Obuv Rossii organizes an offline marketplace
Obuv Rossii GC finally went beyond the shoe retail format and announced its intention to build work with new partners on the basis of the marketplace, that is, provide 30-50% of retail space (more than 700 of its own stores) for third-party goods. All interaction with partners will be built through the online platform “Sell”, which will work from December 2019 of the year. The assortment of retail will expand twice as a result of new categories: household goods, household goods, decorative cosmetics, small household appliances.
The company’s press release states that such a work model will allow suppliers to increase revenues through independent pricing of goods and participation in the profit of stores. Obuv Rossii plans to increase the conversion rate in retail by more than 1,5 times and increase the revenue of existing outlets in the next two years by more than 30%. The company also hopes that it will be able to smooth out the influence of the seasonality factor by introducing additional product groups.
The main components of the new strategy: a flexible and constantly updated assortment; high-tech services, including financial; integration into the e-commerce logistics infrastructure, the development of points for issuing online orders; improvement of their own online stores; creating an ecosystem for interacting with customers and introducing new formats for working with suppliers.
“In the last two or three years, the Russian retail market has been significantly transformed, classical approaches to trade are now less effective. Retail becomes more high-tech, new formats appear. At the same time, the behavior of consumers who constantly need new experience is changing, customers positively perceive the appearance of any new products in the assortment. Given these market trends, we decided to modernize the format of our stores, in fact turn them into offline marketplaces. The task that we are facing now is to maximize the offer in stores to satisfy the needs of our customers, ”says Anton Titov, director of the Obuv Rossii group of companies.
According to Titov, the assortment diversification strategy has already proved its effectiveness: the group has successful experience in expanding product groups through categories of clothing, accessories, and cosmetics.
Obuv Rossii intends to work with both large and medium and small suppliers, regional manufacturers. The company plans to maximize the experience of partners who are experts in their product categories. Suppliers will independently determine the retail price of goods and participate in the formation of the assortment matrix. The group will use a flexible approach in determining the geography of sales: each of the partners will be able to choose those regions and stores in which they would like to present their goods. Suppliers will deliver goods to the central warehouse of the company in Novosibirsk, when it comes to sales throughout the network or in a region remote from the supplier, or to the nearest regional warehouse, if the sale of goods will be carried out within the region of the partner's work.
For its part, the company provides the entire infrastructure: an extensive retail network; an established logistics system and a network of regional warehouses; IT infrastructure; connection to installment payment service for buyers. Interaction with suppliers will be fully automated based on an online platform. Shoe of Russia partners will receive online reports on the placement of goods at retail outlets and on the progress of their implementation; control all processes and quickly make a decision on the movement of goods.
“Our company has a wide geography of sales: we are now working throughout Russia, but our network has a particularly strong presence in the Urals, Siberia and the Far East; in these regions, we have significantly increased the number of regional cities in which we opened stores in the last two years. We offer our partners real, physical shelves, which guarantees them a certain level of sales. We have debugged all business processes and improved trading technologies, our retail is distinguished by a high level of IT integration, modern services, such as installment payments, work in stores, which help to attract customers and increase revenue. Therefore, our competencies and technology of retail sales will allow small manufacturers and suppliers to find their customers even in the most remote parts of our country, ”said Titov.
Obuv Rossii is already negotiating with suppliers and sees great interest in working in the new format. Now the assortment of the company's stores totals more than 10 thousand SKU; as a result of the transition to the new business model, the group expects to double the range of products. In the future, in addition to offline retail outlets, Obuv Rossii intends to offer partners and connect an online sales channel based on its own online stores.
GC "Shoes of Russia" founded in 2003, has its headquarters in Novosibirsk and an office in Moscow. It is engaged in the production and trade of footwear and related products. The company operates 909 stores (172 are franchised) under the brands Westfalika, Pedestrian, Emilia Estra and Lisette, and also develops footwear and clothing brands for an active lifestyle S-tep, all.go and Snow Guard, and owns two shoe factories in Novosibirsk area.
In 2018, the group's revenue amounted to 11,55 billion rubles, net profit - 1,33 billion rubles, EBITDA - 2,86 billion rubles.
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