The Remarkable Journey of Steve Madden: From Legacy Systems to Shopify
Table of Contents
- Introduction
- Jeff Silverman's Career Trajectory
- Jeff Silverman's Return to Steve Madden
- Steve Madden's Growth and Success
- The Move to Shopify
- The Impact of Mobile on Steve Madden's Business
- Managing Wholesale Relationships
- Maintaining Prices in the DTC Channel
- The Challenges and Hurdles of Success
- The Role of Influencers in Steve Madden's Success
Introduction
In this article, we will explore the fascinating journey of Jeff Silverman, the President of Steve Madden. With a market cap of three billion dollars and an impressive sales figure of 1.7 billion dollars, Steve Madden has become a powerhouse in the footwear industry. We will dive into Silverman's career trajectory, his return to Steve Madden, the company's growth and success, the move to Shopify, the impact of mobile on their business, managing wholesale relationships, maintaining prices in the DTC channel, and the challenges and hurdles they face in their industry. Additionally, we will discuss the role of influencers in Steve Madden's success.
Jeff Silverman's Career Trajectory
Jeff Silverman has had a remarkable career in the footwear and internet business. Having been in the industry his whole life, Silverman initially ran a company that provided websites for other brands. In 2005, he began running Steve Madden's websites and in 2007, the company acquired his website-running company. Silverman was then appointed as the president of Steve Madden in 2009. However, in 2015, he returned to the company when they acquired the Blondo brand. Today, Silverman manages the global e-commerce operations and the Blondo brand for Steve Madden.
Jeff Silverman's Return to Steve Madden
Silverman's return to Steve Madden marked a turning point for the company. Prior to his return, the company was relying on legacy systems such as Oracle to run their websites. This outdated technology proved to be costly and hindered their ability to make necessary changes. Silverman recognized the need for modernization and made the decision to move all sites to Shopify. By doing so, Steve Madden experienced exponential business growth and a significant reduction in costs. The switch to Shopify also greatly improved their mobile checkout experience, which played a vital role in their success.
Steve Madden's Growth and Success
The shift to Shopify and the focus on enhancing the mobile experience led to substantial growth for Steve Madden. Their revenue increased by approximately 65%, with gross margin dollars growing over 100%. The company's innovative strategies, combined with the utilization of Shopify's platform, propelled them forward. However, with rapid growth comes the challenge of sustaining it and surpassing previous records. This constant pressure to continue evolving and surpassing targets is a primary concern for Steve Madden.
The Move to Shopify
The switch to Shopify proved to be a game-changer for Steve Madden. Shopify's user-friendly interface and extensive app marketplace allowed the company to streamline their operations and improve the customer experience. One of the most significant benefits of Shopify was the ability to integrate various apps and tools seamlessly. Steve Madden leveraged this feature to enhance their search functionality, employing an innovative Israeli company that utilized artificial intelligence. The collaboration not only resulted in a better search experience but also contributed to considerable sales growth. Furthermore, the easy-to-use checkout process on Shopify, especially on mobile devices, significantly boosted conversion rates and customer satisfaction.
The Impact of Mobile on Steve Madden's Business
Mobile commerce has become increasingly influential, with a significant portion of consumers making purchases through their mobile devices. Steve Madden recognized this trend and invested heavily in optimizing their mobile experience. Presently, almost 80% of their website visits are from mobile devices, and approximately 75% of their sales originate from mobile users. By ensuring a seamless and convenient mobile checkout process, Steve Madden has been able to capture the attention and loyalty of their mobile-centric millennial and Gen Z customer base.
Managing Wholesale Relationships
While Steve Madden focuses on DTC sales, a significant portion of their business is still in the wholesale market. Building and maintaining strong relationships with wholesale accounts can be challenging, especially when dealing with large retailers like Nordstrom, Amazon, and Zappos. Steve Madden understands the importance of balancing their DTC and wholesale channels. They strive to provide a superior customer experience on their website to support their wholesale business. By making their brand highly sought after and maintaining competitive prices, they increase the chances of customers purchasing from their DTC channel after discovering the brand at a department store or other retailers.
Maintaining Prices in the DTC Channel
One of the key challenges in managing both DTC and wholesale channels is maintaining consistent pricing. Many brands fear that wholesale partnerships will force them to engage in constant price cuts and promotions, compromising the integrity of their brand. However, Steve Madden has successfully maintained their prices within the DTC channel while allowing wholesale accounts to offer promotions. They achieved this by limiting the frequency of sales and changing their loyalty program to incentivize customers to purchase at full price. By reducing promotional activities and increasing their focus on targeted social media ads, they have achieved significant growth in revenue and gross margins.
The Challenges and Hurdles of Success
Despite Steve Madden's tremendous success, they face several challenges and hurdles. The first concern is the constant need for surpassing previous growth records. As a rapidly growing company, maintaining consistent growth can be daunting. The pressure to outperform themselves every year poses unique challenges that Steve Madden constantly strives to overcome. Another challenge is the ongoing nature of the internet business, which operates 24/7. Identifying issues and reacting promptly in a business that never sleeps requires efficient systems and personnel available at all times. Additionally, Steve Madden recognizes the importance of influencers in their industry. While influencers can have a significant positive impact on sales, the company must carefully navigate the dynamics of influencer relationships and ensure the longevity of sales even when influencers are not actively promoting their products.
The Role of Influencers in Steve Madden's Success
Influencers have played a crucial role in Steve Madden's success. The company has experienced significant growth by partnering with lesser-known influencers who have authentic relationships with their followers. When these influencers promote Steve Madden's products, their passionate messages resonate strongly with their followers, resulting in increased sales. However, the challenge lies in maintaining sales when influencers are no longer actively promoting the brand. By understanding their influencer's preferences and the desires of their followers, Steve Madden continues to leverage the power of influencers effectively, finding the perfect balance between their own DTC channel and wholesale partnerships.
Overall, Steve Madden's journey exemplifies the intersection of traditional retail, e-commerce, and influencer marketing. Through strategic decision-making, flexible adaptation to industry trends, and a relentless focus on customer experience, Steve Madden has solidified its position as a leader in the footwear industry.
