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Case Study GREATS Footwear

An online direct-to-consumer business strategy allows GREATS to offer customers a quality product at an affordable price




Ryan Babenzien and Jon Buscemi are footwear industry veterans with over 20 years of combined experience directing marketing and brand strategy for the likes of K Swiss, Puma, and Gourmet footwear.

After facilitating the growth of major brands, Babenzien and Buscemi were ready for a new challenge: launching their own Brooklyn-based sneaker brand, Greats Footwear.

Going direct-to-consumer

Greats operates on a direct-to-consumer model and maintains two independent retail stores, but relies primarily on online sales to sustain business.

In explaining the reason for their business model, Babenzien said, “We’re all about quality, but quality doesn’t need to come with astronomical prices — it’s third party retailers that drive up prices. So, to offer a quality product and a value price, we simply don’t wholesale. Wholesale is inefficient, and the customer pays for it.”

GREATS Footwear
To offer a quality product and a value price, we simply don’t wholesale. Wholesale is inefficient, and the customer pays for it.

— Ryan Babenzien, Founder, GREATS

Market trends also played a role in guiding the Greats’ founders in their business strategy. With the e-commerce industry growing year-after-year, more consumers spending more money buying shoes online, and having observed the cost increases and margin decreases that stem from relationships with third party retailers, the team saw significant opportunity in an online B2C model.

In addition to favorable forecasts — eMarketer reports that B2C e-commerce will reach $1.47 trillion in 2014 and $2.36 trillion by 2018 — the success of direct-to-consumer e-commerce was demonstrated other brands executing on similar strategies. Warby Parker, for example, leveraged online sales and bypassed third party retailers so effectively that it began competing with industry giants before ever opening a retail location (and they own their own retail stores). The footwear industry had yet to see a Warby Parker model and naturally, Greats jumped to fill the opportunity.
 

Sales and distribution

Babenzien and Buscemi are often asked how they built a strong customer base without a physical store to help with trust and reputation. For them, the answer is clear: it’s all about careful branding.

Through branding, Greats positioned itself to appeal to its target market — millennial men. It’s no accident that the team built an e-commerce business to reach millennial men: “These guys, they live online. They’re comfortable shopping this way,” said Babenzien, whose assertion is backed up by research from Neilson that shows millennials make up more than half of those who buy online.

Moreover, the report states that clothing, accessories, and shoes have the highest browse-to-buy correlation out of any category of online goods. Said Babenzien, “We already knew people were comfortable buying shoes online. We just made sure our site spoke to them. We made their online shopping experience a priority. So far, it’s worked.”

Shipping plays a part in a customer’s overall shopping experience, and for that, Greats turned to order fulfillment expert, Shipwire. Maintaining a strong, consistent impression of the brand the whole way through — from discovering Greats online to receiving an order — is important. Personalized shipping options made Shipwire an leading choice, but that wasn’t all.
 

A look at the future

Greats was also attracted to Shipwire’s ability to support large growth. The company has already won over customers in Canada, the UK, Scandinavia, and Australia, even though, according to Babenzien, the brand has so far been focused on its domestic market. “We have big plans to expand, though, and Shipwire’s global fulfillment centers are very attractive,” he said. “The technology aspect is key, too. It helps us forecast demand in a way that wasn’t possible before, which helps us prepare and grow.”

By making smart, calculated business decisions, Greats has accomplished more success in its first 18 months than many brands do in years. With rapid domestic growth and their sights set on global expansion, the company continues to blaze a new path in the footwear industry.

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