Magento 2 Case Study: Foeger, 65 year old luxury retailer finding new growth through eCommerce

Magento 2 Case Study Luxury goods omnichannel retailer

This Case Study was the main topic of my talk at Meet Magento Germany in July 2018. The two-day-event had over 800 attendees and I was honored to contribute to the business best practice tracks. I chose to showcase Foeger Woman Pure because this company has been trailblazing in the area of Fashion and Luxury goods since the 1950’s. As you can see in our recent market overview, the Luxury Goods market is only now fully jumping on the eCommerce bandwagon. And Foeger has been trailblazing again with Magento 2 in Europe. They were our very first customer for OneStepCheckout for Magento 2.

 

Magento 2 Case Study Luxury goods omnichannel retailer

Today I am delighted to share their story and experience, through an interview of Mathias Moser, CEO of Foeger and grand son of the company’s founder.

Mathias opens up on 65 years of family story spanning over three generations, what made digital transformation a must and how he managed to turn around his business.

 

 

Half a century of steady growth, pioneering in the Fashion vertical

 

Hi Mathias, thank you for sharing your family history and company experience with us.  

The early days, from garments to ready-to-wear

Max Föger († 24.08.2010), my grand father, laid the cornerstone of “Foeger Fashion” when the company was founded in the small village of Telfs in Austria in 1953. In the early years, he and my grand mother dealt with home textiles, yard goods, and various other products. Back in those days, people were not purchasing clothes, they were making their own!
In the early 1960’s, the first clothing articles for women, men and even children were already on offer. It naturally lead to expanding the business towards more categories stretching it to underwear, youth and then high end fashion.
Over the decades and economic cycle, luxury goods felt quite crisis proof. Ever since, the family’s business mission has been to use the team’s sensibility and expertise to bring the best selection of designer clothing to Austria and beyond.
Here are the picture of the store who has always been in Telfs, in the Tyrol mountains in Austria and how it expanded over time.
Old clothing store in the middle of the twentieth century

Foeger family picture – The family house back in the beginning of the XXth century

Luxury retailer in the 60's

1966_(c)_Dir Anton Aauer

Luxury retailer in the 70's

Foeger family picture – Foeger store in the 70’s

Luxury retailer in the 80's

Foeger family picture – Foeger store  in the 80’s

(c) Ruedi Walti – Foeger store in 2011

The breakthrough with fashion designer brand and luxury products

What is it like to run a family business which so much history?

Magento 2 Case Study Luxury goods omnichannel retailer

Illustrations: Claudia Meitert

The key figure in our family story is my mum, Midi Foeger Moser. At the early age of 14 she already showed great interest for fashion and the family business. For half a century she had been steadily developing it by being at the forefront of the evolution of fashion and luxury goods retail.

In the 70’s she was already a pioneer, discovering brands like Prada and in 90’s even edgier brands like Dries Van Noten. As a sign and symbol of our expansion, in 2011 we built a unique crystal shaped 450m2 extension to our store: a designer brands paradise that makes a statement, and reinforce our commitment and love for fashion.
It worked. This new extension made a lot of noise, triggered those inspirational conversations and helped increase awareness of our brand in the whole region. It is also attracting tourists, helping us acquire new customers. And the best thing is that when they are back in the region, they remember us and come back to our store.
Magento 2 Case Study Luxury goods omnichannel retailer

(C)_Ruedi_Walti_Aussen

 

Customer experience as a key differentiator in Luxury Goods

Who is your target audience and how do you keep them coming?

Our target audience are sophisticated individuals with a strong taste for aesthetics and beauty in the Tyrol region (Austria, Switzerland, Italy, Germany). They have enough disposable income to purchase 300 euro T-shirts so the conversation is seldom about price.

White glove treatment

To make your local shopping experience even more pleasurable and complete, Foeger Woman Pure goes the extra mile to offer a wide range of additional services: personal and private shopping, duty-free shopping, shuttle service, delivery service, free parking, alterations, customer bar, reorders, hangers and garment bags, and much more.

Personal shopping

What our customers love about our store and what makes them come back is our unique approach to customer service. Its not just about  being nice and polite. In fact it’s quite the opposite. Our sales consultant are very honest and knowledgeable about that would suit a customer’s body shape and complexion. It’s the sharp advice, education, the story telling about brands and unique pieces that creates the deep connection with our customers.

CRM

To maintain that relationship, when customers were travelling hundreds of kilometers to come to our store, we’ve been investing in Customer Relationship Management (CRM) even before that concept was coined! Since last century, we’ve been designing catalogs/ magazines that we would print and ship out twice a year.
Taking good care of our customers, inviting them to events, keeping them up-to-date with all important trends, news and new incoming goods with printed mailings and now electronic newsletters, has been allowing us to stay top of mind and keep our customers engaged throughout the year.

Product selection

Last but not least is all about our product assortment. Midi was visionary and had the sharpest taste for beauty, which she translated in to her assortment. The business still spends two whole months a year going around the world’s fashion shows and curating their unique selection of luxury items. The idea is to pick items that are unique enough to spark a conversation and yet broad enough to appeal to customers. And the story telling is what defines each piece of luxury doesn’t it?
Magento 2 Case Study Luxury goods omnichannel retailer

(C)_Christian_Knoerr

A Necessary Digital Transformation for Fashion Retailers

 

Why did you shift your business online?

In the beginning of the year 2010’s, sales growth decelerated. We would see customer “show rooming” i.e. taking a lot of our Sales Consultant’s time to find the right product and only buying when our store was not open, which means online, somewhere else. Worse, we would see less customer coming in store because they would get inspiration online and by staying out of sight, we would stay out of mind.

Magento 2 Case Study Luxury goods omnichannel retailer

If you are not online at all, you are cut from 60% of the market according to BCG Digital or Die study Sept 2016

 

Funnily enough, back in 2000, fresh out of university I said to my mother: “Hey we should start selling online! This Internet trend is here and to stay!” and she would answer : ” That would never work. Customers need to feel the softness of the carpet, smell the leather, glide their fingers through silk, get personalized face to face advice. No-one will purchase a luxury product through a computer!”.

 

Little did she know that that same year, Net a Porter was founded and today records sales of over €2 Billion! Instead she said : “Go and find a real job for yourself! You’re not going to sell skirt and dresses are you?”
So I did and for 10 years I went and worked for a Swiss pharmaceuticals company, first in Finance and Administration, then leading ERP projects.

 

In 2010 Zalando was starting to gain traction in the DACH (Germany Austria Switzerland) markets and online shopping for clothes was a mass trend. That’s when the family business agreed it was time for me to come back and use my experience in IT to lead their Digital Transformation.

 

How did you shift your business online?

I looked at my options and decided that Farfetch was eating too much margin and decided to set up our own online store both to have a marketing presence and be where our customers are looking for inspiration but also to grow sales through a new distribution channel.

Here are the objectives that I set for my online strategy:

  • eCommerce would drive 20% of my total sales
  • Foeger wesbite become a marketing channel that aligns with our brand and customers expectations

Results

 

Most importantly, we managed to turn around the business and our sales turnover is growing again

Resources needed by an old family business to go Digital

 

What resources do you dedicate to your digital channels?

Despite our iconic brand image, we are still a small family business with 12 staff. At the beginning it was extremely challenging for me to be CEO, CIO and COO! Then, because the whole nature of the business was changing, I was able to shift some tasks from the old world to the new world. For example two of my sisters as Sales Consultants and Personal Shoppers in store. As they are expert in visual merchandising and story telling about the products, what’s more natural to get them to list our collections online?
In everything we do, we see how we can ingrain a bit of digital in it. Doing more with less has always been part of our DNA and that’s how small companies survive.

 

What made you choose Magento 2 for your webshop?

Magento seemed a good choice as it is the number one eCommerce platform with lots of customers in the Fashion Industry, dealing with content rich inventory, SKU complexity due to size, colors, brands, collection etc… It was the best eCommerce platform to manage our offline/online set up. They excel at providing with omnichannel retailers with flexible and scalable platform. Based on my experience I wanted something popular, proven, and off the shelf to make it easy.

 

We started with a Magento 1 Enterprise store then migrated to Magento 2 Open Source. Just like with fashion we like to be ahead of the game. We were aware of all the possibilities of Magento 2 and wanted to make it work and boost our online business in an efficient way. The biggest challenges are around the stability of the platform and the fact that we are innovating here. So there are no shortcuts or pre-made solution to what we want to do. Even the whole ecosystem with other Magento 2 service providers are still new at this. But we are keen to create that path that other can then follow. So the key here is to keep communicating so we know what’s happening, where we get stuck, and establish a great relationship between all the parties involved so we can collaborate and fix all the issues together, one by one.
Magento 2 Case Study Fashion and Luxury goods

What are the top 5 functionalities in your Magento 2 store that are adding the most value to your business

Our business have typically very high average order value (AOV). Customers need time and reassurance before they spend on high price point goods. That’s why we put in place a couple of functionalities which do exactly that:
  1. Ask a stylist: it eliminates all doubts about sizing, fit, look. As mentioned above, Customer Service is what differentiates us so it has to be present everywhere, on every channel.
  2. Share on social media i.e. Facebok, Pinterest Twitter, email. It allows our customers to have the approval of their friends and relatives. It fits the decision making process of Millenials. According to BCG study, for the first time in 2018, social media and influencers is the #1 source of information for luxury goods consumers ahead of magazines and the brands websites.
  3. Add to wish list: customers can save it for later, perhaps for a special occasion where it can also be purchased as a gift. But at least it’s there, they don’t forget about it and we can personally follow up on it.
  4. Trust: when you sell expensive items, customers needs to be reassured with other customers ratings and reviews, Buyer Protection service and Certification that we are a serious business. Trusted Shops offers all that.
  5. Checkout: once a high AOV item is placed to cart, it’s an absolute priority that the order is successfully placed. A streamlined checkout emphasizes all the efforts you’ve done from attracting visits to your site down to getting them to add to cart. If your checkout is not a good experience then all your efforts go to waste.

That’s why we made sure we had our checkout UX sorted before we could go live with our Magento 2 website.

 

Tell us more about how you came to contact OneStepCheckout

As per above, checkout is the key area of an online shop, as opposed to an offline shop where your customer doesn’t just leave your shop without paying. So we did a lot of research and found OneStepCheckout sounded exactly like what we wanted.

It addresses the top causes for cart abandonment:

  • Speed: studies like the one by Akamai show that every second delay has a negative impact on our conversion rate
  • Unexpected costs: not showing the order total upfront including shipping costs, extra fees and coupon code discounts make online shoppers leave, based on customer surveys from Baymard.
  • Form filling complexity: the less clicks it’s required to complete checkout, the better the conversion, according to the Pymnts Conversion Index Study April 2018
Back in May 2017 we contacted them, their extension for Magento 2 wasn’t released yet. We pushed.
We’re just like our own customers: we feel the upcoming trends, we are not scared to be early movers, nor to demand the best. Like with any innovation, there are some teething issues. We all (us, our agency and OneStepCheckout) worked quite hard all summer to take it to the standard we wanted but we got there.

 

Our checkout is now perfectly tailored for the German speaking markets with:
  • our regional favorite Payment Methods: Sofort and PayPal Plus
  • our shipping provider DHL
  • display of a tick box to sign up to our newsletter and a separate one to accept our Terms and Conditions.
Best Practice eCommerce Luxury Goods

A few words of advice for Magento store owners out there?

Same as what we tell our own customers: know what you like, know what you want, think big, go for the best quality products, the best service and you won’t be disappointed.

 

Regarding Digital Transformation though, the key insight is that it’s not set and forget. It needs continuous improvement of each part of your webshop and of your internal processes.
So I have a whole list of activities to implement and I prioritize them based on ease of implementation and impact. For example one concept I was attracted to was to accept crypto-currencies. It is forward thinking, just like our Foeger brand. However it looks very volatile and today I know there are much bigger initiatives that will yield more sales and revenues like further website personalization and continuously optimizing my checkout experience.

Thien-Lan WeberAbout Thien-Lan Weber

Thien-Lan is the Chief Marketing Officer at OneStepCheckout. She's a Marketing expert with 20 years experience across Europe and Asia Pacific including Accenture, Clarins, Johnson & Johnson, eBay and PayPal.

Thien-Lan loves connecting people and helping retailers get the most out of eCommerce. As such, she recently joined the board of ExtDN (Extension Developer Network).

She grew up in Paris, holds a Master of Science in Management from HEC Paris and currently lives in Oslo, Norway with her husband and two children.