Apricot Lane’s unique spin on fashion resonates with customers, and a new e-commerce initiative will help it reach a larger audience.
As a fashion retailer, Apricot Lane loves to lead new trends. Founded in 2007 by CEO Ken Petersen and partners Scott Jacobs and Tom Brady, the company brought together two familiar but typically separate concepts and launched a women’s boutique fashion franchise.
“This fashion retail industry didn’t really have franchises,” Petersen says. “But we’re franchisors and we’re good at it. With 22 years of experience in franchising, I thought, ‘My gosh, there has to be a lot of people who would love to have a fashion boutique, but the risk is high without the infrastructure of support, leverage and networking that franchising provides.’ So in 2007 we launched and grew right through the most difficult economy since the Great Depression.”
Apricot Lane has since opened 91 franchises across the United States – from California to Illinois to New York. With a lengthy log of franchising leads, the company expects to maintain a pace of 20 to 30 stores per year. It opened three last month and recently opened a new store in Longmont, Texas.
With a steady stream of brick-and-mortar boutiques popping up around the nation, Apricot Lane is also expanding its virtual presence with a new e-commerce project.
Find it Online
“This is a big initiative for us and we’ve been working on it for a couple of years,” Petersen explains. “I don’t know of many retail franchises that are entering e-commerce in the manner and fashion we are. As a retailer in today’s economy, e-commerce is critical, so the question for us was not if, but when and how, and the ‘when’ is the end of October. The ‘how’ is pretty unique.”
Apricot Lane is working with Spiegel Design Group to develop an e-commerce platform tailored to the retailer’s unique operation. Before selecting the design consultant, however, Apricot Lane conducted a pilot program with two of its stores – in Peoria, Ill., and Dallas, Texas – to answer key questions to help form the basis of Apricot Lane’s e-commerce program.
“When we started, I was asking the same questions our franchisees were asking: ‘Will e-commerce take sales from the store and just move them online? How do we create and generate traffic in the stores?’” Petersen explains. “Because when you think about it from a corporate perspective, we are a franchise business so we are only as successful as our franchises are. So if we were going to do e-commerce, No. 1 we wanted the best technology out there, and No. 2 we wanted to figure out a way in which everybody benefits – the franchisor benefits, the brand benefits, the franchisee benefits and outside partners benefit.”
The retailer initially created Facebook-based e-commerce sites for the two stores and closely monitored their activity over the past year-and-a-half. What Apricot Lane found was that not only did store sales increase substantially, but both of its beta stores added substantial new sales through e-commerce. Petersen believes those results came partially from several strategies:
• Merchandise on Facebook was primarily different from what the store carried.
• Customers could save freight by picking up their order at the store, resulting in store add-on sales.
• Social media grew exponentially as customers began sharing a more diversified product offering.
Peoria and Dallas both used the e-commerce platform to boost recognition as evidenced by their huge increase in social media traffic. Each started with about 2,000 likes and have since reached 200,000 likes.
A New Model
With those successes, Apricot Lane considered implementing the same model to the rest of its stores but quickly decided that the model would not translate well onto a larger platform because it offered no efficiency or leverage. The expense involved to warehouse more inventory, hire models, produce professional photography, hire staff, handle logistics and manage marketing and promotion for this new sales channel would be too high for many of its franchisees.
So Apricot Lane opted to have one corporate e-commerce site with corporate Facebook links that each store will be able to use in its own email and online marketing. The links are embedded with tracking technology that allows Apricot Lane to determine from which store the online sale originated. Each participating store will receive 10 percent of sales as a revenue share, much higher than the 2 and 3 percent shares that are typical in the business.
The e-commerce platform is also designed to drive in-store traffic just as the Facebook platform accomplished. The brand is considering a store pick-up option with customer incentives to pick up at their local store. In addition, Apricot lane will give first-time customers to the site a $10 coupon to be used in their local store. Each store will be reimbursed for these coupons monthly by corporate.
“Stores will be able to participate in e-commerce without the upfront investment and work, and with the goal of increasing store traffic and sales while providing new monthly revenue,” Petersen says. “It will also elevate, protect and consolidate the brand, and that builds equity for everyone.” O