World Stores - searching for retail success
Rory Cellan-Jones | 08:10 UK time, Thursday, 31 March 2011
Sometimes this blog is accused of an obsession with Silicon Valley, at the expense of home grown technology businesses. It's true that the likes of Google, Facebook and Twitter make plenty of news - but when I come across an interesting British start-up I'm keen to let you know about it.
And WorldStores, a business based in Twickenham, has a fascinating tale to tell - it appears to have found the secret to successful online retailing. In just a couple of years the firm has launched 76 niche retail sites, mainly selling large items for the home and garden. And that at a time when selling those kind of products on the high street has been the way to lose money in a hurry.
So why is this business on track to boost revenues by 70% this year? According to the two founders, the secret lies not in the products but in mining web search data. "All the answers to online retailing are in the data," says co-founder Joe Murray. "We've managed to build an entire business around reverse-engineering the retail process," explains his partner Richard Tucker.
So instead of taking a bedroom furniture business and working out how to put it online, their starting point is Google. "We looked though thousands of different keyword searches," says Joe, "and spent two years analysing the data to find categories that have a large volume of searches that don't really deliver a satisfactory result."
The founders, who previously ran a search engine optimisation business, turned up a lot of product categories they felt looked promising and started building websites and contacting suppliers. So there's a cagesworld, a mattressesworld, a barstoolworld, and many more.
Google, as well as being used to to identify new retail opportunities, plays another vital role. WorldStores uses paid search to market its sites. So, for instance, if you search for pet cages, you are likely to see an advert for cagesworld.co.uk.
But the founders say the whole operation would not work without a close relationship with their suppliers. They pride themselves on getting 70% of the 170,000 products they sell delivered to the buyer the next day. That means a complex logistical operation, with their own technology installed in the supplier's warehouse.
Here's one example. The mattresses site is largely supplied by a clutch of tiny firms based in Batley and Dewsbury in West Yorkshire. They have been in a precarious position: too small to supply the big chains and with their traditional customers, the local high street furniture store, dying out.
Now, says Joe Murray, they've been transformed into just-in-time operations. "They get an order from us, they make a mattress in twenty minutes and the van picks it up for delivery the next day."
So World Stores is an interesting mixture: a marriage of search technology and quick-footed niche retailing nous. Backing from the venture capital firm Balderton has helped it to grow rapidly, and its founders are now casting a glance at the German market, which they reckon is a couple of years behind the UK in exploiting search.
There's no guarantee that this plucky little British business will make it big - after all, it's competing with the mighty Amazon, which now stocks plenty of home and garden furniture.
But wouldn't it be nice if a company from Surrey showed that you don't have to be in Seattle or Silicon Valley to master the art of selling online.
Credit: BBC (www.bbc.co.uk)
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