Martin Hosking - Redbubble

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AFR: Retail SummitMartin Hosking: Co-founder and CEO Redbubble

Disrupting Traditional Customer Relations

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Redbubble: in a nutshell

CONTENTCUSTOMERS

2.2M 10.2M

438K

12 FULFILlERS (18 locations), 57 PRODUCTS,

3RD PARTY FULFILlERS

ARTISTS

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A record of growth

$1.2 $3.6 $4.2 $6.0

$15.7

$33.7

$59.3

$88.4

$142.9

FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016

GrossTransactionValue:$Millions

Gross Transaction Value: $Millions

A RECORD OF GROWTH

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Gross Transaction Value by Geography

GLOBAL

Americas

Europe

Oceania

Rest of World

1%

65%

27%

7%

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The background

Online Marketplace

Fast Fashion

Traditional Retail

Publicly Traded Apparel Co’s - Share Price Change (2011-2016)

Amazon

ASOS.com

Inditex

Fast Retailing CO

H & M

Macys

Ralph Lauren

Specialty Fashion Group

Hugo Boss

Myer

Oroton

Billabong

–100 % -50% 0% 50% 100% 150% 200% 250% 300%

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AGENDA

Sell what you have > Sell what they want

PERSONAL STYLE

Micro Targeting

Custom Manufacture

Marketplace

Branding

Mass Marketing

Mass Production

Gatekeeping

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> PERSONAL STYLE

Millennials are not as interested in logos as previous generations who gravitated toward things like the enormous Gucci Gs. Those garish logos would scare today’s consumer away.

Source: https://www.fastcompany.com/3062474/, The Decline of Premium American Fashion

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Personal style trumps brand

Market Share of Brand Logos (%)

Sources: Piper Jaffray, “Taking Stock with Teens”, Pew Research, Pew Research Centre, Marketing Profs

Reflected in Attitudes

• Individuality, creatively expressed, is the new cool

• Tribalism is the new conformity

& Lifestyle choices

• Clothing (de-branded, retro, edgy)

• Body art (tattoos, piercings)

• Consumables (craft beers, new labels, slow food, Etsy)

• Media (social, user generated, shared)

• Travel (AirBnB, Uber, Lyft)Spring-01 Fall-14

* Source: RB May 2014 Consumer Study, ** On trend for 36 month cohort, LTCV = transaction value of sales

“I’VE BEEN USING REDBUbbLE FOR ALl MY GIFTS (BIRTHDAY

AND CHRISTMAS)! I LOVE FINDING INCREDIBLY EXCLUSIVE AND UNIQUE ITEMS THAT YOU

NORMALlY WOULDN’T FIND IN A TRADITIONAL STORE!”

“It was just an awesome expEriencE. The products are

beyond unique, you can’t find certain t-shirts, throw pillow caseS, or iPad caseS anywherE elsE... Very much

worth the money.”

StandiNg out not fitTing in

Customers

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67%

57%*

62%

Of sales from works that sold 50 times or less

Female

Under 35

* Source: Data as per the May 2016 Prospectus

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> Micro Targeting

62% of Millenials are more likely to be a loyal customer if a brand engages them on social media.

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Micro targeting: search vs social

Search SocialWho Google & daylight Facebook, Pinterest,

Twitter, Instagram

Usage Intent driven Discovery

Types Organic search Product listing

Organic socialPaid socialUser generated social

Success Factors Relevance Engagement Relevance

Capabilities Data science Pricing & bidding

Data scienceContent integration

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Search an Example

Nicola Sturgeon, leader of the Scottish National Party, became a trending celebrity in 2015

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Social Example:

Urban Outfitters content and product integrated

Source: Instagram; Curalate

CONTENT STRATEGY BUILDS TRUST & COMMUNITY

Rather than just pushing product, UO will intersperse images of nature, healthy food and other lifestyle themes on its InstagramE.g. #UOGoals encourages sharing health & fitness goals

TECHNOLOGY MAKES IT SHOPPABLE

UO lets its Instagram community then shop its feed with “UO Community,” a dedicated webpage that features items from its Instagram feed with a direct link to buy them

Collected 13,000 images

from customers sharing their Urban Outfitters style in just two months.

Click throughs on items increased 15% versus online store.

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Micro-targetTing

Organic growth fuels sales... ….with all channels profitable on first purchase

Sales by Source (FY16)

% of GTV

68.5%FREE

Organic Search1

(39.0%)

Direct2

(14.0%)

Email (6.3%)

Other Free (9.2%)

Paid3 (31.5%)31.5% PAID

$26.7M

$12.3M(before paid acquisition cost of $7.3M)

Gross Profit (FY16)

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> Custom production

Today, many people see high-end products as one-of-a-kind items—the antithesis of mass-produced commodities whose attention-grabbing logos turn consumers into advertisements.

Source: https://www.fastcompany.com/3062474 The Decline of the American Brand

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RB 57 print-on-demand products

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DifFerEnt products require difFerEnt printIng technologies

Dye Sublimation Printer for Textile Printing

Digital To Garment (DTG) Inkjet PrinterUtilized on Tees/Hoodies/Kid’s Clothes

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HP indigo for Greeting cards and Photo Prints

UV Roll Printer for Wall Art

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Printing Oven For Mugs

Dye Sublimation Printer for Phone Case Printing

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3D PrintIng is coming: a sea-change of posSibIlitIes

COST EFFICIENCY AND PRODUCT SCALE ON THE HORIZON

• 3D printing will become 50% cheaper and up to 400% faster in by 2020 (Siemens)

• Accessories - jewelry, footwear, eyewear - will be the early adopters of 3D printing as they can overcome the

limitations of printing with textiles

(Joris Debo, Creative Director, Materialise)

Source: Gartner Predicts 2016: 3D Printing and Manufacturing, Forbes, Bloomberg,

3D PRINTING WILL BE A $20BN INDUSTRY BY 2020

2013 2014 2015 2016 2017 2018 2019 2020

Global 3D Printing Market

Wohler’s Report Forecast ($BN)

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18

12

6

0

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> Democratization

Under 1% of Millennials say they influenced by advertising, trusting rather content generated by friends of communities

53% of American consumers would rather buy from an individual producer than a major brand (Etsy Prospectus)

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Brands losing power to people

Social media has transformed how culture works, in a way that weakens certain branding techniques. It has united once-isolated communities into influential crowdcultures...Their members produce their own content - so well that companies simply can’t compete.

#1: 48M subscribers 13B views

#223: .4M subscribers, 1.5B views Source: HBR: Branding in the Age of Social Media

PewDiePie

Red Bull

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DrivIng the rise of marketplaces

eBay and Amazon market share:• 2012 24.9%• 2015 29.1%

Q: In the last year have your purchased from any of the following marketplaces?

Q: On a marketplace would you buy from brands or sellers that you’ve never heard of?

91.8%

64.6% 17.5% 17.9%

Amazon.com

Yes No Don’t Know

72.4%

eBay.com

43.9%

Etsy.com

7.8%Jet.com

3.5%Rakuten.com

Source: Internet Retailer Online Marketplaces Report

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> Including Redbubble artisTS

438,000Total Selling Artists

30 June 2016

40% Artists who sold in FY2007 are still selling in FY2016

36% of creatives exclusive

to Redbubble1

20,000 Q1 FY2013

98,000 Q4 FY2016

ARTIS

TS SE

LlING

BY QU

ARTER

1. Redbubble Artist Survey 2016

“One of the nicest things I’ve found about Redbubble is the fact that you actually seem to care about artists and the people behind the work” Michaela, Canada

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Personal Style

MarketplaceMicro-targetTing

Custom Manufacture

SELlING WHAT PEOpLE WANT

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QUESTIONS?