Retail Secrets from Pedestrian Shops

For the past 40 years, Richard Polk has been on a Rocky Mountain high. The owner of Pedestrian Shops in Boulder, Colo., has gone from selling Earth shoes out of a pickup truck to operating two stores that have become retail landmarks.   

Polk and a college buddy saw potential in the quirky Earth brand in the late 1960s. The pair started selling the shoes and eventually moved into a downtown storefront. To attract a larger clientele, they expanded their brand mix, and in 1970 renamed the store Pedestrian Shops. Today, Polk is the sole owner, overseeing a 4,700-sq.-ft. space on Pearl Street and a 1,200-sq.-ft. store in the Village Shopping Center. And over the years Pedestrian Shops has sailed a steady course, posting annual growth of 5 percent. 

Dansko, Keen, Merrell, Vibram, Naot and Ugg are now among the store’s top performers. Polk was one of the first retailers to carry Crocs, and he said the brand continues to rank high among his labels, even with a Crocs store down the block. In fact, Pedestrian Shops is expected to do $75,000 to $100,000 in sales with that brand this year. “Crocs has been a game changer for Pedestrian Shops,” said Polk, who also invested in the company before it went public.   

Now the store has become a family business, with daughters Lauren and Zoe joining the team (Lauren is a VP and Zoe, a college student, helps out part-time). “They understand social networking,” said Polk. “Talking to our customer has become much more complex. Today, different demographics are receiving news in different ways.”

FN: In your 40 years in business, what brands stick out as especially innovative?
RP: Earth and Nike. [Their successes] meant that leather-soled shoes weren’t going to be the standard any longer. [It was] the movement to unit bottoms. There have been other important steps along the way. Reebok’s aerobic shoe was very important. Certainly Crocs. And New Balance, which is wonderful for retirees and vacationers. While we’ve never been a big Nike seller, it helped change the world. And Merrell, along with Vibram, has been [important].

FN: As one of the first retailers to get into Crocs, how did that brand impact your business?
RP: I’ve never had an opportunity as I did with Crocs. It was a wonderful thing for me financially and for the community of Boulder. If you look at my top 10 list, although Crocs is not at the top, it’s still on it. Over the last eight years, Crocs has brought in $3 million in additional sales.

FN: Who is your main competition?
RP: Zappos.com. It is everybody’s competition. It may end up being everybody’s partner. The future is very exciting with the Internet becoming a tool in stores. We’re working on some ideas about how to [use it that way]. There are opportunities for stores to sell more than they can afford to stock.

FN: How has the economy affected business?
RP: We have the advantage of being a mature business. We’re not highly leveraged. Over the last couple of years, that has been the greatest challenge [for retailers] — not being killed by their own debt. Our volume contracted a little bit at the very worst point in the last two years, but we still had great market share. And we’re still OK. It’s been a very difficult time for people to manage their inventories, to stay competitive and pay their operating expenses, but we’ve been able to do that. No matter how bad the economy got, we never dropped into an operating loss.

FN: Are there enough comfort brands out there for stores to differentiate themselves?
RP: That is difficult, but there are other things in the retail experience aside from product: environment, the approach of the sales people, the philanthropic reputation of the company. At this moment, however, it’s important to have brands such as Dansko, Keen and Merrell. If you can’t get some of those, it’s difficult to have significant market share. They also give a store credibility. We introduce new brands every season, and we drop brands as well.

FN: How important has your online business been?
RP: We were online by 2000 as Comfortableshoes.com. We [did it] to be relevant. It was apparent that print [advertising] was changing. It was not servicing all demographics. Now, people who live in our market can look online at what we’re stocking and decide whether to come in. [The first year] Crocs was introduced and was not available all over the U.S. was probably our most prolific period for Internet sales. [For us], the Web is the best place for making products available, [especially when they] have grown faster than their market penetration. We’re doing less sales on the Web now, but we believe a percentage of our store sales are previewed there. Today, we probably range from 5 percent to 10 percent of sales online.

FN: What’s on the drawing board for the future?
We’re interested in experimenting with combining the Internet and the physical [store]. Success has always involved the use of new tools. The buying public will have more choices, and more access.

FN: Who is your main customer?
Locals, and women ages 25 to 60, are very important. The reason is our original customer was the baby boomer. [Even as she’s] gotten older, she’s stayed very young at heart. [She’s] in great physical health, aware of natural foods and exercise. All these things are part of a lifestyle that requires comfortable shoes. One of the most fun things is seeing a guy who’s getting a little older with children. He walks into my store, and his kids sit in front of the Crocs rack and [try] on shoes. They put them on backward and do all these crazy things. They stand up, take a few steps, and they’re so proud. I don’t think you can be too young for comfort.

FN: How do you stay connected to consumers?
There’s a demographic for whom print is still very strong. We’re frequent advertisers, with small daily ads in The Boulder Daily Camera. But we spend less than we used to. We still do some direct mail. We believe it’s really powerful. We do some e-mail, but it’s not as obvious that it’s worthwhile. We do social networking, [such as] Facebook and Twitter. All these things are necessary in communicating with your customer. Building initial market share is very, very difficult. A lot of people try to avoid that challenge with location, getting what they believe is a location that brings them business. I don’t know if that is realistic today.

FN: What defines a comfort shoe today?
Demographic user patterns. For college girls, it’s a retro athletic shoe. [However], young-of-spirit older women buy products bought by college women, [such as] Simple. Although [they’re] thought of as a skate shoe by [the designers], we sell them to grown-ups. The perception is in the buyer’s mind. We look as much at who we expect the consuming market to be as we do at the design of the shoe. Today, everybody is going to build the most comfortable shoe possible. Now Earthies, the new high-heeled Earth shoe, is really challenging the pump market to add more features.

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