Hi, Tell us your name, what you do, and about your business. How do you figure out what’s trend savvy or not?
My name is Nelli Jeloudar and I am the founder of Bundleboon – a curated shopping service specialized in kidswear making trend savvy subscription boxes for kids. We take away the hassle of shopping for your children and instead, we turn it into a fun and memorable shopping experience for the entire family.
Our concept is easy and convenient to use. Simply complete our style quiz on our platform and we will use the data and the answers to hand-pick two personalized outfits and ship them straight to your doorstep. Use your living room as a runway for 5 days and only pay for the items that you love and want to keep.
We currently offer more than 30 brands in our boxes and have constructed consignment deals and exclusive wholesale deals with brands, which allows us to lower the inventory risk and still have high enough margins to scale our business.
Our monthly revenue is around $35,000 with a profit margin of 60%. The average basket size is $180, meaning 52% of the items in the box are kept and paid for.
What’s your own background. Were you always proficient in this business, or did it just strike your mind one fine day?
Bundleboon is my first business, in fact, I never wanted to become an entrepreneur.
When I graduated from college in Copenhagen, I started working for Pandora Jewelry where I quickly found a passion for customer experience and the importance of it.
After 3 years of at Pandora, I came across a job ad on Facebook from a Danish/Dutch fashion startup, called The Cloakroom (European version of Trunk Club) located in Amsterdam. They were looking for Danish account managers and personal stylists. I decided to go for it and moved to Amsterdam. It was by far the best decision of my life.
The two founders of The Cloakroom took me under their wing and taught me that you don’t have to have a fancy degree in business or a pocket full of cash to become an entrepreneur. It was all about the mindset, dedication, and proof of concept.
I have spent my “young” professional life building processes to increase customer loyalty and centricity for both startups and bigger corporations within retail and e-commerce.
In 2014, I was diagnosed with early stages of ovarian cancer and as cliché, as it sounds, it made me realize that life is way too short and that it was time for me to step outside of my comfort zone and take risks. And so I did.
The idea for Bundleboon came about when my friends with kids kept nagging me about how intrigued they were about The Cloakroom and curated shopping. They didn’t understand why there was no such service available for kids. Many of them wanted to find something like- say – subscription boxes for teen boys – but couldn’t find.
What went into designing the initial product? Can you take us through the actual process?
I started doing some marketing research about similar concepts in the US and the kidswear market in Europe. I found out that kidswear is the fastest-growing segment in the fashion industry with market size of $65B, but lacking any true innovation or customer experience.
After a few months, I decided to go for it and see if there was a demand for this type of service for kids. I set up an account with Thunderclap (an announcement tool, which has now been shut down), made a campaign and started to reach out to my network.
The goal with the campaign was to get enough social reach and get traffic to my landing page, where parents could sign up to pre-order a box with 2-3 outfits.
Within 1.5 weeks after the campaign went live, I had 125 pre-orders via my landing page with zero money spent on acquisition. This was a clear indication for me that there was a demand for a service like Bundleboon.
There was just a small problem. I had no idea how to pull it off alone. I needed a co-founder who had complementary skills.
I decided to reach out to my network and they recommended that I should join the annual Startup Weekend in Amsterdam. And boy was I happy about that! I met my amazing German-born co-founder, Monique during the Startup Weekend and we quickly hit it off.
She has a background in buying and portfolio management from Zalando and De Bijenkorf and had exactly the skills that I was lacking. We became really close and she started to help me out with the inventory strategy.
The more we worked together on Bundleboon, the more I realized that we shared the same vision, passion and work ethic. She was my perfect cofounder and it was a no brainer! She quit her job the next day and joined me as a Bundleboon cofounder.
Talk us through the process of the launch of these subscription boxes for kids
It was not until April 2018, during our time at Startupbootcamp, where we decided to launch a full-blown, customized website and style quiz by using Shopify. We paid a branding agency plus a developer for something, we decided to change later. Our new website and quiz had everything we wanted.
The quiz looked super professional, the visuals and branding were beyond our dreams! But in reality, we found out that our users and paying customers didn’t find our customized style quiz engaging enough, causing a fall in our online conversion.
We decided to keep it running and in the meantime, we went back to bootstrapping, analyzing the customer behavior and gather as much feedback as possible by calling all of our customers. The quiz we have now is built based on what our customers wanted.
We did not hire employees until late 2018, so my co-founder and I did everything from customer service, styling to shipping and sending invoices. By this time, we were also dealing with our third co-founder leaving and cash flow running tight.
All of the investors we spoke to told us that we need to show more traction and show how we can scale. We needed investment to really show the potential of the concept, so we started a small crowdfunding campaign on a Dutch platform called Leapfunder, which secured us $18.000 in convertible loans. We decided to use the money on hiring an employee and on online customer acquisition.
In August 2018, we moved to a small office in Amsterdam and hired our first employee, Noga. She has a broad background in fashion and she was one of the best performing stylists at The Cloakroom.
She was actually one of our first customers and she had shown interest in joining our team. She is now running a team of 3 stylists and has the highest basket size and revenue of everyone in the styling team.
How is your repeat customer rate like? Can you take us through how you attract and retain customers?
Our customer acquisition strategy is built up in 4 groups; Influencer marketing paid ads, retention, and referrals.
Influencer marketing works well for us. We reach out to real moms, who are active and engaging on Instagram and have them do a nice unboxing video for us in exchange for a box with clothes.
If the influencer uses the right approach, we can get up to 35 new customers in pr. influencer. We have also noticed that the average basket size is almost 30% higher when the customer is acquired via one of our influencers.
Paid ads on social media – Next to influencer marketing, we also acquire customers via ads on Facebook and Instagram. The engagement, clicks, and conversion are far higher when we use unboxing videos rather than regular photos. Our customer acquisition cost varies between $9-20, depending on the type of advertisement and target audience.
Retention – Getting our customers back is our main priority and we spend a lot of time on each of the customers. Customer lifetime value is very crucial for our business model. Each customer receives a feedback form in their box, where they can indicate when they want to receive their next box.
We will note this in the system and the stylists will reach out to them when it is time for the next box. Besides that, each of our stylists has its own Instagram account, where their customers follow them and interact with them.
As soon as one of our stylists posts a new item or a nice outfit, their customers reach out for a new box. Our current retention rate is at 22% on a monthly basis. We aim to increase this number to 45% during the next coming years.
Referral program – We have recently launched our ambassador program, where we are rewarding our current Bundlebooners when they refer a new customer to us. All they have to do is to share a unique referral code with their friends and family.
If the new customer orders a box and keeps for min. $30, the current customer will get $15 to use on her next box.
What is the current situation? How do you see yourself in the next 12 months?
Things are GREAT! Although we have been through a lot, both good and bad we are still standing strong and eager to take over Europe and be the number 1 destination for kidswear.
We recently won a fully funded TV commercial, which will air later this year just in time for Back To School in September. We are adding more and more brands to our portfolio and are growing our team.
We are currently raising our first investment round and have already secured $780,000 from a big fashion group and are currently in negotiations to close an additional $600,000 from a big VC in The Netherlands.
The total investment will be spent on developing a back-end to help us scale fast and efficient, supply chain, working capital, and market expansion.
In 12 months’ time, we will be shipping 700 boxes/month, have outsourced our fulfillment, added a rental service to our concept and launched Bundleboon in the Nordics.
As a woman founder, do you see this as only financially uplifting? Or otherwise too? If yes, then how?
It hasn’t been financially uplifting, but that is not because I am a female founder. Most founders have to make a lot of financial sacrifices at least in the 6 months of their business.
However, it has been very rewarding in the sense that I have a much bigger network and despite the many challenges, both my co-founder and I managed to overcome that and establish a successful business with the help and support from our team, customers, mentors, and investors.
8. What tools or services did you use?
- Sales Platform and style quiz: Shopify and Landbot
- CRM and ERP: Knack
- Email Marketing and capture: Mailchimp
- Ambassador/referral Program: Swell Rewards
- Accounting: Exact
- Fulfillment: MyParcel (dutch fulfillment platform)
- Customer Service: Slack channels for internal communication and Gorgias for customer communication
- Performance marketing: Smartly
What are your key challenges today? How are you planning to tackle those?
The most challenging thing is definitely the ability to scale efficiently. We are currently working on our internal styling tool, which will allow our stylists to style the outfits online based on what is available in our inventory.
The styling tool will have smart filters, which will narrow down the selection based on size and preferences.
10. Which are some resources, books, articles or podcasts that have been useful to you, and would share with your readers
- The $100 startup by Chris Guillebeau
- The 7 day startup by Dan Norris
- The Lean Startup by Eric Ries
- Hacking Growth by Sean Ellis
- The Startup funding book by Nicolaj Højer Nielsen
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