Customer-defined disruption – the Spreadshirt story with CEO Philip Rooke
In a social media-led world, German T-shirt customiser Spreadshirt harnesses the disruptive desire of on-person self-expression. CEO Philip Rooke offers advice for European companies hoping to go global...
More than just a T-shirt printing company, Spreadshirt offers customers an opportunity of creation and self-expression, and it is fully committed to offering this to as many markets as possible as the German-based company delves deeper into the competitive US market. CEO Philip Rooke is at the helm of this continued expansion and feels Spreadshirt’s customer-focussed attitude is helping win the heart of America.
Rooke certainly offers a wealth of experience. “I have always worked in fast-growth market sectors and environments, where being a strong performing, customer-orientated team is important.” From advertising roles in the 1990s, he moved into online media as it was first developing, with roles at The Telegraph newspaper and Carlton Television. In 2001, he joined Tesco.com in a foray into e-commerce where he’s remained ever since. Rooke made the move to Spreadshirt in 2009 and became CEO just two years later.
Spreadshirt was founded in Leipzig, Germany in 2002, enabling users to design their own T-shirts – and, later, other paraphernalia – to be printed on demand. “In 2017 we celebrated 15 years in e-commerce and seven years of profitability,” Rooke says proudly.
Today, Spreadshirt is available in 12 languages, operates five production sites and ships to over 150 countries. In 2017, the company’s global revenue was over $117mn and over 48mn items had been printed. Spreadshirt also had over 70,000 selling partners. As Rooke summarises: "Spreadshirt has become a grown-up business. We’re international and profitable with an established team and market. We are no longer a startup.”
In a world where tech and e-commerce are everything, Rooke maintains that Spreadshirt’s online-to-offline offering is a huge factor of success. “Spreadshirt is the global self-expression e-commerce company. Our platform empowers people worldwide to express themselves through creating, discovering and selling clothing and accessories.”
So, is what we express “IRL” (in real life) more important than ever as social media personalities risk fading into the background? Rooke thinks so. “In a virtual world overflowing with digital self-expression, we set ourselves apart by enabling people to express themselves offline with on-person products. On person self-expression is the next step beyond social media. It is no longer enough to just like, follow or share something. You need to wear it, to demonstrate dedication.
- Deutsche Telekom acquires UPC Austria for €1.9bn, appoints two new board members
- Revealed: the big companies doing the most for startups in Europe
- The top seven financial services trends that will dominate 2018
"Divisive politics is certainly pushing the envelope on this in Europe and the USA as opinions are polarised. We saw a huge rise in political T-shirts during the Brexit vote and, hate Donald Trump or love him, he sells a lot of T-shirts.” With roughly 500mn tweets being sent every day, there is a risk of getting lost in the ether – perhaps the best way to get your point across is to put it on a T-shirt.
This will all help Spreadshirt to compete in the industry, and Rooke is acutely aware of the difficulties facing print-on-demand. He concedes what Spreadshirt is doing is “not new”.
“We have been doing this for 15 years, and now investors want profits. Five years ago, you could raise money on fast revenue growth but as the market has stabilised and established it is all about EBITDA (earnings before interest, taxes, depreciation and amortisation). Those companies who cannot prove they have good margins, efficient cost and profit are not going to get funded and will die. Spreadshirt has concentrated on making sure our business is sustainable.”
A keen awareness of the competition is key for Spreadshirt moving forward. “There is added pressure in the market from Amazon. If you have not established a solid brand, user experience and relationship with your customers you will lose to Amazon.”
An easy way to create and express
It’s this user experience and relationship that Spreadshirt puts a lot of work into, reasoning that in a competitive market, users will gravitate toward tools they enjoy using the most.
“What’s different about Spreadshirt? We empower our customers and sellers differently, because we offer three approaches to market – create your own, marketplace and shops. So, we can provide limitless opportunities for on-person self-expression,” says Rooke.
The platform prides itself on simplicity: “The simpler we can make it for people to create, buy and sell ideas on our products the better the experience will be, and the more competitive we are. In the last two years we have replaced every point in consumer or buyer experiences. This has made Spreadshirt easier to use and a more rewarding experience. We will continue to invest millions a year into this programme of upgrading.”
The ease of use brings up Spreadshirt’s other two policies: empowerment and excitement. “Even as we work on simplicity, which empowers people to try what we do, we also empower customers and sellers with more choices in products by introducing non-apparel products and also extending Spreadshirt’s own brand into more fashionable designs and colours.”
In addition, “every product we send to a customer must excite them. We have just invested $2.3mn in new printing equipment to provide a more exciting result and ensure faster delivery. And for the sellers the improved shop, publishing process and commissions is definitely adding excitement. A shop owner made over $353,000 in October 2017.”
A well-oiled supply chain keeps up this “excitement” and helps the company maintain its momentum – users can receive their designs while they are still excited about them, not a few weeks later. The ability to use “shops” to purchase items with other users’ designs means that even the less creative among us can still share in this excitement.
Continuous improvement is important for Spreadshirt’s success. “In the next year we’re investing heavily in three things. Customer service such as delivery timing and providing self-service tools… we’re also upgrading our user experience and usability simplicity against our competitors. Finally, we are improving our print quality and production options.”
Expansion overseas: Some executive advice
“Spreadshirt has been present in the USA since 2004,” says Rooke. “It is the single biggest merchandising market in the world and really the home of social media influencers, music merch, gaming fan expression… practically anything Americans are into they express on clothing.”
A perfect fit then? Or an already saturated market? “The US is 30% of our revenue and we have two factories in Pennsylvania and Nevada to cope with the demand. From the US we also export to Asia, Australia,
Canada and South America – almost two in seven items printed in the US are for export. But it is also the most competitive market in the world. We track over 200 competitors the US and we sit in the top five. Many of these are over-funded, loss-making businesses that won’t survive long term.”
The company maintains it has a global focus, but Rooke qualifies: “We have a US first policy. Everything we build to improve our business is done to improve our performance in the US. This is because it is the most competitive market in the world; it is the best testing ground for improvement. If it works here, it will work everywhere”.
From his experience, Rooke offers sage advice for any business wishing to go global. “The biggest pitfall when expanding into the US is to not be aware of the difference, to forget to listen and understand the local culture. It’s too easy for English-speaking companies to think the US is an extension of the UK or Europe. It’s not and that needs to be recognised.
“I’m a big advocate of getting on a plane and going to see how things work for yourself. It gives the team at HQ a chance to understand the local challenges and, by bringing the outlying offices to the HQ they can better understand the way the company works globally.
“As a British man, mostly working in Berlin and Leipzig, I have had to learn how to communicate more directly. Some terrible ideas were implemented because I said things like ‘you might want to change that’. To a British speaker, that means ‘please change it’. In Germany I’ve learnt to be more direct. Just because someone is speaking English, doesn’t mean they have a British interpretation of feedback.”
In addition, good leadership and talent retention are paramount for any company with global ambitions. Rooke’s attitude is consistent across the board: “We operate the same values of simplicity, empowerment and excitement with our culture as much we do with our product and brand”.
“In particular, we have a Feel Good Manager whose job it is to make Spreadshirt a great environment to work in,” Rooke explains. “As what we do is unique, most people are trained on the job. They are also given room to own that part of the business and experiment. We like to give people the opportunity to own their roles and experiment. It is possible to progress in the company and move across roles.
“For this reason, talent retention isn’t a big problem for us. We have a great product and a great company, but we don’t take that for granted. Like any company we have our bad days. But our Feel Good Manager has brought in programmes on management communication to improve the way we work with talent. If you respect and empower talent, it wants to stay.”
Spreadshirt – and Rooke - seem to know what the consumer wants both online and offline, and it’s this customer focus, keen awareness of the market and efficient supply chain management that keeps things moving quickly while exciting customers all over the world.
Like what you see! Signup for our weekly newsletter