LOS ANGELES — Op is taking the plunge where most action sports brands have yet to dip.
Beginning June 1, the Irvine, Calif.-based company plans to add an e-commerce element to its Web site, op.com, featuring apparel, accessories and possibly footwear. The move comes four years after it tried selling product online through another firm, which eventually ran into financial problems. It’s a bold strategy for a manufacturer that doesn’t want to face the ire of key retailers who might bristle at the idea of sales being siphoned off. Competitors like Roxy, Rip Curl and Billabong only sell online through authorized Web dealers.
But the Internet has come of age, and the potential for online sales and opportunities are hard to ignore. Last year, online sales of apparel, books, music, flowers, consumer electronics and computer hardware and software grew 25 percent to $55.93 billion, according to BizRate.com, a market research house and shopping search engine.
“Selling on the Internet five years ago was a very hot topic, very controversial [for manufacturers],” said Dick Baker, chief executive of Op. “Today, it’s a strategic element of the brand. Our number one reason to do this is to broaden our product offering that never sees the light of day at retail.”
Baker said he didn’t want to pursue the bricks-and-mortar model first since established retailers have a big advantage.
“The arena is so crowded with successful board-sport retailers, from the independents to PacSun, Hollister and Quiksilver Boardriders Club,” he said. “This is a vehicle we can better manage and monitor.”
To build its Web presence, Op has partnered with Secaucus, N.J.-based eFashion Solutions LLC, a full-service e-commerce provider, rather than creating the infrastructure itself. EFashion’s dozen clients include urban apparel headliners Rocawear, Baby Phat, Shady Ltd. and JLo.
Op will take care of the front end of the site — designing the look and feel of the Web pages — and eFashion will handle the back end, controlling the online operation from the moment a visitor starts shopping the site. The firm will handle order processing; credit-card transactions; the picking, packing and shipping of the product; returns, and e-mail promotion blasts. Op will ship product monthly to eFashion based on the company’s sales projections. EFashion also operates a call center from 9 a.m. to 9 p.m. EDT that handles toll-free calls for all of its brands.“There’s no risk for our clients — right away, they’re making a profit,” said Steve Silano, eFashion partner and head of new business development.
Creating the infrastructure for a Web site can cost up to $5 million. Instead, clients pay eFashion a setup fee from $5,000 to $15,000 (which is often waived) and share 40 percent of their revenues with eFashion. Silano expects the Op site to generate $1.5 million in online retail sales in its first year. Op this year will rack up more than $250 million in sales, a 20 percent increase over 2003.
Baker said the company is finalizing its content plans, but initially expects to sell only its main Op line, targeting teens ages 12 to 18, and change the Web site’s athlete- and event-driven home page to a more product-oriented focus. The site will keep prices consistent with product found in Op’s 3,000 accounts, including Gottschalks, Kohl’s, Robinsons-May and J.C. Penney, a tactic industry experts applaud.
“It’s key that manufacturers don’t underbid their retailers,” said Frank Kaufman, business assurance partner at accounting firm Moss Adams LLP. “As long as the competition isn’t unfair, they can coexist. It’s really a form of advertisement, as Web shoppers see what’s new and then visit the retailer.”
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