Footwear marketer Steven Madden Ltd. has added a new twist to its online retail strategy: The company wants to sell directly to the consumer and to be the fulfillment partner for Madden products with all online retailers that sell the Madden brand.
To that end, the marketer has created Madden Direct, a new subsidiary that will take charge of all company e-commerce operations, including orders from wholesale and business-to-business partners. Among its first clients are Nordstrom.com and [email protected]
“It's a new distribution channel for the wholesale business as well as direct to consumer via catalog and online,” said Rhonda J. Brown, president and chief operating officer at Steven Madden, New York. “So in essence, I'm actually conducting two types of business online at the same time, leveraging the existing [fulfillment] infrastructure.”
The new subsidiary will take advantage of Steve Madden's existing fulfillment infrastructure and will seek new business from online retailers that want to maintain direct contact with customers but outsource the shipment of Madden products.
For instance, Nordstrom.com gets an order for a pair of Madden shoes from a customer. Right after the customer completes the transaction on the site, information is relayed to Madden Direct's fulfillment center. In turn, Madden Direct picks, packs and ships the order, all under the Nordstrom.com label.
In this case, Nordstrom.com gets the benefit of the sale without the risk of holding inventory, Brown said.
“Nordstrom gets the retail sale, and I bill Nordstrom at wholesale plus a service fee,” she said.
For now, Nordstrom.com and [email protected] are the only two retail sites whose product orders are fulfilled by Madden. But Brown did say her company was in talks with online retailer shoebuy.com.
In addition to the fulfillment of Madden products for partnering online retailers, Madden Direct also will assume responsibility for its Web site, stevemadden.com. This will cover site design and interface, back-end systems, online marketing, customer service and order fulfillment.
The site's revenues last year were up 700 percent to $1.2 million, and first-quarter sales for this year have reached $600,000, up 400 percent from the same period in 1999.
Another charge of the direct arm is stevies.com, a recently launched site geared to girls and preteen customers.
To underscore the new e-commerce strategy, the company has named Stuart Schwartz president of Madden Direct. Schwartz joined the parent company in August as vice president of business development in charge of the brand's Internet efforts.
Under Schwartz's watch, traffic to the site has been recorded at 80,000 unique monthly visitors. The marketer claims an 8.9 percent conversion rate — the percentage of shoppers who become buyers.
Besides footwear, the site sells pants, shoes, accessories and sunglasses, mirroring what is sold through Steve Madden stores and department stores and at footwear and apparel outlets.
For the moment, all focus within Steven Madden is on the new subsidiary and the revenue opportunities from e-commerce. Brown said her company's aim is to become the fulfillment partner for all online marketers that retail the Steve Madden brand.
“My instinct tells me that no one out there is thinking about how to leverage their online experience with the infrastructure that is already in existence, with the fulfillment inventory that already exists and how to leverage that in another way,” Brown said.