How Peter McVeigh helped turn a third-generation family shoe business into an online behemoth

Welcome to the latest edition of Entrepreneur NI. This week I caught up with Peter McVeigh of Donaghy’s – a third-generation family business based in Banbridge. However, their bricks and mortar store is just one component as Peter has help build out an impressive online presence. You can check out Peter’s story below and, as always, if you want to get involved – or know someone who would make a great feature, hit me a reply or visit my LinkedIn here. Your help is always appreciated.

Just like his grandfather before, Peter McVeigh is a firm believer that the recipe for success lies in a few simple ingredients: a good product and excellent customer service. 

Donaghy’s Banbridge is a third generation family business, founded by Peter Donaghy and his wife, Eileen, in 1960. It began as a modest shoe shop on Newry Street and while times may have changed, the store remains the beating heart in the Co Down town’s thriving high street – now a 20,000 sq. ft. department store. 

Peter McVeigh was 26-years-old when he joined the business in 2009, before completing a management buyout of his uncle, Michael, in March 2018. 

Before that, Peter had been working in transport and haulage and didn’t necessarily envisage himself in the family business.

Peter didn’t see himself in haulage all his life either. His mother Ann, in a rather informal approach, asked her son to join the business, just as Donaghy’s were contemplating joining the Wild West that was online. It was a new side to the business that would go on to compliment the bricks and mortar store; allowing Donaghy’s to be competitive in both spaces. 

For Peter, it didn’t need much deliberation and immediately he thought to himself, “how could that be done?” 

“Whenever I was working on my last job I did a bit of research,” he told me. “This was very early on in e-commerce; there wasn't a lot of people doing it. I looked into how to set up websites and got a business plan together and started implementing that in mid to late 2009.

“There was nobody to ask about e-commerce back then. It took five months to get a payment gateway approved. Now you can set up a transactional e-commerce website in a few hours. What took us six months in 2009 could be done in two weeks now.”

Donaghys.co.uk launched on New Year's Day, 2010.

With the wisdom of hindsight, moving online was a game-changer but Peter and the family, with the luxury of foresight, were able to spot that earlier than others. At the time he noticed Amazon had acquired Zappos – a major shoe retailer in America. That marked a significant shift in the shoe retail world. Donaghy’s took notice. 

Said Peter: “We noticed a big trend towards e-commerce whereby a lot of brands – particularly start-up – e-commerce only brands – were moving towards online. A lot of people had dismissed e-commerce maybe in the early 2000s but in the late 2000s, once the dot com bubble bust had receded, we saw something that suggested maybe this is the way retail is going to go in the future.”

However, it wasn’t an overnight boom. In 2012, e-commerce accounted for about 3% of Donaghy’s revenue. In their first year trading online they did about 600 orders. Today, e-commerce accounts for approximately 30% of the business with 19,000-20,000 orders a year being shipped out of their warehouse. 

The company has 55 employees on its books with four of those working full-time on the e-commerce side. Donaghy’s do their own fulfilment, with 65% of their products heading to the UK, 30% within the island of Ireland, and the remaining 5% going internationally. 

Covid also changed those metrics – sales more than doubled with the onset of the pandemic. With the store closed indefinitely at the beginning, Peter and the rest of his management team needed to adapt and relent to a new normal pretty fast.

“Those first weeks of Covid, the retail store had closed but a few weeks in and the online sales shot through the roof. It really moved the needle in terms of that 30%, whereas before it would have been anywhere between 12-15%.”

While research and acquiring the right people go hand-in-hand for Peter, it’s that willingness to embrace change. 

“It’s all a learning curve,” he said. “We are all firm believers in learning and trying to take learnings from other people. We're open to change; it’s easier said than done but we have embraced change over the years. A lot of people don't like change but we've moved as best we can.”

Whether that’s a constant refinement of their marketing strategy, use of social media, or the latest developments in e-commerce, Peter is not one who will allow the business to rest on its past successes. 

He’s all too well aware of the history and “the big shoes to fill” but he’s a man confident in his own ability to move the business forward, and he’s doing that all while adhering to the good old fashioned values. 

“We always have, and always will, try our very best to give the customer the best possible service we can,” he said. “We're big supporters of the phrase, ‘look after your customer or else somebody else will’. 

“That good customer service, choice and competitive pricing have probably kept us where we are. If you don't look after your customer, if you don’t offer good customer service, if you don't have a good product, sooner or later your business will fail and that's as true now as it was 100 years ago.”

Moving forward, Peter says next year will see even further changes to their in-store and online offerings, with the customer experience at the heart of those changes. 

In today’s technology and AI-driven world, those changes are being spearheaded by the data. Donaghy’s, while a family business, are always leaning in on the data. Peter says, “gone are the days of hunches when it comes to purchasing products” for their customers.

Not that those days of gut feelings were all that long ago; after-all it was a hunch, or perhaps just some common sense, that allowed Peter – in a separate business enterprise – to capitalise, during the infancy of e-commerce – “when it was a bit like the Wild West”. 

He casually proclaimed: “We sold the Chinese their own shoes back.” 

You what?

“I ran an export business in China before I took over as Managing Director at Donaghy’s,” he added. 

“We took western branded shoes, which are priced at £60-70 here, but they’re £170-180 in China. So we started uploading our products on to Chinese online marketplaces. We were probably doing 20,000-25,000 orders a year. That was very successful!

“They had to be sent by Royal Mail because then that meant the Chinese knew they came from the UK and we use to put a bar of Cadbury’s chocolate in every order. In China it’s fake, fake, fake everything so this really resonated.

“The shoes were still stating ‘Made in China’ on the inside. It was crazy. I thought there’s no way we can sell the Chinese their own shoes back but we did.”

In the end Peter sold that section of the business on.

E-commerce has evolved so rapidly and Peter and his team are constantly keeping on top of those trends but at the end of the day it’s about those two simple ingredients – a good product and even better customer service. A 4.9 rating on Trustpilot tells its own story. 

And Peter’s advice for would-be entrepreneurs…. “have a good plan, put in place and take that first step. for it’s that first step which is always the hardest”.

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