Teodor is a Bulgarian brand with years of experience and a vision for how the stylish Bulgarian man should dress. With a chain of over 25 stores, the company has become one of the most recognizable brands among the male audience in offline retail. Before the pandemic in 2020, its sales and image were developing well, but there was something missing in the entire puzzle, something that could elevate Teodor to another level compared to its competition, both in Bulgaria and abroad.Despite having an online store for several years and achieving decent results, the lack of a comprehensive concept and synergy between the offline and online channels prevented the brand from unleashing its full potential. And so, until the summer of 2019, when in their desire to change this, Teodor approached us, and thus began our shared story – turning a concept on paper into sales in three markets and the potential to reach an even larger part of the European male audience.
A little background story
When we got acquainted with Teodor's business and processes, we encountered a not-so-standard setup for Bulgaria. The company's processes were managed by custom ERP/inventory software, which wasn't surprising considering the company's early start (over 20 years ago) and the customization needed for its production part. The problem for us and the project was that the online store served as a sort of showcase for some functionalities of the ERP system. In practice, there was no separate eCommerce platform solely responsible for managing the product catalog, orders, shipping and payment methods, and CMS functionality. Over the years, the limitations of this closed loop had accumulated and had become a real bottleneck, not only for development but even for covering the minimum requirements in terms of user experience and functionalities. Fortunately, for both us and Teodor, the management's research led them to migrate the online store to Magento 2.
Besides the positives that come with using the most powerful open-source eCommerce platform in the world, Teodor expected this migration to Magento and Stenik to also solve their maintenance and development issues they were currently facing. The market demanded functionalities that needed regular analysis and updates, something that was impossible at the moment.
When Teodor approached us for their online store, they had prepared a really serious list of functionalities they desired from day one in their e-commerce website. Most of these features had been accumulating over the years due to the inability to implement them properly or on time in their previous platform. So, after a few months of negotiations, we shook hands and began working with a vision for a fresh start in the early months of 2020."
Dimitar Dimitrov, eCommerce consultant and commercial director at Stenik.
Problem on the horizon
After finalizing our standard practice for outlining the MVP of the project, work on the brand-new platform commenced. Everything was going according to plan until, at one point (fortunately not too late), it became evident that the company's inventory and ERP software could not meet the expectations of the online business. The situation necessitated a decision that companies typically contemplate for months, but Teodor had to make it within just a few weeks - they needed a new ERP system. Interestingly, this solidified the trend among Bulgarian companies to be willing to change their ERP systems to adequately support online sales and processes, not just those in offline business. Only a few years ago, this would have been unthinkable.
During these tense weeks for Teodor, the Stenik team provided appropriate intervention beyond what is usually expected from us as an eCommerce developer. Since we had a good development roadmap for the project, we had the opportunity to analyze the needs not only for the present but also for the future. Based on our previous experience in similar situations, we demonstrated a different level of consultancy thinking and recommended a select few potential ERP partners whom we were confident could fit the picture and take a long-term perspective.
The Solution
After our intervention, the Teodor team entrusted Selmatic to take over the functions that were previously handled by their long-standing software, developed according to their specifications. What gave an advantage to the ERP solution we recommended was the ability to combine standard functionalities, developed and proven in various previous projects, with the option for full customization of screens and automations used by different types of users on the merchant's (Teodor's) side.
Here are some key elements of synchronization that were crucial for the project:
Inventory availability
As a well-established trading company, Teodor aims to sell through all possible distribution channels. However, each channel has its own specificities, and when developed separately over time, there is a risk of being well-optimized individually but poorly coordinated with each other. For Teodor, and all well-developed industries with different distribution channels, it is of utmost importance that what is offered online corresponds to the offline availability in stores and warehouses. If the online store operates with its allocated inventory, there is a possibility that physical stores may have stock of items that are in demand online, or the online warehouse may have something in stock that is being sought offline.
Often, in the pursuit of increasing online sales, it is easier to make a decision to offer the entire available inventory, including that from physical stores, online. On one hand, this is a logical solution, increasing the chances of selling all items early and at a good price. However, in the long run, if not done correctly, it can lead to a deterioration of the otherwise good performance of physical stores. In other words, it is quite possible that a customer who liked something from the storefront may not be able to purchase it immediately because the specific item is out of stock, as someone else has already added it to their online cart. For these reasons, it was necessary to implement a flexible hybrid model with the option to include/exclude the company's stores from the list of distribution and warehouse centers.
Delivery
Delivery time for online orders is a crucial factor, especially in the fashion industry, where shopping is emotional and often linked to the customer's desire to receive their order as soon as possible. But how can this be achieved if the ordered items are located in distant stores or if the customer orders several items, and they are all at different locations? It is precisely here that a well-developed and flexible synchronization between the ERP system and the online store can provide answers to these questions, facilitating the process. This synchronization addresses the technological aspects of the issues and lays the groundwork for more advanced omnichannel capabilities that Teodor plans to unlock in the near future.
Loyalty program and customer profiles
In addition to synchronizing the accounts of physical and online customers, the project includes a developed logic for loyalty to incentivize users and increase their CLV (customer lifetime value). The synchronization between online and offline practically enables easier achievement of discount thresholds, which is very well-received by the end customers. In addition to this loyalty program, the platform offers the option for corporate discounts for large companies, clients of Teodor, who provide this benefit to their employees.
Vouchers
In the spirit of omnichannel experiences that Teodor strives to provide to its customers, vouchers are also offered, which can be purchased both online and offline and can be used in both channels. This facilitates the process of giving gifts, which has always been important in the fashion segment, and to be honest, synchronization between channels has always been problematic for retailers, with technological constraints being the most common reasons for this.
And of course...
The entire product catalog
Although we are mentioning it last, as in most of our projects, this aspect comes by default, here we can express our admiration for the entire setup that was built, for which we, the ERP developers, and the client are all responsible. The client committed to aligning the structure of the catalog and the items in both systems, as well as standardizing the data, allowing work on the items to be carried out solely in the ERP system, after which the e-commerce store receives the data in a ready-to-display format, without the need for additional intervention.
The results
Just a few months after the start of the collaboration between Stenik and the ERP system, the results were unequivocal. Teodor reported a threefold increase in online orders during the period from November to January compared to the previous year, with online turnover increasing by 2.5 times. Veneslav Hristov, eCommerce Manager at Teodor, shared that the online store has a 90% better conversion rate than before, and the synchronization between the two systems allows them to correctly fulfill 99.9% of orders.
A coordinated logistics system is evident between the various sales channels, including full integration between the online store and inventory management. At the same time, the physical stores of Teodor continue to operate seamlessly and without issues. The excellent synchronization between the online store and the ERP system not only fulfilled its mission but also ensures the brand's ability to successfully adapt to the rapidly changing environment and the opportunities presented to the successful online store of Teodor.
Do you have any questions?
Feel free to contact us with any inquiries regarding ERP system integration, synchronization with the online store, or the development of a new online store with Magento. Share your experiences or feedback as a comment under the article, or explore our other case studies for various scenarios and solutions.
