Angela and Steve Watts are the life and business partners behind Veldskoen Shoes, selling handcrafted footwear from South Africa. As serial entrepreneurs, they are also the owners behind Slyde, makers of handboards used in bodysurfing. In this episode of Shopify Masters, Angela and Steve Watts of Veldskoen Shoes share their ways of validating a market fit, managing ad spend, and their number one tip for navigating the effects of COVID-19.
A personal connection to Veldskoen Shoes’ history
Felix: Tell us about the story behind Veldskoen Shoes.
Angela: Veldskoen is a shoe that's been around for centuries. If you are from South Africa or Africa and have ever heard of the term Veldskoen, it's a type of shoe there.
Steve: I grew up in South Africa. I loved growing up there. We had this pair of shoes that everybody had a pair of. They were essentially farmers' shoes. They go as far back as 400 or 500 years. One of the tribes in South Africa is called the Khoisan tribe, which a lot of people will know as the bushmen. They were the ones that first started making these shoes in a really rudimentary way. We were looking into how far that goes back. It's obviously really difficult to get there but as you can imagine, it goes back over 1,000 as far as the tribe is concerned because they're the oldest tribe in South Africa. It's evolved and it's basically a heritage shoe in South Africa. We hold it very dear to our hearts as far as just who we are as a culture and a nation. When I was in South Africa at the end of 2018, I saw somebody wearing a pair of these shoes and I was like, "It'd be so awesome to bring these to America because they're such amazing shoes."
Felix: You actually had another successful Shopify store, what made you decide to branch out and diversify?
Angela: Slyde is a seasonal business. Obviously, Slyde, if you don't know what it is, it's a handboarding company for body surfing. Our biggest time of the year is the summer months. In those winter months we have a lot of spare time. We always just use those months to prepare for the summer. Slyde is still running and still successful but we really wanted to grow. We're growing our family and want to support us more. We knew how to do it because with Slyde, we were creating an entirely new market where we have the infrastructure of knowing Shopify in and out since Steve has built and designed and does all the programming and everything for Shopify there and we knew how to market. I think we were like, "If we can sell millions of dollars of these tiny little handboards, if we go into a bigger market that's not so niche we know we can do really well. We were able to prove that in our first year of business."
Felix: What about the shoes that made you realize this is an actual business opportunity to import or to bring this cultural element from South Africa to America?
Steve: The most important thing for me was the story. It was very dear to my heart and obviously I've grown up with the product myself. It's the biggest thing even looking forward to if we have to start any other kind of brand would be that it has to start with a story. It has to be authentic. You have to have a passion for whatever you're doing and you have to believe in the story that you're telling. I truly believe in the product, it's such a comfortable shoe and all our reviews, that's what you hear. Not to mention, it's really important for me as a South African expat, to want to give back to my home country. Veldskoen, it's ethically produced and sustainable. It's a country with almost 30% unemployment. I don't even know if a lot of people can even get their head around what kind of unemployment. Our factory hires 150 people. Most of those people have been with that factory for 20 odd years.
How they tested the American market
Felix: How are you able to validate whether it was going to be a success or not without obviously dropping everything in and just diving right into this new business?
Angela: We brought over a few hundred pairs of shoes from South Africa. We set up a booth at the Abbot Kinney Festival that September of 2018. Steve and I were selling the shoes. We constantly had people there at our booth. It was a crazy and hectic day but the results of it, we knew it was going to work here because we do have partners in South Africa. They do a great job there but everyone knows what a Veldskoen is in South Africa, it was interesting to see bringing something here to the US, how it would be perceived. It was perceived great that day.
Steve: I think as an entrepreneur you need to have a healthy dose of self-belief and stubbornness at the same time. Regardless of us doing that test, whenever I have a belief in something, if I don't have a belief in something, let me start there, it's very difficult for me to get motivated on something but when I do I'm like a dog with a bone. I won't let it go. That was also a great deal of it. The testing, obviously, is very important if you don't want to waste your time but I just knew in my heart of hearts that this was going to be something that would work. Regardless of that, beyond that, that didn't really matter to be because it was more about creating these jobs in South Africa and hopefully making a great brand out of something that was so good and helping so many people over there.
Felix: What else did you learn about selling your product in person that you were able to take with you when you started selling online?
Steve: That we didn't want to sell in person, basically.
Angela: I hated selling shoes in person. I don't want to put a shoe on another person's foot myself ever again. It was such a long and grilling day. The big thing was sizing was a difficult thing. Figuring out when you have shoes.
Steve: They're very specific. It's a bit like a bed. They're very specific about what you lie on because you're in it half your life. You're in them half your life the other direction. If somebody doesn't like it, they immediately send them back. It's a very big hurdle to get over as far as shoes are concerned because obviously we offer free returns and exchanges.
Felix: Anything else that you can do upfront before they even make a purchase to reduce the number of returns due to sizing?
Steve: Technology plays a big role in that as far as I know Nike has a special fit thing that they spent millions on. Obviously we don't have the money for that. Through our email flows, which is post-purchase, just making sure that people understand that when they put the shoe on, that the leather is actually going to ... It's whole grain leather meaning it isn't made up of separate pieces of material or leather. It's a piece of leather that will essentially last a lifetime. There is a bit of a break-in, two to three days of wear. Just making sure that they're aware of that.
Angela: I think what's really helped is that our reviews have grown. We use Judge.Me Having that up there, because people look at the reviews and everyone comments on the sizing, what they normally wear. Then we suggest if they should size up or down.
Storytelling and the components of a successful online store
Felix: How do you make sure that your storytelling comes to your customers?
Steve: With a great deal of difficulty at first, actually, to be honest. I give a lot of credit to my friend Joel who is up in Los Angeles. He's actually part of our marketing team. He's worked for Nike and a bunch ... I would go up there for a day and we would just sit and talk about it. Obviously I had the passion for it. I had created Slyde and I knew I was two steps ahead but he definitely helped me take it to another level of explaining but not over-explaining with copywriting. Imagery is key.
Angela: Shopify obviously gives such an amazing platform to make beautifully designed websites where Steve, as a designer is able to go in there and just be able to tell our story through the imagery that he's been able to get. Then also I think the other major piece of telling our story is what we do through the followup emails, even just post-purchase. Even if they haven't gone through and read all about us and the history, they're getting that as the shoes are on the way to them. Even after they get them or when they go back, if they need to exchange it or decide they want to return it, they see the history and everything. Maybe they're like, "Oh wait, maybe instead of returning I just want to exchange or try something else." We're constantly able to share that story and obviously through social media.
Steve: The emails are definitely a huge part. I give a shout out to Klaviyo for that because they're amazing. Just their whole platform is easy to use and get paid for that, I just really believe in what they're doing over there. I really get a kick out of communicating with our customers through email. I enjoy setting the whole thing up. It's fun.
Felix: Tell us about how you are able to capture the imagery that you want?
Steve: As Ang said, we have partners in South Africa. I'll give a big shout out to Nick who organizes all of the imagery. We work together, I'll tell him, "More color" or "Just do fun." They get some great stuff. We have some very authentic pieces that come out of, it comes from straight from the source. They've been producing some fantastic stuff. It's funny, I'll go through old albums, I catalog. I'm meticulous with cataloging our imagery. I put it all onto Lightroom and then I pick from there every time. I'll go through old pictures and I'm like, "That would be a great banner image." We change it out regularly.
Felix: How do you determine whether the site looks good or not?
Steve: Look, I'm a big fan of AB testing. I love the concept. Unfortunately I don't have time to do that in a very stringent manner. A lot of it is gut feeling and I've been doing it for eight years. I go with my gut. We've taken our conversion rate from what was a 0.7 to well over 2 or 3. It seems to be working. I'm not saying it's the best way. If you have the ability to do AB testing and make that a central part of how you do your web design but I'm just not analytical like that. I'm a designer by degree and trade and I've been doing it a while. It's just something I know something that fits and I know the story I'm trying to tell. It tends to kind of evolve onto the backend which is a good conversion rate.
Angela: It's also important to obviously change it out as the seasons are going and what's going on in the world and what's trending in fashion. You do have to be on top of it all the time because something new is happening every day. Usually, you need to reflect that in your business.
Perfecting the post purchasing experience
Felix: What are sending your customers after they make a purchase?
Steve: Anybody who is familiar with emails will understand flows but a flow is essentially kind of what it sounds like. It's just a flow of emails. You can set up separate flows that target different segments of customers. This is where, I think, Klaviyo is by far and above the best is their segmentation. In other words, you can segment somebody who, just from the things they do, the amount of time on the site, there's so much data that I wouldn't go through it all. Obviously our biggest return on investment from my time is just building out the two most important is a welcome email. Any time you sign up to our email list, our newsletter, you get a welcome letter of about eight or nine emails. Those are all set up as a flow. They go out obviously every two days or whatever. Then our abandoned cart has been fantastic. Obviously, if you haven't set up an abandoned cart in your email. Another one that I just set up recently was browse abandonment. You can set up flows for people who are VIPs, you want to treat those people differently. The most important thing about is recency, it's how recently somebody has done something on your site. If you can keep that in mind as far as when you're setting up segmentation.
Managing and tweaking ad spend
Felix: You had mentioned to us offline that you started with only $1,000 in marketing spend and have grown it significantly over time. How much have you grown your ad spend monthly now?
Angela: We're up to about $30,000 in monthly ad spend and we're growing that every month. We focused a lot on our cost per acquisition. We just need to make sure that we're not losing money per sale of shoes. You have to remember that our shoes are expensive. They do cost 135 to 179. But you have returns, exchanges, free shipping, and then obviously acquisition cost and overhead. All of that comes into play. We wouldn't be able to have rolled over $1,000 into now 30,000 without getting investment, without making sure our acquisition cost was at the right price. That was why we went very slowly started at just $1,000. There was a lot of testing going on and tweaking.
Felix: What is the approach to test early on to make sure that you are not losing money and that you're not going to end the month in the red?
Angela: You need to first figure out all your costs before you know what that cost per acquisition can be. That was the first thing we did. How much can we spend where we're not losing money? What's our goal so that we will have an excess amount of money to roll over into the next month? Being able to have that testing and know where you can be, what your max is before you can up your spend. Don't up your spend if you can't afford it. As we started getting lower in our average acquisition costs, that's when we started raising the spend. The lower the costs got, then we started raising our spend.
Steve: Something I want to add to that as a caveat is, it helps to have a partnership with somebody that you trust that knows what they're doing with Facebook if you want to. There's every way that you could do it yourself but the way that we've done it is we've partnered with a very good friend of mine who also happened to be a data genius and was able to find the people at the right cost of acquisition. I'm not saying that you can't do this yourself because you can but it also takes an immense amount of time when you consider the fact that it's a bit like gambling in that you can throw $1,000 down on Facebook and end up with nothing. You need to be very careful with it. If you're going to do it, you need to understand the way that the algorithm works. You need to understand the back end of Facebook advertising. You need to understand the data. If you don't, if you have no clue what that is and you haven't got the next best mousetrap, I would definitely consider joining up with somebody that can do that. Facebook advertising has evolved to a point now where you can definitely do it yourself but to get those, it takes a lot of time and effort. That's as much as I can add to that.
Felix: Have you been able to determine what has been the winning combination of who you should be targeting and what kind of ads to put in front of them?
Steve: Honestly, it changes weekly because if it goes over a certain threshold that we've set, then we cut it immediately and start on something new. We geotagged a specific because it's a South African shoe and rugby is a religion to us. The Los Angeles Rugby Sevens was a tournament that happened just before the virus hit. We geofenced around that location and we had our best day ever.
Angela: Yeah, we did almost $15,000 in that one day with very little ad spend. Then our Instagram stories that day are all relevant to that event. Everything between the marketing and advertising feeds connects to our social media persona and they are connected to what event they're targeting and then what event is going on.
Team of advisors and their advice for navigating COVID-19
Felix: Tell us more about that. How did you set up a team of advisors for your business?
Angela: I highly recommend being around people that are smarter than you. Our advisor, my main advisor Sam, we met him seven years ago. He just helped us with our financial model. He's passionate about it. He was retired, he's in his 70s. He works for the love of it. I still meet with him once a month to go over all our P&Ls and balance sheets and just make sure I'm not missing anything. Neither Steve nor I went to business school. He has been by far the most important piece of our financial success and not having a bunch of debt and be able to grow our business organically.
Steve: Well, the minute COVID-19 hit and we knew it was obviously going to be more than just a couple of shops closed down, we saw the bigger picture coming like a freight train. The first person we called was Sam and he was just like, he just said to us, "Cash is king. Just cut, cut, cut whatever you don't need. All you need to do is get through this." That's a piece of advice for anybody out there, I'm just saying about the COVID-19 which is just to get through this however you can.
Angela: Goldman Sachs has a program called 10,000 Small Businesses. That was something I did this year. They set you up with advisors for free, to get a mini-MBA that is run through Babson College. They pay for your school for a semester. That was something that was definitely another important piece to just helping us learn and grow the business. Then having those connections with people. Then the third advisor, my dad. He’s doing our books but he's had his own multimillion-dollar business when he was younger. He was able to retire early. It's nice to have him around because he comes into the office every day. If there's an issue it's nice to have a sounding board.