Deckers Outdoor Corporation – the company behind shoes including Ugg Australia and Teva – has implemented a cloud-based...
digital commerce platform to expand its business globally.
The Demandware cloud platform has allowed the company to expand its online business globally by implementing localised, consumer-friendly websites for different territories.
The company was traditionally a wholesaler, selling to other retailers and international distributors, but has recently changed its business model to become more consumer-centric. Some 25% of Deckers' revenues now come from direct-to-consumer sales online and in-store.
To achieve its aim of becoming a global retail merchant online, Deckers had to roll out and maintain localised websites quickly and efficiently – a move its existing on-premise e-commerce platform could not support.
“When we started we had legacy systems comprising a load of databases and lots of things pulled together,” says David Williams, director of online, EMEA, at Deckers.
The business was localised to the North America region, but as it opened regional offices it wanted to expand and offer websites tailored to the local markets.
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“Deckers has a strong belief that growth doesn’t come by simply replicating what works well in the US around the rest of the globe,” he says. “Instead, it worked to understand the local markets in which it planned to expand to provide a tailored experience.”
Williams says most of Deckers’ legacy systems, including Oracle for enterprise systems, didn’t have the capabilities to do this, so the company found it needed something more scalable. For instance, its previous system wouldn’t allow Deckers to reuse parts of websites – each website almost had to be created from scratch.
“As you open more websites and you want to localise, this puts a big strain on your IT resources,” he says.
Deckers chose Demandware’s software as a service (SaaS) cloud platform which allowed the company to reuse technologies across multiple websites.
“It’s a bit like plug-and-play,” says Williams. “It was a lot of work initially, but once you’ve done that it becomes about how much you can do yourself.”
He says the new platform allowed a shift in the business from the traditional split of 80% IT and 20% business, to a position where 20% is IT and 80% covers business decisions.
Control of the website is more of a business concern than an IT concern, he says. “You can react quickly, and it’s easy to make changes when the customer tells us things are wrong. There’s a consistent experience across the websites, and shared elements make it easy to improve that customer experience.”
Deckers' UK site was its first big build. It took five months to develop, going live in January 2011 to sell Ugg footware in the UK. After that it was easy to quickly replicate and customise localised websites in nine other markets, including France and the Netherlands in 2011, a further four in 2012, and two in 2013.
Since this implementation, Deckers has seen improvement across all of its key performance indicators. Since the UK Ugg site was launched, it has seen year-on-year growth in online traffic and revenue increase by over 80%. Additionally, across Europe, online sales rose from $7m in 2011 to $17m in 2012 – an increase of nearly 150%.
Deckers has also seen a triple-digit increase in mobile sales in the UK since the launch of its Ugg website.
Williams says its mobile conversion rate on smartphones has doubled as the company grows its understanding of how people use their mobile devices.
People are doing their research online, not in-store any more
David Williams, Deckers
“Tablet is replacing desktop,” he says. “That’s pretty clear – as tablet use goes up, desktops are going down, especially in the weeks around Christmas. It’s a big change.”
Deckers is also seeing a lot more customers browsing the Ugg site from mobile devices. The Ugg division of the business is considered multi-channel because it also has eight standalone stores and three outlets.
Williams recognises it’s important to have the right balance in a multi-channel world. "The difference depends on the existing set-up,” he says. “I’d love to be more omni-channel than we are currently.”
He would also like to offer same-day delivery for online sales as the retailer has to compete with merchants such as Schuh, which has a lot more stock in-store.
“The biggest challenge for everyone is how the customer dictates what you have to do. It’s about keeping up with customer expectations,” he says.
Deckers didn’t have a tablet offering five years ago. Williams says it’s difficult to formulate a five-year plan for these new technologies because they evolve so fast – five years ago the iPad didn’t exist.
Using data for retail advantage
Williams is also looking at data relating to retail footfall and how that is dropping year on year, while services such as click and collect are growing.
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“It doesn’t take much to add two and two together,” he says. “The conversation is changing – people are doing their research online, not in-store any more.”
This means William has to consider challenges such as the trend for showrooming – where customers come into store to look at items, before going online to purchase.
He also needs to consider in-store price matching and how to utilise mobile. “How is that changing the consumer experience, do you need to recognise them by their device? To understand mobile is the glue really,” says Williams.
The next step for Deckers is to use customer data more efficiently, because Ugg has a lot of branch loyalty and a lot of repeat purchases. “The firms which have a head-start in that area, such as supermarket loyalty schemes, are going to be ahead," he says.