How a Traditional Retailer Began Making 70% of its Profits Through E-commerce
From stores to eCommerce to printed catalogs, Spanish fashion retailer Venca demonstrates how companies can leverage the best of both digital and traditional methods.
This article will take about 3 minutes to read
While the global COVID-19 pandemic has forced stores to close and consumers to stay home, it certainly hasn’t stopped people from shopping. According to a survey conducted by Salesforce, 58% of global consumers expect to do more online shopping this year than ever before. The B2B sector showed even higher stats with 80% of business buyers expecting to pivot to e-commerce and business purchasing online.
Is this digital boom a pandemic response that will revert back once countries are able to reopen? No.
At the turn of the 20th century, consumers began demanding a more comfortable and accessible retail experience. In response, a company called Montgomery Ward & Co. created the first mail-order catalog. The medium grew throughout the early 1900s with companies such as JC Penny, Victoria’s Secret & JCrew launching catalogs as an accompaniment to their in-store experience. In the 1980s catalog sales accounted for ~50% of sales revenues for these major companies.
Today, printed catalogs are still widely used as both a sales and advertising tool (Ikea distributes over 200 million copies of its highly anticipated catalog each year), but they’ve moved out of the direct sales space. Why? Because digital technologies such as e-commerce are now able to meet that core consumer need faster and more reliably.
A Traditional company Turns to E-commerce
However, several years ago Jordi Badia, CIO & CDO at Venca, and his team realized that the catalog alone would not be enough to sustain their growth. Retail had become a global market, as digital platforms allowed local or national brands to reach and capture international audiences. The company, prioritizing innovation and what they saw as the future of the industry, made the choice to pivot towards e-commerce, keeping their catalog as a supplemental sales and advertising tool.
Today, Venca has grown to become a leader in the Spanish retail and fashion industry, dominating the national e-commerce market. The increased accessibility and flexibility inherent to the digital medium has not only bolstered Venca’s revenues, with 70% now coming from their e-commerce platform but has enabled them to grow their product offering. Although still focused on women’s fashion, the company now sells home textiles, small electronics and accessories, and menswear. Furthermore, Venca has expanded its platform to include products from external brands as Slazenger, Caterpillar or DIM.
“During the last year we really started expanding our offerings,” explains Badia. “We want to create an all-around experience for our customers and are therefore focusing on what is relevant for women and their families in general.”
How E-commerce helped build Resilience
“In the beginning, people were focused on the essentials, food, safety, etc. not fashion,” explains Badia. “But we have a very large selection and decided that during the crisis we should put the stuff that people would need more at the forefront. For instance, pajamas, sportswear, or small electronics.” In the following months, Venca saw a 200% – 300% jump in sales in these categories.
Balancing the Old and the New
As Venca is demonstrating, success can be found by finding a balance between the old and the new.
Jordi Badia has been the CIO & CDO of Venca for 7+ years. Having previously worked in the Information and Technology sector, Badia understands how technology can drive growth in a variety of industries.
As a member of Opportunity Network, Badia and his team have used the platform to source suppliers and partners for offloading overstocked products as well as bringing on new products from external providers.
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