Tipsy Elves LLC is as busy as Santa’s elves this Christmas.
The web-only retailer of ugly Christmas sweaters and other whimsical holiday apparel is relaunching its website this month. The new site will have several improvements, including a focus on how it looks on smartphone screens and more secure payment transactions via PayPal’s Braintree integration. The site is in the final testing stages and should go live within a few days, says Tipsy Elves co-founder Nick Morton.
Half of Tipsy Elves’ sales are made on mobile, and mobile devices account for 60% of traffic, Morton says. When the e-retailer set out to revamp its website it started with how the website would look on a smartphone and then scaled it up, not the reverse, Morton says. Five Tipsy Elves employees built the site in-house in about eight months, he says.
The goal of the new site is to improve mobile conversions, Morton says. Right now, the retailer’s mobile conversion rate is about half of the desktop conversation rate. Morton hopes the new site will lift the mobile site to desktop’s level, though he knows that could be a challenge because of consumer behavior, he says.
“We do think there is room for improvement and we would love to double it,” Morton says. Internet Retailer estimates Tipsy Elves’ overall conversion rate is 2%, according to Top 500Guide.com. Tipsy Elves is No. 711 in the Internet Retailer 2016 Second 500 Guide.
For the new website, Tipsy Elves also updated its payment transaction technology with payment processor PayPal. The retailer has used PayPal as its payment processor and had a PayPal checkout button on its site for years. However, the way the technology worked had consumers’ credit card numbers and other payment information passing through Tipsy Elves’ servers.
Such a setup poses risks because if criminals were to hack the retailer’s site, they could access the payment information, Morton says. This hasn’t happened, but Tipsy Elves wanted to add more security to transactions. “We don’t want that liability as a company,” Morton says.
Since it already had the relationship with PayPal, it decided to incorporate PayPal-owned payment processor Braintree’s technology onto the new site. With Braintree, the payment information—including billing and mailing addresses—goes directly to PayPal without passing through Tipsy Elves’ servers. Plus, the credit card number is tokenized for an added layer of security. The Braintree integration took a few days to add to the site, says Morton, without disclosing costs.
The update also will implement an algorithm that analyzes order and customer information, flags those that appear fraudulent and automatically puts them in a pending status. The retailer also will be able block certain IP addresses from making orders.
This is a big improvement compared with Tipsy Elves’ existing manual process. Currently, all orders are approved, and if an order seem suspect, a Tipsy Elves employee manually cancels the order. This is an arduous process, especially because the retailer has 10 to 100 potentially fraudulent orders a day, Morton says. On a daily basis, employees had to look for patterns, such as a gibberish user name like “xlylts” ordering 50 U.S. flag fanny packs, and then cancel the order.
Tipsy Elves projects more than $10 million in sales this year, Morton says. Internet Retailer estimated Tips Elves’ 2015 web sales at $14.4 million, according to Top500Guide.com. Tipsy Elves launched six product lines in 2016 so now it has products associated with holidays through the calendar year, Morton says.
Tipsy Elves has been profitable every year, he says. He attributes this to the fact that the retailer designs and manufactures its own products, giving it a bigger margin on products than traditional retailers, he says. 95% of the retailer’s sales are made via its own site and the rest come from sales Tipsy Elves generates on marketplaces, such as Amazon.com Inc. The retailer raised $100,000 from Robert Herjavec in December 2013 for 10% of the equity on the popular ABC TV show, “Shark Tank.”
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