How to sell new products to cautious Australian online shoppers

As online retail gains traction in Australia, Australian start-ups are working out exactly how to build customer confidence to generate maximum sales and business growth.

Sydney-based start-up Institchu has built a men’s fashion tailoring company by understanding the concerns many Australians harbour about buying online, especially from a new company.

Institchu sells tailored suits almost entirely online. The company was launched by Robin McGowan and James Wakefield in 2011.

After identifying the high price point as the main barrier to young corporate men buying and wearing properly fitted suits (a tailored suit usually costs over $1000), the pair started exploring how to make and sell more affordable options.

By outsourcing to professional tailors in Shanghai, Institchu is able to offer tailored suits for $299 to $500. Via the online store, users enter their measurements, and can also design their own suit by using a wide range of options for the range of sartorial features.

McGowan told StartupSmart their sales have leapt since they invested serious time and money into their web presence and content, and set up a physical presence, a showroom in the Sydney CBD.

“When we first launched the business, our goal was to be a fully online tailoring service. But what we quickly found out was that it made more sense to have an offline experience, and to convert our offline customers into return, online customers,” says McGowan.

According to McGowan, even though 70% of their customers never turn up at their store, the fact they know there is a physical location makes the brand feel more accountable and trustworthy.

A lenient alterations and returns policy has also boosted trust and online sales, even though it’s not used much.

“Ninety-six per cent of customers are happy with their order the first time, and the remaining 4% want minor alterations. We’ll update their measurements going forward so they get the perfect fit next time,” says McGowan.

Maintaining a content rich and professional looking website has also been key to their success.

“We put a lot of time and money into the website. It had to be top notch so they knew we weren’t some foreign tailor and were legit,” says McGowan. “Content about educating men about how to care and style their suit has also been really important for us.”

McGowan and Wakefield are planning to open showrooms in Melbourne and Brisbane next. They’re exploring a variety of international markets after receiving orders from the UK, US and Asia with no targeted marketing.

“Australia is not a big place when you do the numbers, so it’s a bit silly not to look to those markets to expand,” says McGowan.

The latest Roy Morgan State of the Nation report revealed 50% of Australians now shop online, while more and more Australians are exploring the online shopping world from the merchant point of view.