RIP Shoes.com – Goes bankrupt – 6 Lessons to learn
Shoes.com, Canada based online shoe retailer has closed its operations and filed for bankruptcy. I, being a huge fan of vertical ecommerce marketplaces and have always stood up for companies like shoes.com. Its sudden shutdown got me into thinking what possibly went wrong and probable lessons to learn for niche marketplaces and associated brands.
Some notable facts about Shoes.com and CEO Roger Hardy
- The company was a hopeful contender for IPO in times to come.
- CEO Roger Hardy is a pro at vertical ecommerce industry with the fame of $430 million Coastal Contacts (ecommerce eyewear marketplace) sale, it later went public on Nasdaq..
- They were pretty bullish with acquisition of Vancouver’s Shoeme.ca and Seattle’s OnlineShoes.com in mid-2014. Had good hopes to cross 1 billion revenues by 2020.
Lessons to Learn
Lesson 1: Don’t be the last in line
With Zappos, the market leader already backed by a heavyweight, Amazon, another big rival shoebuy.com recently bought over by Walmart (70 million USD), Shoes.com was the last in line. It’s a scary spot to be in with receding market share, lower margins and fierce competition.
If your competitors are getting acquired, it probably time for you to close a deal quicker than them.
Lesson 2: Smell the Customers
Don’t turn a blind eye to your customer grievances, it’s important set things right with proper customer engagement, grievance redressal system to the extent of quick returns and refunds.
Get to the root of problem:
- If Majority complaints are from a specific brand, delist it.
- Always respond to customer and take quick action, be it refund or replacement.
- Get your delivery issues sorted, have quality checks in place, look for areas of excellence and customer delight.
Lesson 3: Be Selective – Avoid low quality products
Vertical marketplaces, being a niche try and overload their ecommerce stores with product of all possible price range, quality and brands to give customers a variety.
It’s important to have a strict quality control process to make sure substandard products are not allowed on your marketplace. Marketplaces eventually bears the brunt for bad products.
Lesson 4: Learn to surf on the technology wave
Since marketplaces are primarily technology companies, they must efficiently ride the technology wave to make sure they are on the top of it and ahead of competition. Lately apparel and footwear brands have also started investing on their own Ecommerce portals so as not to be on the mercy of marketplaces.
Examples of Some Ebizon ecommerce clients surfing technology wave
Companies like Adidas and Reebok in Canada are all set to enhance their customer engagement and online sales closure through Inside, Enterprise Customer Engagement Chat Solution by Powerfront (An Ebizon Partner).
Mobileistic (One of the Largest Master Dealer for AT&T in the Tri-State area) is using instore mobile app to win back customers.
BedSTU, a high street premium shoe brand is all set to bond together with its loyal customer base through its newly launched mobile app.
Lesson 5: Plan your Ecommerce Journey
Start your ecommerce journey by first identifying where you currently stand and then scale up through technology.
Marketplaces : Key focus areas
- It’s ok to have your favorite top selling brands, but it’s important to keep looking for niche new brands with equal chance of visibility on your marketplace.
- Strike a balance between Market place VS Inventory Led model for inventory store, management and delivery. Most customer grievances are around delivery timelines and replacement hassles.
- What finally: Plan whether you would like to be finally taken over by a horizontal marketplace, a heavyweight retail chain or start probably raise funds for brick and mortar presence.
Apparel and Footwear Brands
Since apparel and Footwear brands own the brand, manufacturing and pricing, they are a lot more in control, still they need to plan their ecommerce journey to make sure they are not left behind, key focus areas below:
- Position your product range on both vertical as well as horizontal marketplaces, get a favourite over a period of time based on sales generated.
- Dont ignore your conventional channels: Own stores and franchises.
- Get your own brand ecommerce portal in place and use it to help your franchises leverage the ecommerce to generate their sales.
- In Store mobile apps are the next big thing to help brands win back customer that they are losing to marketplaces.
Lesson 6 : Don’t mess with brands
It’s ok to drop brands from your marketplace, but why be too vocal about it. Shoes.com dropped Ivanka Trump’s shoeline and created a publicity campaign around it. Although I do not see a direct link here but still why mess with someone 🙂
Vibhav Gaur plays a key role in empowering Ebzion’s Automobile Aftermarket clients to sustainably grow their online revenues by leveraging technology + digital marketing.
With a strong background in technology and key focus in Automotive marketing he has helped multiple aftermarket OEMs and Retailers make it big online.
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