Background
A premium menswear brand selling in Ireland and the UK since 2019
StoreHero has helped with everything from automating our P&L, to improving efficiency and marketing spend. Without StoreHero, it would take me hours of spreadsheet work to get the same level of insights, now I just log in and can start making the important decisions. Ecommerce is a numbers game masquerading itself as a marketing exercise
Founded in 2019, Walker and Hunt began as a vision to redefine premium menswear. Operating on a DTC model while also collaborating with retailers across Ireland and the UK, the brand has been a beacon of style and quality. As a Shopify-based retailer, Walker and Hunt recently ventured into the UK market. Their story is one of ambition, quality, and a relentless pursuit of excellence in the luxury fashion arena.
“Prior to StoreHero, I now realised I lacked the confidence and clarity to scale the business profitably. The rising costs of ads is a challenge for all businesses, since onboarding with StoreHero I now make every decision with margin in mind and it’s been an absolute gamechanger.”
Founder, Walker & Hunt
The challenge
Sales were soaring while net profit shrank
With expansion came formidable challenges:
As sales began to soar post covid and even earlier this year, the business found themselves with a shrinking bottom line. The increased sales, were boosting top line revenue but a mix of high operating costs and overinvestment in ad spend meant that net profits were shrinking.
- Rising Advertising Costs: As the brand grew, so did the expenses in capturing market attention.
- Unclear on Unit Economics: Understanding the intricacies of costs versus earnings became increasingly difficult.
- Higher CAC in New Markets: International expansion brought about a spike in customer acquisition costs.
- Sales Volume vs. Marketing Efficiency Dilemma: Finding the sweet spot between increasing sales and maintaining marketing efficiency was a persistent struggle.
One thing I’ve found this year is that e commerce is a numbers game masquerading itself as a marketing game. StoreHero has helped with everything from giving us a real time P+L, to improving efficiency and marketing spend. Without StoreHero, it would take me hours of spreadsheet work to get the same level of insights, now I just log in and can start making the most important decisions.
What StoreHero did
One view of ecommerce, marketing and finance data, and a profit-first strategy
StoreHero emerged as the game-changer for Luke, the founder. It provided a unified platform to merge data streams from ecommerce, marketing, and finance. This holistic view revealed critical insights:
- Addressing Over Discounting: Recognizing the pitfalls of excessive discounts which were eroding profitability and trained bad habits with customers.
- Marketing Spend Analysis: Identifying overspending in certain areas of marketing, which paradoxically reduced margin despite higher sales.
- Contribution Margin Mastery: Understanding and applying the concept of contribution margin enabled a delicate balance between sales volume and marketing spend efficiency, significantly enhancing both top and bottom lines.
Strategy
Adopting a profit first approach, Walker and Hunt implemented several key strategies:
- Restrained Marketing Spend: Carefully reducing marketing spend at times to evaluate its impact on sales and margins. Only increasing spend when there were clear uplifts in contribution margin.
- Order-Level Profitability Tracking: Using StoreHero’s Order Level P+L to pinpoint and eliminate underperforming orders. StoreHero helped Walker & Hunt identify a pattern of unprofitable orders.
- Creative Performance Analysis: Employing the Creative Overview to identify and focus on high-performing marketing creatives.
- Reduced Costs: Reduced operating expenses that were unnecessary and that had crept up over time. Operating costs of the business as a % of net sales are down 29%.
The results
Net profit up 97% year on year
With real time reporting Walker & Hunt have almost doubled net profit (+97%) YoY since using StoreHero. Having a clear view to a real time P+L along with live contribution margin analysis meant that they could quickly spot emerging problems and double down on opportunities.
StoreHero, has saved Luke on average of 8 hours per week and he no longer had to rely on lots of different spreadsheets that constantly needed to be updated.
- Net profit up 97% YoY
- Operating costs as a share of net sales down 29%
- About 8 hours a week saved
- Unprofitable order patterns found and removed
