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Take one chess set, add a little alcohol then sprinkle with £1000 of borrowed money and place it in the attic of your mums house; And hey presto! You have an 11 million pound business. welcome to Firebox. |
Toys for theBoys
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How long has the company been established?
The business was set up as a partnership called Hotbox in June 1998 by co-founders Michael Smith and Tom Boardman who were friends from Birmingham University.
Our original web address was hotbox.co.uk - this was the pre-dotcom boom era when British businesses secured “.co.uk” domain names and “.com” was seen as a domain for the US market. Unfortunately “hotbox.com” happened to be a hugely successful adult entertainment website in the USA which, as you can imagine, caused a few misunderstandings in the early days. We re-branded as Firebox.com in early 2000 and haven’t looked back since (apart from when crossing roads).
Where did the idea for the Firebox business come from?
Michael and Tom were avid readers of lifestyle magazines such as GQ, Esquire, Maxim and FHM and had spotted a retail opportunity for the dozens of weird and wonderful gadgets featured in their pages every month, but which were not available to buy in the UK.
The idea was that Firebox would be a retail brand to bring these new and exciting products first to UK consumers. Start-up funding was extremely limited – the business was set up with £1,000 from Michael’s mum and the offer of an attic to use as an office from Tom’s parents – so a costly traditional mail-order catalogue was shelved in favour of an internet business.
With Tom’s background in technology it meant that the site could be up and running with minimal cost and the fledgling business would reach a larger potential market than a physical store.
How does the Firebox business model work?
We find cool unusual new products from around the world and sell them to our customers here in the UK and overseas. In practice it’s obviously a little more complicated than that, (our competitors over the years have found it pretty difficult to successfully replicate the Firebox model), but at the heart our focus is on retail and service.
Our main focus is on identifying what we think will be the 'next big thing', and many major high street retailers now watch Firebox to identify products that will go on to become successful in the mass market.
What is the company's philosophy?Fundamentally that shopping should be exciting, fun, honest, and as hassle-free for customers as possible. It’s a bit of a cliché but we really do put customer service at the heart of everything we do. Our service philosophy is very straightforward: “If we were the customer, how would we want to be treated?”. Everything we do is based on this premise.
We try our hardest to exceed expectations during every step of the order process – from having as simple an ordering process as possible, to picking, packing and despatching orders the day they are placed. The fastest we’ve ever shipped an order is about 10 minutes after it was placed, and we even throw in a bag of retro sweets in with every order for our customers to enjoy - a little surprise they aren’t expecting.
On the rare occasion something goes wrong, (for example after we’ve passed an order on to our couriers for the “final mile” of delivery), we will do whatever we can to leave the customer happy with the solution. It’s obviously expensive running a business this way, but the reward is customer loyalty and ultimately free marketing. It’s no coincidence that the number one way that our customers find out about Firebox is through word of mouth.
How did it get off the ground?
In late 1998 Michael and Tom invented a product called the “Shot Glass Chess Set” where traditionally chess pieces are replaced with alcohol-filled shot glasses that are knocked back every time a piece is captured.
They took it from original idea through product design, testing, and manufacturing and managed to launch it the same year. In December 1998 the product generated £15,000 in net profit that enabled the business to continue expanding. It was one of the company’s best selling product lines in the early days and was also sold to trade customers in the UK and key retailers in Europe and the USA.
Who is your key target market?
Officially it is an 18-45 year old, urban-dwelling ABC1 male/female with internet access – in fancy marketing-speak they would include “City Adventurers”, “Cultural Leaders”, and “New Urban Colonists”.
But really it is anyone that has ever struggled to buy a cool gift for a friend or relative, or read about interesting and unusual products in the media and found that they were unable to get hold of them in the UK. Firebox customers are independent thinkers, bored with commodity products that are available on the high street and tired of receiving poor service.
Firebox now attracts a much wider female market than when it was originally set up. The male/female customer split is now almost even due to the increased range of lifestyle products and the newly launched range of cool and quirky kids stuff, “Firetots”. Our main market is the UK but we have shipped to 147 countries worldwide and the furthest we’ve shipped an order is to Tierra del Fuego in the South Atlantic.
When was the first catalogue produced?
The first catalogue was an A4 photocopied sheet of paper containing 8 products that we sent round to friends and family when the website went live in 1998. (The print run was about 35 copies and it didn’t drive a huge amount of revenue, but it paid for the photocopying costs, so technically gave us a return on investment.)
Our first REAL catalogue was launched in November 2000 – it was part catalogue, part magazine editorial. In a fit of creative genius we called it a “magalogue”, thinking at the time that we had invented an entirely new sales format combining traditional catalogue retail with editorial features.
The magalogue was received well by existing customers who knew the brand and our irreverent style and sense of humour, but didn’t work as well with potential new customers who hadn’t come across our brand before. We redeveloped the format to include a bigger emphasis on showcasing products without losing the inspirational lifestyle elements that we feel sets us apart from our competitors.
How often are the catalogues changed / refreshed?
We print catalogues around 3 or 4 times a year, and we like to think we subtly improve the format each time. We try and make sure that at least 50% of the products are new to each book, and the ranges on offer are tweaked to fit the upcoming seasons ahead.
How would you define the Firebox Catalogues?
A paper-based version of our award-winning website, just slightly less orange.
What process do you use to source Firebox products?
It’s a heady mix of jet-setting round the world visiting various trade shows and keeping in touch with our manufacturing partners in the USA and the Far East.
The Firebox product range is incredibly diverse: we sell everything from a USB VHS Player (it plugs into your PC and helps you transfer VHS tapes to digital video) to Kopi Luwak (the world’s most expensive coffee, made from coffee berries which have been eaten by and passed through the digestive tract of the Asian Palm Civet).
The immense variety means that our buying team really have to be on their toes – but what ties everything together is that each product has an unusual twist that makes it memorable.
Once we choose a product we test it thoroughly (ie. we play with it lots in the office) and get to work on shooting our own product photography, writing a review and getting the product in stock and ready to ship to our customers as quickly as possible. Our record time from finding a new product to getting it online is around 48 hours.
How often do you introduce new products?
New products are added to our range every week - the idea is that every time you visit our website you’ll find something you haven’t seen before. Every product has its own distinct life cycle – some burn brightly and are quickly retired, while some others are evergreen products that continue to sell year after year.
When did the website launch?
The original hotbox.co.uk website was launched in the summer of 1998. The Firebox.com website which followed was launched in April 2000 after 5 weeks of blood, sweat, tears and HTML coding.
How has the website contributed to sales?
Hugely - the majority of our orders are placed via the website with the rest by phone. We decided many years ago that we wanted the catalogue specifically to drive visitors to our website so we dropped the order form five years ago and simply replaced that page with more products. The net effect was an overall increase in revenues and slightly fewer cheques and postal orders being sent to us, so it made sense to continue.
Is there a particular time of day and / or day of the week your website is the busiest?
The majority of our orders are placed during working hours. We like to imagine our customers furtively flicking between our website and the excel spreadsheet they’re supposed to be working on. (One of the ideas on our technical “to do” list from the early days was a “boss” link you’d click on to bring up an important looking pie chart so that you looked busy if someone walked past your desk).
How do maintain your customer database?
Our website, database and back office tools are all developed in-house, but we work with a data processing company called Meta Morphix who help us with cleaning and screening data prior to physical mailings.
Do you segment your database?
We broadly segment based on the usual metrics of recency, frequency and transaction amount but this is an area that we’d like to improve on in the future.
How often do you send out your email newsletters?
We send our email newsletter more or less fortnightly – roughly the amount of time it takes us to launch enough new products online to warrant emailing our customers with the news.
What is the fundamental reason for your email newsletters?
To remind our customers we exist, to let them know about our exciting new products and hopefully to provide a bit of entertainment as well.
Do you use a specific email marketing service provider?
Like most of the IT systems at Firebox, we have developed our email marketing solution in-house. Our database is now over 600k and we track deliverability, blacklisting and content scores.
Would you say you have any competitors?
With the substantially lower barriers to entry for operating online, competitors such as “I Want One of Those” and “Boys Stuff” soon followed Firebox. With the profile of the gadget sector growing and stealing share of wallet from traditional gift outlets, many high-street retailers have now joined the fray as well.However by operating exclusively online it means that Firebox can act much more quickly than high street competitors: from finding a product, passing necessary testing and certification, securing product PR in the media and adding the product to the constantly-updating website.
What has been the growth revenue in the last few years?
Firebox has been profitable since late 2001 and has grown very rapidly. Turnover for 2007 was around £11m, and Firebox was ranked as the 13th fastest-growing business in the UK (Source: Sunday Times FastTrack 100, 2004).
Over the years have there been any huge threats to the Firebox business?
Competitive and economic pressures remain in force to keep us on our toes, but back in 2001 we faced a threat from an unexpected source: our bank that processed our credit card payments.
The dotcom bubble had burst leaving many online retailers heading into administration and exposing the banks to losses. Our bank decided that in order to reduce its exposure to online retail it would require a new deposit from us equivalent to our busiest month’s trading to be held as security. This meant we had about 30 days to come up with over £300,000 or have to turn credit card processing off, effectively shutting down the business. Fortunately we were able to move our credit card processing contract to a different, more forward-thinking bank that understood how online retail works.
What does Firebox acknowledge as their biggest achievement?
Building a relatively well-known online brand from scratch without a huge marketing budget – just a huge amount of passion and lots of coffee.
What is set for the future for Firebox?
Global gadget domination! Bringing the Firebox brand to more people in the UK, launching even more exciting new products and taking our brand into more overseas markets. This past year we have launched a standalone US business which is growing rapidly, and we also have an eye on European expansion.
