Boardsport specialist Blue Tomato was selling snowboards, skateboards, and surfboards online long before e-commerce became a buzzword. Today, the company generates half of its revenues from Web sales and half from 26 brick-and-mortar stores.
In 1988, Gerfried Schuller became European snowboarding champion with the Burton team and the first-ever snowboarding world championships took place. It was also the year when Schuller founded a snowboarding school called Blue Tomato. Not long after that, he began selling basic equipment for snowboarding students and enthusiasts out of what was known as “Gerry’s Garage.” He opened his first official retail store in 1994, and followed up with his first Web shop in 1999.
Seventeen years on, Blue Tomato has 13 stores in Germany and Austria, sells more than 450,000 products carrying 650 different brand names, both online and in-store, and garnered revenues of €69 million in 2016 — up 36% over the previous year. Part of this midsize enterprise’s success is certainly down to its founder’s ability to spot a promising business opportunity. But that’s not the only contributing factor.
1. E-Commerce: Spotting Potential Early
What began as a modest, local interest in snowboards and snowboarding equipment generated by the Blue Tomato snowboarding school soon turned into an avalanche of demand on a global scale. Blue Tomato launched a rudimentary Web shop in 1999 and went on to set up its first e-store in collaboration with SAP Hybris in 2001.
“It was actually more of an online order form than e-commerce,” recalls Eustachius Kreimer, who back then was responsible for advising Blue Tomato on payment integration and is now the company’s director for IT development and customer service. “But it was the crucial foundation stone for our international business.”
Thanks to Blue Tomato’s ongoing collaboration with SAP Hybris, which then had a workforce of just three, the Web shop continued to develop and grow. “Product images from Blue Tomato currently still feature in several Hybris demo versions,” says Kreimer. Now in its fifth phase of development, Blue Tomato’s Web shop supports the sale of products in 14 different languages and their distribution across Europe.
2, Snowboards, Skateboards, and More: Living the Image of a Niche Supplier
Blue Tomato never set out to be a traditional, broad-based sports gear supplier; instead, it has always concentrated on selling the major brands favored by surfers, skateboarders, and snowboarders. “Our range of over 650 different brands is heavily inspired by youth culture,” explains business administrator Kreimer, who consciously positions his company to potential suppliers as a non-mainstream seller.
Currently, the product detail pages in Blue Tomato’s Web shop specify the body measurements of the clothing models shown, some of whom are employees at the company’s stores. In other words, they’re ordinary people. “That’s totally in keeping with our positioning,” says Kreimer. “We aim to sell brands to our customers at eye level.”
And, sure enough, by providing this size information, the company has been able to reduce its online returns rate because customers are better able to judge whether a certain product will fit them or not. Which is obviously great news for the bottom line.
3. Focus on Europe: Selling on the International Market
Blue Tomato markets its products throughout Europe. The Web shop “speaks” 14 languages and supports payment in nine different currencies, including euros, Swiss francs, and UK sterling. The prices calculated online include the applicable sales tax rates in the country of order, such as 19% in Germany and 20% in Austria.
“The system maps prices and tax rates in a highly granular fashion – and it also communicates with customers in their local language,” explains Kreimer. In the case of a country like Switzerland, this is no mean feat. The SAP Hybris platform makes it possible to sell products to people in the western part of the country in French, to customers in the canton of Ticino in Italian, and to inhabitants of Bern and Zurich in German.
Payment methods can also be adjusted to fit individual requirements, as an example from the localized Web shop for the Netherlands shows. In addition to the more widely used payment methods, it also maps the e-commerce payment system iDEAL, which is a special feature of the market in the Netherlands and very popular with consumers there.
4. Smartphones and Tablets: Making the Mobile Offering Attractive
“It’s imperative that we make the mobile customer journey through the Web shop as compelling as its desktop counterpart,” explains Kreimer. Because half of all customers already access the Blue Tomato online shop from their smartphone or tablet – though most still make their online purchases from a PC.
Specifically for the mobile “path to purchase”, a new application uses so-called “ranking cocktails” to personalize content, which is then displayed in a mobile device-compatible format. Content is personalized according to the customer’s location, the kind of device he or she is using, and the device’s loading speed. The order in which products are displayed is based on a person’s past usage behavior.
5. Making Omni-Channel the Norm with SAP Hybris
Thanks to the SAP Hybris platform, Blue Tomato’s online and in-store business operations in Austria and Germany have been operating in sync for the last two years. “We always know exactly which products are currently in stock at our retail stores,” says Kreimer. If a product is out of stock at one store, sales assistants can check for availability at other stores and in the online inventory and order the item in question from there.
Similarly, when the Web shop recommends products based on a customer’s purchase history, it only displays those products that are actually in stock ‒ be it online or in-store ‒ and available for immediate delivery. “If that didn’t happen, we’d not only have disappointed customers but higher process costs, too, because we’d have the extra expense of making sure we procure the out-of-stock product as quickly as possible,” explains Kreimer. That’s why Blue Tomato’s Web shop and retail stores all tap the same inventory status.
“Thanks to SAP Hybris, we always know exactly which products are currently in stock in our retail stores.” Eustachius Kreimer, Blue Tomato.
Other benefits of the SAP Hybris platform, says Kreimer, are that it can be “scaled at will, supports the integration of external tools, and gives us the freedom to map processes in close alignment with our own business model.” For example, it allows payment technologies like those used in the Netherlands to be incorporated, as well as highly specific device detection technologies developed especially for e-commerce purposes.
6. Embracing New Approaches: Google Glass
At the beginning of 2015, Blue Tomato and SAP Hybris jointly designed a smart device-based product advice scenario for use at Blue Tomato’s Munich store. In this scenario, if a customer uses a specially designed SAP Hybris smartphone app, the sales assistants know exactly what that customer is looking for the moment he or she enters the store and can provide targeted product advice immediately. That’s because data glasses worn by the store personnel — in this case, Google Glass — automatically display information about the individual customer’s product interests and requirements.
Although Google Glass has not yet become established at Blue Tomato, this example illustrates the direction in which digitalization may very well take the retail industry before too long. “It’s vital to be open to new approaches at all times,” says Blue Tomato’s Eustachius Kreimer.
Top image via Shutterstock
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