MUKILTEO – Dan Gerler launched his virtual shoe store at a time when buying things on the Internet was a novelty.
Ten years ago, Amazon.com was just a year old, mostly selling books.
Many of the shoe companies Gerler courted for the Web-based business were skeptical, reassured only by the fact that his family-owned company also operated five stores in the region.
Now, Onlineshoes.com is much better known in the industry than Gerler’s handful of stores. It’s one of the top five online shoe retailers nationwide.
“I’d say this year, 95 percent of our revenue will come from our online sales rather than the brick-and-mortar stores,” Gerler said.
Profitable since 2000, Onlineshoes.com has turned out double-digit revenue growth rates year over year. Last year, the business finally outgrew its 20,000-square-foot warehouse next to The Shoe Advantage, also owned by Gerler, in Mountlake Terrace.
“When we left that space, every nook and cranny was filled,” Gerler said. “We probably should have moved out a little sooner.”
The main distribution hub and customer service center now takes up 140,000 square feet in a former Boeing Co. building in Mukilteo. The towering stacks of shelves filled with shoeboxes seem to stretch for miles.
As his online endeavor turns 10 this month, 49-year-old Gerler credits its longevity to prudent planning and growth. By not succumbing to the dot-com hype of the late 1990s, Onlineshoes.com lasted even as other online retailers have become infamous flameouts.
“Having the shoe heritage we have was very meaningful early on to the manufacturers who joined us,” Gerler said. “And it translated into how well we can help the customer.”
The family tradition of selling shoes dates to 1968, when Kuno Gerler – Dan’s father – opened his first store in Seattle, followed by the Red Wing Shoes store in Lynnwood three years later. Dan Gerler took over the business in 1983.
Bob Bradford, vice president of sales for Dr. Martens USA, said the service reputation for Onlineshoes.com has helped it become one of the best and biggest at what it does. It’s why the image-conscious maker of boots and shoes has retained Onlineshoes.com as a long-term partner.
“They’re a great ambassador for the Dr. Martens brand,” Bradford said. “Dan’s assembled a really good team.”
Three years ago, Onlineshoes.com carried about 50 shoe brands. Its selection now includes 140 brands and more than 22,000 styles, ranging from athletic sneakers to dress loafers and high heels. Gerler said the site has tried to stock a wide range of premium brands in the middle of the shoe market, leaving the sale of both really cheap sneakers and high-priced fashion footwear to others.
Two weeks ago, the site also began offering kids shoes, which have been a fast-selling addition so far.
As Onlineshoes.com’s sales have grown by leaps and bounds, the competition from sites such as Zappos.com and Shoes.com has ratcheted up as well. Last year, online spending on nontravel products and services totaled $82 billion, according to comScore Networks. The research firm estimated that online spending for clothes and accessories grew by 36 percent from 2004 to 2005.
To keep its place against growing competition, Onlineshoes.com has stayed focused on improving selection, service and the Web site’s ease of use, Gerler said. Customers can get free shipping and exchanges, price guarantees and loyalty bonuses to keep them coming back to the Web site.
It seems to be working, as last year’s tally of 9 million visitors to the site is expected to grow to 16 million this year. Onlineshoes.com is the fastest growing UPS customer account in the Northwest, Gerler said.
The strategy for the future of Onlineshoes.com includes adding more brands and building on the growing base of repeat business the site’s attracting. Despite its newfound size, Gerler said he intends to keep the business privately held.
A decade after pioneering online shoe sales, Gerler said he’s not as surprised by the business’ growth as others in the industry have been.
“In 1996, I wouldn’t have forecast where we are now, but by ‘97 I knew we had a tiger by the tail,” he said.
Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.
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