DONEGER MANEUVERS ONLINE FOR GROWTH
Byline: David Moin
NEW YORK — After buying up just about all of the competition, The Doneger Group — the last major independent player left in the ever-shrinking buying office field — is seeking to sustain growth, this time in cyberspace.
Doneger is aggressively building its “online marketplace” that already includes about 100 virtual supplier showrooms and is planning private label and enhanced closeout offerings.
It’s not the only online business-to-business marketplace attempting to facilitate cheaper, faster and more accurate communications between retailers and manufacturers, and save costs by reducing the need for faxes, phone calls, messengers and traveling. One competitor, MAGIConline, also has an Internet fashion marketplace and last week formed an alliance with QRS Corp., which provides e-commerce supply chain solutions to retailers and vendors and will power MAGIConline.
That partnership is likely to spur intensified Internet activities and distinctive offerings at The Doneger Group, but Abbey Doneger, president of The Doneger Group, promises that external issues won’t compromise his strategy.
“We’re doing an online business our way,” he said during an interview. “We didn’t listen to Wall Street business models. This is based on solid fundamentals.”
According to Doneger, it’s also a strategy based on realistic expectations for profits and revenues, technology that’s simple enough for any tech-averse shopkeeper or garment executive to handle and past relationships with suppliers nurtured by Doneger over the years, something other online marketplaces generally don’t have.
The Doneger Group has invested “a few million dollars” in technology, including accounting systems as well as online services, during the past four years, Doneger said. He declined to be specific on the costs, but acknowledged it will take a while to turn the operation profitable. Doneger’s Internet staff consists of 25 people in five departments: technology; data entry; photography; art and editorial; sales and customer service. The in-house technology team worked with Site Dynamics in Clearwater, Fla., and the site is hosted by Globix, here.
Whatever the costs, it’s clear they’re significant for Doneger, a relatively small firm with a high industry profile and a long history. Doneger’s staying power — the firm has been in business for 55 years — comes not only from buying up the competition, but from a skillful flexibility in running the business, so it now boasts a range of clients, from small “mom-and-pop” shops to Wal-Mart, and a range of services so that the firm is as much an information provider as a traditional buying and consulting service.
The latest maneuver involves enhancing The Doneger Marketplace B2B Internet site, which was spawned last August from Doneger Online, another B2B site. Doneger said both Web sites are growing in usage, and by separating them, each becomes more manageable for Doneger’s technology staff to maintain and easier for Doneger retail clients to navigate.
While the Doneger Online site is informational, providing trend reports for colors, fabrics, store windows, new vendors, styles and recommendations, the Doneger Marketplace features an “Exhibitor Center” housing virtual manufacturer showrooms, including Mudd, Marisa Christina, Susan Bristol, Jeep, SML Sport, Gallery and Foxcroft.
This Exhibitor Center is the focal point of the Marketplace, with about 100 companies currently showing there. Manufacturers pay $10,000 a year to show on the Web site, which has been live for a year. About 400 retailers have been accessing the portal to view or shop products, Doneger said. Retailers can probe showrooms, accessing exhibitors and products by category, name or specific type of product, such as wool pants; and one of the advantages is faster cross-shopping for comparing prices and styles.
“Retailers are comfortable purchasing certain products online if they are familiar with the quality and styling,” said Leslie Ghize, Doneger’s director of online services. “But with brand new products, most likely they will request samples. We look at the Internet as a tool, not a replacement for one-on-one business activity.”
Doneger Marketplace is also planning what Doneger officials describe as “a major merchandise exchange” for buying off-price and unloading goods, representing an advancement from Doneger’s Price Point buying site.
In addition, The Marketplace plans to offer private label, primarily casual sportswear with an emphasis on knits, with offerings changing seasonally, through a sourcing program with Studio Direct, a San Francisco-based division of international sourcing agent Li & Fung Co.
“We’re seeking to create a true marketplace for retailers and manufacturers to access service offerings, tools and products for off-price, private label, assortment planning and research data,” Doneger said.
“These aren’t just links,” added Ghize. “These are meaningful business relationships and opportunities.”
The Marketplace also enables retailers to view product “easily, [and] get information right from your desktop. It’s more timely, and retailers can focus in a category of business, and review and preview products before coming into the market,” Ghize said. “But we don’t see it as a replacement for [market visits]. It’s a tool, for editing and finding information,” though purchasing can be conducted via the site.
The Marketplace has a magnifying feature that enlarges products for close-up views; a database of products and information from manufacturers; a line sheet shopping cart-type feature; and an order inquiry feature, though actual transactions are done off-line.
Other Marketplace features: a calendar of events and design and financial planning services.
Manufacturers, just as they can control who has appointments to visit their showrooms, can control who has access to their virtual showrooms. Doneger also said that the manufacturers manage their virtual showrooms just like actual showrooms. “They visit it everyday, refresh it and call retailers to see what they think of it.” The manufacturers can invite retailers who aren’t Doneger clients to visit their virtual showrooms.
“We are not an Internet company. We are using technology as a tool to enhance our service offering and create opportunities for retailers and wholesalers,” Doneger stressed. “We built it with realistic and practical expectations and goals, with no unrealistic sales goals, and we’ve paced the development to be consistent with user acceptability.”