How Shoebacca competes with the retail giants - live from Acumatica Summit

Jon Reed Profile picture for user jreed February 1, 2017
Retail is tough, but online retailer Shoebacca is winning. At the Acumatica Summit, I found out how they are pulling it off. Shifting from internal IT hassles to a customer focus is a big piece of the puzzle. So is reaching millennials. Shoebacca shared why they took the early adoption risk with Acumatica Commerce. Up next: smarter forecasting.

Schlacter and Finney of Shoebacca

Fresh from the NRF retail show, my lingering thought was: modern retail is a tough racket. Try telling that to Shoebacca - an online retail footwear outfit based out of Irving, Texas. With "significant" year-over-year growth and brand affinity with hard-to-win millennials, Shoebacca is pressing ahead.

Acumatica CEO Jon Roskill featured Shoebacca in his opening keynote at the Acumatica Summit - the annual conference for Acumatica partners and customers. After the keynote, I went deeper into Shoebacca's retail ambitions during a chat with President Ryan Schlachter, and Thomas Finney, Director of IT.

From the video testimonial Roskill played, you can see why Acumatica is excited. Shoebacca is an early adopter of Acumatica's freshly announced Acumatica Commerce solution. Roskill's believes that the customers who get the most out of Acumatica ERP expand from financials into logistics and commerce. Shoebacca now does all those things under Acumatica's umbrella, connecting different systems in a way that reinforces Roskill's "multi-cloud" advocacy.

I'm sure Acumatica doesn't mind that Shoebacca moved from NetSuite - their biggest head-to-head competitor, and category leader by market share. During the video, Schlachter said they needed their disparate to work together, without manual/custom integrations. Acumatica's flexible licensing structure was another big draw; they didn't want their warehouse users paying the same license costs as their accounting team. Schlachter:

Acumatica has a licensing structure that is going to allow us to grow at a faster rate... Everybody in our business except the janitorial staff uses Acumatica.

From IT distractions to business focus

Then Schlachter spoke to a theme many companies can relate to: moving beyond IT distractions:

Acumatica has allowed us the opportunity to focus on our business, which is selling shoes - instead of focusing on IT development.

During our chat, I asked the guys to expand on that. Schlachter:

I'm not in the IT business. The less time I have to spend trying to get things to work efficiently allows me to be successful in marketing and product and customer service and customer experience, which ultimately is the driving force in the growth of my business.

Shoebacca has made a big shift in thinking from internal IT development. Finney:

At one point in time, we had a lot of in-house developed applications. In fact, prior to my tenure, there was even an approach that thankfully didn't happen. They were investigating building an in-house ERP system.

I recently wrote about the (mis)perception that cloud ERP isn't flexible or customizable. If anything, Schachter says, they're finding the opposite:

At one point, we were so frustrated with the solutions we had. We were frustrated because we were trying to adjust our business practices and our standard operating procedures to accommodate our software. The phrase we constantly use at our business is you don't want the tail wagging the dog. We really wanted something that was more open, more customizable, that we could adjust to meet our business needs and build around our standard procedures to make us efficient.

Competing in online retail is about nailing the customer experience

Freeing themselves to focus on go-to-market doesn't turn retail into a cakewalk. So what are the keys to Shoebacca's success, with Amazon's long shadow always looming? Schlachter:

I've been in this industry a long time... I've seen the best of the best businesses, and I've seen others that were flashes in the pan. Ultimately, what has put us on this trajectory of exponential growth, and why I'm so confident is that we are sound in what we're doing. We are making the right investments. We are pushing the envelope with technology. We have a good team around that to be successful.

Shoebacca is hardly the only retailer with an online focus. So what sets them apart? Schlachter:

The customer experience. Our customer experience is something unlike any other right now. The website looks great; it feels great, it's intuitive. That's the word I always drive to is: let's be intuitive and really engage our customers.

That feeds into the relentless pursuit of retention:

We want to continuously engage our customers and build a loyal following to our brand. All that stems from a great assortment of product, but we also offer a tremendous value to our customer. Ultimately, I don't think that anybody has the same mix that we have of product, and the same level of detail that we have within our merchandising and on-site experience.

Weighing the risks of early adoption

With nearly half of their customers coming from mobile - and trending upward - a mobile-friendly web overhaul was a big fourth quarter priority. Shoebacca coordinated that with their Acumatica Commerce go-live. That includes Acumatica's Magento-driven e-commerce solution on the front end, and Fusion, an Acumatica warehouse management partner, on the back end.

Shoebacca has cut reseller deals with a slew of high-profile footwear brands. It's all shipped out of a huge warehouse facility in Irving. That keeps Shoebacca's 50+employees plenty busy. Their customers split 60/40 men-to-women; Schlachter says their success connecting with millennials is crucial.

Our demographic has traditionally been about 18 to 45.... We ultimately find ourselves resonating with the millennial consumer.

Being an early adopter always carries risks. How did Shoebacca weigh it?

A reoccurring conversation we've had with a lot of people here, whether that be Acumatica, whether that be Kensium or even Magento (Acumatica's e-commerce partners), is that we're gonna push the envelope and we're gonna push it hard. The key is to have a partner that's going to be responsive in helping you meet your goals - and ultimately bettering their product.

The payoff is worth the risk:

To answer your question directly, there's always concerns with that. The trade-off is that we get to really help build the system around our needs, instead of getting in later and having it already be built.

The Acumatica Commerce go-live has raised the stakes. It's about mobile reach, customer intimacy - and smarter use of data. Finney spoke to the mobile trend:

We've seen a substantial trend toward mobile. The levels of mobile traffic are a very vertical trajectory. That's a big reason why we re-designed our site and moved to Magento's 2.0 platform. I think we were one of the first mobile-first designs on Magento's 2.0 platform. Previously, we saw a lot of missed opportunities with mobile traffic. We wanted to make sure we didn't let that continue.

Pushing the data envelope

Schlachter emphasized this redo wasn't about looking beautiful: it was about better processes, and better data:

To Thomas' point, when we rebuilt our site, it wasn't "How can we make this beautiful?" That was a thought - and it was really important - but it was secondary. It was: how can we really dive into our metrics, how can we dive into our analytics and improve our business. Especially given our demographics, how can we target that mobile channel?

So how can data help you serve customers better? One example: better SKU data on products. Finney:

We have a lot of SKUs. We've made a very strong effort to put a lot more merchandising information on our site, and to attach it to SKUs so that it is easier for customers to find what they're looking... We spend a lot of effort in multi-categorizing, products so they can be found in different places on the site.

That also pushes Acumatica:

We're dealing with large quantities of SKUs; we have a pretty robust amount of orders, so we push Acumatica pretty hard... There's a lot of transactions that happen in the warehouse, and all of that is integrated into Acumatica.

The journey to harnessing data is just beginning. Acumatica has added dashboarding that Shoebacca hasn't had time to evaluate. They are challenging Acumatica to do even more on the analytics side. Finney:

It's a huge opportunity for them... I didn't get to catch the entire keynote, but I think you see the efforts they're putting into that.

If Acumatica's analytics is a work in progress, Finney says they've made up for it by "making the data more accessible." That means Shoebacca can move ahead with their predictive/forecasting plans. Finney:

We choose to use Acumatica as our source of truth for accounting, warehouse. [Add in merchandising data], and those data points become very helpful when looking for trends and making data-driven decisions. That's part of our plan in 2017: to start using that data to be a little bit more proactive in forecasting with our purchasing methodologies.

The wrap - "we don't want customers, we want Shoebacca customers."

As Finney says, this is about the lifetime value of their customers:

We have a strong initiative to try to improve what's called the lifetime value of the customer. We think that using the data that we're able to collect is really a good way to re-target those customers and try and make them repeat customers.

If you're going to win alongside Amazon's reach, customers need to take you personally - in a good way. Schlachter:

Retail is very competitive. You have to be finely tuned and running at 110 percent to be successful.

As he chases his retail dreams, Schlachter knows that great product is not enough:

I'm always going to have great product. I don't want to have a shoe customer - I want to have a Shoebacca customer.

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