By Kendall Fisher(opens in new tab), executive producer
Retail brands are focusing ever more on e-commerce(opens in new tab) amid mandated store closures, which begs the question: In an industry whose consumers already are overwhelmed with options, how does one brand stand out from the rest?
Imran Khan, CEO and co-founder of Verishop(opens in new tab), says he’s leading with the same strategy upon which the company was built: fulfill the promise to the customer.
As it stands, Verishop, whose site helps customers discover new clothing, home goods, beauty, children’s goods and other brands, has the fastest shipping(opens in new tab) in the marketplace, offering customers free one-day shipping. The company also provides 24/7 customer service.
While Verishop has cut back significantly on its marketing, Khan says he’s reallocating those resources to joining the conversation around coronavirus. Verishop launched, based on customer feedback, the “Work From Home Shop(opens in new tab),” a one-stop shop for everything from sweat sets and socks to diffusers and headphones.
“We’re fortunate enough to be an online business, and we have a one-to-one relationship with our customers. We know who our customers are,” Khan explains. “More than ever, we need to be in a conversation.”
Watch the video above to hear why this kind of customer conversation is crucial to Verishop’s success.
Here’s the full transcript of our conversation with Khan:
Kendall Fisher: Hi Imran. Thank you so much for joining us today. You are the CEO of Verishop, and for our audience who might not know, can you explain what is Verishop? What do you guys do?
Imran Khan: Yes. First of all, thank you for having me, and my heart goes out to everyone who has been impacted by this terrible virus. So what Verishop is: Verishop is your brand and product discovery platform. We are a virtual shopping mall that we are building where you can go find all your favorite brands and discover new cool brands. And what our team has done, they went all over the world and all across the country and found a lot of new exciting brands in fashion or beauty categories as well as the brands that you know.
Kendall Fisher: Wow. So you are based basically all online?
Imran Khan: All online.
Kendall Fisher: Interesting. I'm interested to know how the current state of the world has impacted Verishop then. What have you seen, what are your consumers doing and how have you dealt with that?
Imran Khan: I think we have been lucky because our business is 100% online(opens in new tab), so it has not been impacted by physical store closures. But we saw some really interesting changes in consumer behavior. For example, if you look at our business, our home category is up 158% on a month-over-month basis. If you look at our beauty and wellness category, it’s up 107% month over month. At the same time we saw fashion, like men and women fashion, is down 16% and 17% respectively. So we're seeing how consumers’ spend has been changing. People are spending more time at home, so they're buying cookware. For example, cookware is up 180% month over month. We're also seeing that traffic from metro cities has been down, but in the suburbs has been up significantly.
Kendall Fisher: Interesting. It makes sense. Like you said, people are home cooking now more than ever before and I can understand why fashion might be taking a back seat. What about any of your loungewear, luxury pajama brands that you work with? Is that seeing an uptake at all?
Imran Khan: Yes. Loungewear, like we have this exciting brand store, Lett(opens in new tab). The founder of the Lett brand actually came from reformation. She has done a really good job building this brand and we have seen very strong growth from Lett on our side. We're also seeing a strong growth in other loungewear products also. So yes, we are seeing that. But I think those clothes were offset by other fashion categories in the marketplace.
Kendall Fisher: Yeah. Speaking of some of these brands that you work with, have any of them been extremely impacted by what's going on and if so, how have you dealt with that?
Imran Khan: Yeah, those brands have been impacted, and we have been trying to work with these brands as closely as possible. We are a small business. We have been live only for nine months. So with our limited resources, we've been trying to help as much as we can. My wife and I co-founded the company, and we personally have been also trying to help. Like we just announced this morning, we've donated $100,000 to LA Food Bank(opens in new tab) to support people who have been furloughed or laid off, to those families. So we've been trying to do more personally and for our company and to work with our brands as much as we can.
Verishop, an e-commerce site, is giving back amid COVID-19. (credit: Verishop)
Kendall Fisher: That's incredible. Thank you guys for doing that. It’s extremely good to hear when we get to work with customers and brands like Verishop that are doing their part to give back. That brings me to how you are managing cash flow. How are you maintaining business and making sure that things are running as smoothly as possible right now, given the circumstances?
Imran Khan: Yeah, I think during times like this, and this is the third recession I have been through in my life, and one thing I learned during these recessions: you have to pay highest attention to cash flow(opens in new tab). In any business, cash flow matters. Ultimately, that's the single most important thing you have to care about. It's not revenue, it's not profit, it's cash flow. But during this time you have to pay even more attention. For example, we have this daily meeting. Every day I have meetings with my finance team to look at the cash flow. So we look at the cash flow very, very closely trying to really invest in areas that will drive 10X value creation. And for things that are just nice to have, we’re not really spending money on those things. That's what we're really focused on.
Kendall Fisher: What areas are you cutting down in?
Imran Khan: Look, I think one of the most interesting things is that we cut a lot of spending on travel, for example. People don't need to travel. So we've cut a lot of budget on T&E. In Santa Monica, parking is very, very expensive. We were able to save money on the parking side. The other area is we have to push up some of our investment in the future, we have to look at all the investments that we're going to make this year. We came up with a ranking system. We ranked them P0, which has to be done. And then P1, P2, P3, P4. We really manage the business that way and really focus on what is P0 and P1 right now for us? Priority zero and priority one right now and just getting those things done.
Kendall Fisher: That bodes the next question being: Where are you investing more of your time, money, resources into right now? Like you had said earlier, you're focusing on certain areas where you know you could grow 10X. What are those areas?
Imran Khan: Yeah. I think I would point that in three buckets. The first one is technology. My background is technology, which I've been doing for the last 19 years, and we're investing in technology. I think if you look at an e-commerce platform(opens in new tab), what's missing is discovery. Amazon is effectively a search engine. You can know exactly what you want, and you go search for that. But what is really important when you are trying to look at categories like fashion, home, beauty, electronics, you want to discover new products, and there are so many amazing brands that are not building this incredible product. The discovery needs to happen. So we have done one, and we got a lot of these discovery brands on our platform. 30% of our revenue is now coming from discovery brands. But what we want to do, we want to bring more discovery brands but to support these discovery brands, we need to build this discovery engine in our platform.
How do you disconnect? The way you discover great content on Instagram, the way you discover content on Pinterest? We need that in commerce. We are investing in that. We hired some great engineers so we continue to invest in our engineering team, and that's some of the innovative initiatives you will see later this year. The second big area that we really focused on: How can we expand our selections. We now have around 500 brands on our site. We want to increase this lumber by 60% in the next six months. So our team is really, really focused on expanding selection so that you can find a lot of new kinds of products on our platform. So we're really, really investing in that.
Then, the third area that we are really, really investing in is: We're finding a lot of small brands, they don't have the skillset of doing logistics, doing infrastructure services that they need to support their growing business. So we want to bring those kinds of services to the merchants, to the brands so that they can leverage our infrastructure to grow their business in addition to driving additional demand. So we are investing in that. We're launching a service called Fulfillment by Verishop where if you're a small business and you are building a great fashion product or a great home product or a great beauty product, we will do your fulfillment and logistics for your website.
Kendall Fisher: This all sounds amazing obviously, but is any of this being impacted right now or are you finding participation from these small businesses in these various brands? Are you going to be able to grow your brand base by that extreme amount with everything going on right now?
Imran Khan: I think in this difficult time brands need more help, and I think we want to be there. I think we want to build a business that we want to be there for consumers, and we want to be there for our merchants. For consumers, we guarantee the best price. If you buy today and in 30 days you find a cheaper product, just give us an email or text or call, whatever is easier. For 30 days, we'll guarantee you the best price in addition to the quality of the product and the discovery, all those things. And the same thing for the brands. We want to help the brands to grow. That doesn't only mean driving more revenue for them, but also helping them do their job. How can we help them do the logistics? By doing so, they can do a better job of building better products, which we can bring to our customers.
Kendall Fisher: So you haven't seen any of those brands pull out thus far? They're utilizing you as this is what's helping them get at least a little bit of traction, get a little bit of success right now?
Imran Khan: We have not seen pull back from the brand site, but obviously we saw pull back from consumers on the fashion side. Yes, I've seen impacts like that. But I think the consumers are rightfully so focused on areas that matter the most, like wellness and beauty and cooking and things like that. And we are trying to make sure that we have those breadth of services for them. I'll give you a perfect example: We just went live with the direct-to-consumer brand, a very small brand called Year and Day(opens in new tab). If you're on Instagram you will see that, it's an Instagram brand. They've done a really good job. They have a really good product. We just brought them live, and we're seeing strong growth. So I appreciate everybody checking it out. There's great, great home cookware and tabletop products.
Kendall Fisher: Well, that's good to hear. In terms of the supply chain side, are you seeing any delays? Are you still able to get these products into consumers' hands as quickly as possible or have you had to do any type of external communication to be like, “Hey, we'll get this to you, things might be slowed down in X, Y and Z,” or are you just moving smoothly?
Imran Khan: So far, we have been incredibly lucky, and so we have been keeping our shipping promise. One of the things we have been very focused on with Verishop is free, one-day shipping. We now have the fastest free shipping in the marketplace. So far we have been incredibly lucky to do so. This is a fluid environment. It can change anytime. We are keeping a very close eye on it, but for us it's safety first. So everybody is doing social distancing, and we are working with our warehouse partners to have better safety processes built into the system(opens in new tab) and monitoring everybody's health, encouraging people if they're not feeling well, to work from home, all those kinds of things. But so far we've been lucky. Our partners have been really working hard. Everybody's working really hard because we want consumers to get the product they need primarily when they cannot get out of the home. We want to make their life easy, and that is what we are really focused on.
Verishop's fashions come with a one-day shipping guarantee. (credit: Verishop)
Kendall Fisher: Yeah, definitely. In terms of external and internal communication, how are you handling it? Let's start with internal, with the employees that you have working remote or working in these warehouses. How are you managing communication around everything that's going on right now?
Imran Khan: Yes, that's a great question. And this is something I think a lot about as a CEO because communication is a challenge in a regular business environment. One of the biggest challenges that I've seen in my professional life, that in a company teams don't talk to each other. There's a lot of investment that goes through how can you get your team engaged? In an environment like this, it’s been even more challenging. And it's an even bigger challenge for companies like us, which are just smaller companies and with a shorter history. We've been in the business for a year or so. So one of the things we have been doing is really bringing this virtual town hall on a regular basis. Every Friday we have a virtual town hall where everybody dials in from everywhere and we talk about what we are seeing. We also have more regular conversation through Slack channels. Every group is having regular meetings.
One of the things that I urge to my team is to over-communicate. In a time like this, over communication will not hurt you(opens in new tab). So that keeps encouraging them. And then on a regular basis, I'm checking in on them. One of my colleagues, his family is from Brazil. I checked in on him yesterday and just had a normal, social conversation. We didn't have to talk about business. We talked for 15 minutes about life, and I think that's important to bring people together because those water cooler moments are missing now.
Kendall Fisher: Yeah, that is so true. Especially right now where people are feeling obviously more distance than ever and more alone than ever. Having these types of one-on-one conversations that are outside of work make a world of difference. Have you had to do any layoffs or furloughs due to this?
Imran Khan: We unfortunately had to make a small adjustment. It's a difficult time, but we had to make a small adjustment(opens in new tab). I think that my biggest concern was making sure that we take care of everybody's health. So obviously we extended health care as long as we could.
Kendall Fisher: How did you go about having those communications? Was it super personal? Did you have to do this virtually, and any advice you would give to any other business leader who's having to go through something similar?
Imran Khan: I think you have to do this conversation one at a time because these are very personal conversations and have to be one-on-one conversations. That's what we tried to do.
Kendall Fisher: Yeah. Great insight there. As far as external communication, how are you going about marketing right now? Are you marketing, are you still taking advantage of advertising across social media? I know you touched a little bit on some of the Facebook and Instagram stuff earlier, but have you slowed that down with, or are you still going about business as usual? And if so, how have you had to change your advertising to fit the state of the world right now?
Imran Khan: We slowed down our advertising. Our advertising budget is down month over month and it's down significantly from January. I think what we're really trying to do is be part of the conversation. I think this is the time that we want to be on the side of our customers and our partners. So what we're trying to do is be part of the conversation. For example, this morning we published a blog to talk about what we're seeing in our business, things like that. So we're going to regularly publish those kinds of blogs to talk about what we're seeing in our business, what we're seeing in the world. We recently did a poll on Instagram asking people if they are productive working from home.
Verishop's relatable brand image includes blog posts aimed at customers. (credit: Verishop)
Imran Khan: We got great insight. We found 65% of the people said they are productive from home(opens in new tab). And then if you double click on this data, you'll find that based on the sector you are in, some people are more productive and some category sectors are not productive at all. So what we're trying to do, one of the things that we're very, very fortunate about, we're an online business, and we have an online one-to-one relationship with our customers. We know who our customers are. We're really trying to understand insights from them, their life, their psyche, their spending behavior, what are the kinds of things that excite them and share those things and be part of this global conversation. I think more than ever we need to be in a conversation because, yes, we are maintaining social distance. The worst thing we can do is not communicate with each other. So we want to be part of this conversation, these global communications.
Kendall Fisher: Yeah, definitely. So when you're doing these blogs or these Instagram polls or what have you, you're more being part of the conversation, in general. Working from home stuff, small business advice, stuff like that. Rather than saying, “Hey, we have cookware that you can use when you're working from home,” or, “We have this loungewear set that you can use when you're working from home.” Instead you're focused on what everybody's talking about, rather than selling the product?
Imran Khan: Yeah. Look, we do have some advertising. I don’t want to say that we have stopped all advertising, but I think it's more important that it's all about communication. I think everybody is isolated, and when you're isolated, I'm a very social person. I like talking to people. I like going to social places. So I think it's important that we are more involved in these global conversations, be part of the conversation, keep content that's engaging to our customers and our partners.
Kendall Fisher: Yeah. Where do you see, with all of this, where do you see ecommerce headed following how the world has changed right now? And how do you remain unique? How do you stand out among the others? How does Verishop become the place that everybody goes to shop rather than some of these other big brands that are doing some similar things?
Imran Khan: Yeah. So I'll take the second question. I think the first thing is our promise to our customers--which incldes four things: Number one, we will help them discover new brands and new products. I think we all want to look individual and feel different than others primarily in the world of social media. And we are a place where you can discover new brands and new products, where you can express your individuality. So that's, as I said, 35% of our revenue coming from the brands and products that you never heard of. We have brands from all over the world, all over the country. That's number one.
Imran Khan: Second, we want to get the product at the most convenience, so we have the fastest free shipping, free one-day shipping, free returns, and 24/7 customer support(opens in new tab). We actually publish our customer support numbers on our homepage on top of the page. I don't think any companies do that. The third is, I think, the internet. one of the biggest problems with the internet is that over the last 20 years, the internet is losing trust. There's a lot of fake news on social media. There are a lot of fake products in big, big ecommerce companies, and you often get a lot of products primarily when you buy products that request some standard. Everything we buy, we source from the brands directly so there's a quality. The other thing is we really, really stand for the quality that people care about: the wellness, the clean beauty product. We have a sustainable store inside our stores. Things like that.
Then the fourth is you should never pay more money for quality and convenience and discovery. So we always guarantee the best price. I think that's how we're trying to differentiate. In terms of ecommerce, look, I think even before this crisis, ecommerce was only 11% of overall consumer spending. I think that number one, it’s going to be 50% in the next decade or so. I'm a big believer of ecommerce. I think that will continue to grow(opens in new tab). I think people will realize that shopping is so easy, and primarily if returning is easy, why not just do it at your convenience? So I'm a big believer of ecommerce and I think it will continue to grow regardless of this virus or not.
Kendall Fisher: I love that insight. Thank you. To round things out here, almost everyone has a business continuity plan. Almost none of them will be sufficient for something like this. What part of disaster preparedness plans are actually helpful here, and did you have some plans in place? You said you've been through three recessions thus far, so did you have a plan in place for something at least similar to this or has this been out of left field?
Imran Khan: It is completely out of left field. I think every recession that I went through, they were very different. This is completely different. I have not seen a pandemic(opens in new tab) in my lifetime at this scale, at least I can think of. So I don't think anybody has seen something like that. This came completely out of left field. But look, we're learning. I think one of the greatest things about Americans and the greatest thing about human beings is that we're very resilient, and we learn from our mistakes. We learn from our experience, and we're learning, and we're adopting.
Kendall Fisher: So will you do anything different moving forward having gone through something like this now?
Imran Khan: No. I think one thing that I always said is that you always have to have a strong balance sheet, and I want to continue to stay focused on it because things like that will come from out of left field, and we just need to make sure we have a strong balance sheet. And then I think, more than ever, we need to be focused on customers, customers, customers, customers. How can we make sure we make your life easy? How can we help you find better products? How can we help you discover new products that we need to be focused on? I think we have a lot of work to do. As we said, we only have 500 brands. I want to be in a world where we have 50,000 brands and make it easier for you to discover brands rather than searching for it. So we have a lot of work to do and just going to stay focused on it.
Kendall Fisher: Well, thank you so much for joining us on this call today, and we look forward to everything that Verishop has to offer in the future. Stay safe, and stay healthy.
Imran Khan: Thank you. You too. Social distancing.