Long wary of competing online with its retailers, women’s footwear manufacturer Gabor Shoes AG has launched a portal that sells to consumers but also routes many online orders to its merchants, helping them compete online against Amazon and other online sellers.
“Gabor has always concentrated on being a manufacturer, and has not wanted to sell online and compete with retailers,” says Markus Reheis, chief marketing officer of the Rosenheim, Germany-based company. “But the world is changing.”
In Gabor’s home country, he notes, about 30% of shoes are sold online. “That’s a big problem for our retailers without e-commerce sites—they can’t compete with Amazon.”
But while Gabor has begun selling online directly to consumers, it’s doing so on an e-commerce marketplace designed to route as many orders as possible to its client retailers, Reheis says. Since launching in February, the e-commerce site, Gabor.de, is channeling half its orders to dozens of retail stores for fulfillment—and the manufacturer is laying the groundwork to get hundreds more retailers on board with the site by the end of his year, he adds. The family-owned manufacturer—still controlled by the Gabor family, which founded it more than 60 years ago—doesn’t report revenue figures or break out the percentage of e-commerce sales. But though sales through its new online portal are small part of total sales, the company sees e-commerce as important to its long-term growth, Reheis says.
“The goal is to offer the best e-commerce experience to the end customer,” Reheis says. “And with the retailers integrated on our site, they now get online sales they didn’t get before.” Retailers purchase Gabor’s products at a discount, then keep the full retail price listed on Gabor.de when fulfilling an order.
The site, which runs on Magento Commerce e-commerce software from Magento Inc., includes a Magento order management system that Gabor has integrated with the inventory systems of dozens of retailers.
As a consumer places an online order on Gabor.de, the system automatically routes it to the nearest merchant able to fulfill the order from its own store or warehouse, says Stefan Willkommer, CEO of TechDivision, a web development and consulting firm that worked on Gabor’s e-commerce site. If the system can’t find a retailer in stock with the particular style and size of a Gabor fashion, casual or sport line product, he adds, it kicks the order to Gabor itself for fulfillment.
About 40 retail store locations were fulfilling orders to customers on Gabor.de as of last month, and Gabor expects to have 400 store locations among 100 retail companies fulfilling orders by the end of this year, Reheis noted in an interview last month at the Magento Imagine users conference, where he and Willkommer did a presentation on Gabor’s e-commerce technology and strategy. Worldwide, Gabor sells to some 5,000 retailers in 60 markets. The new e-commerce portal is designed for retailers in Germany, but the manufacturer is looking for e-commerce to help it grow sales in other markets as well, notably France and Korea, Reheis says.
Although Gabor makes higher profit margins when selling its footwear and accessories directly to consumers, it wants to involve its retailers as much as possible in e-commerce to keep up with consumer online trends. “Our B2B business is extremely important to us,” Reheis says. “Even if we grow our own end-customer business, it’s important for us to keep our retailers stable.”
Gabor is betting that more retailers will want to come onboard with the manufacturer’s new e-commerce strategy, even though that will require more technology integration work and helping many brick-and-mortar retailers adjust to fulfilling online orders. About 80% of its client retailers operate primarily as brick-and-mortar merchants.
The manufacturer has integrated its e-commerce and order management platform with enterprise resource planning software that Gabor and retailers use to manage inventory records and other operations. It also integrates with retailers’ store point-of-sale systems. For now, it updates inventory levels once or twice a day to match products shown on Gabor.de with what is available in warehouses. It’s also discussing with ERP software providers about using web services applications to update inventory levels more frequently, Willkommer said.
With their technology systems integrated with Gabor, retailers just need a web browser to connect to Gabor to receive online orders, Willkommer said. But they also need to learn the process of fulfilling orders, for which some of the smaller retailers are poorly equipped. “It’s not just a technical issue,” Reheis said. “We need to train them how to accept and fulfill orders.”
The payoff for participating retailers has been incremental sales, he added. “We’ve seen about 30% more turnover in units sold among merchants connected the marketplace,” he said.
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