If 2009 was the year of anything in retail, it was a year of change. The consumer changed — spending and buying less as unemployment rates soared — and strategies changed. Some retailers had to close stores, shelve expansion plans and downsize their headcounts. And most notably, attitudes changed as many retailers started to lose confidence in their businesses.
“It’s been really hard,” said Stacey Kastel of Sassy of Margate in Margate City, N.J. “Everyone has struggled — everyone.”
However, a new year is under way, and many retailers are looking at it as a time to learn from past mistakes. Some were eager to share their knowledge about key ways to elevate their business models, drive sales and keep consumers engaged.
“Keep your overhead low,” said retailer and wholesaler Shawn Ward of Shane & Shawn, who recently closed the New York-based retail shop he ran with his partner and brother, Shane, to move to a mobile store format. “Don’t ignore your sales data. You’ve got to study and learn from it.”
“In short, don’t overbuy — wait for opportunity,” added David Zaken, owner of the David Z chain of stores.
Drawing upon their best practices, here’s what other retailers told Footwear News are the dos and don’ts to thrive in the new year.
Ray Margiano, CEO and founder of Foot Solutions, Marietta, Ga.
Margiano called 2009 a “clean-up year” for the 250-store franchise operation. “As a group, we were not impacted as much as the rest of the industry, but still took a dip in sales and growth,” he said. “The first six months of 2010 will be a slow turnaround with a more positive final six months, but not even close to a full recovery.”
Do … Adjust quickly. “If you keep doing what you’ve been doing and it hasn’t worked, then you need to shift gears and do something else.”
Don’t … Dwell on the past. “Never look back over your shoulder. 2009 is gone and good riddance.”
Todd Kirssin, DMM of Footwear at DTLR, Hanover, Md.
For athletic retail chain DTLR, 2009 had highs and lows. During the back-to-school season, business wasn’t as strong as it had been in the past, and the women’s business struggled. Holiday sales, however, were up significantly in December, thanks to hot-ticket brands such as Nike, Adidas and Polo. This year, Kirssin said the key to success is to embrace change, even if it means taking a new approach to what has worked in the past.
Do … Change your point of view. “Constantly flip the script with your offering and think like your customer,” said Kirssin. “As it becomes harder to get consumers to part with their dollars, you’re not just competing with your surrounding stores and Internet [competitors]. Their closets are your biggest competition.”
Don’t … Bet on past success. “Don’t put too much faith in what worked last year,” cautioned Kirssin. “The market, trend, style, material, silhouette is sure to change. You have to be nimble and fast on your feet, always thinking two steps ahead all the time. The guy whose strategy is [based on] last year is going to crash and burn.”
Greg Selkoe, founder and CEO of Karmaloop.com, Boston
According to Selkoe, 2009 wasn’t as much of a struggle for online retailers. “We’re online and the customer is definitely there. Business in 2009 was up 30 percent from 2008.” The company, which also has a small brick-and-mortar store, used largely for special events, has experienced steady growth since launching in 1999, when e-commerce was just getting off the ground. Through the downturn, Selkoe said business was able to stay afloat, thanks to user-friendly content that drove customers to the Website and the addition of new merchandise categories.
Do … Get tech-obsessed. “Invest heavily in the Internet. Market share is moving online. One of the things we did that was really successful was Klickable video — an online video feature that combines content and shopping, and that’s really the future.” Selkoe also said category expansion is a good way to slowly attract new customers. “We expanded our line a little bit beyond streetwear, adding more contemporary items.”
Don’t … Panic. Worrying incessantly about business will hinder the development of proactive ideas and solutions, said Selkoe. “These things all go in cycles. We were up 80 percent in the first two weeks of January compared with last year.”
Jeff Greenberg, owner of Lloyd’s Shoes, Carmel, Calif.
For veteran retailer Jeff Greenberg, the little things — especially in a down economy — make a big difference. “Investing in your interior is a good move right now. I’m putting in new light fixtures and freshly painting the back wall. It’s good for business and morale.” So far, Greenberg hasn’t seen sales decline in 2010, but he’s not getting too comfortable. “As retailers, we want to be optimistic, especially for my peer group, age wise,” he said. “We’ve been at this a long time and we want to be back in the ring, doing well. But I would say, don’t abandon your caution.”
Do … Hold employee performance reviews. “Now is a good time to bring your salespeople in a little closer,” said Greenberg. “It’s a good idea to give an honest review to your employees. What I focus on is how they can help the store and help themselves.” Greenberg is working on a program in which the associates who can reach certain sales goals will make more money.
Don’t … Focus only on shoes. “You may have other potential areas of growth in your business, so it’s good to be open-minded about that,” said Greenberg. “Right now, I’m trying to be more aggressive with our accessory business.” Recently, Greenberg took a trip to Los Angeles to scout new handbag lines to add to his assortment of bags, socks and small leather goods.
Jill Hathaway, owner of Hathaway Shoe and J. Hathaway, Kansas City, Mo.
Jill Hathaway’s stores haven’t been immune to the economic downturn, but she is determined to grow. Hathaway, who runs the euro comfort store Hathaway Shoe, celebrated this month the grand opening of J. Hathaway, a new fashion footwear boutique. Like many shops across the country, business at Hathaway Shoe took a hit last year, but looking ahead, the retailer is eager to get the new boutique off the ground and is already off to a good start. “We had a grand opening party on [Jan. 16] and it was a phenomenal day. We got a lot of new customers,” she said.
Do … Network with other retailers. “We’re doing this event for the American Heart Association’s Go Red for Women initiative. I involved all the local boutiques and restaurants and they donated [$1,000 worth of] gift cards.” One of Hathaway’s employees, who is also a design student, is constructing a dress out of the cards. The installation will rotate to different storefronts, and customers can buy $10 raffle tickets to win the dress on Valentine’s Day. “I often visit local stores to tell them about my business and offer to help them out in any way. That’s really important.”
Don’t … Throw in the towel. “We ended up being down 10 percent last year, but that is better than we were doing in the third quarter,” she said. “After the third quarter, we were down 18 percent, so we really bumped up our marketing and advertising.” Hathaway said she also utilizes manufacturer closeouts and discounts to fill in products wherever she can. “You’ve got to constantly update the merchandising of your stores so they look and feel valid to the consumer.”
Richard Kirshenbaum, founder and partner of ShoeBox New York, New York
Kirshenbaum was busy last year. Along with franchise partner NexCen Brands Inc., he unveiled a new store design that is being rolled out domestically and internationally. The multibrand retailer, which stocks a large selection of Vince Camuto brands, as well as high-end labels such as Alexander McQueen and Frye, has weathered the storm, but it hasn’t been easy. “We’re extremely happy with how we positioned ourselves toward the end of 2009 and the first month of 2010,” he said. “We’re watching our inventory, and gross-margin dollars are up [and] markdowns are down.”
Do … Build vendor relationships. “The most important thing is that retailers and manufacturers form relationships and partnerships,” he said. “We’re all in this together — it’s a two-way street. Ninety-nine percent of the people we do business with have been sympathetic to our needs.”
Don’t … Overextend. “While I don’t think anyone should just say ‘no’ off the bat, I would say be very cautious about expansion plans,” Kirshenbaum said. “It has to be the right situation economically and it has to be a perfect deal.”
Jon Fahrner, CEO of Moxsie.com, San Francisco
Sales have been steadily increasing for Moxsie.com’s online shop, but that doesn’t mean Fahrner has been resting on his laurels. The retailer paid close attention to consumer demands last year, and in response, added an EcoShop to the site’s shop-in-shop format. “More retailers need to let customers guide them,” he said. “Holding on to merchandising strategies or store identities while the customer has evolved and buys differently won’t work. The best retailers have had a balance between gut feeling and customer data, and you can let that guide you as far as merchandising.”
Do … Get personal online. “It’s so important to add a human touch to an online store,” said Fahrner. “It’s just as much about content and communication as it is about commerce.” The personal touch could be a connection made with the consumer through lively product descriptions, or letting them voice feedback on the site, said Farhner.
Don’t … Expect too much from social networking. When it comes to Twitter, Facebook and blogging, be smart about how you use the tools, said Fahrner. “Don’t depend on Facebook or Twitter to be high-impact selling platforms. You’re contributing to a culture of followers, not selling to people, so don’t expect direct sales right away. You’ve got to be willing to commit to it over a period of time.”