Yellow Octopus Talks Online Traffic, Marketing And More

Yellow Octopus has had an online presence since it was founded five years ago, and in that time, the business has managed to build up a loyal Australian customer-base, while also building up an international following.

After Australia Post revealed Australian consumers spent $21.3 billion in online shopping in 2017, we decided to speak to Yellow Octopus to see what the company is doing to take its slice of the e-commerce pie.

“Yellow Octopus sells unique and quirky gifts and gadgets. As this is a specific niche, in order to tap into a large enough customer market, we started the business with an e-commerce strategy in mind,” Derek Sheen, the founder and CEO of the business tells Power Retail.

Despite having a quite seasonal business, with most of its website traffic and revenue being generated over the busy Christmas period, Sheen says the online store still manages to attract just under 30,000 visitors per week.

“The average number of visitors to our website over the course of a year is 27,500 per week. However, this peaked at 119,000 visitors per week last Christmas,” Sheen says.

From these visitors, Yellow Octopus reportedly maintains a conversion rate of roughly 2.1 percent.

But, how steady is this traffic, and what is Yellow Octopus doing to maintain it?

Online Marketing Campaigns

Yellow Octopus has a clear idea of who its customers are. According to the business, approximately 85 percent of its customers are local Australian consumers, while 10 to 12 percent are international shoppers purchasing gifts for people within Australia. Presently, only about three to five percent of Yellow Octopus’ orders actually get shipped overseas.

These, and other more specific, customer demographics help the business market its business effectively through Facebook promotions and Google AdWords.

“We run Google AdWords and Facebook ads continuously, and this is where the majority of our marketing expenditure goes.”

Sheen also says that creative content plays a big role in Yellow Octopus’ marketing activities.

“We also produce a lot of content on our blog, The Yellow Blogtopus. This helps us engage with customers with useful ‘Gift Guides’ and articles on topical events throughout the year,” he says.

However, the business also likes to take its creative marketing efforts one step further, especially during peak trading times.

“Last Christmas, we put together an “Even Jerks Deserve a Gift” marketing campaign to promote our office Kris Kringle range. We produced two short videos that collectively gathered over 100,000 views on Facebook.”

Creating an Omni-Channel Shopping Experience

Yellow Octopus likes to make sure customers have access to the products they want when they want them. So, as part of its omnichannel experience, the gift retailer uses an inventory management system to ensure consistent stock levels and pricing between both its online and bricks-and-mortar store.

“As a result, we can provide customers with the same omnichannel service and experience regardless of whether they shop online or in-store,” Sheen says.

“Products that are out of stock in the bricks-and-mortar store can be ordered immediately from our online warehouse and delivered to the customer.

Establishing a Point of Difference

With a product offering of more than 4,000 unique and quirky gifts, Sheen believes Yellow Octopus stands out against its competitors largely due to its sizeable collection of curated gifts that are sourced from Australia and around the world.

“These products are not found in your run-of-the-mill shopping centre shops or online department stores,” he says.

But for customers who leave their gift shopping until the last minute, Sheen says they still have a number of options available to them, including purchasing the goods in-store in Melbourne or utilising the businesses guaranteed shipping services that include same day delivery within Melbourne and overnight delivery across the country.

Discounts and Promotions

The Australian Bureau of Statistics (ABS) recently found that heavy discounting pressure is taking a toll on retailers’ bottom line, but Sheen does think they can still be useful when you’re trying to clear out old stock and you need to do it quickly.

“Big promotions do not really make a big difference to our overall online revenue, but discounting definitely still works in the short-term if you need to move some old stock.

“However, we’ve lately seen some retailers offer almost ‘permanent’ discounts, and that just destroys the business in the long-term, as customers become accustomed to the discounts, or only shop when a sale is on,” he says.

Plans For the Future

According to Sheen, augmented reality (AR) will play a big role in the future of the e-commerce industry, as well as biometrics.

“We will definitely see an increased use of AR, so that customers can virtually try on products or see how a product would fit in their home before purchasing it,” Sheen says.

“I also feel that with many mobile devices having inbuilt fingerprint or facial recognition, there will be an increased use of biometrics to authenticate online transactions, providing a safer shopping experience for both customers and merchants.”

In terms of current initiatives in place for Yellow Octopus, Sheen says working on its social media presence and testing the effectiveness of online marketplaces are both things the business is actively working on.

“We are currently working on building our Facebook audience and optimising our [Facebook] promotions, to make them more effective outside of the main gifting events like Mother’s Day, Father’s Day and Christmas.

“We have also started promoting certain products on the Catch Marketplace, which is great for increasing our customer-base who might not have come across Yellow Octopus otherwise,” he says.

By curating a unique product range, targeting its specific customer-base, marketing, and taking advantage of new and exciting e-commerce and omnichannel trends, Sheen says Yellow Octopus has been able to increase its online revenue and traffic every year since the brand first launched back in 2013.

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