4 Things Retailers Should Be Thinking About Right Now

Aldo Westfield World Trade Center NYC
Inside the Aldo store at Westfield World Trade Center, NYC.
Courtesy of brand.

In a retail environment where constant change has become the new normal, shoe companies have been forced to juggle a slew of disruptive forces at a frenetic pace.

Volatile weather, the explosive growth of e-commerce and consumer shifts toward experiential spending are just some of the hurdles footwear and apparel firms are attempting to clear.

But the arrival of spring has brought with it a new sense of hope for many retailers, who say they’re ready to unveil strategies — including beefed-up in-store experiences and social media initiatives — aimed at overcoming these difficulties and spurring growth.

“Retailers are cognizant of the need to evolve and improve the store experience, and some are making progress,” said B. Riley & Co. LLC analyst Jeff Van Sinderen. Still, “it will be a process, and a lot more needs to be done,” he added.

Indeed, as an increasing number of fashion companies find themselves in bankruptcy court or barely staying afloat, getting the industry back on track will be no overnight task.

Here are four factors that are top of mind for retailers this spring:

1. Creating the Right Vibes

Over the past two years, brands and retailers have been adapting to a growing consumer shift toward spending on experiences, such as travel, museums and dining, and away from purchasing products.

Now, that swing is becoming more evident in shrinking top and bottom lines across footwear and apparel companies — Macy’s Inc., Nordstrom Inc. and J.C. Penney Co. Inc. are just a few of the department stores struggling with tepid brick-and-mortar traffic. Although it will take some time for shoe firms to determine and implement the most effective strategies to address this growing consumer appetite, some are trying out new ideas.

Saxon Shoes Saxon Shoes Courtesy of retailer

“We always have something going on, whether it’s trunk shows or events where we’re doing ticket giveaways or charitable groups or in-store events,” said Gary Weiner, president and CEO of Saxon Shoes in Richmond, Va. “We’re always mixing it up and giving [customers] something new for the season so they can connect with the product.”

Similarly, Dan Ungar, owner of Mar-Lou Shoes in Cleveland, said he’s tried a range of approaches, including hosting focus groups and wine tastings to garner feedback and lure shoppers.

“I’m working very hard with my team to make the customer visit more experiential,” Ungar said. “It’s crucial for independent retailers of all sizes to create an experience that is not possible on an electronic device or via delivery by a drone or a delivery service.”

Ungar’s store serves cold drinks to customers, and he brings in a professional esthetician who performs foot reflexology twice a week as a complimentary service.

2. Weighing Weather

For the second consecutive year, winter’s wild fluctuations have been a nuisance to shoe companies. A heat wave that hit parts of the Northeast and South in February dampened winter sales — offsetting some gains from several days of frigid weather during the same period.

Also as in winter ’15, sluggish overall boot sales continued to weigh on retailers, but Weiner said he’s hoping for a spring turnaround.

“People just were not in the mood to purchase boots [this winter],” Weiner said. “But my business has started to explode now that the weather has broken. It should be a nice premonition of what’s to come.”

DNA Footwear Daniel Kahalani Daniel Kahalani, CEO of DNA Footwear Courtesy of retailer

At DNA Footwear in New York, CEO Daniel Kahalani believes spring traffic will flourish after an unexpectedly frosty March. “[Many people] have had enough of this winter and they want to get out and shop. Spring and summer are always great seasons for us.”

Laurel Tate, owner of Two Sole Sisters in Colorado, said she’s taking advantage of spotty weather to help clear inventory.

“We can capitalize on the unpredictability of the weather right now by selling more than one product to the customer,” said Tate. “Customers are buying flats and heeled sandals for daytime, and then a spring bootie for the cooler evenings.”

An aggressive promotional environment during the winter months created issues for Canadian retailer Aldo, but Daianara Grullon Amalfitano, VP of global footwear at the company, said the firm is also finding an upside.

“We are seeing a great appetite for novelty items and fun treatments — customers are tired of winter and looking for new, hot trends,” Grullon Amalfitano said. “We’ve managed this transition into spring by offering customers something they don’t already own.”

3. The Athletic Component

Retailers are banking on the intersection of athletic and casual styles to be footwear’s bright spot this spring.

As warmer temperatures prompt consumers to seek out shoes that are both trendy and comfortable, athletic and athleisure styles from Adidas, Nike and Puma, by and large, continue to lead the pack. “I would definitely say there’s going to be more of a focus on sneakers than ever before, [especially] in basics and running shoes,” said Margot Wasserman, buyer at New York’s Tip Top Shoes.

Adidas Pure Boost Clima The medial side of the Adidas Pure Boost Clima in “Clear Brown/Chalk/Clay Brown.” Adidas

Releases by New Balance and Merrell also continue to be crowd-pleasers, while several smaller comfort brands are gaining momentum. “Ecco, Dansko, Gabor and a few other Spanish and Italian brands are doing [athleisure] well,” Mar-Lou’s Ungar noted.

Still, despite athletics’ apparent strength, Van Sinderen said he’s also seeing some changes under way in that realm. “One [striking development] has been the cresting of the huge classic-sneaker trend that has been going on for the last couple of years, such as the Adidas Stan Smith,” he said. “That seems to be morphing a bit.”

4. Tackling Digital

In addition to ramping up e-commerce strategies to combat rising competition from online giants Amazon.com Inc. and eBay Inc., brands and retailers are taking their social media tactics to new heights.

“Instagram is a top priority for us since that is where our followers are the most active and engaged around the globe, as well as Facebook and live content through the various channels,” said Aldo’s Grullon Amalfitano. “Overall, we see social media platforms as an opportunity to engage directly with our customer in a meaningful and authentic way.”

Tip Top’s Wasserman and Saxon’s Weiner said their stores are also using Facebook, Instagram and Pinterest to connect with customers. Tate of Two Sole Sisters said she’s found Instagram to be the most effective online platform to promote her business.

“We do a lot of in-store product shots or lifestyle shots,” Tate said. “I think showing the shoe or handbag on one of our staff members or customers is really helpful — [displaying] how the customer can wear the items. They can see how we’re styling specific pieces and how they can work with their wardrobe.”

 

On the e-commerce side, both large and small retailers are throwing more resources behind online selling.

Macy’s, JCPenney and Nordstrom have dramatically shifted their investments online, while DSW Inc., Shoe Carnival and others have also unveiled digital enhancements, including the launch of mobile apps and revamped websites.

Still, many retailers say the rise of digital and the need to create the right brick-and-click mix might be their toughest mission.

“The internet keeps getting stronger, affecting every retailer,” noted Mar-Lou’s Ungar. “People can sit in front of their computers in their pajamas at midnight and order as many shoes as they want and have them delivered and picked up for free.”

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