know.
Anthony Nappa
From there. Just, that's when it grew. It was at around the time, probably four years in, it was a good time because we started making a bit of a name of ourselves in the industry. Mm-hmm. And suppliers were getting, they were, they didn't wanna be on, cause these are premium brands, right, and like they don't really wanna be on eBay.
Michelle Lomas
That's huge for a startup. You're like, what? I've already paid employees and rent and now I've gotta pay this agency.
Anthony Nappa
Well, I was pretty naive cause I was paying eBay a lot more than three grand a month, right. But like three grand a month for, you know, SEO. What the hell's SEO?
Michelle Lomas
It's such a mental thing.
Anthony Nappa
You know, Google Adwords, I can do that myself. I'm doing that myself.
Michelle Lomas
Yeah. But then they start doing the work and you are like, oh wow, this is why you pay an agency.
Anthony Nappa
Hundred percent.
Michelle Lomas
And how's the business doing today?
Anthony Nappa
Yeah, the business is going good, um, 18 months ago we took some investment.
Michelle Lomas
I saw that. Congratulations.
Anthony Nappa
Yeah, it's from some good retail, traditional retail expertise to help us get into the omnichannel world. We actually moved into a bigger warehouse just before Covid, we were a bit nervous 1500 square metres. Previously we were 300 square metres, but we were bursting from the seams of that, and Covid happened and it was perfect. So that helped us.
Michelle Lomas
Yeah. Let's talk about Covid because you, it seems like you were doing great. And then Covid happened and you were doing really great where a lot of other businesses failed. Like how did you pivot during that time? I mean, obviously being an online retailer, you had an advantage over everybody else. But you know, what was that period like for you and, and how did you pivot?
Anthony Nappa
Little bit bittersweet because we took over the QVB store probably a couple months before.
Michelle Lomas
Huge store.
Anthony Nappa
Yeah. Look at the time actually was half the size, so we took it over and took over the shop next door, luckily, you know, their lease was expiring. They didn't want to renew. So we took that over, did a renovation, and then, you know, Covid happened.
Michelle Lomas
Well, you were prepared. I remember that period where most of the brands scrambled. We had a lot of clients who were like, we just don't know what to do. And the realisation that Sydney, at the time, Australia at the time was extremely slow to the e-com game. Overseas e-com is much more prevalent and important in people's everyday lives.
Anthony Nappa
It's a good point because when I tried to go, so going like retail and, and online retail, It's, you know, we call it Omni. But it really is different disciplines. We took over our parents store in the QVB. I ran that project with my brother and you know, it didn't really go well. Fast forward two years later when we did the renovation again and we hired ahead of retail who was from General Pants, Lovisa experience.
Michelle Lomas
It's, yeah, it's hard. Hard.
Anthony Nappa
It's hard. It's a different, it's hard. It's a different discipline, UX, conversion rate. You know, that was like a different language to me. So like going from retail to online retail hearing all these, you know, SEO for example, if you're a traditional retailer, you didn't know what SEO is.
Michelle Lomas
Or the, or the power of it.
Anthony Nappa
Yeah. You know what that's described so perfectly. Um, you know, bricks and mortar, the shop closes at 6pm.
Anthony Nappa
And then opens again at 9am, like online 24/7.
Anthony Nappa
UX, email, paid search, SEO, uh, affiliate marketing, so many different facets. Then there's the backend stuff. So you're right. Like you can never really sit down and really truly be satisfied.
Michelle Lomas
No, that's a 24/7 job. I bet when you're on holiday you're still like, change this headline or like-
Anthony Nappa
I've, I've learned, I've learned like, so the Shopify app, you know, it refreshes your sales.
Anthony Nappa
And I had a real, we laugh about it, but it was a real mental health thing. Like, and you know, my dad used to see me like keep checking it and it was like, a dopamine hit. Yeah. And my mood was based on how good the sales would be.
Michelle Lomas
You freak out.
Anthony Nappa
I'd go place an order on the website. Check if the cart was broken and that look, that it's a, it's a more, more a curse than a blessing. But there was times where, like where was an order and then our Google ads, our credit cards expired.
Anthony Nappa
So Google wasn't working. So there, there are good things from it. But overall mental health, like I deleted that app.
Michelle Lomas
There's probably every founder listening to this, nodding their head and going that they've done the same thing.
Anthony Nappa
When I hear another founder say that, I just wanna hug him, like, yes.
Michelle Lomas
We're in this together.
Anthony Nappa
We're in this together. Yeah.
Michelle Lomas
I did read in one of the articles that you had the website crash for a couple of weeks. Is that the most horrific story that's happened to you?
Anthony Nappa
Yeah, that was trying to change it. I tried to do some code and I Googled it and just like-
Michelle Lomas
Crashed the website
Anthony Nappa
Crashed then.
Michelle Lomas
Oh, how terrifying.
Anthony Nappa
Spent like, I don't know, like 2000 bucks to fix it. And back then, you know, that was, that was when I was starting too, yeah, that was probably all profit. So that's why like, you know what, let's do eBay,
Michelle Lomas
That's when it all started. That's when the decision to do it happened.
Michelle Lomas
The Flex Your Hustle Podcast is made possible by the team at Commission Factory. Commission factory's the largest performance and partner marketing network in Asia Pacific, pairing tens of thousands of meaningful and scalable partnerships. If you are listening to this show, you might be looking for ways to find and activate successful connections that drive revenue for your business? Well, Commission Factory works with everyone from e-commerce brands to influencers, big digital editorial titles and cashback communities, right through to the latest apps and software that help customers convert, and they aggregate all those partnerships in the one place.
Michelle Lomas
To drive success, because I'm really interested in your story, mainly because you are one of those founders that we have on the show that didn't come from marketing.
Anthony Nappa
One of the tactics I figured out was cause I used to manage, you know, the Facebook ads myself.
Michelle Lomas
How'd that go for you?
Anthony Nappa
At the start, obviously it was, wasn't the best. Yeah. But it actually worked out all right. And, you know, I, was it myself working it out, or was it, you know, talking to the heaps of people?
Michelle Lomas
I love the industry is so supportive of each other.
Anthony Nappa
Yeah. Yeah.
Michelle Lomas
If you're a founder, every other founder wants to help you. No, it's, there's none of this competitiveness that I think people would assume.
Anthony Nappa
No, a hundred percent. And it's good because you help, you get help. Mm. I feel like it comes in.
Michelle Lomas
That's right. You, you have to pay it forward.
Anthony Nappa
One thing I really wish I gravitated towards more. Cause now I'm really like, it's clicked to me and you are gonna say, oh, you know, a bit late. SEO-
Michelle Lomas
Takes time. Not that you are late to the party, but it takes time.
Anthony Nappa
It takes time.
Anthony Nappa
And now that I've realised the, the formula of what to do, like, oh, we are always doing it. So we never, not did it, but I just outsourced it and trusted. I never really delved into it and figured it out, but now I've figured out like how to make it work. And it's like now it's, that's one thing I'm really obsessed with.
Michelle Lomas
And you should be, it's, well, it's fundamental. Yeah. It's like every other channel. You, you have to do CPC, you have to buy into Google, et cetera. SEO is a must have. Yeah. And a consideration that has to continue to happen. And I've seen in so many clients make the mistake of not putting the emphasis on it because they're not putting the big dollars into it like they are with CPC, for instance.
Anthony Nappa
Depends what company you work for. Like even for us a bit, you know, getting a board and stuff. I started like getting into the shoes of like, you know, gotta hit numbers and now I've just pulled that back and said, we're not hitting sales numbers for the sake of it. Yeah, let's take cause that's very easy to hit like a sales number, drop your prize.
Michelle Lomas
Interesting.
Anthony Nappa
Don't worry about the number now let's, sorry about the number in the future. We've had a lot of SEO gains without management team being fully immersed in it.
Michelle Lomas
It's very brave of you, uh, as an online retailer to, to take, I guess to pull back on the gas pedal in terms of like low funnel. And to think about that top or mid funnel and how do we drive that, you know, lifetime value of a customer. Yeah, it's, it's something, especially in a market like we are today heading into a recession, you know, there's a bit of nervousness about what's gonna happen and are people gonna pull back their spending, et cetera.
Anthony Nappa
I, it's the benefit of not being a public company.
Anthony Nappa
They back us. I think you have to be always long term though, like, Even back then we were long term, right? But were we really, if we're just doing Google. But back then we probably thought Google was gonna be the way and wasn't gonna get-
Michelle Lomas
You can't rely on it anymore.
Anthony Nappa
You can't rely on it. No.
Michelle Lomas
I've heard so many, um, VC fund owners who talk about that one thing. We're looking for companies to invest in, that don't rely on paid media to drive their business forward and to scale their business. And so it's really the way that you've gotta be thinking about if you know you're heading into the future, how do I drive this business forward without having to rely on paid media?
Anthony Nappa
Yeah, it's a bit of a drug though, starting to wean off it.
Michelle Lomas
Wean off it. It literally is like a drug.
Anthony Nappa
It is. It's wean off. Like we're feeling a bit of withdrawal for now.
Michelle Lomas
Nervousness. Um, yeah. Anxiety.
Anthony Nappa
Yeah. Like I've just trained my brain not to get dopamine from sales. Right. Like, you know, and profit takes a couple weeks before you get, see what the profit is, so.
Michelle Lomas
Hundred percent.
Anthony Nappa
It's a traffic driver.
Michelle Lomas
Yep. Once you're in there, you can't, it's very hard, like you said, to pull it back.
Anthony Nappa
Yeah, yeah. So you don't wanna have two big traffic driver costs. Look, I've spoken to a lot of people in industries and I'm definitely the only one doing this. I think a lot of people are, you know, weaning off that paid media drug.
Michelle Lomas
Yeah. We spoke to another online retailer last year, Elliot Midalia from Boody, and same thing, they had just really focused on lower funnel for so long and they did their first brand campaign last year and they went hard.
Michelle Lomas
You know, they got, uh, Jane Goodall as the face who's huge and you know, really went hard on a big marketing campaign and that really paid off for them.
Anthony Nappa
Yeah, I agree. And cause we are a multi-brand retailer, it's never gonna be people type Keratase. We wanna make sure we're up there. So we'll always have a component to paid media and that'll always be there.
Michelle Lomas
I want Moroccan oil and not-
Michelle Lomas
Yeah, exactly. Yeah.
Anthony Nappa
The stores are gonna help that for us because stores are a great way for branding. Um, you know, a lot of our competitors who won't name them, but we know we're bigger than them online.
Michelle Lomas
Subliminally sticks in your head.
Anthony Nappa
Exactly. Yeah.
Michelle Lomas
So one area that we haven't talked about is affiliate marketing.
Michelle Lomas
Um, tell me a little bit about what you're doing, uh, in that space and how it's working for you.
Anthony Nappa
Yeah, it was really good. Um, so one of those things about, you know, when it works, double down on it.
Anthony Nappa
This is something, you know, one of those things as well. Ah, didn't wish I realized this. You know, two years ago.
Michelle Lomas
You told me this story about how you did your first, um, influencer campaign, how much did you pay for it?
Anthony Nappa
Okay. So, yeah.
Michelle Lomas
Alright, here we go.
Anthony Nappa
Yeah. This is one thing. Yeah. This didn't work. Right. So seven years ago, but probably was seven years ago.
Anthony Nappa
Cost about seven grand. I won't name the influencer, but it was one that would've more male followers than...
Michelle Lomas
Maybe some fake followers.
Anthony Nappa
Fake followers, male followers than female followers.
Anthony Nappa
You know, we gave her some free products and it was some Mother's Day campaign. Mm-hmm. I was bitter off getting seven grand in front and off a balcony. Cause at least some of that. Seven grand hopefully would've just flown back in from the wind. You know, I would've got some money back.
Anthony Nappa
Seeing between heaps of other ads.
Anthony Nappa
Wrong audience, no testing.
Anthony Nappa
So that didn't work.
Michelle Lomas
Terrible. I think some of the influencers that they still do to this day, but like they just take a photo holding a product and go, I love this product and it's like, if I scroll a week ago, you were using a different shampoo and you said exactly the same thing.
Anthony Nappa
So some controversy of Kim Kardashian, something that was meat and she's vegan, I think.
Michelle Lomas
Ah, yes. I think that was a, I mean, there's so many classic cases of that. Yeah. I think the Khloe Kardashian one where she had a cupboard full of cleaning products and I was like, girl, there's no way you clean your house.
Anthony Nappa
No, a hundred percent, no way. That's so well that's an example of like, going on lower funnel, not top of funnel in terms of like you're just focused on the sale straightaway. Not on the long term, but I guess when they're that big they'll always get stuff.
Michelle Lomas
Awareness. It get drives awareness, but so basically it didn't work for you?
Anthony Nappa
Didn't work for me, no.
Michelle Lomas
So what'd you do because it's working now.
Anthony Nappa
Look, it's hard to measure, you know, our brand, look, our brand has grown. So we've moved from 28 to 44% of brand awareness, which is pretty good. On top of influencers though, we've done heaps of other stuff.
Anthony Nappa
It's hard to know if it's worked heaps, but it's something that we're still doing.
Michelle Lomas
Chinese water torture. We'll just call it something more positive like, positive impact of influence or something?
Anthony Nappa
Yeah. Positive. Yeah, positive impact of, yeah. Okay. I'll call it that.
Michelle Lomas
Um, and so yeah, affiliate obviously is, is so much more than influencer marketing and I think most people kind of gravitate to influencer marketing first. So what else are you doing in that space?
Anthony Nappa
We've partnered up with Commission Factory and they got ShopBack, cashrewards, they manage that for us because great.
Michelle Lomas
You just keep putting it in.
Anthony Nappa
Keep, keep putting it in. Yeah. And it's working. And now we're, what we're doing now is we're trying to really, instead of doing like an overall approach, which is per brand, we're segmenting certain offers per brand. Certain brands provide more margin, so.
Michelle Lomas
Excellent.
Michelle Lomas
That's really good. Yeah. Um, as a retailer, that's really interesting that you are able to segment that and so gonna continue on in that aspect, obviously working well for you.
Anthony Nappa
Yeah. Yeah. That's, that's one thing we're doing. Yeah. We're not, we're not, that works well, you know, obviously some are better than others.
Anthony Nappa
It is still a form of paid marketing.
Michelle Lomas
Interesting. Some others would argue that it's, uh, cost of goods sold.
Anthony Nappa
Cost of, okay. Yeah, that's a good point. Because you only pay and once you've sold, sold the product.
Michelle Lomas
Yeah. Um, it's definitely a channel I would say that needs to be activated.
Anthony Nappa
Yeah, yeah.
Michelle Lomas
Definitely with the marketing lens. But
Anthony Nappa
Yeah, that's, that's actually, I've never looked at it like that. Yeah, it could be put, but you know, we're trying to improve our margin here on the book, so we're not gonna put it under that, under that thing.
Michelle Lomas
Yeah, there you go. Have a think about the, you know, how you balance those books tomorrow. So let's talk about kind of that shift that you are now taking towards more of that long-term strategy in the brand.
Anthony Nappa
I read a great book, How Brands Grow.
Michelle Lomas
We'll leave a link to it in the show notes.
Anthony Nappa
I wish I read it. Oh, I wish I read it, two, three, you know, like SEO thing. I said like, I wish I'd read it two, three years ago.
Anthony Nappa
Because what the science says in this book, cause he doesn't have any opinion, he just presents the science.
Anthony Nappa
The best way to grow retention is to grow your market share. You look at all the companies in all different industries, the higher the brand market penetration, the higher their repeat purchase rate is.
Michelle Lomas
And table stakes now though, are loyalty program. Don't you think?
Anthony Nappa
It rewards your loyal customers anyway.
Michelle Lomas
Yeah, but you have to.
Anthony Nappa
I've looked at all, all competitors, um, not just competitors, but like, you know, public companies that you have access to and chats and you know, I've got a great standing CMO.
Michelle Lomas
Well, average basket size and things like that is always a good thing. Yeah. If you are, if you're moving the needle even at a small percentage.
Anthony Nappa
Well, for us, and from the data that I've looked at, it doesn't really convert the one buyer or the two buyers.
Michelle Lomas
Increase with the footfall. Right?
Anthony Nappa
Increase with the footfall. Yep. Yeah. Also, omnichannel retailers, people with bricks and mortars have, you know that people that shop on both are more loyal data says so we're gonna try and do that look by end of this year, we only have four, so it's not like anything massive.
Michelle Lomas
You're starting off in some big centers with some big foot traffic.
Anthony Nappa
Yeah. So yeah, we want to really increase our brand and you know, we've got a purple color. A lot of competitors are all black and white. Mm-hmm. We wanna own this purple colour. We want people to think subconsciously like Priceline.
Michelle Lomas
Priceline's pink.
Anthony Nappa
And we wanna own purple. Yeah. And like we're already strict. We own the store. Like we wanna make sure that colour purple is the same color on our website. So QVB, didn't we stuff that up?
Michelle Lomas
Time, time for a reno.
Anthony Nappa
But we're being strict on that. Yeah. That colour purple and yeah, we wanna really own that, that colour and just, you know, we're all still in the same stuff, but let's try and sell it in a different language.
Anthony Nappa
Different branding.
Anthony Nappa
And trying to do it in a different way.
Michelle Lomas
Smart. And I think the, the way that you're sort of heading into the strategy very slowly-
Michelle Lomas
Is also smart because there is kind of this shift from a consumer perspective. Covid definitely changed the way that we are purchasing products.
Michelle Lomas
Um, and maybe some of the products which hair care for, some people might sit in that category of, it's a, it's, it's a kind of like a lower investment purchase, right? I'm, unless I'm switching hair brands, I'm usually loyal to one brand. I've had the same shampoo for 10 years and maybe switch it up every now and then, but I know what I want.
Michelle Lomas
And so, you know, that online retail aspect is just way easier for me as a consumer. You stepping into brick and mortar when a lot of brick and mortar is stepping away from it, heading more online. It's just a really interesting space in flux, and so I think that strategy to go slow but hit some pretty big centers while you're doing it, be very selective, um, in some pretty interesting, um, and high spend markets and see how it goes is like the smart approach.
Anthony Nappa
Yeah, no, I, I agree. And, you know, we're testing these four, if these four work and quite nerve-wracking. But if it does work, which not, you know, pretty confident it will. But if it, if it, once we get a, an idea of a couple months that it works, then it's on for young and old.
Michelle Lomas
You guys seem to be pretty chill about, um, if things don't go right from what I hear.
Anthony Nappa
Yeah, we like, we got great team, great brand. There's no real reason why it won't. It won't work.
Michelle Lomas
Well then it will.
Anthony Nappa
Yeah, it will. Yeah.
Michelle Lomas
It's gonna work. It's gonna be amazing.
Anthony Nappa
Let's next year, yeah, we'll talk about this year.
Michelle Lomas
We'll be here next year talking about the other 40 stores that you're launching next year.
Anthony Nappa
Fingers crossed. Yeah.
Michelle Lomas
Alright, well I've got one last question for you. What do you think is gonna happen in the future when it comes to retail?
Anthony Nappa
Obviously 2023 is gonna be a bit tough for, um, online, but I think it's just, you know, just a bit of a bit of a valley.
Michelle Lomas
A valley's a pretty big dip.
Anthony Nappa
Valley's a dip. So it's a bit of a valley. Yeah.
Michelle Lomas
Or maybe a plateau. I'd like to say plateau. I think we've been on a pretty big steep growth curve. Right. And so maybe we're just gonna chill out a little bit for a little while.
Anthony Nappa
A hundred percent. So like you said, we always look long term.
Michelle Lomas
So true. A little bit of a burning question, you know, Amazon picking up speed in this market. Prime Next Day Delivery, you think you'll head back into, uh, working with, uh, another online retailer?
Anthony Nappa
Um, we do in New Zealand.
Anthony Nappa
You're trying to build that market up. I can't never say never. Mm. But definitely on the next two, three years.
Michelle Lomas
Maybe we'll be sitting here next year and you're like, yeah, we're getting into it.
Anthony Nappa
Well, I'm sure there's big American multi channel, multi-brand retailers doing that, so we'll see. Yeah.
Michelle Lomas
Anthony, thank you so much for joining the podcast. Really great story. Very excited for the future of Oz Hair and Beauty. We're gonna have all of the details in the show notes of the books that you mentioned, and also you know, when the stores are launching and where to go and visit them. Thank you again.
Anthony Nappa
No worries. Thank you so much. It's been great.
Michelle Lomas
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