Strategies for a Successful eCommerce Gated Launch

Welcome to the E-commerce Wizards Podcast, where we feature top leaders in e-commerce and business to discuss proven strategies and trends from people in the trenches. Now let’s get started with the show.

Guillaume: Hello everyone, Guillaume Le Tual here, host of the E-commerce Wizards Podcast. We feature top leaders in business and e-commerce. Today I have Jordan West, CEO of Mindful Marketing with me. And today we’ll be talking about gated launch. The procedure that the Jordan will be presenting today generated 250,000 dollars of sales in 24 hours for a new product line on an existing e-commerce website with no ad spent. So really interesting thing. Just before we get started on this conversation, we have our sponsorship message here.

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Alright, so Jordan, you got my interest peak here with this gated launch. Tell me more.

Jordan: Yeah, thanks again for having me on the podcast. This is great. I love doing this. Your read of your ad was great by the way. I always get nervous when I do live reads as well so I was with you there.

Guillaume: Thanks for being here also.

Jordan: Totally. So, I’ll tell your audience a little bit about myself first here. I started in e-commerce about six years ago, my wife and I started a baby clothing company. It was first called Carmen West creative littles. And that was just my wife’s name and she was making it for little ones. We started that years ago, and slowly morphed into another brand that was called Little and Lively. And from there, we’ve actually added two more brands to the mix. What I’m talking about today has to do with that particular brand and what we did there. So, for myself, I am an agency owner, we have about 15 of us at our agency, and then we’ve also got our brands, and we’re actively making acquisitions right now. If you’re an e-commerce store looking to sell, I would be a perfect person to reach out to right now. In our nation, we’re really trying to take a good look at these kind of stories. Anyway, all of that being an aside, we’re going to talk about gated launches. What do you want to know first?

Guillaume: Well, I’ve seen that before gated launch like that we hear about it, but how do you make that work? Because this is a new product line? How do you get the buzz online? How do you go about that making this a success?

Jordan: Totally. To start, before I recommend anybody doing a gated launch, you have to already have a customer base. For us, we store our customer base in a VIP group. Everyone that makes an order from our store, they get a video, the very first time that they make an order. A personalized video from one of our team members saying, hey, thanks so much for ordering. If you have any questions about your order, or you want to talk to other Little and Lively customers, go to our VIP group here.

So that’s how we get people into our VIP group on Facebook. And there’s a lot of chatter that goes on there, there’s usually probably about 10 to 20 posts a day, within the VIP group either asking about clothing, sizing, all of that. That’s really where we house all of our top customers, and they’re able to talk back and forth. We also have an SMS list, which we also call our VIP SMS list. SMS being text messages.

Those are the two big things to start, you could do this type of strategy with an email list for sure. But I don’t think it would be quite as effective as with SMS and with a VIP group. The whole idea behind the gated launch is we actually password protect the site for about 12 hours before the launch so nobody can get into the site. That’s when we can make all of the changes to the site. All they see is a password protected site that says if you want early access to this launch, we’re going to be launching our new whatever, so this one was our new fall Winter Collection. We did this in August, we said, hey, if you want access to our new fall Winter Collection, join the SMS list here or join our VIP group on Facebook here. So we have tons of people signing up during that time because they want early access.

Guillaume: Right. And just like a question there, because this is an existing brand that you have. It’s an existing e-commerce site, it already has sales and so on. And you’re still putting like the whole site, not just the section, the whole site inaccessible right now.

Jordan: The entire site is locked down. It’s to build those buzz rates. For about two to three weeks before we’re showing sneak peeks of the new line, we’re showing, some of the items that are going to be available, we’ll show a look book just to get people’s excitement up. The great thing about having a VIP group is that in that VIP group, people start talking in amongst each other. And they start kind of egging each other on. So, people who maybe weren’t thinking about purchasing, they’re like, oh, yeah, that’s a great idea, I should get that item with this one. And they all have their purchases planned out before. So, at 10 o’clock Pacific is when we generally launch these. 10 o’clock Pacific, we give our VIP group the password. We come up with a unique password that they have to enter to get into the website.

So, we give it to them on SMS, and we give it to them in the VIP group. There’s a bunch of psychology that goes on here. First of all, they feel special because they got the special password to get in early. When we did this particular launch, it was incredible. We’re looking at Google Analytics, and just like, okay, what’s this going to look like? So, the first minute, we see about 500 people on. I am like okay, this is going to be decent. And then it’s minute two and we have like 3000, and then 4000, then 5000 people on the website were like, oh my gosh! And in that first day, the conversion rate was about 17%. It was just absolutely crazy.

Guillaume: 17% is amazing.

Jordan: Oh, it’s incredible. Our average is about 2.5, we’re pretty industry average. But it’s absolutely incredible what can happen during one of these gated launches. So, in the first two hours, while the website was password protected, we did about 125,000 dollars, just in those first two hours. And then we open the website up, and then the general public comes in. And it was just mayhem, we couldn’t believe the amount of orders that we were having during this time. I think some of our best launches before were maybe like in the 50,000 sort of range. And then it just kind of, you know, stays pretty steady.

But this particular launch, we really saw the power of the VIP group. And the power of making people jump through hoops to get product. Most people want to open up their entire catalogue and just like hey, buy this, buy this, buy this. But by actually putting in barriers, I think that we actually do better.

Guillaume: I believe you, the psychology of it that makes sense to me. What about the traffic hit? Because you have 5000 concurrent visitors meeting on the same time, did you have to do any kind of technical preparation for that?

Jordan: I’m going to use the SH word here, we’re on Shopify and we had no issues at all with that level of traffic. Even being on the regular version of Shopify, we didn’t really have any issues trafficwise. Though, we do have a lot of people reaching out saying, hey I had items in my cart, and they’re gone. Or we also have a mobile app as well. Sometimes if they don’t refresh the mobile app, there’s big issues, right? Because they’ll have something in their cart, and then suddenly it’s gone because somebody purchases from the website, because it’s not updating in real time.

So, there’s a lot of issues around that. I still love the app, I love brands having an app for a lot of different reasons. It’s a big authority sort of play. Kind of can make your brand actually look a little bit bigger than you actually are. For us, we’re kind of growing into our app right now. There’s a lot of different sort of psychological things that I think go along with having an app, as well as just the whole idea behind the VIP group is that, when you go into a store on Black Friday, you know how many people are in the store, a physical location. You can see how many people are there. When you go into a website, you don’t really know the mayhem that could be going on in the website, unless people have proved it or something or one of those things that say oh, there’s this many people looking at the product right now, but nobody really trusts those anyways.

Guillaume: You program whatever you want on that widget.

Jordan: Yeah exactly. So, you can say whatever you want. Whereas when you have a VIP group that people talk back and forth on, on Facebook, on those launches, there’ll be like 100 posts with people showing what they bought in their cart. So, people can see like, oh my gosh, there’s so many people buying things right now! And they can see items selling out, they can really have that. It’s like you create some of that fear of missing out. And you create this whole frenzy around your brand. And for us, it really lasted, this frenzy. It got a lot of word of mouth going for this particular launch that was like 250,000, that first day, then 50, then 40. And these are bigger numbers than we’re normally doing. We actually ended up having to hire permanently, more people because of that launch. And we have no doubt that we’re doing another big launch. Every launch that we’ve done since then, we’ve either sold out or pretty close to sold out.

Guillaume: Yeah, because that was my next question there. There’s a lot of logistic when you do big sales like that flash sales, because there’s inventories take into account. Of course, there’s the technical find your Shopify auto scales and Magento the same, just talk to your hosting company before, you’re going to have a flash sale, they’ll set you up properly. But then how did you prepare for inventory? Did you expect? Did you have any kind of forecasts that it would be that good? Was it sort of a great surprise, or?

Jordan: Yeah, generally we’re forecasting about 50% year on year growth. Luckily, we actually produce everything in Canada. We bring the fabric over and then we’re able to produce in Canada. So even with the selling of a lot of items, we’re able to refill those items within about two weeks. Comparatively to being in China. If we were manufacturing in China, that would be a lot longer of a turnaround to be able to actually make those items. That’s another reason why we would really love still manufacturing in Canada. Yes, it’s more expensive but for us, it’s close to just in time manufacturing as we’re going to get.

Guillaume: Yeah, okay. So there was still a lead time, like some people order it, they’re going to wait two weeks extra, because you sort of ran out of stock, and you’re producing kind of just in time?

Jordan: Yeah, we’re still carrying probably 700,000 dollars worth of inventory at all times. But for items, we don’t know what’s going to always sell, how do you know? For us, we do our best estimate that we can, we’re also in about 120 stores across Canada, and getting even bigger, we’re going to be going into The Bay and into Chapters Indigo. So those are going to be some really good brands. 

Guillaume: Congrats for the distribution power.

Jordan: It’s a little scary to be honest, we’re 95% still online. I think of those partners, and if there’s any partners like that listening, I still think of them as marketing partners for us. We’re not making tons of money off of our wholesale comparatively to our direct consumer. Anyway, that’s a little aside.

Guillaume: But it is very interesting, because it’s so broad. When you’re building a business online, it’s not just about the website, procurement, the fulfilling, partnerships, marketing, and in that case, the gated launch through to have my new product line actually start well, and so on, there’s just so many things to think about?

Jordan: I think the big thing for people listening that I would want them to know is always be launching. Always be launching something new. The couple brands that we’re looking at acquiring right now, do not launch very often, we do launches almost once a week of a new product just to get new product out there, especially in apparel, it’s something that we can do, we can put a new design on something, we can try a new color. All of these things to really get the hype up seems to work really well for us. And it seemed to work really well for our clients at Mindful Marketing as well.

Something that we’ve been recommending a lot of is that take your products’ launch, you could launch a bundle of products together. You could have a bundle sale, you can do all of these things, but something that’s just not your classic 20% off sale. Getting more creative with those I think has really helped us drive revenue and will continue to help us drive revenue.

Guillaume: Okay, well I’m curious if you want to elaborate a bit more on this. You had your date of launch, this was a whole reveal for a whole new collection like your fall collection. And the other launches that you’re talking about more like smaller launches. What is it like you say, one new design, one new product that you just advertise on your homepage, talk about it in your Facebook?

Jordan: Yeah, it’s just another reason to talk to your email list, your SMS list. We’ll take, say like this green shirt that I’m wearing right now, this is one of our items. We’ll take it and what we’ll do is we’ll actually ask our VIP group. Hey, what kind of graphic would you guys love? So, we’ll create a graphic that the majority of people said that they would love, we’ll create a graphic and be like, hey! What do you guys think about this? And then we’ll launch it the next week, and it’ll sell out right away, because everybody already said that they wanted it. This is the power of owning your customers and having a VIP group and having two-way conversation. I think a lot of brands, what they do is they have one way conversation all the time.

Guillaume: They just talk and nobody’s talking about them, nobody’s talking back. There’s no conversation, they’re just trying to radiate ads spent.

Jordan: Totally. It’s like old school parenting. You just tell your kids what to do rather than working collaboratively. It’s just a different mentality that I think that we have now and being millennials too, we know that people really care whether the brand listens or not. If we can show that we’re listening and actually have a conversation back and forth, it’s a lot more powerful than us just shoving new ideas through our marketing channels. When they know that we listen, that goes a long way with word of mouth.

Guillaume: Very interesting. And perhaps if you’re comfortable about this, spilling a little bit the number of the size of the VIP group or the SMS list, because some people listening might be saying, okay, fine, you made 250k but how big of a membership that you have to work with there?

Jordan: At that point, I think it was only 7000 people on each list.

Guillaume: Okay. 14k people total.

Jordan: There’s a pretty big overlap, I’m assuming between the SMS list and the VIP group, so let’s call it 8000, maybe 9000 total between the two. So not a huge list. That to me is a really good curated sort of list. But think about those customers. Those are our diehard fans, who then tell how many people how much they love our brand.

Guillaume: All past customer, those guys, it’s not like ad acquisition to ad as it’s on Facebook to like, comment. All past customers are the core.

Jordan: It’s not every single past customer either. These are people who have ordered multiple times, who really love our brand. That’s why they joined the VIP group. These people are our advocates, they’re doing, hundreds of thousands of dollars a year in advertising for us, because they love the brand. And because we’ve listened and we treat them well.

Guillaume: Pretty cool. Okay, any other tips or tactics you’d like to share with anybody trying to do a gated launch for a new line or new something?

Jordan: Yeah, I would say just be very clear with your group. You can do it with an email list, that’s totally fine. I just think that it’s even more powerful with a VIP list. But be very clear, like, hey, you’re going to get a password at this time if you want early access. The first couple of times may not go incredible, but continue to test it. And you’ve got to have at least 1000 people within those groups for it to really take off.

Guillaume: A thousand people okay. If you have other ideas to discuss about gated launch, go for it. Otherwise, I’ll bring you to the earlier days of your e-commerce venture?

Jordan: I think that’s enough information to get people a little bit dangerous with gated launches.

Guillaume: Just know enough to be dangerous, perfect. There’s still a lot of brands in America that don’t have much online presence, maybe even have a catalog, but they’re still like old school retail. There’s some pretty impressive stats on this, half of the businesses still don’t have a proper web presence and are not transactional. Let’s say we have those more traditional business, they have lots of business experience, they’re offline, they have distribution channels, whatever. And now they want to go direct to consumer, they’re building that new website, that new e-commerce site, they want to get it off the ground. So how did you proceed with acquiring your first few customers? Was it like Google ads? Facebook ads? Did you do a gated launch for the site itself?

Jordan: No, it was all Facebook to start. First, we built an organic presence on Instagram. That was the first really big thing. That’s where our customers were. What I recommend is, a lot of these brands may actually already have these social channels built out. But make sure that you’re aggregating your customers somewhere. For us at first, that was Instagram, that was a big part of where our customers were at the time. And that’s kind of where they still are, there and a couple other places. We started there and then we went heavy on Facebook ads, and that’s what I really recommend is Facebook and Google. Know how much it costs to acquire a customer and then just start acquiring them. Because you have to acquire customers to really get the buzz up about your brand.

Guillaume: Then you were tracking your costs, your return on investment for your ads cost spend versus your cost of merchandise and the profit, then you just sort of scaled up Facebook ads, Google ads, and have that the aggregation of customers on Instagram to try to exchange with them. And At which point you added more interaction like the Facebook group and stuff like that. Awesome. Thank you for the answer on this one.

Let’s keep elaborating on this part. The early days of your company, because there’s that part where you sort of have to start from ground zero, and build up an audience and build up your list, build up your brand, build a customer base. Once you have a large enough customer base, it’s easier scaling up. Different challenges will be more like financing and stuff like that. How do you get your website from zero to the first million dollar of online sales per year?

Jordan: Yeah, it’s a great question. I think this is where I would go into really building your lists. Not just focusing on Facebook advertising now, or Google advertising, but really focusing on building up those email lists and the SMS list, create a VIP group, start building up your messenger list. All of these places that you can start building up your lists so that people now will have you in their inbox. Go really hard on retargeting. People who have been to your site, if they don’t know about your brand, they need to see you 20 to 30 times before they’re going to make a purchase.

So, hitting them with different angles about your brand different ways that your product is going to help solve their problem is really, really important. A lot of Facebook advertisers, and just advertisers in general will say, don’t show them more than a frequency of three. So they’re going to see three of your ads, absolutely not, they need to see you 20 to 30 times in different areas, omni channel. So don’t just focus on Facebook for your retargeting focus and it’s not a lot of money that you have to spend. Focus on Google, focus on YouTube, focus on Google’s display network. And then you’ve got Facebook, Instagram, all these places you want to be all of these places, after people have come to your site and not purchased.

Guillaume: That’s really like a philosophical statement. You want to have the visibility that many times 20, 30 times. It’s a philosophical statement on the advertising strategy.

Jordan: Totally and it’s a reason why at Mindful Marketing we do so well for our clients. There are certain strategies that we use that we know work at Mindful Marketing. And this is why I’m so passionate about this stuff, because it’s counterintuitive, but it works.

Guillaume: Yeah, retargeting has proven itself, but you’re going really all in with 20, 30 times. Very interesting approach. Would there be any other tips or tactics or strategy you’d like to share with anybody trying to scale up the site to from zero to their first million dollar a year of online sales?

Jordan: You’re going to have to think about your cash flow. So, figure out first of all, how much you can afford to spend to acquire customers, that’s a big thing. And then market as much as you can to get those customers. And then the other thing too, is follow just a couple people in the e-commerce space, that know what they’re doing, jumping all over the place. If you’re going to try a strategy, try it for at least a couple of weeks before you say it’s failed. But really just try and stay the course. If you’re acquiring customers profitably or break even, just keep going.

Guillaume: Okay. Very good advice, very interesting. That sort of covers it for that section. Anything else you’d like to cover for today’s topic?

Jordan: I just wanted to let people know we do have a sales launch checklist. If you’ve heard all the stuff about gated launches and you think it’s interesting, we actually have a checklist that we’ve created at Mindful Marketing for people. You just go to mindfulmarketing.cl/slc and that’s where you can get the sales launch checklist. It’s the same checklist that our staff uses every time we do a gated launch so we really do believe in it. That’s just a free download that you can get on our website.

Guillaume: Awesome. Thank you for sharing all this highly valuable information Jordan, thank you for being here with us today.

Jordan: Thanks for having me.

Guillaume: Thanks for listening to the E-commerce Wizards Podcast. We’ll see you again next time. And be sure to click subscribe to get future episodes and contact us at magemontreal.com.