How SNIPES Launched a Trendsetting Dropship Program With fabric Dropship

snipes-dropship-marketplace
Summary
  • SNIPES is a leading sneaker and streetwear retailer that was looking to grow its customer base in the U.S. but required a new approach to expansion.

  • The company chose fabric Dropship to expedite its acquisition strategy and launch a successful dropshipping program.

  • In the first-month post-launch, 18% of SNIPES’ total online sales were generated through fabric Dropship.

SNIPES is one of the most dynamic and fastest growing sneaker and streetwear retailers in the world and has grown into a globally-renowned brand, boasting partnerships with stars like DJ Khaled, 21 Savage, and more.

Since launching its first store in Essen, Germany in 1998, SNIPES has expanded operations across Europe and the U.S. and opened over 300 physical stores dedicated to its sneaker and streetwear-focused customers in the United States alone.

Over the years, SNIPES has consistently pushed the streetwear culture envelope, selling and shipping the freshest shoes, clothing, and accessories across the globe. The company has also embraced omnichannel commerce with its efforts to streamline the customer journey across sales channels and create an unparalleled online shopping experience.

However, fashion evolves quickly, especially in niche and specialty markets. To seize on the enormous growth opportunity in the U.S., SNIPES turned its attention to acquisitions, but soon realized they required a low-risk technology solution that offered them the scalability and the flexibility to connect with niche markets and compete across a range of high-demand product categories.

A New Strategy for Rapid Global Expansion

In 2021, SNIPES significantly expanded its presence in the U.S., by acquiring American sneaker chain Jimmy Jazz. The deal grew SNIPES’ store count from just over 100 stores to over 300, making it the largest acquisition in the company’s history.

However, gaining a significant foothold in the U.S. market also brought a number of new challenges. For example, SNIPES had to figure out the best way to sell through Jimmy Jazz’s inventory, combine distribution centers (DCs) and systems, and market the new brand to their loyal customers.

They had three options:

  1. 1. Go through a heavy order management system (OMS)/warehouse management system (WMS) integration
  2. 2. Wait until Jimmy Jazz sold through their DC inventory
  3. 3. Nestle dropshipping in between two businesses to avoid significant technical debt and quickly gain access to the Jimmy Jazz product assortment

After vetting these three options, SNIPES determined the most efficient way to realize the value of the Jimmy Jazz assortment was to leverage a dropshipping marketplace solution. This allowed them to gain parity from a product assortment perspective and show Jimmy Jazz customers that SNIPES could meet their needs—a key strategy for SNIPES as they were working to drive organic migration from Jimmy Jazz to their brand.

The solid economics of dropshipping

Dropshipping can be a profitable business model because it allows businesses to sell products without keeping inventory in stock. By shifting fulfillment responsibilities to the suppliers, retailers can offer more products while maintaining full control over pricing, customer experience, and brand image.

dropship-modelWith a dropshipping marketplace, SNIPES could tackle many of the challenges that arose from the Jimmy Jazz acquisition.

By making Jimmy Jazz a dropship supplier, the company could eliminate the complex process of combining inventory and transitioning the authority, equity, and value of the brand. Plus, a successful dropship program would help SNIPES widen its U.S. customer base and could:

  • Drive incremental value and capture lost demand
  • Monetize and extend the value of high value marketing assets
  • Transition owned Jimmy Jazz inventory seamlessly through acquisition
  • Migrate value from one website (Jimmy Jazz) to another (SNIPES)
  • Test new product categories and SKUs

Longer term, the company would own valuable consumer data, which could be used to inform future merchandise buys for in-store and online. Additionally, SNIPES could extend sneaker and streetwear assortments across brands, colorways, and sizes with existing vendor relationships, all without the risk of buying and managing inventory.

However, standing up a dropship marketplace would be too costly and resource-intensive for the SNIPES team to tackle alone. They decided to seek the help of seasoned e-commerce experts who would understand their specific pain points, meet their expectations, and take a hands-on approach to building and scaling their dropship marketplace.

Picking the Right Partner

fabric Dropship emerged as a front-runner because of its modern technology and lightning quick time-to-value. It also stood out because of its people. Top-notch technology is table stakes in e-commerce, but what could really take SNIPES to the next level was the support of knowledgeable, enthusiastic professionals with experience building and scaling marketplaces. fabric was the only partner that could set the company up for operational success, while providing a proven approach to strategy, development, and implementation that would position SNIPES to thrive well into the future.

fabric’s commitment to best practices, ability to generate innovative business ideas, and willingness to share lessons learned stood out to SNIPES’ CDO, Jenna Flateman Posner:

“We selected fabric as a partner because I felt that as a company, they are very approachable and nimble. I have a lot of belief and confidence in their leadership. I’ve also been really inspired by their dedication to evolving their solutions. There is nothing static about their platform.”

Solving Complex Challenges and Accelerating Time-To-Market

marketplace-tech-stackIn retail, any large acquisition like Jimmy Jazz will introduce greater complexity into retail operations. With the addition of nearly 170 brick-and-mortar stores and an e-commerce website, SNIPES required a more robust technology solution in order to offer a truly holistic omnichannel shopping experience to its customers.

For example, SNIPES’ distributed order management (DOM) system uses logic-based rules to check inventory levels and route orders from sales channels to the most optimal fulfillment locations. However, seamless integrations with fabric Dropship ensured that orders that were normally out-of-stock could now be routed to a dropshipping supplier. Instead of potentially accepting high cart abandonment rates and lost sales, SNIPES could now continuously fulfill orders and assure customers that they would never run out of stock.

Another key advantage was fabric Dropship’s lightning quick onboarding of suppliers and the ability to begin dropshipping products in as little as 30 minutes. This has opened the door for strategy expansion for SNIPES where they can look at products that are outside of current categories and feature up-and-coming brands.

For example, SNIPES’ marketing team launches compelling, high-value content in areas where they’re establishing brand authority—like basketball, dance, hip hop and skate. With dropshipping, they’re able to feature relevant new brands to capitalize on the momentum and offer an extended assortment to better serve those niche markets.

Improved flexibility and connectivity

Not only did fabric offer turnkey integrations with vendors, shipping providers, services, and e-commerce platforms (including Shopify), it also supported modern and classic protocols for sharing information as well.

Connections could be made with suppliers via application program interfaces (APIs), electronic data interchange (EDI), Secure File Transfer Protocol (SFTP), XML, CSV, ShipStation, or through a web portal. This gave SNIPES the flexibility to onboard any vendors/suppliers they wanted to work with, without worrying about devoting resources and development time to building custom connections.

Finally, in addition to white-glove, personalized onboarding, SNIPES gained access to fabric’s in-house team of highly-experienced commerce professionals with years of experience building and scaling marketplaces. From dropship and business growth strategy to sourcing services, fabric’s experts advised and integrated with every team within the SNIPES organization to ensure the right business decisions were being made to maximize the potential of their dropshipping marketplace.

Dropshipping Accounted for 18% of All Online Sales in the First Month

“Our experience with the fabric team has been pretty remarkable in a lot of ways. This is our first foray into a marketplace, so with that comes selecting technology but also learning the nuance of what it means to stand up a marketplace. What’s been fantastic about the team is having industry experts that not only understand the technology but have sat in my seat before.”

— Jenna Flateman Posner, Chief Digital Officer at SNIPES

Coupling fabric Dropship with professional services made for an exceptional debut of SNIPES’ dropshipping marketplace. Within the first month, 18% of total online revenues came from the launch of their dropship program.

But these haven’t been the only results that have energized SNIPES. Since the fabric Dropship implementation, the company has:

  • Driven greater efficiency: fabric’s handling of vendor onboarding on behalf of SNIPES gave the SNIPES digital team more time to spend on strategic activities, like diving deeper into the large volumes of customer and order data generated by their dropshipping program.
  • Minimized out-of-stock: fabric Dropship enhanced SNIPES’ inventory depth with dropshipping suppliers, allowing SNIPES to better meet demand without stocking more inventory.
  • Enhanced their paid marketing efforts: Wider product assortment in its dropship program has allowed SNIPES to build more authority across product categories and put paid ads behind brands that customers love the most.
  • Become more data-driven: The success of new vendors and brands have informed SNIPES of new trends, helping them purchase the right inventory to sell online and in physical stores.
  • Reduced their total cost of ownership (TCO) of software: fabric Dropship has enabled SNIPES to reduce operating costs for warehousing and staffing, boost margins, and improve profitability. It has also freed up working capital to be used to fund capital expenditures.

The Future of SNIPES and fabric Dropship

Because of the project’s success, SNIPES has decided to continue its engagement with the fabric professional services team to target new brands, and, most importantly, bring the future vision of SNIPES to life.

Looking ahead, not only will SNIPES sell shoes and apparel to skateboarding or basketball personas, but they can also round out their customers’ shopping carts by recommending and offering complementary products in key areas where they are investing in establishing brand authority.

These are just a few of the many dropshipping opportunities that can help increase basket sizes and boost customer lifetime value over the long term. By leveraging fabric Dropship’s unique technology and team of experienced professionals, SNIPES is poised to rapidly scale its business—all with minimal risk.

Lori Howitt

Head of Marketplace Services @ fabric. Ex-Amazon (Shopbop) and Best Buy Canada.


Topics: Commerce
Written by Lori Howitt

Head of Marketplace Services @ fabric. Ex-Amazon (Shopbop) and Best Buy Canada.

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