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Introduction
Fit for Life partnered with several well-known brands such as C9 by Champion, FILA, Gaiam, and PetWell, and created a licensing agreement that added millions of dollars to the additional market value. However, this raised questions for the new businesses that joined the company online about how to “compensate for apparel sales that shifted in the deal.” This is how the transition from Demandware happened: increasing online conversion rates by 70%, reducing page launches from months to days, and now saving them over $250,000 annually.
How much do you pay for your e-commerce platform?
If you have purchased a yoga mat, fitness ball, or resistance band for exercise, you likely bought from one of Fit for Life’s affiliated brands:
- SPRI is a leading manufacturer and distributor of rubber exercise resistance products for the health and fitness industry.
- Gaiam is a brand that offers yoga, fitness, and health products.
Gaiam, in particular, has a distribution network that includes 38,000 retail doors, 18,000 in-store shops, and 5,000 managed category sites. Products are sold in well-known stores such as Target, Macy’s, Kohl’s, and Bed, Bath & Beyond.
“We’re everywhere,” says High.
After announcing the acquisition, Fit For Life – the partner in the deal that manages High’s hard goods – made an astonishing discovery.
They looked at our invoice and saw what we were spending on e-commerce and said, “Wow.”
Several hundred thousand dollars annually is what SPRI and Gaiam were spending on Demandware.
Additionally, the organization had also made significant spending on an in-house team of five developers to maintain their suite of sites. After the acquisition, the development team was downsized, and High looked for site modifications and external experiments at a cost of $125-$200 per hour.
As High explains:
It took a long time to do anything with Demandware. The last time I requested a landing page, it took four months.
Having been catalog-driven, High spent several years building the group’s online presence and ensuring a full range of products was available online. She noticed the complementary sales generated by her efforts and added a digital marketing manager and an influencer marketing manager.
“We finally managed to catch up with the website,” says High. “Now we want to lead.”
But that simply wasn’t possible with Demandware.
The loss of apparel sales after the acquisition meant that High and her team had to be able to move faster and at a lower cost than before.
To compensate for the sales losses, they would need the ability to experiment quickly and roll out new offers.
“I had many ideas that I couldn’t execute on Demandware because they were too expensive and took too long,” says High. “It was painful.”
The hole in sales seemed like it could swallow High and her team… one day, not four months, after the transition
Even though she was spending hundreds of thousands of dollars annually with Demandware, High says the company’s customer service was nearly non-existent.
“I sent an email and heard nothing,” she says. “I felt utterly alone in a technology-heavy environment.”
In addition to the cost and development resources needed to maintain the sites, High and her team transitioned to Shopify Plus. The move to Shopify Plus saved them over $250,000 annually.
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For the system overhaul, the company also switched its order management system and enterprise resource planning system, along with moving to a new warehouse. All of this – including the launch of a new set of sites with agency partner BlueSwitch – was done in the time it used to take to create a landing page.
In High’s words:
“Shopify Plus is a proven and reliable platform. It’s a performance-tested platform. It’s nice to be able to trust that when you flip the switch, nothing is going to happen.
“Shopify Plus has been a big part of our growth”.
High says she and her team can now build a custom landing page themselves in a day using Shopify Plus and the Shogun app.
“It’s nice to be able to make changes quickly”, says High. “We now have a sense of freedom and ownership that we didn’t have on Demandware”.
Using Plus and Visual Merchandising, Wholesale Growth, and New Brands
Regarding the assortment shift after the acquisition, High says she and her team used Plus and its environment to fill gaps in three ways:
- Visually-driven landing pages
- Wholesale Growth
- New Brands
- Ensuring that each product has SKU variations instead of separate SKUs so that sales history and product reviews can be attached and moved up
- Ensuring that each attribute is placed in the correct category – all yoga mats listed in the yoga mats category rather than the fitness mats category – to enhance the customer search experience
Instead of landing on a page with standard product images similar to competitors’ sites, Gaiam offers users a unique experience with visual navigation. For instance, users landing on the company’s yoga page are treated to a rich visual representation for each category:
Including design, Gaiam’s visual navigation was created in just two weeks and was implemented in June 2017. Since then… Gaiam says they have logged a 70% increase in conversion rates which led to a significant increase in sales. Yoga category revenue increased by 6% and active sitting category revenue increased by 16%.
“These are complementary sales and we are happy with the performance”, says High. “Visual navigation allows us to use the deep library of content we have to drive sales”.
SPRI has always relied on wholesale in its business.
But with over 15,000 accounts, many of them large like Hilton Hotels, the process became unmanageable as it required an entire team to manually take and enter wholesale orders.
That’s why the wholesale channel Plus – which allows merchants to use their existing stores to provide a self-service store for large volume buyers – has allowed SPRI to be active in its marketing and start selling more.
Similarly, the wholesale channel has put Gaiam in a better position to target smaller wholesale customers and provide promotional content, such as marketing banners that these customers can display in their gyms and yoga studios to drive sales.
Since launching wholesale on Shopify Plus… the number of SPRI accounts has increased by 6%, and wholesale now represents 47% of the company’s total e-commerce sales. The number of Gaiam accounts has increased by 22%, and wholesale now represents 18% of the company’s total e-commerce sales.
“Wholesale is a major focus for us”, says High. “We see a real opportunity for growth, and the channel raises our average order value”.
When High’s dog, Odin, hides and heads to the product development section, he does so for a good reason.
Fit for Life is developing new sub-brands like PetWell, which is an innovative line recommended by veterinarians for pet massage tools. It turns out Odin was hiding from High’s office to serve as a living test while the development team works on improving a line of five massage products.
“He loves getting massages”, says High with a smile. “That’s the only real reason he wants to come to work with me”.
Anticipation
Fit for Life now offers new sub-brands that can quickly adapt and add to its site in a cost-effective manner.
Most importantly, the new brands and success in wholesale, along with visual navigation that improves conversion rates, come together to alleviate the significant sales transition after the acquisition.
“We’ve lost the clothing that was a big part of our business but sales have not declined,” High proudly states. “We filled the gap with the money we saved from reordering and poured it into new initiatives. It’s an achievement we are very proud of.”
Improving Physical Store Infrastructure
The 70% increase in conversion rates brought about by visual navigation…
It’s not just a revenue increase for Gaiam, but it is also potentially profitable for retail partners like Target.
Every period, High reviews retail vendors, distributes report cards, and conducts training sessions aimed at helping partners improve their e-commerce channels to increase sales:
“They are begging us for data,” High says. “We take what we’ve learned and provide it to our partners, which is of course good for us but also helps them achieve complementary sales.”
Post-Demandware and the Search for a New Guinea Pig
High and her team expect to play a larger role in helping retailers boost sales as Fit For Life introduces new sub-brands, acquires rights to manage other well-known brands, and expands Gaiam’s presence in active seating by introducing comfortable products for the workplace.
It’s a future filled with challenges undoubtedly, but High is handling it with confidence after the hard work she has done to fill this significant sales gap.
However, with product development now focused on new initiatives and expanding the range of pet massagers, the team may likely have to find a new guinea pig.
“Odin already got his massage today, so he’s completely asleep,” High says. “He has his own bed here and sleeps on one of the meditation pillows we sell.”
Source: https://www.shopify.com/enterprise/migrating-from-demandware-health-and-wellness
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