Digital Giant

When Tony Ellison began virtual “e-tailer” Shoplet.com in 1994, the rest of the office-products industry had barely begun to offer online the stock that filled the back rooms of their retail outlets. Now, Shoplet.com has become a market leader with a national footprint and an expansive offering of some 400,000 products. Here, CEO Tony Ellison talks about how he identified this early opportunity, and how he plans to continue capitalizing on the “seismic shift” redefining business as usual.

Tony Ellison, CEO

The company was founded in 1994, on the simple premise that we wanted to provide the largest and widest selection of office, business, and industrial products online, with competitive pricing and [the] best customer service—all from a very efficient platform to transact from.

In 1997 the company became profitable, and we’ve been growing ever since. We’re the number-one virtual e-tailer in the office-product category. We’ve had 58 consecutive profitable quarters of organic growth. Our growth has been tremendous, from 2000 to 2006 we grew triple digits, and from 2007 onwards we’ve still enjoyed strong and aggressive double-digit growth.

Our DNA is the web. Our industry is experiencing a seismic shift, which started in the mid-90s and continues today, from offline to online, with customers realizing it is far more efficient to be online, both in terms of time and price. For the big boys—Office Depot, OfficeMax, Staples—retail has become a liability, with its huge overheads, and they’ve had losses, both in terms of sales and talent. In comparison, when you look at Shoplet, we’ve been claiming market share and attracting the best talent.

Fundamentally, the difference between us and everyone else is our value proposition. We go to market with the largest selection in the category, 400,000 products—35 times as many products as an average brick-and-mortar superstore. Secondly, we offer customers 10-35 percent savings on the cost of goods offline, outstanding US-based customer service, personalized service with in-house sales people, and we offer our customers what they need.

We are an obsessively customer-centric company, and we look at how complementary a new product category is to what we already sell. That is how we decide what to offer. A customer is likely to buy everything from coffee to IT products to office supplies from one source, and once we have a relationship, we look to monetize that.

Some 98 percent of all businesses in the US are small businesses. Shoplet.com is the champion of small business, and most of our growth has been organic, from word of mouth. The majority of our revenue comes from small business: 75-85 percent (companies of 25 to 250 people).

Fortune 500 companies have benefitted from transacting through an e-procurement platform that delivers volume discounts. The platform (when first developed) usually cost over $750,000. There were, and continue to be, very few small businesses in the country who could offer that kind of money up front to streamline their purchasing process and gain control of their ordering. In 1997, we wanted to differentiate ourselves with a sustainable, competitive advantage in the marketplace, so we built a proprietary e-procurement system that we offer free of charge to all of our customers to help them manage their [spending].

We see social media as a great platform with which to engage our customers and build a community. We are very active on Twitter, Facebook, and have our own wonderful blog to help us continue engagement with our customers. Social network sites have been a great medium through which to learn more about our customers. At the heart of all this is CLV [customer lifetime value]. It isn’t about acquiring customers; it’s about retaining customers. Through all our marketing we are able to focus on behavioral-based advertising and marketing that serves targeted ads, retargets our customers, and provides complete customer segmentations.

For the future, we plan to continue growing, serving the customer. We don’t have any sexy or outlandish new strategies, we’re just going to keep improving the customer’s experience online. We continue to see a huge trend of people coming online, and we are so well positioned that we’ll continue to gain market share.