Shoe people are a particularly tough breed of fashion warriors. Skilled and ready to roll with the punches, the best players in the business have mastered the art of adaptation.
If the last few weeks have unsettled the nerves and rattled the financial cages of brands across the planet, they have also shown why the footwear industry not only survived the last recession but thrived.
The smartest brands and retailers could write the book on sourcing challenges, complexities of foreign markets and the currency fluctuations that bedevil less-experienced operators.
For both manufacturers and retailers, the recent U.S. recession was a long exercise in tough love, as companies pared their expense sheets, sought new sourcing opportunities and reached out to their customer base in innovative ways. The majority of players used their refined business strategies to fuel the public’s building fascination with footwear.
The summer of 2011 has been both sweet and sour for many in the industry, with healthy sales contrasted by gyrations on Wall Street and in the foreign markets. The incredible challenges of a highly volatile global economy will keep everyone on their toes for the foreseeable future.
As the industry gathers in Las Vegas to show off its new wares and the all-important back-to-school sales are tallied, the best minds are looking beyond the summer, hoping the formula that has worked to date will serve as the blueprint for future growth. They know the line between winning and losing in the resilient shoe industry will come down to four key areas:
Escalating sourcing costs and other inflationary pressures will continue to be the critical hot-button issue. As industry players tinker with the formula to keep cost increases in check, they need to make sure quality doesn’t suffer. For some manufacturers, switching factories has paid off handsomely. For others, it can be a recipe for disaster with late shipments and inferior production runs. Today’s choosy consumers aren’t concerned about factory moves and labor costs. They are concerned about quality and price. The biggest industry challenge in the months ahead is getting the customer to pay more for product, not accepting less.
Higher tickets are justified when the product warrants it. The industry has done a fantastic job lately of offering truly inventive footwear, from the natural running category to the creative material mixes seen in the luxury market. But sometimes the rush to tout new features can backfire. The rapid rise of toning could serve as a cautionary tale that innovation for innovation’s sake doesn’t create a sustainable movement.
It’s all about people. There have been some major executive moves in recent months as companies aim to reposition themselves. But wooing great talent is only half the job. The best companies have to make sure they build a culture that allows that talent to shine. In times of economic uncertainty, many firms overlook this, putting all the attention on cost cuts, head count and expenses — all of which have no impact if creativity and teamwork suffer.
With social media, e-commerce and generational shifts tearing away huge chunks of the old-school marketing playbook, it’s time to rethink how retailers and wholesalers stay true to their consumers. The best and most effective way? Service. From the wholesaler’s customer-service staff to the most junior salesperson on a retail selling floor, a well-developed service strategy will always pay big dividends. The personal touch can be the most important element at a time of great uncertainty.