Boom times for digital commerce

In just two years Auckland-based digital commerce agency Overdose.Digital has gone from ‘go’ to revenues of $8 million. Proof that when you harness multiple teams of smart people, it’s likely you’ll produce spectacular results.

Business entrepreneurs have been known to harbour over-optimistic growth predictions. But when you hear the grand plans of Overdose.Digital’s co-founders – Group CEO Todd Welling and creative director Ryan Delaney – you just sense they’re right on the money.

That’s because 2018 was such a stunning year for the business. The runs already on the board are impressive to say the least.

Let’s examine those runs.

In November the rapidly growing digital commerce ‘anti-agency’ won Best Emerging Business, Central, at the Westpac Auckland Business Awards. In a mere two years the team has grown from just Welling and Delaney to 85 staff across Auckland, Melbourne, Sydney, Singapore and the Ukraine. Early this year they’re opening in Wellington and expanding their Auckland head office – while offshore the focus is on Sydney and a vastly increased presence in ASEAN (Association of Southeast Asian Nations) markets, as well North Asian markets China, Japan and Korea.

If you’re looking to eye-ball signs of growth, you won’t see all 85 staff at Overdose.Digital’s Parnell office – just a handful. To explain: this is a business structured on deeply integrated partnerships – or as Welling prefers to describe them: “complementary mergers”.

“In all these merger scenarios it wasn’t a case of us saying ‘let’s buy some revenue or let’s buy some clients’,” he says. “It was always either of geographical relevance or service relevance.”

The mergers don’t involve any cash changing hands either, he says.

It’s hard to believe that two and a half years ago both co-founders were working ‘hands-on’ out of a client’s basement. Revenues have grown from $500k in Year one to $8 million last year. By the end of 2020 Welling says the plan is to turn over $100 million and be a truly global business.

So where did the genesis for Overdose.Digital come from?

Welling and Delaney met in 2012 ‘through the trade’, so to speak. Back then Welling owned a digital agency that focused on e-commerce development and was contracted to assist fashion label Federation Clothing, where Delaney worked as its graphic designer.

In early 2016 they decided to launch Overdose.Digital after seeing the opportunity to combine the multiple pillars, or disciplines, of digital commerce development, including marketing and design, under a single brand.

The timing for a multi-disciplinary agency couldn’t have been better. Typically when a new client approaches Overdose.Digital, the first priority is to consider the overall e-commerce strategy – how to make that brand’s digital commerce platforms more effective, particularly around conversion rates and brand exposure.

Design, with an eye to user experience, is another key component, as is marketing, and search engine optimisation (SEO) – the latter handled by an Australian-based team. (Overdose.Digital has acquired two specialist teams across the ditch – the other one, DO Commerce, focuses on fast-growing e-commerce platform Shopify).  

E-commerce is growing rapidly and is largely data-driven, explains Delaney. “New tools are constantly being introduced to enhance the digital commerce experience. AI tools, for example, give you properly curated recommendations based on customer behaviours.”

Welling largely attributes the rapid market growth of Overdose.Digital to its ‘anti-agency’ approach – “in other words not necessarily doing what’s right for the agency, but doing what’s right for the client”.

Right sizing

With around $0.5 billion of e-commerce now going through its clients, it represents a truckload of transactions. Therefore Overdose.Digital knows what converts [into sales], Welling explains. “Our approach is to design business solutions that are relevant and practical for our clients.”

This involves ‘right sizing’, he says – building a solution the client is geared to handle.

“We believe the future of digital search lies in developing bespoke, correctly-sized solutions, relevant to each individual client.”

Welling says often brand retailers will have a base layer of best-practice transactional retail, but still require what he describes as ‘fireworks’. “Those high notes in a relationship.”

He says brands often invest in the so-called high notes, but fail to invest in their core infrastructure. The danger there is that you end up in the land of hype, he explains, and a business that lasts just six to 12 months.

Overdose.Digital won’t get involved in those types of enterprises, Welling says. “Everything we’re doing is based around longevity. Building up really deep plaids where you’ve got long-tail residual revenues – not the sharp, spikey, peaky revenue.”

This is the strategy applied to local retail clients such as Barkers Menswear, Merchant 1948, Mi Piaci and Ziera – where work centres on using a digital presence to activate in-store sales.

“A lot of our work isn’t just about driving online revenue; it’s about driving brand health and brand growth,” says Welling.

He points out that 70 percent of retail purchase transactions are influenced by some form of digital engagement. So even if a shopper is purchasing in-store, there will already have been some engagement through the brand’s online or social media platforms.

“Digital is the precursor to physical sales conversion.”

Control has moved away from retailers choosing how consumers engage with them to consumers defining where they want to engage. It’s the brands responsibility to be present and active in those spaces, explains Welling.

“The investment in digital drives in-store sales, and so now [engagement] is all about a single wrapper. Don’t just think vertical layers, think lateral layers and lifetime consumer value.”

He says in 2019 they’ll be going even deeper into channel-less commerce, developing in-store experiences that are also a mobile and digital experience, and gamifying ways to encourage engagement. Sales staff will be less about selling and more about assisting and driving engagement. Overdose-Digital is unveiling its first augmented reality (AR) offering for a client early this year to help consumers in their decision-making.

It’s easy to see why Overdose.Digital opted for its clever business model in order to deliver on all the experiential technologies currently (and about to be) available for generating the aforementioned ‘lifetime customer value’ – technologies such as AR and AI (artificial intelligence) that create more blended, personalised and profitable environments.

“The really smart retailers are really ‘crushing it’ with this approach,” says Welling.

Relevancy and growth

Delaney and Welling believe the key to their success has been an ‘all in’ approach – focusing on relevancy and growth. “When your back’s against the wall, you tend to win,” says Welling.

Focusing purely on the likes of process automation and efficiency just makes your company pretty dull and boring, he adds, and you risk losing your best staff.

“Many of our people didn’t buy into their salary, they bought into this vision to be a market-leading, aggressive, fast-paced company. It’s absolutely our obligation to deliver that dream that we’ve sold to them.”

Demonstrating their respect for their team, Overdose.Digital recently donated a 20 percent shareholding of the company to staff – due to come into effect at the end of March.

Surrounding yourself with really smart people always produces great results, says Welling (who reduced his personal shareholding from 80 percent to 45 percent, with much of that difference gifted to people whom they believed were needed in the organisation).

Making staff shareholders in the company is recognition that business growth is a direct result of all their “energy and hustle”, he says, and a reward for their trust and faith in the founders.

“Hopefully in three to five years’ time there will be a bloody good payday for them. I’d love to get to the point where their equity starts to reflect what they’re getting as salaries.”

The success of the Overdose.Digital business model also owes much to the transparency of the company’s leadership team and, as Welling puts it, ability to “call bulls**t on each other” and be honest about each other’s strengths and weaknesses.

It has also been important to have a balance of youth and experience on the leadership team from day one. Clients like the combination of a steady hand on the wheel and the youthful engine driving it, says Welling. “That combination de-risks the decision by the client to run with us.

“Many clients don’t necessarily buy into our skills; a lot buy into our attitude,” he adds.

Big plans

For now, Overdose.Digital is continuing to build silos of ‘designer and developer’ expertise; to establish market footprints through the use of regional expertise and allowing business to grow organically.

“Then as they hit tipping point we’ll inject leaders into that space [to grow them further].”

It’s basically about ‘group leverage’ and ‘local activation’ where possible, says Welling.

The company recently secured funding through London-based Together Group, an organisation that unites best-of-breed founder-led strategy consultancies, agencies and technology providers. A serious presence for Overdose.Digital in both the UK and US is just months away.

As Welling says, they’ve found second gear, but there are still three of four gears to go up.

Looking ahead Delaney and Welling have a bold, unadulterated vision for the company. While strategizing three years in advance, they’re conscious of the need to be reactive to what’s happening in the market today and being very early adopters.

The goal over the next three years is an audacious one: to become the world’s leading digital commerce agency and one of New Zealand’s best exports – publicly-listed and traded, with up to 400 staff, around 30 offices and, somewhat surprisingly, the same ‘mid-market’ client-set they work with today (retailers with online turnover of $1-$20 million and the agility and ambition to grow further).

Both Welling and Delaney admit to being somewhat media shy. Until now the focus has been totally on elevating the brand. Welling even admits that he had to be convinced to take the title of CEO. But now that the company is growing globally, he’s had to come out of the ‘back room’ and become the face of the company. They’re both having to hand over more of the reins and realise that they can no longer work 14-hour days, seven days a week, and touch every piece of client work.

“We saw the biggest growth when we let go,” admits Welling, adding that Australia and Singapore came about simply because he had the time to go and “tread the streets to work things out”.

“That opportunity to have clarity of thought definitely led us to make those big plans.”

Story by Glenn Baker, editor of NZBusiness.

A 10-point strategy for digital commerce success

By Todd Welling and Ryan Delaney. 

1. Data

The answers are usually in the data, but you have to go hunting. The role of Analytics is to give you insights, and your role is to interpret those and apply some ​forensics ​into actionable changes. 

Tools: Google Analytics is king here, but don’t discount other platforms such as Glew, Kiss, Tableau etc. Ensure your team invests in a deep layered integration, capturing all engagement points. Set your benchmarks, build your funnels and utilise dashboards in Data Studios. 

2. Test and Measure

Everything we do is a ‘best guess’ with the known information, but don’t assume your gut is always right. User experience (UX) patterns, conversion triggers, pricing methods and competitor differentiation is a constantly moving target. Always be learning. Try your best assumption, then plan B, then C. 

Tools: Google Experiments is a great tool here to dabble with, but we also get great results with Visual Website Optimiser (VWO).  

3. Design for Conversion

Our Creative UX team wholly focus on business outcomes, not just the latest and greatest trends. Remember ​parallax scrolling? ​And ​vertical carousels? This is where Design crosses into User Experience, and we must find that balance that still encourages transaction whilst surfacing the brand values. As well as saying abreast of UX trends, this also requires a deep understanding your product mix, user demographics, path to purchase and their device intent. 

4. Social Proof

One of the most powerful conversion factors is having your advocate customers doing the hard work for you. Actively encouraging your audience to contribute your content is a must for any consumer facing brands. Consider how you encourage reviews, motivate User Generated Content and build an army of micro-influencers. 

Tools: The YOTPO toolset is a great addition to almost any commerce offering. This blends user triggers to generate content and reviews, and then serves these to highly-related audiences. 

5. AI for Personalisation

For commerce, the most powerful implementation of AI is in building out personalised product recommendations and category-specific content. We’re now seeing clients with completely AI-driven experiences where all content areas of a site are curated with machine-driven smarts. 

Tools: One of our favourites is NOSTO. This allows the retailer to build multiple layers of personalisation and serve this content across website, social and email.

6. Pay Later

To the ‘boomers’ amongst us, the concept of platforms such as LayBuy, AfterPay, ZipPay and others as a deferred credit line really shouldn’t work. But it does! We regularly see double-digit increases in conversion rate and cart values when these solutions are applied with the right UX. 

These tools aren’t just another payment gateway, they are a huge marketing machine with access to highly engaged online consumers. Choose the partner that can connect you with the best prospective clients, not the one that squeezes an extra 0.1 percent off the commission. 

7. Content, Content, Content!

The most common under-investment is in the constant need for quality content production. The Internet is now a democratised space with a low attention span, verging on ADHD. If you’re not communicating with your customers they’re digesting your competitors instead. In the past few years the ‘life expectancy’ of a piece of content has degraded from 3-5 days down to hours and minutes. The average consumer engagement with any piece of content is now in the seconds. Thus the cadence has to increase. 

Successful brands are typically posting three to four times per day on Stories, and daily across other traditional social platforms. Don’t assume that only millennials are consuming content in this fashion, some of the highest growth demographics with Instagram is female 45-plus.  

8. Remarketing and Storytelling

Remarketing works, but only if done intelligently. As opposed to re-spamming customers with the same product images of items they just chose NOT to buy, instead consider how

you can communicate around the features and benefits of those products.  

If someone abandons on a $200 pair of sneakers, don’t show them the same picture, instead present a lifestyle video, then maybe some design provenance, then maybe talk about eco-credentials. This is ‘shoelacing’: stringing together stories of related marketing messages, not a straight spam of same-product data. 

9. Email for Income

For nearly every client in our portfolio, email delivers the highest conversion rate and revenue stream of all outbound marketing streams. This is achieved by ensuring we are pushing out relevant, personalised and time-sensitive communications. Ensure you are using a modern cloud marketing toolset that supports rich journeys and smart automations. 

Tools: Choose a platform which has an existing integration with your commerce platform. Popular at Overdose are Klaviyo, DotMailer, Emarsys and Bronto. They all need strategic thinking and management to generate the fiscal rewards.  

10. Search is not dead

SEO is one of the broadest practices in digital commerce but often gets pushed to the back-burner. For organic revenue, a strong SEO approach will outperform all other channels. SEO requires investment into competitor research, keyword research, content creation, technical execution and constant monitoring and refinement. 

All other social advertising is based on assimilation ​of user intent. Facebook “thinks” that you like business content, but you never actually told it so, you just happened to read a few posts so it places a best guess. Google “knows” as you demonstrated clear intent on your search query. SEO is hard, and takes time, but when you’re winning the results can be spectacular.