August 10, 2018
The Omnichannel approach creates a seamless shopping experience, making it popular with retailers challenged by evolving consumer demands. According to Michael Sonier, Head of Omnichannel Products at Magento, “Really what drives the adoption of omnichannel is consumers no longer really expect anything less of us. They want a seamless and unified experience, across all touchpoints.” Customers who’ve grown accustomed to the convenience and selection offered by eCommerce storefronts now expect the same experience when stepping into a physical location in terms of inventory selection, order fulfillment, and delivery. “The modern consumer is looking for a seamless experience whether it’s a branded store, a multi-brand retailer, or an online experience. They want to buy whenever and from whomever they want,” says Sonier.
As a result, the traditional retail model is evolving with the times to engage and entice eCommerce-savvy customers. International Data Corporation stated in their Worldwide Retail 2018 Predictions that, “By 2019, 50 percent of retailers will have adopted a retail omnichannel commerce platform.” For traditional retailers, integrating new workflow components into their daily operations will feel like an imposing undertaking. However, enhancing the conventional sales model with the omnichannel approach has proven to be a winning strategy for many businesses looking to expand their competitive footprint in the global online marketplace.
Gabor Shoes Embraces a Digital Model for Marketplace Growth
Founded in 1919, German footwear manufacturer Gabor Shoes AG maintains a thriving customer base thanks to their seasonal footwear collections which effortlessly blend contemporary styles, quality manufacturing, and modern comfort technology. With a network of 5,000 retailers in over 60 countries, Gabor offers consumers a diverse collection of 3,000 different footwear styles each season. Despite relying predominantly on their in-store traffic to drive sales, Gabor has continued to generate respectful annual sales topping €380 million.
With the growth of eCommerce, 30 percent of all shoes in Germany are now sold through digital channels. Despite the noticeable shift from traditional retail to online shopping, Gabor maintained a minimal online presence with no digital connection to their in-store experience. Although expanding into eCommerce would dramatically expand their market reach and revenue growth, Gabor was concerned the move would create competition for their retailer, potentially damaging a relationship the company considers a key part of its business foundation.
A solution was needed in which a competitive digital platform could be created for Gabor while honoring the commitment to their retailers. Dr. Markus Reheis, Gabor Global Head of Marketing stated “Gabor always worked with classic retail and this was the reason for hesitation because they did not want to create competition for these stores by introducing an online component. But since times are changing and online business has become more and more important, Gabor decided an online presence was necessary but with a concept placing partners and retailers on their side. We started by looking intensively into possible concepts and solutions and finally decided on the marketplace approach.”
Enabling Customers, Supporting Retail Partners
After considering options to simultaneously empower their customers and retailers, Gabor decided integrating the omnichannel approach would best meet their needs. TechDivision’s Stefan Willkommer stated, “We needed to enable consumers to benefit from digital channels while supporting the existing retailer structures and partners as far as possible.”
To begin modernizing their retail experience, Gabor partnered with TechDivision GmbH, a prominent Magento omnichannel solution partner in Europe’s DACH. Gabor began by building engaging front-end landing pages with powerful tools such as TechDivision’s M2IF extension and Pagedesigner. They also made additional enhancements to the storefront using Magento 2 Import Framework, an opensource software available through Github. Gabor then established a centralized data hub using their existing IT infrastructure as a base, creating a unified logistics network linking all of their physical stores.
Working with TechDivision, Gabor established a 360-degree inventory control and fulfillment system which is managed by a system of advanced algorithms. This new system is able to tap inventories spread across the Gabor retail network rather than relying entirely on a centralized warehouse for order fulfillment. Now when a customer purchases a shoe online, the system locates a retailer stocking the specified pair of footwear. The retailer then receives an order notification, and in most cases, accepts and fulfills it. If not available, the system does another allocation run for the next available retailer. With every order routed to their retail network for fulfillment, retailers are rewarded with sales commissions which encourage their participation.
By involving retailers in their marketplace, Gabor has maintained the commitment to their brick and mortar locations while incentivizing their retailers to embrace digitally-driven commerce. To further grow the relationship between their retail and online platforms, Gabor plans to gradually integrate endless aisle elements into their in-store experience. This omnichannel concept will consist of a progressive web app accessible via in-store tablet devices which customers will use to browse an entire seasonal collection, make a purchase, and then have their order shipped directly to their homes.
An Endless Aisle Elevation
Now several months in, the results of are simply amazing. Gabor’s traditional retailers have acknowledged the value of omnichannel integration with 80 retailers now connected, a number expected to continue growing throughout 2018 and beyond. Even more importantly, Gabor’s customers have responded positively to the eCommerce experience with turnover tripled within the three-month timeframe. Powered by Magento, Gabor’s integration of the omnichannel concept into their retail structure has elevated business operations to a new level in just three months. With their endless aisle concept in the works and expectations for sales goals to be exceeded this year and the next, Gabor has their running shoes on as they keep pace with the future of commerce.