Walking the Talk with Kola Tytler, CEO of Dropout Milano

Kola Tytler: And we've seen huge improvements. Now our online traffic is up about, if I'm not mistaken, 300% from a year on year. I think we are getting close to capturing, not gonna say the entirety of the public in the streetwear industry, but I think we are getting quite close to reaching almost most certainly most of the people that are interested in what we propose, and I think, again, has come down to the work done on the structure of the website, SEO and digital advertising.

Voiceover: Welcome to the Heroes of Ecommerce podcast, hosted by Russell Miller of Ryzeo. On this show, we speak to ecommerce business owners and leaders, the unsung heroes, taking their industry by storm. Tune in as we share success stories and discuss ecommerce ideas to take your business to the next level. So let's dive in.

Russell Miller: Welcome everybody to Heroes of Ecommerce. I am your host, Russell Miller, General Manager of Ryzeo, we're an email marketing agency. With me today, I am super, super excited to have Kola Tytler of Dropout Milano. How are you doing, Kola?
I'm very well, thank you. Thank you so much for having me Russ and I am excited to take part in this.

Russell Miller: Okay. So we're super, super excited to have you. For those of you who have not heard of, Kola and Dropout yet, Dropout Milano is the, I would say the premier destination in Europe for sneaker heads. How would you describe

Kola Tytler: it? I guess that probably one of the things that we aim to be one of those, I probably can't say their destination, but we try to be amongst those spots that if you are interested in, in the sneaker culture, in the street wear culture, basically, you do have to visit type of thing.
In the US you have like flight club and stadium goods and maybe, round two and those type of places. For people that are within this industry and which are interested in this culture and dropout them to be, basically almost one equivalent, in our own version for, for Europe.

Russell Miller: Got it. Now are you right now, are you based in Italy or in London?

Kola Tytler: So actually I am in I'm in London right now and I am in London most of the time. So I work in, I work as a doctor in the NHS which is the British national, health system. But in Milan is a, basically there's a full team, I would say Italy actually, rather than Milan.
And, yeah. So I, run operations remotely and we liaise pretty regularly just over teams and Zoom and and WhatsApp effectively.

Russell Miller: And you're also a full-time doctor. Yeah. Correct. I just want to pause for a minute that anyone who ever complains about their workload has never met Kola.
Wow. Okay. So I have a math background and a little bit of software background and I would love, there's a really neat kind of backstory here, so I'd love to, dig into that and tell people a little bit about, how the site evolved and like the hype analyzer story and where that came from.
Sure. So it truly is one of those oh, it's a long story type thing, but, if we consider that, I'd been interested in sneakers probably since I was, a early teenager, I would say. But probably when I got to about 16, 17,that I started reading and, getting more passionate about the industry as a whole.

Kola Tytler: And when I, when I moved to the UK to study medicine, being more, in contact with, with the limited edition sneakers concept in, in London, I started to see there could be a viable commercial opportunity within that space. As basically we, we moved on, I moved on, initially was just you buy one pair cuz you wanna get the next pair and then, maybe you get two and you trade one for the other one onto, you grow your collection type thing.
However, it was doing that basically I can quite early realize that most of the sales, between private individuals happen between some, maybe someone won a raffle or, got a sneaker from any retailer or whatever, which actually goes on to sell it to a person who will themselves go on to sell it to a third person.

Kola Tytler: Therefore, I would say actually the majority of transactions within the limited editions sneaker industry, at least, certainly seven, eight years ago were between people that were reselling to another party, if that makes sense. So at that stage, I started thinking, okay, if that's the case, surely that means that, you can probably buy high, buy low, and sell high effectively.
I took that concept with me and together with a friend of mine, who's based in, who's based in Rome, in Italy, we looked into how we could actually make this process as objective as possible. Cause we thought, okay, imagine that you have x amount of money and there, there's more and more releases.
That effectively means that you want to have the best, the best strategy to select where you're gonna put your money and what you think is gonna go up in price or what is gonna worth the most, or what is gonna give the biggest delta between what you're paying and what you're selling for.

Kola Tytler: So we basically developed a software, cause I, in the meantime, started coding. I just learned it online really, just on forums and YouTube, that type of thing. And, my friend was also, he is, he is now 24, so he was at the time about 17, 18. And, we developed this software.
We effectively scraped the major website. We looked at the prices and what we did was we looked at the trends for the prices. And, based on the trends in particular, and based on how many listings were available, we developed the scoring system. Now, the scoring system obviously was based on of criteria that we decided.
However, it gave us a way of comparing hundreds of styles, which meant, maybe we didn't know exactly what was going to go up. But with our experience and with this tool that was a lot more objective than we could be by taking out the emotional factor, we were able to decide which sneakers were more likely to go up in price.
And basically by comparing, the different sneakers, we started literally training sneakers as an investment asset. We were putting money into the sneakers that we thought would've the biggest delta, and then after a period there were usually six to eight months we would sell them.
And there effectively, this allowed us to make relatively decent profit. So much that we thought, okay, but we are still selling for the most part to people who are going on to sell. So we thought that the next natural step would be selling directly to the end consumer because that would mean that, again, we are buying, we're still buying for the cheapest, but we're selling for the highest possible price.

Russell Miller: And that effectively meant that we could now truly increase our margins, in, in this operation. And that's effectively, in summary, how we ended up with the idea for dropout. We did it in Milan. Neither me or my, or this guy were based in Milan, but we managed, we knew people in Milan, so we got in touch with people there.
We proposed the idea. We found, we set up a team and we managed to do it. And the software that we'd created, we basically expanded it so much that now served the purpose of figuring out what the best price is to buy where, what the best prices to sell were, which styles were more in demand, which styles were more, were gathering the most interest. Until today, effectively we still use this, this piece of software for this purposes.

Kola Tytler: So we use it to determine our prices, which are fully automated, what we buy, how much we pay, what we display on the website, what we display in the store. And, I think, if I'm not wrong now, about two years ago, we took the steps to actually patent the source code for the software in Italy.
Which, it gave us basically some tax advantages cause it made dropout the tech company as well. And that's, basically, how we got here from that perspective.

Russell Miller: That is, I think super, super cool is, because I don't have a lot of words, but I'll just use the same ones over and over again.
And is Hype Analyzer, is that something that, it seems like it, it has its own website so people can still like, go do research and see how like a shoe is, is doing.

Kola Tytler: So, Yeah, It does though it doesn't serve the purpose as it used to, like before, it was really about, initially it was really about, work out what's gonna be a good investment.
But then obviously, we realized that actually, we can leverage this so much that we might as well make use of the information that we, that, the most useful information for us. But now, it does serve a useful purpose, but truly, it still gets like a decent amount of clicks despite not being, like it doesn't have any, advertisement or, payment or anything like that.
But it does have a good amount of data. Cause actually, we use the, we use it quite a lot for SEO purposes. We use it to send people to our dropout selling platform in particular. And it gives us a little bit more of of an idea of what people interests are because, consider dropouts website is actually transactional for the most part, which mean that, we get people, that, some people are basically window shopping effectively on our website, which does skew the data.
And on Hyper Analyzer is not as much. And we see more of the interest that people have. With the tool, we can't actually have a better idea as to what, where the interests lie. And, again, if as you can imagine, this gives us a better approach to spot trends.
Cause really, in our store, I think what we try to do is we try to build a store where, you walk in January, March in September and you see the cool stuff, but now we need to decide what the cool stuff is. And, basically Hyper Analyzer is like an extra tool that allows us to understand, what the cool stuff is. And that's how we, that's how we use it.

Russell Miller: That is, super fascinating. Have you ever thought about extending it to like other areas, or is I guess shoes is the focus right now,

Kola Tytler: I think. Yeah, shoe is the focus, the thing is it, the secondary sneaker market is an interesting place because the thing, one thing that I probably don't like so much about it is that you are somewhat, I don't wanna say dependent, but you are quite a lot reliant on X brand, continuing with, first of all the limited edition strategy.
And then you are also quite a lot reliant on certain collaborations to land and, to ensure that the products, effectively proposed are, of interest. So from that perspective, the scalability of that sector in itself, I don't think it's that high. Unless you perhaps, leverage it to, like some of the platforms like the US platform, StockX or Goat for example, where, however, the tech aspect is probably a lot more important the sneaker aspect, then I think is a pretty difficult area to actually scale. I think we've done all of that and we have, we have created perhaps, a platform where people know, that they can buy sneakers from us.
But, for the last year or so in particular, we've been expanding onto more of the apparel and sharing the street culture as a whole for the most part. Cause, there's a lot more room for expansion there. The margins are better there, and it allows us to tell a story that isn't necessarily so much tied to, like Nike for example, although at the moment, I think, yeah, think at the moment, if you think about it, especially with the location of our store, I almost say that we are almost like an extra advertising tool for Nike and, and Adidas like, yeah. You come to our store, most of the sneakers are Nike and we are in a pretty good location where Nike doesn't have a store. It's good for them and it's good for me, but actually I'd rather be in a position where we are actually scaling the exposure of our brand and an increase in that.
So I think, for that perspective, our focus is more geared towards other aspects rather than scaling the pure sneaker side of things.

Russell Miller: And the apparel, would that be original brands or they would come out under the dropout label, or would it be like reselling?
We sell a dropout, branded, line, it's got a decent. I would say reach and certainly, people do show interest in, in, Milan, certainly. We do carry other brands as well over since, about, I would say probably now eight, nine months we've been selling, put it this way, we now go to, the UK, France, the US and we look for brands that we think are align with our vision that we think are, they’re cool and they're doing their thing, in those markets but aren't present in Italy otherwise.

Kola Tytler: And, we basically import those brands in Italy and propose them to our public with the idea of showing that we, we show, the cool stuff that, is up and coming. And, for those brands, we basically, deal directly with the, with the distributors, themselves, which mean, we do get higher margins, for example, and we do, we do get them directly from them. Still, there's still a little bit of, for example, Supreme, which obviously is we don't get it directly from Supreme or, or we may, but it's more of like a still like a resell type thing. We do a little bit of both, but the idea is to, I think eventually start leveraging our power to expose the public to those cool brands and, show what the, what the streetwear culture is about via those new lines, of those, of those, labels that we think align with, with dropout.

Russell Miller: If you were gonna go back in time and kind of start the business again what, what would you say to your younger self, if you're gonna help your younger self kind of skip over some of the mistakes. What do you think is are the most, knowing what you know now about dropout are the most core areas to focus on?
Is it sourcing? Is it like, advertising? Is it social media? Is it operations? Where do you think is really the edge for dropout Milano?

Kola Tytler: I think, first of all, I think it, it is difficult for me to say, oh, I will skip this. Cause personally, I think everything is part of the journey, from the tiniest to the biggest mistake.
Everything helped us to get where we are, number one. And it allowed me to grow as a person. I'm happy of everything. I would say though, perhaps, focusing on the brand itself. So literally branding I think is something that we, we did at the start and then may also unknowingly, I think.

Kola Tytler: And then, because we did it unknowingly, I think it kinda maybe slipped and maybe went a little bit out of focus for maybe one to two years. And then, over the last year and a half, we picked up again. And, I think that's something that really brings results over the long term.
I think that our competitive edge now, which is probably a very difficult one to match, is that if, especially if you come to Italy, people generally know what dropout is like they've heard of it. And quite often I'm even in places like, which not even Milan or outside and maybe you're speaking with people and it's oh, I'm not too clear what dropout is, but I've heard of it.
And that's a really good start because actually, the next step is okay, now you know what it is, and now you know, you know that you can trust it because you've heard of it before. It's not something that just drops out of the blue. And I think that's because of a good work on branding that we've done over the last year to year and a half.

Kola Tytler: So I would say, to me, probably the biggest thing I would say is always focus on why, why you're doing this. . And if you do focus on why, then you get, you get a little bit more clarity and that can help you in understanding and planning your strategy and your approach and, eventually your execution.

Russell Miller: Okay. So that is super interesting, and I would love to dig it, dig into that a bit more. I haven't asked this of a guest before, but are you, would you be able to screen share and show us some, parts of the brand or like things you're really proud of? Either on the website or other, like products or think,

Kola Tytler: Yeah, just bear with me.

Russell Miller: Okay. Because I really like the idea of giving people an inside tour of the store and kind of the aspects of the brand, because this seems like super, super interesting.
So now, for example, you should be able, my screen is on. Yep. Yeah. So I think, it is, there’s, okay, put it this way. To illustrate what I was, what I was talking about. For example, like now, you open our website, our brand is, is is there when you start, right?

Kola Tytler: And, I think that's something that we wouldn't have done before. Cause, we didn't think. We didn't think of it that way. I think before we were more like, oh, the most selling sneaker is, I don't know, whatever, the Nike X, Y, and Z. And so that would be when you first come in.
But actually we realized that, you can have, like a bestseller section, which is displaying that anyway. And truly you are, you're putting your focus on the product. You know that you want people to know. Cause the reality is that especially with our, I think, you know, with our, SEO power now, if people are looking for X product, they will come to a website regardless.
Therefore, we might as well show them what we want to show them. That's something that we learned, I would say, effectively over time. And then I think, let me have a look. Maybe one, one thing that, is quite, I think is quite useful, which again, we didn't do before.
I think we've only done over the last maybe, six, seven months is actually had in the pages, some of the pages are talked about us. Cuz that's, it is external validation to be honest. Cause I think, you go on a website and maybe you never heard of it before or whatever, but to see that actually, Business Insider has talked about it and Visa has talked about it and Vogue mentioned it and Forbes has talked about it and Hibis, blah, blah, blah.
I think that actually has a really strong voice, to the credibility of the website and, and the brand as well to put that. And then for us, because we are, we're in a physical location, to, put that on the homepage, I think that also helps cause people know, okay, if there's a problem, whatever, there is a physical thing.

Kola Tytler: It's not like a abstract entity that, basically, you know, who are they? Where are they? Whatever. Like that type of stuff really helps. I think maybe another thing that, is interesting to, to see, let me see if I can find, I think we've recently, okay, so obviously this, my screen is in Italian, by the way, so apologies for the non Italian speakers.
But, this is just to illustrate the picture. So we did, out home advertising, for Fashion Week in Milan. So we, we took a billboard, in the, in one of the, basically in the luxury district. And I know this almost looks like a Photoshop. Actually this is a real picture, was taken. So we took a billboard to, we took a tram as well. And the tram is still going around actually. And that, those are the sort of, would say again, branding exercises that, you know, something that we wouldn't have done before, which we are doing now, which actually really help.
Cause the thing is things that is also, we see them as, they promote a strong concept of brand signaling as in, a lot of brands, or a lot of companies, especially if they are, if they're maybe like a little bit small or they're a little bit unsure of their strategy, they're not going to commit to expenses like this, which are not going to give you an immediate return.
And I think for, this is our way of also showing, look, we say X, Y, and Z, but we also do X, Y, and Z. Then actually, we can do things like this. So I think that this subconsciously, it shows to consumers and to our public that we are a serious brand, that is doing things that, we are still a small company, but we do things that big companies do because that's how we think. And it serves both, uh, directly, but also again, subconsciously to drill into the mind of your, the, of the user base that, dropout is a, has got big goals, big, big vision. And again, we, when we say that we want to be leading brand within the space, then we really mean it.
We've asked ourselves why are we doing this? And, and then obviously after, when you've asked yourself why, then when you can go and, go towards the, how are you gonna do this? And, what are you going to do? And all the rest of it.

Russell Miller: Tell me a little bit about that process, cuz I think that is, it sounds like it was a real motivator for you and your team. What did you guys come up with for the why, and then what activities did that sort of push you to?

Kola Tytler: I think for us, I think initially, put it this way.
I think, we, when I started, when I thought about dropout initially, I was reflecting on the number of, of stores that had seen in, in, in New York, in, in Los Angeles, in Paris, in London, still within the sneaker, resale segment.
And I think, what I liked of them was probably the experience that they provided. Not, maybe not a hundred percent for all of them, but I think experience was a big factor of it. And I think, when we first opened and when we first launched, we were all about, okay, no, we are gonna sell, we’re gonna sell the sneakers, blah, blah, blah, this and that.
But then we realized that actually it's no sneakers that we sell, if that makes sense. And, obviously, yeah, I practically yes, it was sneakers, but if you go a little bit deeper, I think that conceptually, it's more about why are customers buying those sneakers, and then why are they buying them from us?
And, once you start asking yourself those questions, then you go deeper and you realize that, there's a lot of, there's a lot more abstract things that go into it. Someone may be buying a sneaker from us because they're, they may be seeking, I don't know, external validation from someone.
The same reason why you're buying that expensive coat that you don't need. Someone may be buying from us because they wanna be. They want to say that they shop from the exclusive store. The same way that you can go on in hard roads in London or in, you can go in Saks in in New York, or you go in Galleria Fayette in Paris, or you go to, Rodeo in Los Angeles, whatever, when you can probably get the same item, online for cheaper.

EKola Tytler: Some of that will have to do with the experience, but we will also have to do with okay, I can shop in that place. And then, the other aspect of it, that we also thought was, people want to, want to buy with peace of mind. And I think that's why a lot of people buy from us.
For us, especially the last aspect was about, once you are, once you understood those, bases for your consumer behavior, then you can start targeting more appropriately and more effectively. And once we consider that a lot of customer consumers, customers I would say will be buying from us because they, they develop this trust.

Kola Tytler: Even though we sell expense, real expensive items and even more expensive than the competition, then we know that if we do activities that are fostering, that are increasing our credibility, then, we can basically increase that, that, that user base, in the public. . And, that's basically the idea that we know that we put out. And at the same time, if we are associating our brand with, with those activities and with those concepts, then we will be creating in the mind of our consumers, a correlation between credibility, trustworthiness and also being cool and, our product and our brand.

Russell Miller: How did that, how did that, I know you guys have both a retail location and an online store. Our audience is all like ecommerce owners. So I want to focus, like, how did those activities play out in the online world? Like how did you change what you did or or the sort of outreach or any of those activities?
I can't show you what the website looked before, but I think now, for example, put it this way, if you went on drop.com, say, two and a half years ago, the website I think it was my brainchild, so I'm not gonna say bad, but I would say it didn't look as, as premium maybe.

Kola Tytler: I think now it looks better. I think that now I think we’ve, we’ve focused it more. Before, say we had, for example, on the mean, on the, I dunno how you call this, but the bar effect, below the search bar, we had a lot of brands, a lot of collections.
So now you have about, six, seven options which I think is the maximum we, I think we already have maybe a little bit too many. But still, this, the maximum that we will go. Before we had 10 different options You could go Nike, you could go Nike dance, you could go Yeezy, you could go DIDs, blah, blah, blah.
And then we realized that actually, we wanna make it simple, So I think that actually helped. So reducing some of the options and focusing it more, I think helped online and, for the ecommerce space, a lot of work, which I think probably the most of our search, of my learning and, and, digital work has gone towards, first of all, digital advertising and SEO. SEO's been a huge task that we've taken on. So we've started from, from, internal linking to, getting backlinks from publication that linked to that, mentioned us, but not linked us.
Things of that kind. Ensure that we have a good social footprint all over the web. And we've seen in I would say, huge, improvements. Now our online traffic is up about, if I'm not mistaken, 300% from a year on year. And that's, I think we are getting close to capturing the, I'm not gonna say the entirety of the public, in the streetwear industry, but I think we are getting quite close to reaching almost most certainly most of the people that are interested in what we propose. And I think again, that's come down to the work done on the structure of the website, SEO and digital, advertising.

Russell Miller: Let's dive in a little bit deeper there, cause I think those are really interesting topics to our audience. And I also wanna cover email marketing, of course cause we're an email company. But, if we, just to level set, like how much traffic do you guys get now, or roughly, do you have a sense? Do you have a sense of like how many visitors you get monthly?

Kola Tytler: See, we get about now we are about 300,000.

Russell Miller: 300,000 visitors. So it's a huge amount of people.
Considering 96 97% of them are from Italy, which is, if you imagine that Italy is a much, cause when you're in Italian, then yeah, your public is significantly limited compared to what it would be say in English, for example.

Russell Miller: Right. Okay. Walk me through, walk me, let's look at on the, let's get into the weeds as they say. Get into the details of what, what you have found to be like, really effective SEO strategies. And then we'll talk about digital marketing and the other part that have helped you guys a lot.

Kola Tytler: I think again, probably one of those like, boring people, that sounds very theoretical, but actually it, I think, maybe, cause I've been doing this for quite a few years now, in general, with the business. And I think that, if you don't ask yourself why at the beginning, then you're gonna lose.
That's my idea. Or someone is gonna come, who's gonna ask them who's, and they're gonna ask themselves why, and they're gonna do what you're doing better than you. So I would say number one again, ask yourself why, and then start answering the questions and go down from there. Now, I would say with the, with the SEO in particular, there are a number of aspects that one needs to consider.
First of all, is your website coherent? As in, if you were, click baiting people into places where they don't wanna go, they're gonna bounce out of your website, and that's a waste of time. And Google's gonna know that and Facebook is gonna know that and, it's not gonna lead anywhere. So ensuring that the website structure, I would say it's clear, simple, that, you don't have a billion options laying around for all type of things.
Cause basically, people actually don't want, generally anyway, they don't want to be given too many options. It creates confusion. It makes them to go out, it makes them to go to wherever simple. That's number one. Then after that is ensuring that you take out all the practices, for example, ensuring that you have a, you don't have a lot of links, pages that are, sorry, links that are leading to, empty pages or that you're getting a lot of errors on the website.
I would say, certainly for Europe, and I, presume probably applies universally across the globe, ensuring that the website is, I would say well-structured to be viewed by mobile. I think it's very important because even though now I'm, obviously I'm sharing the, my desktop version, but the reality is most people, most of the traffic will be coming from mobile anyway.
So that's definitely something that someone has to do ensuring that you have internal linking. For example, I'll show, say, let's say for example for us, you go to Jordan and then again, this is what internal linking is. you Link pages of your website inside other pages, if that makes sense. So in our Jordan collection, there are links to the collection of Jordan one or the three Jordan four, Travis Scott of White, that type of stuff. And, doing that will help cause you know, Google will be able to, and social engines will be able to make sense of what your website is about because what the web, what the social engine is doing is following your pages and it's following all the links to see where they lead.
And that's how the website is understanding the structure of, of your platform. And if you manage to do that, appropriately, then you know, Google, Bing, Yahoo, MSN, whatever, they will show you at the top of their search results. And that's what you want. Cause the reality is most people literally and is pretty much crazy.
Even if they know your website, like they will quite often, they will go to Google to say, a lot of people to go to Amazon, some people will be going to Amazon dot com, but some people will Google Amazon. And then click. If you are in a position where you can appear at the top for the relevant keywords, you are making yourself a huge advantage.
Now, this is a, it is work that takes a long time. I think, before we started seeing significant benefits, it probably took six, seven months and a good amount of money spent. But it's definitely worth it because, now, if someone start doing it today, they're three months behind me and and in seven months I'll be a lot farther ahead that I am now.
So it's a continuous job, and it's a continuous piece of work that someone has to do. And the other big part of it obviously is backlinking. So again, that's where this comes handy. If you say, if you consider that, all of those websites, they have huge domain authority Which mean that the social, the search engine, they value those websites a lot. Now it does mean that if get, I don't know, like any of those website or any website within your industry or within your market or, with wherever your public is, to give you links towards your website, then when the search engine is scrolling, that Forbes article or whatever, they will actually follow it through and go on your website.
And that will mean that your website is now more validated. The concept of validation that we have so much, and giving you status in real life also applies on search engine. There is such a thing as a, a website status and all this stuff is basically geared towards increasing your online status. And if you manage to do that, then you will get significant SEO benefits.

Russell Miller: And what has ended up being your most valuable pages? Has it been like the collections pages or has it been blogs or anything else?

Kola Tytler: Most conversions starts from our homepage. And actually that's quite interesting, because for us, although the collection pages, in particular, the ones for the most sought after styles are the one with the most traffic, the majority of our visitors that convert actually usually come to a homepage and then basically browse around, find the product that they like, and end up buying that, which mean that a lot of people come to a website knowing that they want to buy something, but they don't know what, if that makes sense.
And we take that as a huge win. That's something that we really wanted. And it's one of the sort of unwritten goals that we really strive and continue to strive to achieve is get to a place where people just come to our website. Cause they know that they're gonna find something cool and then, you know, they browse and they buy it. We don't have a trillion styles that half of them people or three quarters of them, people don't care. No, we don't do that. We try and stick to what we think is valuable and what we get is valuable from our data analysis.

Kola Tytler: And that again, that's something that the search engine really values because, Google, obviously, with the Pixel, that install on your website and stuff, they're tracking how much time people are spending on your website. And if people are going to your website seeing that it's trash and then leaving, then you know, obviously that's gonna harm your ranking.
But if people are coming to your website, they're browsing around a lot, they stay around a lot, then that's gonna help you.

Russell Miller: Yeah, that is great advice. Let's transition to another kind of important channel of digital marketing and like paid advertising, in the last year or two, has that been very valuable for you? What channels do you like, what's your strategy there?

Kola Tytler: Yeah, actually that, that definitely has been very valuable, I would say. I mean we've been using, Facebook ads and, ad role in particular initially since, quite early days of the venture, but probably, it's gone one to one with the SEO the improvement that we've done. And, I would say especially Facebook, I think, we have learned over the last year how incredible Facebook can be. As in, before, maybe there was a lot of focus on you do the targeting and you need to know who your customer is and this and that and it worked fine then.
But actually I think Facebook has evolved so much that they're so good at predicting who is likely to convert and who's likely to just click and just waste the time on the website. That is incredible the value that they can provide. I would say that, for us now, we found a a pretty sweet spot in terms of cost per conversion, which allows the ads to drive revenue in a profitable manner. Doesn’t, necessarily sort of saturate our public, cause people get annoyed if you start serving them the same ad or the same ads, continuously.
So I think, that has taken a lot of trial and error, but I think that, if one takes the time to grow, to go through the different options that especially, again, I'm focused on Facebook cause that's was proven really valuable to us. If you go through the options and how it works and understanding the different types of campaigns, then you can get real value out of it.
We don't actually I’m gonna be honest, and so we don't use Adro anymore. We found that's just our very own experience. It's just my own, just our single case. We found it to be quite redundant in the sense that by using Google Ads, especially now that Google has added a new type of campaign, which I can't remember, I think they're called smart campaigns or something.
And that actually is so much more efficient that considering that a lot ad role portfolio is on Google Network, you basically just pay an extra for something that kind you can do yourself on the Google ad web platform. We now using effectively just Facebook ads, Google ads We use Pinterest for a while. It wasn't quite doing it for us. We used, ways. I don't know if you heard of it.

Russell Miller: Yeah, I'm familiar with Interesting. That's random. OK.

Kola Tytler: And that was quite random. Cause honestly, I think when we used it, I'm like, I'm serious. It was literally, you would open it up. I think we were almost like the only ad in Milan for that. Conceptually I think it's a bit, cause the thing is this, you are using waste most often, you are going somewhere, right? Yeah. So it's a bit odd to see the direction for a place where you're clearly not going to. Yeah. So I think conceptually it probably wasn't. I think and also someone who's using ways quite often, they're driving so, yeah.

Russell Miller: So it doesn't, they're not really in a moment where they can do it anyway.

EKola Tytler: Correct. We had to riffing the strategy there. I think, I'm sure there's a lot of value in it, but I think, we cannot, went there a bit blindly. We stopped using it. We haven't used it since. But, if we do think of a, of another, use case for it, then you know, we might pick it up again. Cause I think it's still underused.
What has been your biggest learning in advertising in the last year or two as far as Facebook or Google? Have you focused okay, we need to really invest in a lot more creative. We need to think more about our targeting, we need to think more about our retargeting. Was there anything that changed or stood out in how you approached it?

Kola Tytler:I think it was bit of a general, as I say, approach. It is when we start asking ourselves all those, and I start asking about all this, why? Yeah. And that's when you actually go deeper into things and that's when you start, again, for example, doing ads, but then I was like, okay, why are we doing the ads?
Yeah. So that's when, we really go inside and then that's when you actually start breathing into things and learning things. And, I think that's, that maybe has been the catalyst, I would say. But otherwise, some of it was more about, I think we became just generally maybe smarter as well, in the sense that some of this is also, like you open a business right now, a business can be technically, pretty much any business can be replicated right now. I think your task is not to make your business uncopyable or whatever, but you wanna make your business as hard as possible to replicate, and as well for someone to come and do it better than you, if that makes sense.
So a lot of this is also geared towards not only creating competitive advantage, but creating a sustainable competitive advantage. That's also why we do all of this. Cause the reality is, if your Facebook ads are shown, I don't know, every month to 4 million people which are interested in the street to a market and speak Italian and whatever, then, if you do that for a year, then you can be somewhat confident and maybe, a third of them, quarter of them, will remember, will have some awareness of your brand and for any other brand to come into your space and challenge your position in the space that's gonna, it's gonna be difficult, right?

Russell Miller: So really doing investing in brand advertising to build your brand, get yourself out there, get it, have it known. And then that sort of pays off downstream. So that's a nice segue into, I guess, customer retention, and lifetime value and things like email marketing. How have you thought about those? Do you think about your customers in LTV, lifetime value basis?

Kola Tytler: We do. We do actually. We do our best to incentivize our highest spending consumers, to, to stick around and, we, to ensure that they get a taste as well of the dropout brand experience as well. And on that, I think, if it's visible on on my screen, we are looking into Web3, and, into the possibilities that, Web3 open, and that's why, this new addition to website, so this NFT part is at the moment is just a sign up, but It'll develop into a section of the website only available to holders of dropout NFT. Tell me about your, what's the, what's your vision there?
I'm really excited with the possibilities that I think, Web3 and blockchain, allow.

Kola Tytler: And, now in fact, actually with some on the website, I can probably show you a little snippet. So if you just bear with now at the moment, say, yeah, if you go to, if you just go there, basically, will you guys form? Now I will translate this. The form says Dropout lands in Webre with NFTs that will give access to products, events, and experiences, sorry, and exclusive experiences offered by dropout. Register your interest to remain up to, updated on dropout and, news.
And now that's, that's a lot of nice words. And, how are we gonna use this? so if I show you for example, now this price it's not an error.

Russell Miller: Now, so we're looking at what's the price we're looking at for the people that are listening right now.

Kola Tytler: So we're looking at 125,000 euros of sneaker.
This is one of the world’s most expensive sneakers. It's a factory flawed Jordan one. As you can see, the tick, you know the Nike swoosh is upside down. And that's actually VI Vice came, vice came all the way from New York to Milan to shoot a documentary in this. It's a pretty interesting story, in fact, I would say.
But nevertheless, and this is one of the most clicked single page in our website. And obviously, no one is really buying 125 grand of sneakers on the website, right? So what did we think? Okay, so we are gonna use this as the test run for what we are going to do. I say that, the NFTs will allow individuals to take part in experiences, events, things like that. And I will show you after, right after this, what type of events I'm talking about. Cause we did one before. Now, Web3 actually allows for website owners, for example, to gate certain parts of their website to holders of specific NFTs. For example, in our case, this, again, this is just a, it is basically, we're using it as a test product, obviously, to drive traffic to the, to the signup page.

Kola Tytler: But the thing is this, you can actually only unlock this product. Now this says Connect Wallet, this in English says Connect Wallet. And I think that in the future, this concept will be very, I think used by a lot of companies because it allows you to determine and to block certain part of your website or certain products and, basically keep them for only those who've got your NFTs or a part of the whatever community you want them, whatever community you know, you're interested in.
And, now, so in order to unlock this product, you need to, log in. .

Russell Miller: So we're logging in right now with Meta Mask, which is a popular, crypto wallet.

Kola Tytler: Correct. Now, actually I'm not, I can't remember if I am. Yeah. Okay. I, cause I'm logged in with a different wallet, but basically, because I'm not logged into the right, the right wallet, I can't unlock this product.
So as of now, there's no way that I can buy this product. Oh, interesting. now, one may think, and I think here is where it gets interesting, one may think, okay, why would you. Block people from buying a product on your website. That sounds bit counterintuitive. However, the way that we are gonna use it is actually we are gonna create, we are gonna allow people with other NFTs to order, products free of charge.
So certain products that will be released with a zero Euros price tag, however, they will be NFT gated. And that will only be available for those people for life, so for Lifetime. And that will give a huge lifetime value. Not on our side, but on the consumer side So that's as much as creating a community and fostering a community as it can, as it, as it could be.
And the type of events. So if I show you here, so in June, for example, this year, , oh, unfortunately I don't have, yeah, I don't have, other pictures of this from here, but nevertheless, so you know, one can see. Maybe. Okay. Wait, maybe I can trade through our, his Instagram.
Yeah. Okay. Yeah, I can trade through here. So if I just scroll down. So basically what we did, can I find it? No. Maybe I can't find, I'm afraid Oh, never mind. Oh, yes, actually. Okay. Find here. So in, in, in June, we took people, on a trip, on a yacht. Uhhuh that drop out, paid for everything, So we, oh, took interesting, took, we took some Instagram followers, and then basically, we took them on a yacht. We offered them food, we get them free clothes and, just as part of a, dropout branded experience, just to show that dropout as a brand is about doing cool stuff. Yeah. And, we'll still, once we did that, the way that we picked the people was basically through just our Instagram following.
But once we have, once we will have a community of people that hold our NFTs, we will reserve those type of events for only those who have, who are part of our community. And I think that these type of concepts, will be used by a lot of companies in the Web3 space because you can now, with no doubt, identify people that are part, that liking your brand, that are, can be part, want to be part of your community and, reward them, whichever way you want to do.

For example, instead of doing Instagram raffles or email raffles or whatever, know, you can use,

Russell Miller: Oh, that's huge. How much will it cost, to buy the, the dropout NFT, or how long?
So the dropout NFT will cost 174 euros which for an NFT. Floor price is not actually the, I dare to say it's not that expensive, but, bear in mind actually, you you do get, users will get not just all of this, they will also get a, so the N F T will come as a, graphical representation of this one.
so yeah. So this hoodie, basically we've got a, we've done a digital version,94 pieces. and they numbered 1 to 94. So the hoodie looks exactly like this, but it's got, it is got numbers here. So it's got 1 2 3 X 94. Oh, I see. And each NFT is unique, so it's. Is not one of 94 is one of one, because the NFT itself is, they're all different.

Kola Tytler: So you know, they're all on the same, they’ll all on the same chain and they'll all be part of the dropout collection, but they won't be two NFT with the same number and you will get, and the buyers will get that digital representation, which when they, when Roblox and Sandbox hopefully, will, develop into, higher I would say qual, graphical quality metaverse spaces. Then we will also create wearable. At the moment, it's not really worth it because, the, it is it's all like huge pixel. So it's not, it doesn't look very good if it just look like a black hoodie with a red stripe. we, we don't bother doing it now, but in the future, we will also do that because dropout is a trademark, we have a trademark for it. that basically will, will show those people again, what the brand is about. And again, this is also about, future proofing, I think the brand. Cause I may, I may be wrong obviously in this and we may all fail and whatever, but I think that this type of things, I think give so much potential that we would be passing on an opportunity, if we didn't do something now, and this is, what we came up with to give a huge value to our consumers so much that actually, yeah, 174 Euros.
But to set up all of this and to, from the graphic to the promo to the website integration, clearly, we'll be doing this at a financial loss. But again, it's one of those things where we want in two years time, people to say, yeah, this brand is doing it, but, dropout did it first type thing.
And I think that's something that is, got a huge value, which come again, later on, be transformed in financial value as well.

Russell Miller: That is super cool, and I have not heard of any other brands doing that. That is, I think an interesting first, at least a debut for our podcast. We are gonna, of course have it in the show links and direct people to dropout.
I want to end by talking about email marketing, which is, a focus for us. How do you guys approach email at dropout in terms of like your campaigns and automations, any graphics you do, stuff like that.

Kola Tytler: So I think email marketing one of those things where we could be better, especially because of the big traffic that we have. Now put it this way. I think when, as I've just shown you, for example, we do collect, emails and we do segments. So for example, anyone's registering here is going into dedicated, pool of emails, Which will give specific communication, which won't be shared for the people.
Cause really, I we dropping 94 NFTs, so it's not that many, it's not huge. I don't need to communicate it with, 10 million people to sell them all. You know what I mean? If we have a thousand people signed up, then that's fine. If that makes sense.
We do that and we do dedicated campaigns and we do some segmenting in terms of segmenting the Italian people and people that are in the UK, the people that are in the US, the people that are in France.

Kola Tytler: We used to send before weekly, newsletters. And they weren't really automated. It was more of a, it was quite a manual thing like, we were basically drafting them and, getting the graphic designer to give us the graphics and then sending them off. But it was quite labor intensive. It did yield clear results. To be honest, I think that, email marketing definitely does work. As in, every time we would send a newsletter, straight on, we would get direct sales from that newsletter. It does work. But I think, we have always remained constrained to the regular newsletter type thing.
Now we don't really do it once a week, now we do it more like once every two, three weeks cause it's still manual. But, I think that automation is something that we did look into actually before. I did, I do say that we do it one every 2, 3, weeks. But we do send the cart reminder. We do send that type of stuff. But otherwise, we don't really go much beyond that. And I think that's another area that I think, is in our agenda. But it's not something that we have, truly I think explored to the full capacity and to the full power that the system probably can give us.

Russell Miller: Got it. Are there any other tools or software or anything else you've been excited about recently that, that you felt like gave you an edge? It's tricky. Let me, yeah, it's tricky. Cause to be fair, there's not actually that, that much, in terms of Yeah. All the use of tools and for us, we do a lot of, we do so much in-house data analysis and, software gathering and customization that a lot of the times, we see things and I would say, for example N F T stuff LA that is an integration with, with a third party company.

Kola Tytler: And that's something that, is, we needed to have someone else to help us to do the main thing, for example. Yeah. So otherwise, we tend to do a lot of things ourselves and I think that's because,

Russell Miller: It could be in-house too, if there's something you've developed in-house in the last year that you're really proud of or any data analysis.

Kola Tytler: I think, lemme just, I think, the, we do have, it's a bit, it's a bit complicated, to explain We basically gathered, we’ve developed a way of assessing the interest that the brands pose on the homepage. And then, we basically rotate them.
So we, we check how much time people spend on this view. For example, the view that I go on. And then, we move on to, we do heat maps, basically. Put it this way, right? And then we assess the heat maps and, we do from that, Try to determine, this brand is more interesting than that brand.
Or, people are more interested at the moment in black colored products. And then, we're gonna show more black product colors cause they're more likely to convert. And once we sell out, we're gonna focus on the ones that, are less likely to convert. Or, the ones that, this is left and this is what you got, you have to buy.
And that's a piece of, a piece of software that does the analysis for us. And basically that's pretty much the, is as, as close as we could get to what we do for sneakers, for the apparel. Cause obviously, for the apparel, being the only ones, we don't have as much data, so we have to guide, we have to base ourselves on what we have from our own website.

Kola Tytler: And I think, one good, one thing that I would say is, especially for ecommerce, the great thing of ecommerce is that, you have Google Analytics and at least until next year, when the pixel regulation changes. But for now, you have Google Analytics and you have all those pixels and even Facebook and you can get so much information.
I would definitely say, a good use of Google Analytics is a huge advantage. It's a huge edge. Cause probably, a lot of people aren't making use of the full capacity that those things offer. And I think that's not something, to be honest, I think, I feel I can explain properly, in a short period of time.
But I think it's definitely some, it's something that's definitely worth reading into. And as someone who’s, who’s got a company, I would say sometimes, obviously, , it's about finding someone who knows. But to me, I think. It's good to get a basic understanding, at least, get an idea of the concepts and then go there and look for the best person that can do that thing that you need.
And if you gotta hire freelance it or outsourcing whatever you wanna do it. But I would say, don't be scared of, getting into those things. Cause I think that some of those things, I think sometimes you will get scared that some of this stuff, like it's not gonna give you like a direct immediate return.
And I think that being there in the long run and being, having that growth is really about leveraging the bits that aren't gonna give you that immediate return. And an understanding where is worth in the long run to put your resources in.

Russell Miller: That is very interesting. Focus on kind of your long term data analysis and kind of building up a longer term edge by understanding your customers. Yeah. Do you have a dashboard or anything you'd like to show off? And if you don't that's totally fine.

Kola Tytler: We do, I we do actually have a pretty comprehensive custom dashboard, I'd have to say, but we do keep that for ourselves. And the reason why I say that, I know that, we, I'm not gonna say that we guard it with our life, but yeah, I know that’s, we are not the only ones that can do what we do, if that makes sense. Yeah. We may be one few people that do it, but we're not the only one that can do it. So I think I'm gonna let people figure out how they wanna play that game.

Russell Miller: Okay. But really focusing on really extracting all the data you can from your website on people's brand preferences and category preferences and what's exciting. Yeah. that, that seems like a huge takeaway and that's actually something we're trying to build out for our product as well, to give people that trend information. Our listeners should definitely watch closely because, Kola is definitely pushing the envelope in terms of integrating Web3 with ecommerce. So thank you so much. My guest has been, uh, Kola Tytler from Dropout and amazing story, super brand and lots of good stuff to come.
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