Two years ago, Walmart Inc. subsidiary Jet.com stirred attention when it acquired Boston-based digital property Shoebuy.com for $70 million.
Since then, much has changed for the e-tail specialist, including a name change to Shoes.com (after purchasing the domain from its now-defunct competitor) and the departure in October of longtime CEO Mike Sorabella.
Interim CEO John Foristall, who served as CFO for roughly eight years, said the online retailer’s mission remains the same. “The beauty of the acquisition is that Walmart is allowing us to maintain the core DNA of what has made Shoes.com strong but then harnessing the scale and the efficiency of a Walmart engine to make us even stronger. That’s gone extremely well for us since the acquisition,” he said.
Within the Walmart organization, Shoes.com is now responsible for managing footwear for Walmart’s website as well as Jet.com. “The business model is very beneficial to the partner side,” said Alex Proelss, SVP of brand marketing and creative, “because you have one team that focuses on your business across three platforms, and collectively, we reach 140 million people monthly.”
She noted that each platform is carefully differentiated. Walmart.com, for instance, caters to a mass audience, though in the coming year, it aims to attract more national shoe-brand partners to increase its average unit price. Jet.com, meanwhile, is focused on millennial shoppers in nine core urban U.S. markets, so the product mix there leans toward hot brands and trends.
Shoes.com, said Proelss, aspires to be a one-stop footwear shop. “We want to be able to offer the gamut and put it into very clear, personalized streams for the customer to find only what they really want,” she said.
To manage its large responsibilities, the dot-com has grown internally, adding more than 40 personnel in the past year. And it plans to expand its offices in Boston’s Charlestown neighborhood to accommodate more team members.
Shoes.com is broadening its reach externally as well. After nearly 20 years on the East Coast, the firm tapped into the Walmart network to introduce its first West Coast warehouse in early 2018. “This allows us to get product to the consumer faster, with better economics for us, which we can pass on to the consumer,” said Foristall. “And we are in talks to launch a third facility in the Midwest in order to target the entire country.”
Along with distribution, Shoes.com also benefits from Walmart’s technological incubator, Store No. 8. “They have launched Jet Black, which is a tech-based shopping experience — of which shoes is one of the top categories,” said Proelss, adding that other innovations such as VR and AI are in development by that group.
Additionally, Shoes.com began beta-testing an image recognition feature on its mobile site in Q4 and officially launched it this month. The visual search tool, powered by Slyce, allows users to take a photo of a shoe and then shop either the exact style or an assortment of similar items.
Proelss noted the company is prioritizing its mobile experience overall, since the channel now represents more than half of Shoes.com shopping traffic. “We’ve got some fun things launching later in the year to make that more frictionless,” she said.
Nevertheless, the e-tailer and its parent company face a significant challenge from digital juggernaut Amazon.com. But the company’s catch-up efforts appear to be paying off. In fiscal 2018, e-commerce sales for Walmart U.S. (which includes Jet.com, Shoes.com and other sites) increased 44 percent, with similar gains expected for fiscal 2019, which ended Jan. 25.
Foristall believes that Shoes.com’s strong reputation in the footwear world will be an increasingly important asset.
“One of the reasons we were acquired was our brand relationships and the fact that these relationships go back an awful long time,” he said. “For us, it’s a collaboration. We represent brands the way that they want to be represented. We work with them to control the brand experience. We’re an extension of their brand, and that’s the differentiator.”