Inside Retail: After being at Catch for almost five years, what made you decide to take a job at MyDeal?
Ryan Gracie: I wasn’t actively in the market looking for a role, but when Sean [Senvirtne], the founder and CEO of MyDeal, reached out to me quite some time ago, it really piqued my interest. The conversation felt very much like the first conversation that I had with [Catch founders] Gabby and Hezi [Leibovich] back in 2016. The opportunity and the upside that’s in this business feels untapped. And after being here for only one day, I can see that this relatively small team is full of the passion and energy that existed at Catch back in 2016 and all the way through. They are batting way above the average and doing things that only startup cultures can produce.
Now that they’re ASX-listed, they’ve got a chunk of money in the bank that they can utilise to grow the business, and they’re on a growth trajectory where they’re employing good, smart people. Sean is building a really good team around him with [CFO] Lachlan [Freeman], [COO] Josh [Mangan] and [chief merchandising officer] Dean [Ramler] and a chairman like Paul Greenberg, who is e-commerce royalty. Being around that calibre of people is what I really enjoy.
For me, it was also about getting back to the hustle. I wanted to get back to more of a hands-on role, where I have an opportunity to come in and make a real impact. At Catch, it got to the point where I didn’t feel like I was making a tangible difference. I got so far away from my passion for marketing – it was no longer for me.
IR: What aspect of marketing do you love?
RG: I really enjoy the creative aspect of marketing. It’s kind of an oxymoron because most of my career has been about performance marketing, data and bringing customers in via those digital channels. Towards the end of my stint at Catch, I got to use the right side of my brain and do some really creative work with the Everyday Aussies campaign, which was so successful.
IR: That’s the Kim Car Dash Cam campaign, right? You came up with it?
RG: I worked in tandem with an agency to come up with it. It was based around another campaign that I liked, and we just went from there. I spent every night thinking of new characters.
That’s what really excites me, but at MyDeal at the moment, it’s all about performance marketing. We will tinker with that and make sure that we drive as much efficiency out of it as we can, and then it will be time to build the brand, go above the line to drive unprompted awareness, which is very low at the moment, and start to attract more free traffic and get people to come directly to the site and convert.
IR: There’s a lot of interest in online marketplaces right now. What makes MyDeal different from the others?
RG: A lot of marketplaces in Australia are underpinned by external third-party software. Catch is underpinned by Mirakl software, a lot of other marketplaces are driven by the Marketplacer software. At MyDeal, they’ve developed their own proprietary software that drives the entire business. So they’re in charge of their own destiny. They’re not paying fees to an external party, which can get very expensive, especially as you drive scale and volume. They’ve got a crack development team that’s been working on this for 10 years and continues to augment the system, and it’s really easy for sellers to integrate into. It’s probably the most sophisticated marketplace software of all the marketplaces in Australia.
IR: It seems like the rise of online marketplaces has really changed the e-commerce sector. Does it feel that way to you?
RG: It was definitely a game changer at Catch. The moment that we tapped into marketplacing, we increased our SKU count from 30,000 to over two million, and all of a sudden, we had many more fishing lines in the water to attract the fish.
It feels very easy to scale a marketplace. You get this software and you attract sellers in, they hook up their stock count and warehousing, and away you go. But the challenge is controlling the customer experience when you’re heavily reliant on third-party sellers to fulfil a sale that has happened on your site. If you look at brands like Bunnings, Target, or Myer that have very strong well-known brands, when they put their customer experience in the hands of a third-party seller, it can be really detrimental. That’s one of the challenges that Catch has, and it’s one of the challenges that MyDeal has.
IR: Speaking of bricks-and-mortar retailers like Bunnings, Target and Myer, what are your thoughts on how a pureplay retailer like MyDeal can compete with omnichannel retail?
RG: I think the strength of a pureplay is in the efficiency of the resource. I’m standing here and I can literally see every person that’s driving sometimes close to a million dollars in revenue a day. There are so few resources required to generate so much income.
When you look at traditional retailers, they have all of this floor space that they need to service, and the cost becomes very burdensome, so they need very large margins just in order to stay afloat. That’s the benefit of being a pureplay – we don’t need such high margins. We can sell product at a low price and keep costs down.
IR: So pureplay retailers aren’t at a disadvantage by not having bricks-and-mortar stores?
RG: There’s the tangibility and the brand-building that can happen with bricks-and-mortar presence. I worked with JB Hi-Fi for five years, so I know the power of those stores – I know that people love to interact with the people that work in those stores, and I know that having the yellow and black plastered all over shopping centres is what leads to that brand growth.
It’s hard for customers who don’t know a company like MyDeal to instantly trust them. If they buy a product, will it be hard to return if it’s not what they’re after? You don’t form the relationship that you form when you go into a bricks-and-mortar store. But sometimes the relationship you form with a bricks-and-mortar store is bad because the customer service is bad. When you get that mix right, then I think that having bricks-and-mortar stores is very powerful, but it comes at a cost. And the cost is high.
IR: Since Amazon launched in Australia a few years ago, the frenzy has died down a little, but they recently surpassed $1 billion in sales. Do you still see Amazon as a big threat locally?
RG: Amazon has definitely taken off in Australia, and if any retailer believes they aren’t a threat and that they shouldn’t be looking to Amazon for how to operate best practice, then they’ve got to.
What they do with their fulfilment, the way that they can expedite delivery almost overnight and get it to you within hours, is going to be a game changer for e-commerce. People want great products at great prices, but sometimes they will trade off those great prices for speed of delivery. People want it really quickly, and that’s where Amazon is winning the fight.
But they’re also a trusted and well-known brand. They’re relentless with their above-the-line advertising, and their Amazon Prime offer will not be beaten. The fact that they offer content as well as free delivery, great prices, great customer service…at every turn, they seem to be winning the fight, and all of us are just trying to catch up to them.
Some will, some won’t. But there will still be room for other players in the market – and that’s where we operate with MyDeal. We don’t subscribe to ever really catching up to Amazon, but the pie is still so large that if we can take even a slim slice of it, it’s still a solid business.
IR: Returning to the topic of marketing, it seems like there’s been a big rise in livestreaming in Australia over the past year or two. What are your thoughts on this trend?
RG: We tried it at Catch – we formed Catch Live and ran it for about six months. There was a large team behind it and a lot of production that went into it – and costs, of course. The problem in Australia is scale.
I know it has really taken off in China, where you’ve got a billion people, and it costs exactly the same amount of money to livestream and broadcast in China as it does in Australia, but the economies of scale make it far more profitable there. If you put a livestream out and you get 100 viewers, it’s not really going to turn the needle. I think that one day it will eventually catch on, but getting that critical mass to make it worthwhile is the hard part.
IR: Maybe what I’ve been seeing is more influencer-driven? So there aren’t necessarily as many resources behind it…
RG: I think that influencers are extremely overpriced. I’ve used influencers in the past, engaged them and taken a risk on the fees that they want to charge, but for me, when you’re a retailer selling brands, the proposition is very different. It’s very hard for an influencer to say, ‘Here are some amazing Nike shoes’. They’re really promoting Nike, rather than the retailer, so the benefit is more to Nike than us. It’s very tricky.