The Nordman factory develops online sales channels and relies on import substitution

Alexey Sorokin, marketing director of the Nordman factory, answers SR's questions. For 24 years of work, the team of a small manufacturing enterprise from Pskov has transformed into a large Russian enterprise and a team of specialists who are working on creating the best footwear for uncomfortable, extreme conditions. At the moment, the company has over 750 employees. Nordman today there are 3 completely different lines of footwear: everyday urban footwear for adults and children, footwear for hunting and fishing, specialized work footwear with protective elements. The factory sells footwear not only in Russia, but also exports its products to the Baltic States, Belarus, Ukraine, to more than 24 countries around the world.

Alexey Sorokin - Marketing director of the Nordman factory.

SR: Alexey, how did Russian companies develop in the very difficult year of 2020?

Alexey Sorokin: 2020 really turned out to be a difficult year, planning it in 2019, we looked to the future with very cautious optimism. We planned to go through 2020 at the level of 2019, and this would be a satisfactory result for us. After the introduction of non-working days at the end of March, we did not stop production, but continued to work in a limited mode, in accordance with the decrees of local authorities. We were allowed to work as an enterprise producing work shoes, while at the same time we mastered the production of protective hygienic masks and medical suits in almost a week.

Due to the fact that, after all, the scale of our activities in the spring of 2020 was much smaller than usual, we started to optimize internal processes at the enterprise, mastered a new practice of online negotiations with customers and suppliers, even created our own Nordman academy for online training and webinars with partners. We also learned to work remotely, because some of the employees still had to be transferred to a remote mode of work. I'm not talking about the anti-epidemic sanitary measures at the enterprise, which we introduced immediately after the pandemic began, and we continue to follow the recommendations of Rospotrebnadzor to this day. Of course, demand dropped, partner stores where our shoes are sold were closed for almost 2 months, but some of them continued to trade, being included in the lists of organizations that were allowed to work during the pandemic. We had to revise plans and budgets for 2020, we carefully lowered them, somewhere even in vain, because the online demand for goods has only grown.

We were worried that non-working people would tighten their belts, but state support, and simply the need to buy shoes, either postponed demand or transferred it to the Internet. After almost all restrictions on the work of organizations were lifted, sales jumped sharply, and the time when many enterprises were not working or were working in a limited mode led to a partial shortage of various types of shoes.

SR: How the pandemic affected business proprocesses: production cycle, development of retail and customer services?

A.S .: As such, we do not note the impact of the pandemic on the internal processes of the factory. In 2020, we already planned to increase labor productivity by introducing modern technologies in the field of digitization of business and technical processes, in terms of managing stocks of raw materials and materials, introducing a new quality management system and EDI. This work is being carried out to this day, bringing positive results. For several years we have been actively developing our own online retail sales. We planned to grow in 2020, but we did not expect big growth starting from the second half of last year. In a timely manner, we made a number of decisions on the internal processes of the online store, increased advertising budgets, began to analyze the money spent on incoming traffic in a different way, made a number of improvements on the site in order to increase the average check and conversion in general. As a result, we ended the year 2020 in retail with a significant overfulfillment of plans and with an optimistic attitude towards the development of online channels in the future. Not without marketplaces, where we are present and quite successfully sell our shoes, especially for children. The plans also include the construction of offline retail and the development of wholesale online sales.

SR: How was the introduction of mandatory labeling, the pros and cons that have already been identified?

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A.S .: In 2020, the new rules and conditions for shoe labeling came into force. It's no secret that we stood at the origins of the labeling and took part in a pilot project back in 2018. Then it seemed that we were ready for everything, learned everything and would meet the obligatory marking fully armed, but it only seemed to be. The implementation took place not without difficulties, especially the speed of the marking operator's reaction to the emerging questions about the shortcomings in the processes on their part. Each production is unique in its own way, and the rules were established by the state for all the same. And here we really had to work on some processes in production and in internal logistics, and some processes had to be reconfigured again. But we overcame all these temporary difficulties thanks to our belief in positive changes in the footwear market in Russia. After all, it is no secret that the entire civilized market of suppliers and manufacturers of footwear expects only one thing from labeling: putting things in order and “whitewashing” a significant part of the shadow sector. This will make it possible to compete in good faith on the market, which in itself will lead to the progress of organizations and enterprises and an improvement in the quality of products manufactured and imported into Russia. As a result, today we and our partners are selling labeled products throughout Russia. Of course, there are still some shortcomings in this system, but I am sure that in the near future all of them will be eliminated.

SR: Import substitution: how successful is it in the footwear sector?

A.S .: Of course, the Russian footwear industry is not ready to completely take over production within the country, there are many reasons for this: this is the insufficient capacity of Russian factories and factories where raw materials, materials and components for footwear are produced, this is also a lack of technologies and specialists in the footwear industry. But we managed, it seems to us, to partially replace some goods from Europe on the Russian market, I will not specify trademarks, however, based on the growth in sales of some of our products and on the partial or complete disappearance of some imported goods from the shelves, we can safely say: yes, we we managed to carry out import substitution, and we intend to continue to follow, including along this path.

SR: Your results for 2020 and plans / wishes for 2021 ...

A.S .: For us, 2020 ended with an unexpectedly good result (relative to expectations during the spring events of last year). We produced more shoes than planned, revenue grew by 15% compared to 2019, we did not reduce the number of jobs, and even increased in some areas, and we continue to recruit employees. We received tangible financial support from the state, which helped us not to stop developing. And in 2021, we plan to increase all key operating indicators, build new workshops, expand production capacity, create new jobs, as well as release new shoe models for the whole family. I want to wish everyone that nothing disrupts your plans and we finally come out of the pandemic with minimal losses and return to a normal lifestyle, normal work and business.

Materials prepared by Ekaterina Sergeeva