Web strategy pays off for Athens retailer

Matt's column will alternate with 5 Questions for the Boss, the popular Q and A with the region's top business leaders, written by business assignment editor Henry Unger. These columns, published exclusively for subscribers, are part of our commitment to bring you insightful coverage of metro Atlanta's business scene.

myajc.com

Find columns you’ve missed on our premium website for subscribers at www.myajc.com/business.

TIPS FROM DIANA HARBOUR

1. When leasing space, negotiate for the landlord to pay for finishing the interior.

2. Don’t over order merchandise. Keep meticulous records of what affects your sales so you can better forecast.

3. No one else will run the business exactly like you, so factor that in when you expand locations and have limited time at each.

From her cubicle at a credit card company in Columbus, Ga., Diana Harbour saw a flat trajectory for her life ahead. It terrified her.

Eight hours a day, the English lit major wrote bland paragraphs of boilerplate to be printed on credit card statements. She also plotted her dream.

Eight years later Diana, now 32, and husband Josh run an Athens clothing store called The Red Dress Boutique and a much larger online retailer by the same name. The Harbours say they expect $8 million in sales this year, far above what they had just two years ago. They have about 40 employees and are preparing to expand internationally.

Here Harbour explains how she did it.

The decision to launch

When I was debating leaving I went to my dad [who owned a commercial landscaping business]. He was very upfront. He said you were a terrible employee. You are type A. And that tells me you need to do something on your own. He sat me down with his team of accountants and wanted to give us the worst case scenario. The majority of small businesses fail in the first five years.

I said you have two choices in life. You can have security or freedom. Sometimes you can have both. Sometimes you only get one. I was more terrified of the security in that cubicle and not doing something that I had wrapped my soul around. I choose to do freedom.

We sold our house and used that money to secure a bank loan. We moved to Athens and we shacked up with four different friends and rented an air mattress from Aaron’s and lived out of a suitcase apiece over a 12-month period while we got the store off the ground and were able to save enough for a down payment on a home.

There were hurdles I had to overcome. Not breaking down in tears when I had to let someone go or if a customer came in and was mean to me. [My dad said] these are going to be obstacles that come at you a lot and you are going to have to know how to handle them and not dwell on them. Don’t let your emotions eat you alive.

Growing the business

The couple put most of the money they made back into the business, keeping only enough to pay basic bills. The business did well enough to open another shop in Augusta. But the economy was changing: customers were pulling back on the high-end clothing that Red Dress featured.

We started listening to our customers, and mainly listening to the parents when they came in. I heard parents say, “No, I won’t buy you that. But I’ll buy you four of these.” It’s the same amount of money but spread over four items. It’s basically more bang for your buck.

My mom gave me a cash loan to have the website built. It was $6,000. She told me I had to pay it back in six months with interest. Josh didn’t think it was going to work.

I was thinking I can make this work if we get the price points right.

It was slow. We would only do a couple thousand dollars in a month that first year. We were packaging orders at the cash register in the store.

I found out I was pregnant. The next day Josh got his acceptance letter from UGA law. We had people saying, how are you going to do this with a baby and a website and law school? We said we are just going to do it.

I went back to work five days after I had him. I had him in a sling…

My low point: Robert was a year old. Josh was a year and a half into law school. I thought we were going to have to shut down the website. And Josh and I sat down and said we are going to finally cut the high-end brands completely. Plus a new website design, which cost loads of money, and we were just hoping and praying it was going to pay off.

One of the hardest things about the website was finding a niche. I realized I have this opportunity to do this Southern preppy niche at a great price point. These girls want to look like they are wearing the $300 Lilly Pulitzer but not wanting to pay the $300 price tag. I have an eye for going out and finding that.

Runway shows are only twice a year. The spring runway is end of September and will not hit stores until March. I can go find it in December and January if I study it. I know which brands will get pretty close to that look. I would go and find it at a lower price point.

Finding a niche

The Red Dress website often shows items that have sold out and shows new clothes added daily.

Scarcity breeds demand. I’ll order limited quantity. Girls want to know a hundred other girls don’t have what they have on.

I get on social media and I hammer it. I was taking photos of the models in the fitting room in the clothes and uploading them immediately into Facebook so girls could see live time what just came in. It started a bit of frenzy.

Social media has made it where you have to have the new, the next, the now. Every day.

When I was planning out the packing of what they are going to receive in the mail I wanted something that I would be excited about opening. I have my girls writing handwritten thank you notes with every order. You get stickers. You get a free gift. You get tissue paper. You get a beautiful red envelope. When they get that box they are getting something to brighten their day.

FOLLOW UP: Read about Harbour's appearance in October on Shark Tank