Operating stealthily and effectively, Daryl Divilly tells John Kennedy why he has united his stable of successful online health and beauty brands under the I Love Shopping Group
When most people think of successful digital commerce entrepreneurs they think of Jeff Bezos of Amazon or Jack Ma of Alibaba. But closer to home, one firm has been steadily and stealthily built by Ireland’s own version of Bezos and Ma, the normally publicity-shy Daryl Divilly.
From an understated warehouse in Bray, popular e-commerce websites serving the Irish market such as BeautyFeatures.ie, Inhealth.ie, Beautyskincare.ie, Babysafety.ie, and PregnancyandBaby.ie have all been doing significant business in Ireland for 10 years. The business makes on average 150,000 deliveries a year across Ireland.
“I have enormous respect for people who run SMEs because they really understand all elements of the business cycle”
Established just over 10 years ago by Divilly the company is at a crucial path in its journey and he has decided to bring together all of the group’s e-commerce sites under the umbrella The I Love Shopping Group.
“We are Irish owned e-commerce sites with many common customers. The I Love Shopping Holding company gives the customer confidence of high standards and quality of service in all e-commerce sites,” Divilly told ThinkBusiness to explain the rationale for the decision.
Covid-19 growth curve
Aside from a common brand and the economies of scale, the growth of online shopping during the Covid-19 crisis was also a key factor.
“The growth of online shopping was dramatic and encouraged us to upgrade our technology to cope with the additional business. We have now made a significant investment in world class technology throughout every area of business which will ensure that the business can continue to deliver a truly customer-centric experience to its customers while growing the business rapidly.”
Divilly’s journey into digital or e-commerce began during the middle of the last recession while he was working at Coca-Cola where he got a taste for testing markets. “I decided I just wanted to set something up and the desire to do so grew and grew over the years. And against everybody’s advice at the time, I left Coca-Cola to go into this full-time with a beauty website.”
He realised quite early on that Irish consumers were generally at a disadvantage when it came to consumer beauty and baby products because most of the distributors for goods were UK-based and as a result were missing out on price-competitive deals.”
Focusing on the beauty and baby verticals at first and sourcing products before they came to the Irish market, the business began to grow fast, working with brands like L’Oréal and Unilever and supplying chains like Mothercare and Lloyds Pharmacy with goods as well as selling directly to consumers via the websites.
Divilly began by taking a table in a beauty business’s warehouse in Bray in 2009 offering to sell brands for them online. However, as that business contracted and Divilly’s online beauty and baby websites expanded he suddenly found himself alone in a 10,000 sq ft warehouse. “The property market at that stage was quite bad and I needed a place to grow the business, so at the bottom of the market I bought the warehouse which turned out to be a brilliant investment in our future.”
As the business kept growing Divilly added more verticals and in 2019 the company recorded a €3m turnover.
With the Covid-19 lockdown spurring the Irish public to e-commerce and online shopping, Divilly estimates he recorded half of that sum in the first few months of 2020 alone. “We actually had to turn off all of our advertisements to cope with the volume of orders which were up 400pc and we had to take on more staff for our warehouse to handle astronomical demand.”
Divilly is into the detail
Prior to Coca-Cola, Divilly worked at the head offices of Superquinn. “My desire to be an entrepreneur stems from my background as well as my time at Superquinn where I had close contact with Fergal Quinn. The whole business was just very entrepreneurial. It was all about trying things, doing things, and it didn’t matter what age you were. I was quite young at the time and I suppose that ‘can do’ attitude rubbed off on me.”
Another influence was his father Dermot Divilly, chair of An Post, who was also in business and ran many companies. “So, the desire to be an entrepreneur was always there.”
One of his father’s businesses was Roma Foods and during his summer holidays while in college he would step in for sales reps while they were on holidays and travel around the country.”
Cumulatively, these experiences all gave Divilly a sense of why everything from marketing to supply chain and distribution all had to work in concert with each other.
After studying business at Trinity College Dublin, Divilly graduated into a business world that was consumed by what was the then dot-com bubble but he came to the painful realisation that his knowledge of technology was lacking at the time.
He opted to study a Master’s degree in Interactive Media and E-commerce at University of Limerick where he put his knowledge of business to the test as a business mind in a class full of techies. It worked. But as he emerged from the course, however, the dot-com bubble had burst.
“If anyone had learnt anything from that time it is that you have to justify your valuations. You have to be able to generate revenue. So I went back to an area I knew – which was groceries – and worked at Superquinn in an emerging area called category management, which was about analysing data, figuring out which products in a shop should sit near to each other to stand the best chance of being sold and it was driving efficiencies across all of the stores. We were designing stores using software and it was a very up-and-coming area and that’s how I ended up working at Coca-Cola to build a team in that field.”
A gap in the market
One day while at home he noticed his sister received boxes of online orders from the UK full of beauty products and when he asked why she bought them she explained that she couldn’t get those brands in Ireland. “Sure enough, I went online and realised she was totally right. So I decided Ireland needed a single place to buy these brands and have the prices in euros.”
Once up and running with his first beauty site, Divilly knew he had struck a chord with the Irish public.
“There was very little competition and we began to rank quite highly. I got lucky with a few brands that I took on at the time. Some of these brands were also starting off at the time and became very big brands and that allowed me to win other brands.”
While Divilly was expert at digital marketing and product development, he realised he hadn’t run a business from end-to-end before and had to get to grips with things like VAT and payroll. He hired a colleague from Coca-Cola who was expert at the operational aspect of running a business leaving him free to focus on product sourcing and the dark art of search engine optimisation (SEO).
“It was all a big learning curve. I have enormous respect for people who run SMEs because they really understand all elements of the business cycle.”
One of the crucial areas Divilly grappled with was discipline around workflow.
“We learned quickly that we couldn’t be taking more orders while we were struggling to get orders out the door. The key was to introduce efficiencies in the warehouse so that we could scale up or ramp up to meet demand and keep customers satisfied.”
Looking to the future, Divilly is focused on maintaining margins, creating a single recognisable brand for his portfolio of e-commerce sites, but ultimately, ensuring customer success.
“The main thing is we don’t intend to give away all of this growth we’ve achieved – and we’ve won a lot of new customers – and we want to ensure next-day delivery and so we are implementing the systems to do that. The key to high levels of customer satisfaction is to have clear communication between your stock levels in the warehouse and what the customer sees on the website,” Divilly concluded.
“The reality is we are competing in a market of online businesses where the customer is king and expects the highest level of customer service. We have set ourselves up to put the customer at the centre of the business and deliver.”
Written by John Kennedy (firstname.lastname@example.org)
Published: 18 August, 2020