RETHINK Retail | Jesse Wragg, Co-Founder & Managing Director of eCommeleon

How did a simple mismatch of a brand’s sneakers and socks disrupt well-paired relationships with its retailers? In this episode, we’re joined by Jesse Wragg, an ex-real estate agent turned agency leader turned VC-backed entrepreneur.

You’ll hear how brands and retailers are approaching marketplaces, strategic insight for the now and predictions for the future of commerce. When he’s not running a business helping retailers with marketplaces, you can find Jesse renovating a Ford Transit planning future world explorations.

 

Episode 116 of the RETHINK Retail Podcast was recorded on November 23, 2020

 


Hosted by Julia Raymond
Researched, written and produced by Gabriella Bock
Edited by Trenton Waller

TRANSCRIPTION

Julia Raymond Hare:
Hi everyone, today we’re kicking off another episode of RETHINK Retail with my guest, Jesse Wragg. Jesse is the Co-Founder and Managing Director at eCommeleon a software company designed to help retailers take advantage of global marketplaces without becoming overly reliant on Amazon. That’s a big one. Jessie, welcome to the show.

Jesse Wragg:
Thanks for having me.

Julia Raymond Hare:
It’s great to have you. Let’s start out, so you are based in Germany right now. And I’d like to just hear a bit more about your background and your journey to co-founding eCommeleon?

Jesse Wragg:
I’m based here in Germany, actually in the old East in a city called Leipzig, which is about an hour and a half south of Berlin. But I am originally from the UK. I did live in Australia for five years before moving to Germany, where I was working in real estate. And then when I landed in Germany, I wanted to get into a different industry something a little bit more severe with internationalization. And funnily enough, I landed in an E-commerce agency, which was specialized in helping retailers to expand internationally, specifically in marketplaces, called InterCultural Elements.

Jesse Wragg:
It was while working there as Head of Sales that my now business partner, he was my boss at the time. He and I came together and founded eCommeleon with what was originally an internal software at this agency. We decided to bring the software to the market as a solution that people could use in-house to get similar results. But without having to go through the agency model, because we noticed a lot of people, a lot of retailers especially didn’t want to outsource their marketplace work. They wanted to be able to sell on multiple marketplaces, but they wanted their teams to be able to manage the process. So Eduard, my partner, my business partner, and we founded eCommeleon, we raised venture capital, seed financing at the end of 2019. And we brought eCommeleon as a software product to market in March this year, just in time for a global pandemic.

Julia Raymond Hare:
Right, right. And I know Jesse this is really interesting, because you said you learned that retailers do want to develop their skills in house for how to manage their products and sales on marketplaces. I know you guys do offer some service components at eCommeleon, but would you say overall, you would recommend that’s the better path for retailers?

Jesse Wragg:
Yeah, absolutely. So, we do offer some service purely because of our background, we’ve come out of a service agency, so we understand that a lot of businesses do kind of want that handhold approach. But I think when you go to an agency, you really, to use the old adage,  get given a fish, whereas by preparing and giving a retailer a software that they can use themselves, we’re trying to teach them how to fish, we’re giving them the tools that they need to do the work that they want to do, in this case, obviously, to be able to sell on multiple marketplaces around the world, regardless of what internal expertise they’ve got.

Julia Raymond Hare:
Absolutely. And it’s crazy because you jumped from real estate to head of sales at an agency and saw b2b software. So would you say there are any similarities between things you learned in real estate in Australia and jumping into that new role?

Jesse Wragg:
I definitely wouldn’t buy a house on a marketplace.

Julia Raymond Hare:
Well, that could be the future though Jesse, who knows?

Jesse Wragg:
It could, it really could, no, you’re right. Honestly, now I think that the main thing that I’ve sort of taken away from all of this is it’s all about people. People want to buy from people and it’s something that it was always true when I was selling houses like sure I was a real estate agent, but the people wanted to buy the houses, they always wanted to meet the owners, they wanted to be shown through, they wanted to hear from the owner why they built the house in a particular way, or why the garden was laid out like that. And they want to understand and meet the people that were there to have this kind of connection with the people whose home they were taking over.

Jesse Wragg:
And bringing it into the context of E-commerce, this is also something that you see quite a lot where consumers do want to have a relationship with the people that they’re buying from. And I think this is one of the downsides, I guess of marketplaces in general is that you do run the risk of losing that connection with a consumer. If you’re an Average Joe buyer, and you just jump on Amazon, looking to buy a new yoga mat, fine, you’re going to find 50,000 sellers, all offering pretty much the same yoga mat, all made in the same manufacturer somewhere in China.

Julia Raymond Hare:
But I’ll jump in there because I want to ask Jesse, there is a demand for marketplaces and even though you might lose some of that human touch, nearly 60% of E-commerce last year came from marketplaces. So it’s growing rapidly. And why do you think that is?

Jesse Wragg:
Absolutely you’re right. And the thing is,  I think was about 52% of product searches began on Amazon. People they’re not even going to Google and typing in what they’re looking for anymore. They’re going directly to Amazon. And I think that’s pretty scary, it obviously says you need to be selling on marketplaces, because you need to be where your buyers are. And it’s about the experience you can give that buyer, you shouldn’t be just another Amazon seller, you should have good customer service, you should have, obviously, nice packaging, you should have a good experience to the consumer.

Jesse Wragg:
Some of the best products that I’ve bought, or some of the best consumer experiences I’ve had when buying on Amazon has been when it’s come in a nice box, when it’s been well packaged, it’s not just tons of plastic, and I open the box, and I feel bad, like I’m destroying the world sea turtle population by buying this new pair of headphones or something. It’s a good experience that the buyer needs to have with you as a retailer. And the marketplace simply generates platform for you to be able to do that.

Jesse Wragg:
And I think that’s another really important differentiation to make, as well, between the platform in a marketplace where you could look at a typical platform via a website, or a brick and mortar store even, it’s where you’re trying to generate the sales here. Whereas the marketplace doesn’t focus on generating the sales per se, it focuses on generating the traffic, allowing you as a retailer to make the sales. And obviously there are differences with different marketplaces, Amazon, of course, also offer their own products, they compete against retailers, it’s what puts a lot of retailers, rightly so, off of selling on Amazon.

Jesse Wragg:
But there are a number of marketplaces out there, which offer very exclusive direct access to exactly the kind of buyers you’d want to reach. A great example of sort of these niche marketplaces is in the US, you’ve got Chewy.com is kind of a go to place for pet food and pet supplies and things like that. If you’ve got a dog or a pet, you might go to Chewy.com and find what you’re looking for probably quicker, or maybe better quality than what you’d find on Amazon, and certainly, with a lot less searching around through all the noise. That’s also true in pretty much every niche category. There are new marketplaces popping up for most niches around the world.

Jesse Wragg:
And even Etsy, one of the most popular marketplaces these days started life as a niche for artists and people who are producing handmade or one-of-a-kind items. As we’re moving into a marketplace dominated arena of E-commerce, there are more and more niche marketplaces popping up. And what that means for retailers is, they do have an opportunity to be where their consumers are without having to necessarily sell just on Amazon or just on eBay and kind of be stuck in a loop of becoming too reliant on them.

Jesse Wragg:
I think one of the things about Amazon is, of course, it’s a marketplace where you should be offering products, you should definitely have listings there, you should have a presence on it. But the thing is, I’m such a anti-Amazon person myself, I really don’t like the way they operate. I don’t like the way that they run their business. I don’t like the way that they treat their employees, I don’t like the impact it has on the environment, or the fact that they basically dodge taxes wherever they operate.It is really the fundamental part of serving my motivation for eCommeleon is to make it easier for people to sell on marketplaces, which aren’t Amazon.

Jesse Wragg:
And I think in addition to all the other reasons that I just mentioned, by getting on to non-Amazon marketplaces isn’t actually having success there, you’re contributing to something that’s a little bit more than just an individual business success. You’re contributing to that marketplace and all the other marketplaces that you’re selling on, and basically giving Amazon a bit of a stick in the side. And it’s a bit of a motivation. As I said, my personal motivation is really to try and take some of those sales which might otherwise be happening on Amazon and let them happen on a smaller marketplace that isn’t just going into funding Mr. Bezos, his latest hobby.

Julia Raymond Hare:
And that’s probably something on a lot of retailers’ minds is the fear of becoming too reliant on Amazon, and betting that they will, I mean, they’ll probably continue to be a top player, but there are hundreds of other marketplaces. So it’s interesting to hear you say that you probably should be getting on to the niche marketplaces, as well as the big players like Amazon, eBay, Etsy, if that’s a good fit, that’s more of a niche, but they’re expanding as well, hugely. I want to take a step back and think about the differences between brands and retailers, because there’s been a lot of discussion in recent years about how that’s actually merging in a lot of circumstances. How do you differentiate it when it comes to marketplaces, the role of a brand and a retailer?

Jesse Wragg:
Good question, I think it’s a little bit different, it depends a bit on the marketplace. Certainly, if we begin by looking at Amazon, you obviously have as a brand, a lot more opportunity to market your products, you can use A-plus content, if you are successful enough as a seller, and you become a vendor to Amazon you unlock even more sort of advanced marketing options. But definitely, just as a brand, there’s a whole slew of potential marketing options that you can use to really promote the branded products. And I think where a lot of brands get stuck here is that they then think they also have to add inventory to that. I talke to quite a few brands, and something that I encourage a lot of retailers that I talk to as well is, simply use Amazon as a marketing channel, not necessarily as a sales channel, you’ve got this very traditional model of brands selling to distributors and suppliers, and then being resold on to retailers, obviously, sometimes you have the retailers purchasing directly from the brands, depending on the individual setup.

Jesse Wragg:
But you see a lot of retailers getting concerned about brands kind of cutting them out and going directly to the consumer. And the best way that they can avoid that from happening really is by doing a good job of selling the products themselves on marketplaces and collaborating with the brands, rather than competing with them. Talk to your representative at the brand, and see if you can get an exclusive deal to be the only person allowed to sell this particular product or product range on marketplace expert, Amazon or somewhere else. But let them provide good marketing content. The reason a lot of brands are starting to go direct-consumer is because marketplaces make it hard for a retailer to market the product in a way that is consistent with how the brand is marketing it.

Jesse Wragg:
I was talking to someone at Adidas at a conference in March, and they were telling me about this specific pair of shoes that Adidas creates. It was basically designed to be worn with another particular really high-end pair of socks. I didn’t realize they were lots of different socks, but apparently that’s the thing. But basically, they were really struggling with the fact that the retailers were selling the shoes without this sort of notification that it should only be worn with these socks. And they were selling the socks without sort of a notification that it should only be worn with those shoes. And it meant that people were buying the shoes and having a bad experience and not getting what they expected out of the shoes because they weren’t pairing them with the correct socks.

Julia Raymond Hare:
I love this example. I mean, who would have thought something so simple would be something that leaders at Adidas are concerned about, right? Like how they’re not pairing the sock with the shoe. It seems simple, but it actually is, things like that are driving big decisions.

Jesse Wragg:
Absolutely. And the thing as well though is, when you look at a brand, whether it’s a behemoth the size of Adidas or if it’s just a small Mom and Pop brand, there’s usually somebody sitting there who’s taking the time to really carefully think about how do we actually want to market our product, what message do we want to give to the consumer, how do we want to be portrayed in the market and it can be everything from the general big picture, what is our brand? Who are we, what’s our story? Right the way through to, do we want to call our product blue, marine blue, navy blue, light blue or dark blue. And you have big conversations within these brands about which of these words they want to use to describe the product.

Jesse Wragg:
The problem that a lot of brands don’t realize is that if they’ve agreed on marine blue, Amazon only allows for this particular feed product type, subcategory, navy blue, the retailer won’t be able to create listing on Amazon, by using marine blue, they would have to use navy blue. And so what happens then is there’s a disconnect between what the brand wants, how the brand wants their products to be marketed, and how the retailer is being forced to market it in order to be able to sell on the western world’s largest sales channels. And then it just mean it causes this friction where the brands go, “Oh, we don’t like marketplaces, because it cheapens our brand. We don’t like the way that our products are represented there.

Jesse Wragg:
And it’s like, well, your products end up on these marketplaces anyway. Brands and retailers should be collaborating on the creation of these listings, to make sure that everyone is happy with it, does it match the message that the brand is trying to send, is the retailer able to quickly and easily handle this or should the brand content team or whoever it is, be doing this for them, because everyone’s going to benefit, the retail is going to make more sales, the buyer is going to be able to find the products they want, they’re going to see how they expect to see it, they’re going to get the information that they want about the product to be able to make an informed decision and then not have to return it six weeks later. And best of all, everyone’s going to make money off of it. All the marketplaces are going to be happy because they’re getting, more sales, they’re getting more consumers going there. They the brands going to be happy because the retailers are making more sales and therefore purchasing more products. It’s, a win win-win.

Julia Raymond Hare:
It’s a win, win, win. But I would you said brands and retailers should be collaborating. So there’s this communication, would you say the burden falls equally on both of them, or more on one than the other?

Jesse Wragg:
I think it’s a really good question. Because there are very strong points for both. Typically, in a traditional brand-retailer relationship, the retailer is the one who has the experience with actually talking to the consumer and presenting the information to the consumer. But obviously, in the 21st century, brands have an online presence, they have content available, they have information about their products. Often the only thing that’s missing when it comes to marketplaces is a no How about the marketplaces. Again, this is where eCommeleon comes in. This is one of the barriers that we’re trying to sort of break down, is making it easier for people to sell on marketplaces.

Jesse Wragg:
But when it comes to a brand or retailer, and who should be creating the product data, or who should be creating the product listings, rather, it really comes down to the individual relationship. I personally am a fan – certainly for Amazon – having the brand create it because you can have a brand create these fantastic listings with great A-plus content with so many graphics and images. And then the retailer simply has to add their price and their shipping rate. And they’re off, they’re starting to sell it. And they’re going to sell way more than they would if they were creating the listings themselves. Because they’re not dealing with listing errors, everything goes up straight away, because the listings already exist.

Jesse Wragg:
And obviously for the brand, if they then want to make changes to the listing, they’ve got Brand Registry, they simply make the change. In most cases, they don’t have to then argue with Amazon about what is allowed to be said about the product, as long as they say, “Yep, we are this brand. We are the company that produces this product.” They can change the listing how they want to.

Julia Raymond Hare:
Absolutely I love how you answer that Jesse because it does seem like that’s where we’re headed. And if there’s anyone representing a brand who’s listening, I hope they heed the advice and try their best to help retailers because you’re right, retailers historically, were the experts in communicating with consumers. I think they still are, there’s other channels outside of marketplaces where they’re still selling your product.

Julia Raymond Hare:
From your experience working with retail clients, what are some challenges that they face when they’re entering a new marketplace? Do you have any examples of this from the work you’ve done at eCommeleon?

Jesse Wragg:
Yeah, absolutely, I think the biggest challenge is probably justifying putting the work into starting to sell on a new marketplace, without any evidence of an ROI. And it’s kind of a catch 22, where, obviously, you’re not going to get the sales from a new marketplace until you put the work in to actually get start selling on the marketplace. But in a typical situation, a lot of retailers that we speak to, there will be getting anywhere from 60 to 95% of their revenue coming from Amazon, or maybe Amazon and eBay. And obviously, it depends a little bit on their overall business strategy. But if they’re only an online business, or if their only online presence is on marketplaces, it’s quite a dangerous position to be in because all you have to do is miss one delivery or forget to mark an item is dispatched. And you run the risk of Amazon shutting down your your account for potentially weeks, or at least as long as it takes to create an appeal.

Jesse Wragg:
So there are a number of reasons to expand into other marketplaces. But at the same time, none of these other marketplaces are Amazon, there’s a reason that nobody’s talking about Etsy, in the same way as they talk about Amazon. And obviously, Walmart is growing well in the US, and there’s a marketplace in the UK called OnBuy, which is also sort of snapping at the heels of Amazon is really exciting to see how they’re growing as well. But when you’re looking at marketplace diversification, you have to kind of go into it knowing that none of these are going to be the next Amazon for you. But that doesn’t mean they’re not worth selling on.

Jesse Wragg:
Obviously, if it’s going to take five hours to create listings on Amazon, and five hours to create listings on eBay, and five hours for OnBuy, and for Cdiscount and for Real and for Auto and Lando and Walmart, and so on and so forth. The ROI is definitely better on Amazon. But if you can find a way of creating a process that works for all of these channels, and actually reducing the amount of time it takes to sell on each of those channels, then it’s absolutely worth being on all of them.

Jesse Wragg:
Every one of these channels is a completely different process. So Amazon, a typical Amazon title is around 250 characters, whereas on eBay, a typical title is 80 characters. So you obviously you can’t just take your Amazon title and put it on eBay. And it’s not very good to sort of just chop off the end of the title so that it fits on eBay. So that means you need to then have one Amazon title and one eBay title, and then an OnBuy title and a Walmart title. And then an Amazon color and an eBay color and a Walmart color. And of course, if you’re doing this across thousands of skews with variations, it becomes massive timesing.

Julia Raymond Hare:
Oh, my gosh.

Jesse Wragg:
So Exactly. So this is where a lot of retailers then just start looking at and go, you know what, we’ve got other parts of our business to run, we’re on Amazon, that’s fine. It’s enough.

Julia Raymond Hare:
They could have maybe a first mover advantage by getting on these other niche marketplaces that are growing.

Jesse Wragg:
And even the ones that are well established, there’s a great marketplace in Germany called Real, the English spelling is real, R.E.A.L, but it’s a good strong, solid marketplace. It’s a household name in Germany from a brick and mortar perspective.

Jesse Wragg:
It’s a very similar history and story to Walmart in the US where you have an established brick and mortar presence. It’s a household name across Germany. And no, it’s not Amazon, but they opened up as a marketplace. They were already getting traffic. And suddenly when they opened up to third party sellers, these third party sellers that were on there and started doing well and taking advantage of all the advertising methods and promoted listings and things like that, they do still make a good number of sales. No, they don’t sell as much on Real as they do on Amazon. But, if you’ve got 20 grand a week coming in from one channel and 100 grand a week coming in from another channel, it’s still a good position to be in.

Julia Raymond Hare:
Jesse, I’d like to wrap up our conversation with, saying the elephant in the room that the retail industry really is in a state of massive transformation. And it’s been a wild roller coaster of a year. What do you think, if you’re speculating is ahead for marketplaces in the next five to 10 years?

Jesse Wragg:
That’s a really good question. And obviously, I don’t have a crystal ball. But what I can definitely say is that my forecast for marketplaces and also E-commerce in general, I think, for the next 10 years, hasn’t necessarily changed because of COVID. It’s certainly been brought forward probably about four years. One thing that we’ve already been seeing a lot in the last three or four years is a growth of new marketplaces. We talked a little bit about niche marketplaces, categories specific or country-specific marketplaces that are sort of holding their own against Amazon, or the big players so to say, within their category, and they are attractive opportunities for people to be selling their products on.

Jesse Wragg:
This is growing, there’s more and more and more of these marketplaces.

Jesse Wragg:
And if you go back in time maybe 50 years, and you look at where we used to buy things. And we go to the greengrocers to buy vegetables or we’d go to the fishmonger to buy fish products or the butcher to buy meat. And then along came the supermarket, and you just had one place to go to buy everything. And I think that’s sort of the circle that we’ve entered into where now with marketplaces, Amazon, or Walmart, or wherever it is that you want to buy your products, you have these places where you can go and buy everything. But what’s happening is, is that you’re getting these niche marketplaces pop up, you’ve got Chewy, you can go and buy a dog food. And you’ve got Etsy where you can go and buy a nice art and craft products made by people who have actually put a bit of time and care into something, it’s not just come off of a production line.

Jesse Wragg:
As these niche marketplaces are coming up, and as they are growing, and they’re succeeding. This is I think, where we’re heading towards, but at the same time it is going to be a never ending circle, where you’re going to then see all of these niche marketplaces again, eventually kind of amalgamate back into whatever is sort of the next step for Amazon, the next step for Walmart, where they kind of become an amalgamation. And you start seeing maybe slightly larger niches where it’s not one for dog food, but one for everything to do with pets, for example, in terms of where marketplaces in general are heading though, they’re exploding. And it’s because that’s where consumers are going. They know that, that’s where they can go and find everything. And by that same metric, it’s where brands and retailers are starting to offer their products because, sure, you can get on Shopify, you can have a nice website and get things up and running, but then you got to think about the traffic. Or you can just go onto a marketplace where the traffic already exists, and you can just try and get your products in front of the consumers who are already there and already looking for their products.

Jesse Wragg:
So marketplaces are definitely here to stay, they’re going to continue growing. And they’re definitely worth being on, especially going into the early 2020s.

Julia Raymond Hare:
Well, Said, Jesse, and I’d like to end this by two more questions. One is, what is the best piece of advice you would give to retailers today?

Jesse Wragg:
Diversify. Absolutely get onto as many marketplaces as possible, throw it all against the wall and see what sticks. Do it properly, make sure that you’re looking at which marketplaces are actually suitable for your products, but just get as many of your listings onto as many marketplaces as you can, because you just have to look through the amazon seller central forums, and you see how frequent an account suspension is, that hasn’t happened to you yet, obviously, I hope it doesn’t. But it’s really … Especially now coming into Q4, it really is only a matter of time in some categories. But also, if you’re not on marketplaces at all, give it a try. Even if it’s just a small sample of your product range, just look at what options there are to create marketplace listings that do reflect the way that you’re managing the rest of your business and launch on there and start slow. But get your listings under these channels that focus on bringing the traffic, because it’s just one less thing that you have to worry about.

Julia Raymond Hare:
Great. And then I’d like to end with a little trivia. So this is my question for you. Do you know which brand invented running shoes?

Jesse Wragg:
I should know that because I’m listening to an audiobook called no logos at the moment. And it was a topic on that, but I don’t-

Julia Raymond Hare:
Yes you do.

Jesse Wragg:
… Because I don’t think it was Nike.

Julia Raymond Hare:
It was not.

Jesse Wragg:
And my head went straight to Nike, because that’s just the power of their brand.

Julia Raymond Hare:
Right?

Jesse Wragg:
I want to say Puma.

Julia Raymond Hare:
Close, it was Adidas, which we talked about a few times in this episode, which is why I wanted to ask, but you were close. You knew it wasn’t Nike. That’s important. I think a lot of people answered Nike.

Jesse Wragg:
Yeah, I really should know that because I heard it in an audiobook, not a week ago.

Julia Raymond Hare:
Excellent. Well, Jesse, you are an expert on marketplaces, you have a very vibrant personality and life. You’re converting a van right now. And you’ve traveled all around the world. I feel like a lot of people would want to get in touch with you who listened to this podcast today. So if so where can they find you?

Jesse Wragg:
The best place to find me really is LinkedIn. I don’t really use other social media. I mean, I have Instagram, but that’s about it. So yeah, LinkedIn is generally the best way to get in touch with me. Or if you want to book in a call to talk about eCommeleon directly, then obviously our website has a little book a demo button. Otherwise, just ping me a message on LinkedIn, and I’m always happy to chat about anything really.

Julia Raymond Hare:
Excellent. Jesse Wragg, Co-Founder and Managing Director eCommeleon. It was great to have you on the show today.

Jesse Wragg:
Thanks for having me, Julia.

Title

Go to Top