Ben Lerer was curious whether his online men's clothing store JackThreads would be viable outside the U.S. So one day earlier this year, he asked his Web developers to flip the switch.
Suddenly, shoppers in Australia, Canada and the U.K. could begin ordering Duplex hoodies and Breda watches from JackThreads to be shipped to their homes. In just three weeks, those markets accounted for 15 percent of the division's sales.
Lerer, the CEO and co-founder of Thrillist Media Group, was vindicated. After watching his e-commerce peers blunder overseas expansions by overspending on posh offices and sales forces around the world, Lerer plans to just turn on new markets and see what happens.
Today, JackThreads began welcoming customers from 11 more countries, including Germany, Hong Kong, Japan and Russia. Lerer isn't hiring employees based in any of them.
"Let's go to these 11 countries, not so that all countries become huge aspects of our business, but with the expectation that some of them will," Lerer said in an interview. "Let's not go build an office and invest a s--- load of money and go all in. Let's dip our toe by understanding the different shipping providers, what currencies they want to buy in and what they're comfortable with, and take some baby steps."
Since his media startup Thrillist acquired JackThreads in 2010, Lerer has taken a cautious approach to going global after other online retailers like Fab.com ran into trouble. Fab invested a great deal of capital in beating a German clone, only to slash more than 100 of its employees in Europe earlier this year. Groupon also invested in an aggressive overseas expansion to quash copycats, but struggled with sluggish growth. Groupon ended up scaling back its operations, too.
"If a country isn't an obvious home run, rather than going and bending over backwards and forcing the issue, we're going to try Japan; we're going to try Germany, where maybe we find that obvious organic connection out of the gate," Lerer said. "Over time, we'll circle back to the countries that weren't immediately successful and make them successful."
To oversee his global experiment, Lerer has hired Samantha Kent from Borderfree, a consulting firm that specializes in taking e-commerce companies global, to run international operations for JackThreads. While she won't have local experts to tap in each country, JackThreads has already started customizing storefronts for each market. When it's summertime in New York, it's winter in Australia. That's when JackThreads promotes jumpers (sweaters) on its site Down Under.
Thrillist, which employs writers and editors outside the U.S. for its online men's lifestyle publication, used some data to choose the 14 international markets for JackThreads. The company went for countries with concentrations of English speakers and ones where people had tried to buy from the site in the past. Thrillist expects its shopping site to have 5 million members within the next month and double its revenue this year.
So far, international customers are spending about 50 percent more per order than those in the U.S., and they're buying more of the company's private-label goods, which tend to have higher profit margins, Lerer said. Customers outside the U.S. could make up 25 percent of JackThreads's business by the end of the year, Lerer said.
Or they might not. It's all new territory for Lerer.