Swift and strategic adaptation to change is critical for footwear retailers’ success in 2021 – and as the mood of the market evolves, brands and retailers must evolve, too.
At the virtual FN CEO Summit held on June 9 and 10, the panel discussion “Key Footwear Retailer Strategies in the Age of Dynamic Consumer Shifts” was led by Matt Priest, president and chief executive officer, Footwear Distributors and Retailers of America, and featured Tacey Powers, executive vice president and general merchandise manager, JWN Shoes, Nordstrom. The pair discussed Powers’s long career in the footwear industry, the impacts of COVID-19, and significant shifts in consumer behavior.
“I have been with Nordstrom for 39 years,” Powers said. “That in itself is reflective of what was, and what is.” Powers began her career as a buyer, and back then, “it was completely decentralized,” she explained. “Early on, we had shoe buyers in every store and business was only transacted in brick-and-mortar stores,” adding that, “I was the buyer, the planner, the allocator and supply chain.”
“Search,” “traffic” and “conversion” were all “new speak” at the beginning of the digital era, Powers said. She remembers the launch of Nordstrom.com – and when people didn’t want to sell their product online; but eventually, the wholesale community had to educate themselves on the digital sphere. “The wholesale community has had a massive shift in how they have to operate to be successful,” she said.
Powers describes the beginning of Nordstrom’s e-commerce experience as “rocky and frustrating” for the customer, but insights learned on the sales floor helped inform the company’s digital strategy, and Nordstrom, in time, became the multi-channel retailer it is today.
ABCS TO DTC
Priest said that brands are trying “more and more to get in on the action of DTC.” And Nordstrom’s approach to that relationship is all about its value proposition, Powers said. “Our approach to the shift has been, ‘Why Nordstrom?’ We know that brands will continue to limit their partnerships and look for retailers who can tell their brand story and be complementary to what they’re trying to achieve.”
With its Nordstrom Analytics Platform, the company has an opportunity to “share consumer insights and preferences that provide richer insights than they would have through their brand channel alone,” she said. “All of us are working to better control our company’s destiny.”
“Over the next three years, we will build our own marketplace, that connects brands, suppliers, d-to-c brands and other purchases on a Nordstrom platform, and support it with all of our underlying service propositions,” she explained, such as free shipping, returns, alterations, BOPIS, etc. “I think there will be major shifts in the traditional wholesale model for all retailers, and we all want to understand quickly how we buy and sell inventory in a way that is profitable for both parties.”
FOOTWEAR MERCHANTS IN 2021
Priest said that with 50 percent digital penetration, the industry is in “a totally different ball game,” and asked Powers where the footwear market is headed this year. “I would say that the one thing that has not changed is you need to know your customer. What has changed is how you get to know her.”
To achieve that end, the leveraging of data and analytics is key, Powers explained. A data-driven approach with digital muscle will be critical to retailers’ success, she said, as well as instinct, taste level, and your gut, which all play a role, and the need to know “where you place your bets.” Powers added that regarding trends, “There’s so much media consumption, and understanding what your customer is exposed to is critical,” and predicted that curation “will be around brands and less about specific products.”
Powers said that during the pandemic, the retailer was focused on footwear for the casualization movement – but Nordstrom is most excited about the return to dressing up and occasion, and Powers says that this is where Nordstrom really excels.
Priest said that with inflation and forecast, the average price per pair of shoes is up 4 percent. Powers agreed that spring 2022 will have price increases and that 2021 will be a “rebuilding year” – and the global supply chain is “still a question mark.” She added that while the business is on a strong path, it’s still a “conservative” company – and they’ll likely still be in “chase mode” a little while longer.
Summit sponsors include presenting sponsor PayPal and event sponsors Aetrex, Caleres, FDRA, K-Swiss, Riskified, SkyPad, Sperry, Two Ten and Zappos.