How Hawkers Used Savvy Marketing to Drive the Growth
It began simply enough. Two brothers and their friends were looking to take their small second-hand-merchandise website to the next level, trying to identify one product that would propel sales. That product ended up being sunglasses.
What started as a resell business has become, just a few years later, a viral sensation as the upstart company is now challenging the top companies in the industry through a combination of innovative online selling and a bold new leader bringing his visionary business background to bear on the company.
Hawkers is now one of the fastest-growing brands on the market, using online marketing, influencers and a commitment to environmentally friendly production to compete with Ray-Ban and others as the top sunglasses company in the world.
Today, Hawkers has a presence in 50 countries worldwide and sales in excess of $100 million. The company, which sells 90 percent of its products online, has sold more than 4.5 million pairs of sunglasses since its founding in 2013.
In 2012, four young entrepreneurs were building Saldum, a Spanish website that like Craigslist bought and sold goods on the second-hand market. Saldum was the brainchild of brothers Alejandro (Alex) and David Moreno, and their friends Pablo Sánchez Lozano and Iñaki Soriano.
The business was struggling and they began building e-commerce websites for other companies. They began looking for a product to sell quickly and inexpensively. Lozano’s brother, who was studying in the United States, came home with several pairs of Knockaround sunglasses that had become popular due to word-of-mouth sales and influencer marketing.
The four entrepreneurs bought 27 pairs for $300 and resold them at a profit. They soon realized they had their product and a strategy to sell. The company became the official reseller of Knockaround sunglasses in Spain, but the four founders wanted more — their own sunglasses brand that would be affordable, stylish and accessible.
The founders wanted a pair of sunglasses that was high quality but had a much lower price point — $20-$40 — than those sold by luxury brands Ray-Ban, Gucci and Prada. They reached an agreement with Italian manufacturer Luxottica to make their prototype and Hawkers was launched.
Online Selling Approach
The company opted to focus on selling online only. It used targeted Facebook ads to identify young women who fit a specific persona. The ideal customers had large groups of friends, had recently purchased an iPhone, studied at certain universities, attended festivals and liked certain types of music.
The company distributed free copies of the sunglasses, encouraging them to post pictures to Facebook and Instagram a strategy that had worked for them when reselling Knockaround sunglasses.
The marketing practices helped grow the company quickly. However, with growth came challenges.
Betancourt Brings New Leadership and Strategy
By 2016, the company was struggling with operational challenges. While Hawkers was bringing in millions of dollars in revenue each month, expenses were also rising quickly. Demand soared, soon outpacing supply, leading to long delays between when orders were placed and fulfilled. The company feared that loyal customers would begin canceling orders. The company’s online system was limited and as customers sought to find out the status of their orders, the website could only show if orders were “shipped” or “unshipped.”
The situation was dire to such a degree that the company considered going out of business.
Hawkers approached Alejandro Betancourt Lopez and a small group of investors into the company. The Betancourt group invested €50 million (approximately $56 million) in the company and Betancourt himself became the company’s new president in November 2016. Betancourt hired Nacho Puig as chief executive officer.
Betancourt began investing in capital improvements and by 2018, with an additional €20 million commitment, was the company’s largest shareholder.
Influencers became a key part of the selling strategy, well before influencer marketing became a trendy approach to selling.
Hawkers began identifying influencers within its customer base and established an incentives program. Influencers involved in the program would receive discounted sunglasses and a commission on customers they brought along.
Viral marketing has continued to be a trademark of the Hawkers strategy. The company has started a campus representatives program. College students with 1,000 Instagram followers can become brand ambassadors at their universities, hosting events and parties in exchange for perks such as tickets to popular festivals. Today, there are 5,000 Hawkers campus reps.
Strategic collaboration has been Betancourt’s approach at the helm of Hawkers. While there are some brick-and-mortar stores, the vast majority of Hawkers sales are online.
Hawkers now has partnerships with well-known, international brands, including PayPal, Smart, Kia and Mercedes-Benz. They have a sponsorship agreement with the Los Angeles Lakers, too.
In addition, there are endorsement deals with major celebrities, including Usher, Lionel Messi, Dani Alves, Felipe Massa, Nicky Romero, Fernando Verdasco and Paula Echevarria.
Their presence across social media continues to be a driver for success. The company has more than 6.6 million Facebook followers, for example, 1.7 million Instagram followers and 192,000 Twitter followers.
An Innovative Technology Approach
Combining the online sales approach and strategic partnerships has become a key part of Hawkers’ success. Consider its partnership with Spanish clothing brand El Ganso. Hawkers used the collection ad format on Facebook, which featured catalog items under a photo or image, instead of using photo ads alone.
Using A/B testing, with some customers shown the collection ads and some the photo ads only, Hawkers showed significant gains with the collection format. The company saw a 51 percent higher return on ad spend, 30 percent lower cost per purchase and 86 percent higher interaction with the ads. The company now commits 33 percent of its Facebook ad spend on collection ads.
Managing growth has continued to be a critical need for the company. The company started selling on Shopify to address challenges with its website platform.
As a Shopify Plus retailer, Hawkers took advantage of several features on the online selling platform. Shopify allowed for easy scaling as the company grew and a better online shopping experience for Hawkers customers.
Shopify was able to handle thousands of customer inquiries daily and, with custom integrations, was able to provide detailed real-time delivery status updates. Using the Shopify Plus platform, Hawkers has been able to grow from hundreds of orders daily to more than 10,000 daily orders.
Betancourt started his career in the energy business and founded an energy company to develop thermonuclear power plants before leading O’Hara Administration, an asset management company. He has overseen investments in a wide range of industries, including banking, fintech and oil exploration.
That business knowledge has helped drive Hawkers’ growth.
So, too, has been a commitment to environmentally friendly products. It has recently launched a new brand, H20. The gender-neutral collection includes sunglasses made from sustainable plastics and those recovered from the world’s oceans. The sunglasses come in packaging made from recycled and biodegradable components can be disposed of in landfills and will biodegrade in five years.
A commitment to its customers, a reliance on innovative marketing approaches and new approaches to strategic partnerships have propelled Hawkers to remarkable success in a short time. As the company looks to broaden its customer base to more regions, Hawkers is exploring new products, including a line of prescription contact lenses and eyeglasses.
Originally published at https://www.businesstelegraph.co.uk on February 6, 2021.