Evolving to survive: Suggestions for retailers

Johannesburg, Gauteng, SA - There was a time, not too long ago, when footwear retailers, wholesalers, importers and manufacturers around the globe could rely on the certainty that their specific skills would see them through for time to come. Market forces were relatively simple and could be dealt with effectively. For instance, currency fluctuation, transport costs, component quality, new procurement locations, store rentals, wage negotiations etc., etc. These were all accepted factors that influenced footwear businesses on a daily basis. Most managers, owners and directors were sufficiently skilled and educated in their specific fields of footwear expertise and thus could cope with these market influences. 

 

With the advent of the internet, social media and the consequent boom in online sales direct to the consumer, the predictable and strictly adhered to channels of distribution became distorted and quickly morphed into a super-fast route from source to consumer. Casualties have been numerous, from the small, vulnerable operators to much larger retailers, wholesalers and importers not being able to deal with new consumer requirements. Without going into details of the demise of larger footwear businesses, which are already known to most readers, here follows a short account of a small footwear retailer’s challenges and objectives. 

 

During the halcyon days following the 2010 World Cup, I spent some time researching what I thought was an evolutionary change in the footwear business. Being a specialist retailer with a certain amount of experience in import and distribution, my thoughts were to build a business consisting of a larger distribution arm, backed by a smaller specialist retail operation. It seemed that international footwear companies had already started this on an evolving basis where distribution would reduce over time and retail would increase. Better margins, improved cash flows and lower overheads were always part of the attraction. Who knew what was to come, that exponential change that continues to keep us awake at night on that treadmill which seems to spin faster and faster. 

 

Gone are the strict import-wholesale channels of distribution, and those that exist have been cut in two. Gone are the large retail stores in glossy malls; only a few successful medium- to entry-level chains have survived. Gone are the margins which allowed wholesalers and retailers to carry massive inventory. Gone are the layers of personnel, each dedicated to a specific task. Smaller retailers have to dig deep and utilize their passion and expertise as they are faced with having to restructure their businesses. An effective, powerful transactional website, with links to Facebook, Twitter and Instagram, is the minimum one can do to ensure your customers don’t forget that you exist. That laborious task of capturing First Name, Last Name, mobile, Email, gender, shoe size, width and more, is an integral part of communicating with consumers who know, trust and support your business. Reduce the size of your store (relocate if it makes sense), make it cozy, filled with unique shoes that aren’t easily located online. Use the internet and your own connections locally and internationally to source, import small quantities of quality shoes that can be sold online and from your store. Always keep smaller quantities of KVIs (key value items) to assure your customers that popular brands are still available. Become the retailer who can vary the mix of sale, lower the rental costs and keep experienced staff in the business. This is the future for smaller dynamic footwear operations that are able to adapt (daily if necessary), to provide their customers with most of their footwear desires.