Digital has enabled brands not only to get closer to customers by selling direct but also to offer greater support to partners selling their brand online. But brands do need a solid base in digital to harness its power. David Williams, Senior Director, Digital Omnichannel, EMEA, at Deckers Brands [IRDX RDEO], spoke to Emma Herrod about how Deckers has achieved this through a restructuring of people, processes and technology.
THERE IS fast-fashion retailing with the necessity of speed to get clothing items onto a website and ready for sale in the blink of an eye and then there are the brands, already looking ahead to winter 2017. These are the sellers of the must-haves in 12 months’ time. However, while one eye is on distributors and partners to sell the carefully designed and planned products in different regions and markets, the other is trading the current season selling direct to consumers through a multitude of channels, including digital and retail stores and omnichannel services. The lines are blurring across the entire wholesale, direct and third-party businesses.
Digital is not only enabling brands to get closer to customers, by selling direct to them via their own websites, but it is also helping them to work better with the third party sellers – department stores, retailers, distributors – that form the backbone of the wholesale business.
US footwear company Deckers Brands, for example, sold its Teva sports sandal brand into the UK using a distribution model before supporting it by selling direct online. A regional office was opened in London in 2008 to run the European wholesale and direct operation, with another set up to operate in Asia Pacific. Deckers Europe now focuses on three footwear brands across 30 markets – UGG, Teva and Hoka One One – for which it operates nine ecommerce sites in five languages. Having launched with UGG online and through flagship stores in the UK in 2011, other European markets followed in quick succession, with each site supporting the existing wholesale business with local language, and localised product pages, delivery and checkouts.
According to David Williams, Senior Director, Digital Omnichannel, EMEA, at Deckers Brands, the big question for Deckers is now: “How do we as a business digitally help the wholesale business to give a holistic digital experience?” He explains how if a partner is selling direct to consumers online Deckers is there to support them with assets and brand messaging, as well as providing the full brand experience for customers on its own site. It also has to support them offline since a pop-up shop in Selfridges, for example, has to be as much on brand as Decker’s own London flagship store.
A true omnichannel approach means supporting and working seamlessly with your wholesale teams. Williams comments, “We have been servicing wholesale via trade marketing teams in this way for years.”
Williams believes that brands should share all insights to increase performance at wholesale and empower partners to deliver a true brand experience.
Ultimately, a brand knows its products and brand messaging, and being able to support all parties selling the brand benefits everyone. As Williams explains, you get brand advocates who want to engage with it, so brands need a place where people can go to see the full range and gather all of the information, as well as interact socially. “It’s about giving the brand experience,” he adds.
Working with wholesale partners also provides an opportunity for the digital team to broaden their horizons and have a general understanding of trading outside of a website.
This ability to support the wholesale business digitally has been helped by a restructuring of Deckers and a focus on brand ownership and process responsibility rather than increasing the headcount and duplicating roles and responsibilities as it entered new geographical markets.
When Deckers started selling into Europe via distributors, it was made up of lots of silos concentrated on the wholesale business rather than selling direct to consumers. “Marketing spend was focused mainly on the brand for the wholesale channel rather than the direct business, and operations was focused on wholesale, too,” says Williams. “As the business evolved, so did our marketing spend to support the change to an omnichannel approach with all channels at the centre.”
Deckers’ head office is in the US with the EMEA regional office headquartered in London where it supports the different European markets. Williams emphasises that one size does not fit all, and explains that it came to the conclusion in 2014 that the business, technology and processes had to be restructured in a way that enabled the scale and growth forecast for wholesale and direct operations.
The company moved from proprietary ecommerce systems (which raised challenges around scaling), to Demandware back in 2011. He explains that while the US’s business challenges involve scale, its geographical expanse and fierce competition, Europe’s also include the many different payment types, delivery methods and varying levels of omni-channel maturity.
However, as he points out, what works in one area isn’t always the best option for another: “We always try and start from a core and then adapt for each region.” He explains that different systems are needed in China to work effectively with Alibaba, social commerce and WeChat rather than the traditional ecommerce services in Europe and the US.
There are differences at a marketing level as well. Deckers used American football quarterback Tom Brady in its UGG marketing. While he’s a well-known celebrity in the US, awareness was lower and varied across Europe. This raised the question of whether assets can be used globally and how and where brands are localised.
At the start, localisation leads to huge growth, especially once language, payments and delivery have been sorted out, but as markets mature they bring new challenges, differences in conversion rates and levels and complexity of work.
For example, Deckers’ old digital architecture made some local sites unsustainable to manage in terms of content, promotions and pricing, while others needed to be fully integrated with omnichannel services such as click and collect in the UK and France. In addition, Deckers Europe was operating localised bi-channel sites in the Netherlands and Italy. Added to this complexity, Williams says, is the question of “How do we as an ecommerce team help the wholesale business to give a consistent digital experience”.
The key steps in the transformation were to see where business processes, people and technology could be focussed on brands rather than siloed sales channels.
The online merchandising and digital brand experience has changed to reflect this more aligned approach at a regional level, with more localised experiences and services within specific key markets such as Germany and France.
The more regionally and locally relevant a brand can be made, the more personalised the experience becomes for the customer explains Williams. While Deckers is globalising as much as it can, with mobile first, personalisation by technology, conversion optimisation via usability and best practice, and engaging in brand storytelling in all channels, regional execution and control of these is important. Individual markets can then be more personalised with eCRM and consumer insights and fully integrating the customer journey with localised marketing.
“Pricing, promotions and social and local marketing initiatives are handled locally with everything else handled centrally,” he explains.
The digital team now operates a regional hub and spoke model with a scalable platform which is being continually developed for better management of pricing and a more white label approach to managing categories, pushing out assets and content in the relevant languages to websites.
The European digital team has moved to an agile setup with existing staff becoming product owners for each of Deckers’ three brands. Each product owner has the authority, time and knowledge to focus their work on those brands, and working internationally across all of the language sites. Their responsibility covers trading and content from landing and product information pages through to items being added to the shopping basket.
Marketing technology is handled as a separate responsibility across all brands. So is the basket to checkout to ensure consistency of the local experience. A group also works on omnichannel fulfilment and customer service and how these affect the websites and customer journeys. Another is more operationally focused on the customer experience and omnichannel capabilities, such as endless aisle, click and collect, data capture from store and the in-store experience. Supporting all this is UX and in-house and outsourced web development.
“The restructuring was seen as us looking at a more agile approach to doing things,” explains Williams.
“It was about getting people cross-functionally coming together and empowering them to make changes in a very quick, continuous improvement kind of way.”
Williams explains that customer service will tell them if address formats need changing, for example, while others comment on the ongoing design. “The days of a steering committee deciding on changes doesn’t exist,” he adds. “It’s product owners and stakeholders who prioritise the work. So the product owner has one KPI at the moment, which is basket to checkout conversions.” He is a firm believer in matrix working and says: “Having someone who owns that process and product has seen us improve conversions and the experience since they are constantly testing and improving it.”
Small iterative changes are constantly being made to the sites following a hybrid of waterfall and agile methodologies of discovery, designing and developing a minimally viable product and then deploying after testing and sign-off by the UX specialist, the web development programmer, QA, the product owner, and finance and IT, if necessary. Following the realignment of ecommerce in this way, brand marketing, retail operations and retail IT are being brought in as well.
REAPING THE REWARDS
Now, rather than using lots of resources simply to maintain site functionality, the European team is able to concentrate on optimisation, and is looking to improve support for the retailers selling its brands and growing the business.
The European Deckers ecommerce business continues to see double digit growth and is especially strong in the German and UK markets. Williams says it experienced some amazing increases in conversion rates, with macro conversion rates rising “25% across the board in the past year” as changes were made to landing and product pages and to baskets. He explains that ecommerce is now more integrated with the rest of the business, and the increase in productivity through being agile has led to much less technical debt. “Because of the way we’re working there are less work tickets and a reduced need for changes once things have gone live.” He adds: “I feel very comfortable that the structure is now in place for us to manage launches in other countries.”
THE BUSINESS NOW
Selling direct to consumers has also brought the brands closer to their end consumers since they are “one step closer” than as a wholesaler. “You are speaking to consumers, getting feedback, and gaining a better idea of where and what to test,” says Williams. It also gives scope for continual improvement and the chance to realign employees around the voice of the customer. It means the business tracks the seasons more closely as well, since ecommerce trades the current one rather than way ahead as wholesale does.
It has also helped embed links between wholesale and ecommerce, and the business is now seamless with every channel within Deckers having a voice. Williams says: “We know what is happening in every channel, in every location, by week, by every market we have a direct business with. You have to have conversations across the business since one channel affects others: at no point should we not know what is happening.”
Digital is giving Deckers the ability to offer greater support to those who sell its brand while also keeping control of its messaging and being one step closer to the customer. As everyone involved in ecommerce is aware, the goalposts keep moving and technology continues to bring everyone closer together. The introduction of iPads at events, for example, could bring Deckers closer to its customers when products launch.
The company has successfully managed the move from a US company that supported international distribution to a truly global business with strong regional offices and Williams is proud of the team’s ability to manage these across channels in the UK. He says it will continue working on growing the individual brands while improving omnichannel services across Europe and focussing on driving support for key partners.
The aim, he says, is to be a truly European business with each market representing an equal share of revenue; at the moment the UK accounts for the majority of the business, followed by Germany, France and Italy. “The complexity of the markets makes it exciting and daunting at the same time,” he adds.
Deckers Brands in brief
Deckers has its headquarters in the US but operates as three regions: North America, Asia Pacific and Europe. Wholesale is the largest part of its business at up to 60%.
The US business has always sold direct, so it has strong roots in ecommerce. It started its international push from there with global distribution before setting up Deckers Europe in 2008. The company’s vision is to offer unique brands and to make them global and this is represented in Europe as UGG, sports sandal brand Teva and Hoka One One running shoes. UGG stores were opened in the UK in 2009 with the wholesale operation launching in 2011.
According to the company, its push for the direct business has been all about owning the brand experience, giving people access to the full range and information 24/7. Williams believes that it represents “the pinnacle of the brand experience”. On the wholesale aspect of the business, he says, “It’s where the volume of the business is and it’s competitive – you need to keep bringing exciting new products to the market to keep selling at this volume.”