Stirring up sales with apps

High-end tea salon and boutique TWG Tea has global ambitions to get its brand of luxury teas to more people.

But the home-grown small and medium-sized enterprise, founded in 2007, is not relying solely on opening more tea outlets overseas. To help grow its business, TWG Tea is going into the online retail business.

Last December, the retailer released mobile apps for iOS and Android for customers to purchase teas to brew at home here, send to friends or order from abroad at the same prices as its physical outlets.

The free app, which is 9MB in size, lists most of the tea products that TWG Tea sells. This works out to more than 900 gourmet products, teas and accessories, with a product photograph for each listing.

TWG Tea also plans to extend online sales to its website in the third quarter of this year with a site revamp.

Ms Maranda Barnes, co-founder and director of communications and business development at TWG Tea, told Digital Life: "We strongly believe that our digital assets will work hand in hand with our new location openings to drive the business to new heights in 2014."

The firm, with 350 employees globally, plans to open 20 tea boutiques and shops in Asia and the Middle East this year, with no less than US$15 million (S$19 million) invested, The Business Times reported last December.

This would boost the number of outlets globally to 50, an increase from 30 currently.

Specifically, Ms Barnes, 38, said TWG Tea will focus on opening tea salons in new markets, such as China, Taiwan, Qatar and Cambodia, this year.

With the mobile app, TWG Tea will also serve countries it previously did not distribute to.

The company now distributes its products to about 40 countries and territories. But the app will add about 40 more, including Argentina, Bahrain, Brunei and Switzerland.

The app offers shipping to about 60 countries and territories for now, with more locations to be added later this year. In Singapore, delivery is free and expected to be made within two working days, but for overseas shipping, a flat rate is charged, with rates ranging from $40 to $185, depending on the location.

The app allows only orders, paid through PayPal, with a minimum purchase of $100, excluding the shipping fee, because it does not make business sense for the company to deliver orders below that amount.

Ms Barnes said several hundreds of thousands of dollars went into making the app, with the bulk of costs spent on photographing the company's hundreds of tea products.

A Singapore developer helped with the app creation from January to December last year, but the photography work took three to four years, starting from 2010, to complete.

The work put into the app will also be used for TWG Tea's e-commerce website.

The idea for the app arose about three to four years ago, even though interest in smartphones was just picking up. Ms Barnes said a big factor that prompted her to look into the app was a "gut feeling", going by how the smartphone boom happened very quickly in Asia.

She added that she and her husband, TWG Tea co-founder Taha Bouqdib, 44, were also hooked on smartphones then.

"If you are so addicted to your phone, a mobile app that works and functions for a brand that you like will be successful," she said.

And it seems the company has reason to be optimistic about mobile shopping. A study done last year by research firm Nielsen found that 31 per cent of Singapore consumers said they shopped online with their mobile devices in the past month, up from 24 per cent in 2012.

TWG Tea was not able to comment on how much its business could grow as a result of the app. But it said last December that its annual sales grew from $1 million to $55 million in the past five years and it is aiming for $1 billion in annual sales in the next 10 years.

Ms Barnes also noted that, based on recent research by management consultancy Bain & Company, about 5 per cent of global sales for luxury brands were made online last year, with a third of these sales driven by mobile devices.

The TWG Tea app has been downloaded about 10,000 times on the Apple App Store and the Google Play Store so far, and the company is eyeing 100,000 downloads by the end of the year.

Ms Barnes believes the app and website, instead of eating into sales at TWG Tea's physical outlets, will drive in-store sales.

The app was designed to help users find and learn about tea products wherever they go, while mirroring aspects of the physical store experience, such as the search filters they can use in the app and brief descriptions of the products.

"Although the app and website augment the physical store, the experience of face-to-face interaction with our tea connoisseurs is irreplaceable. We believe with the app and website, sales (in the physical stores) are a natural expectation," she said.

And research has at least shown that mobile apps can drive in-store sales.

Professional services firm Deloitte said in a report last October that, in Britain, consumers visiting websites and using mobile apps were predicted to have spent 18 billion pounds (S$38 billion) in British stores last year, compared with 5 billion pounds of sales made directly on mobile devices.

The amount of in-store sales influenced by mobile devices was estimated at 15.2 billion pounds in 2012, while sales made on the devices were 1 billion pounds.

Said Ms Barnes: "What we want to build here is a loyal following of discerning customers who are passionate about tea and understand tea. We believe the app and website would be a driving factor to help build this."

What about allowing customers to place orders using the app so they can enjoy teas and tea desserts straight away when they arrive at a TWG Tea salon?

"No. We are not willing yet to sacrifice the personal touch. At the end of the day, the customer experience is with another human being. We still want to keep the experience of customers interacting and discussing with tea connoisseurs at the counter or with a waiter. It is very sacred," said Ms Barnes.

And there are no plans for now to allow customers to use phones to make contactless payments at TWG Tea outlets. "Contactless payment with phones obviously does not correspond with the TWG Tea customer experience. For customers at the counter, we do not want it to be a rushed experience," said Ms Barnes.

"We want to be tech-savvy and have a beautiful app, but we are not going to ask our customers to take out their phones while they are at the cash register. It is not a fast-food experience."

TWG Tea and its 1837 logo

Singapore-based TWG Tea was established in 2007 and its first European-styled tea salon and boutique opened here at Republic Plaza a year later.

It now has outlets in eight locations here, including Ion Orchard, Takashimaya Department Store, The Shoppes at Marina Bay Sands (left) and Changi Airport Terminal 2.

TWG Tea sells more than 900 teas and related products, such as tea accessories. It also sells tea-infused pastries, such as macaroons.

The teas are sourced from more than 30 tea-producing countries in the world, including Hawaii, South Africa, India, Japan and Argentina.

A pot of brewed tea starts at $12.50 and the most expensive tea is yellow tea, which can sell for between $800 and $3,000 a kilogram.

TWG Tea was co-founded by five people: TWG Tea chief executive Taha Bouqdib, The Wellness Group chairman Manoj Mohan Murjani, Mr Bouqdib's wife Maranda Barnes, TWG Tea managing director Rith Aum-Stievenard, and TWG Tea executive pastry chef Philippe Langlois.

The company has 350 employees globally and has outlets and a presence in 16 countries and territories, including Singapore, the United States, Britain, the United Arab Emirates, Hong Kong and Indonesia.

The initials TWG are derived from The Wellness Group. The year 1837 in the logo is not the year TWG Tea was founded. The company said this was included to honour the year the tea trade became official in Singapore after the Chamber of Commerce was created here.

Lifestyle giant Osim currently owns a 70-per-cent stake in TWG Tea, although one of its co-founders, Mr Murjani, is contesting the stake, which is expected to play out in the High Court. A pre-trial conference is slated for next month.

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