We recently ran across a commentary outlining the efforts of a rather innovative, Boston based online retailer of luxury class goods, who’s CEO indicates that serving a need in an underserved market segment can be accomplished with the combination of leveraging innovative sales practices, advanced technology and a modern supply chain.

The Bloomberg Businessweek article, Satisfying the Fetish For Italian Shoes, describes the efforts of M.Gemmi, a 15 month old online retailer addressing a challenging and lucrative market that has struggled to reinvent itself. The mission of this B2C online retailer is to sell beautiful and well-constructed high-end footwear without the luxury price tag in what the CEO describes as a “post-luxury” online business model to addresses a new shift in consumer attitudes toward luxury goods..

Citing the Bloomberg descriptor of capabilities:

Armed with a team of data scientists, 15 Italian factories, and $32 million in venture capital, Boston-based M.Gemi wants to shake up the luxury shoe market much like Brooklinen unmade the posh world of 1,000-thread-count bedsheets or Warby Parker upended the business of fashion eyewear.”

This online retailer offers shoes that generally retail from anywhere from $500 to $2000 in price offerings from traditional luxury goods retailers to M.Gemmi prices ranging from $128 to $498.

To accomplish this goal while meeting financial performance needs, the two co-founders invested a year in developing relationships with smaller, family-run Italian cobblers, most of who had been abandoned by other luxury goods retailers in favor of cheaper, Asian based suppliers. Somewhat similar to apparel and fashion goods retailer Zara, new and different shoe styles are introduced each week and retired after three months. According to Bloomberg, the online retailer’s design staff can move from sketch to sale in 60-90 days. Further, production is continually calibrated to match customer product demand by closely monitoring buyer responses to various footwear designs.

The article notes:

Within three hours of going live with its line of summer espadrilles in April, it knew the slip-on style was a hit but the lace-up version was a dud. So it revved up production of one and dialed back the other.”

From our Supply Chain Matters lens, that is a good example of responsive retail supply chain capability.

The firm’s talented CEO, Ben Fischman, is no stranger to the apparel and footwear industry, having founded retailers Lids and Rue La La. He indicated to Bloomberg that current online consumer demand has exceeded initial projections, with M.Gemmi expected to reach $60 million in revenues this year. Once more, the online retailer’s customer count has grown 500 percent in one year with half of those customers being repeat buyers who spend an average of $1000 per year.

While primarily focused on a U.S. based online market, Fischman indicated to Bloomberg his belief of the need to have presence in all retail channels with the retailer now looking at potential expansion into Europe and Asia, as well as the opening of two pop-up style physical retail stores in New York and Los Angeles.

We wanted to bring M.Gemmi to Supply Chain Matters reader attention because it manifests the new style of retail leadership, one that balances addresses underserved market segments with integrated product design and supply chain wide responsiveness capabilities. Notice also that the emphasis is not solely on growth and scale, but rather growth in conjunction with existing and future business process and supply chain response capabilities.

Bob Ferrari