Retailers shift their ad spending from TV, radio and print ads to digital ads.
The shoe retailer says its sales will increase 30-40% this year.
Inspired by online shoe and apparel retailer Zappos.com, young French entrepreneur Boris Saragaglia launched his own e-commerce site called Spartoo.com in 2006.
Spartoo, which gets its name from a hybrid of the leather Spartan sandals worn by the ancient Greeks and major web players such as Yahoo and Google, says it sold more than 1.5 million pairs of shoes across 20 European countries in 2011.
Today, 29-year-old CEO Saragaglia oversees an online shoe empire selling 25,000 models from 500 brands and has operations in a dozen countries.
Saragaglia says he’s seeing returns from following Zappos’ model of making service a top priority and offering free delivery and returns. However, while Saragaglia says Spartoo drew on Zappos' business model, it does focus strongly on competitive pricing. Zappos’ CEO Tony Hsieh on the other hand, has long emphasized that his strategy was to offer great service so that Zappos did not have to deeply discount its shoes.
Spartoo.com, No. 119 in the Internet Retailer Top 400 Europe research guide, strives to offer good deals, but price is not its only selling point, Saragaglia says.
"The idea was not to completely duplicate an idea from abroad,” Saragaglia says. “I didn't want to simply get involved in a price war and make that my only selling point. So I sought from the outset to offer a very big choice and quality of service, for example with free returns."
Spartoo’s revenue rose to 100 million euros (US$130 million) in 2011, up from 60 million (US$78 million) in 2010, he says. He predicts sales will climb to between 130 and 150 million euros (US$170-$195 million) this year.
“Exceedingly strong international growth of some 200% over these past few years has been the driving force in the business,” Saragaglia says.
Spartoo, which has more than a dozen local-language sites, is now focusing on expanding marketing services in each country and adding more brands to its arsenal rather than moving into more countries, Saragaglia says.
“We are apprehensive about opening in other countries,” Saragaglia says. “Twelve countries is already lots of work and a very big challenge—so we are looking more at reinforcing and consolidating our international presence.”
Spartoo is looking to raise 100 million euros (US$130 million) to fund its plans to focus on marketing and connecting with consumers in each country in which it operates, Saragaglia says.
“We are in ongoing negotiations with investors concerning the expansion—we will see what opportunities come up and develop on the best of them—the door is still wide open,” Saragaglia says.
Saragaglia says having a presence in each country gives spartoo.com an edge over competitors.
“We recruit new brands and develop the business with the people from each of the countries in which we operate,” Saragaglia says. “This helps us get the right staff and, most importantly, to have a strong understanding of the country in terms of products we offer delivery choices and retail culture.”
Saragaglia says web retailers have an opportunity to take a bigger share of the European shoe market, which he estimates to be valued at 50 billion euros (US$65 billion).
“The online retail market for shoes is still maturing across Europe and has a lot of potential for growth,” he says.
In France, online shoe sales account for only 6-7% of the total footwear market, whereas for some products, online retail already accounts for 15-20% of overall sales, Saragaglia says. In the United Kingdom, online shoe sales account for 10% of shoe sales. Saragaglia hopes that with Spartoo’s help, that figure could increase to 20% over the next couple years.