Despite the closure of nearly 4,000 specialist shoe shops since 1990, the performance of the remainder is not picking up according to a new report on the sector from retail consultant Verdict.
In fact, over this same period, specialists have lost 17 percentage points of market share, worth about 800m in “lost” sales. The major beneficiaries have been retailers like Marks & Spencer, Next and River Island which are able to focus on developing ranges of shoes which complement the fashions they offer.
Footwear specialists have historically been manufacturing-led and endeavoured to “push” production through their retail chains. Even when most of the companies sold their factories they continued in much the same vein and as a result tend to be buying-led. By not listening to customers they have missed out on trends such as trainers. A lack of innovation and retail branding led to bland, uninteresting shops with indistinguishable merchandise.
Clothing retailers can provide something different, either picking up on the style or colourways of the retailer’s logo, or the provision of fashionable shoe and clothing brands, such as Kickers or Caterpillar. They source product from anywhere in the world to meet the specific needs of their customers.
According to the survey, shoe specialists have much to learn from their clothing counterparts. The key is to be customer-led, to understand who their shoppers are, understand their lifestyles and what they want to buy. They should tailor their fashionability and prices to meet these needs and source products from wherever necessary to satisfy their customers.
There is good evidence coming from a number of mass-market players that this message is beginning to get through and will form the basis of trading strategies in the future.
Consumer spending on footwear grew by seven per cent in 1997 to reach 4.7bn. But over the past two years heavy markdown activity associated with shop closures has resulted in significant deflation in shoes with the result that volume sales grew faster than cash sales.
In contrast, sales through specialist shoe shops edged down by 0.1 per cent last year to just over 2.6bn. Footwear specialists have not benefited from the growth in consumer spending on shoes and, in fact, their declining share of the footwear market has accelerated over the past couple of years as consumers have increasingly turned away from the undifferentiated retail offers of most high street shoe shops.
However, Verdict believes that the tide is turning and that existing shoe retailers, plus the new owners of the various British Shoe Corporation chains, are adopting strategies of customer segmentation and starting to differentiate their product offers, store environments and price points.
Fashion trends have not helped retailers over recent years – there have been no strong looks for men’s shoes, for example. Women’s shoes have remained very heavy with cleated soles and block heals for too many seasons. According to the report, moves to introduce sexier, high heeled shoes meet with resistance from a generation of young women who have grown used to bulky and unfeminine, and even uncomfortable, footwear.
The market for the affluent over-45s is not being fully exploited at present. Only C&J Clark with K Shoes is seeking to attract this spending. Verdict believes that other shoe specialists should develop formats for this age range in case clothing retailers, such as Alexon or Viyella, develop an interest here.
Retailers at the upper end of the footwear market – primarily Bally, Kurt Geiger, Russell & Bromley and Church’s/Jones – have long traditions in their respective markets and did not feel the full impact of the BSC break-up. These strong retail brands will be able to maintain their position against the ambitious Shoe Studio, which has acquired some of the old BSC stores.
The cutting edge of fashion is the domain of the smaller chains, such as Schuh and Shelly’s, plus a host of independents. Merchandise is distinctive and occasionally eccentric and retailers here can only thrive if they are totally customer-led. Faith and Dolcis extend from the fashion edge towards the mass market. Spurring one another on, Verdict expects both to make more high fashion shoes available to a wider market through their more extensive retail chains. In this way they will aim to reignite consumer interest in the distinctive product offer of specialist shoe shops.
The centre of the footwear market is broadly defined by M&S, Clarks and Next. M&S is now the market leader in women’s shoes, but C&J Clark is the overall leader because of its strength in men’s and, especially children’s, shoes.
All the mass-market players major on value for money across a range of price points and degrees of fashionability. M&S and Next will seek to build their shares further through new stores/store enlargements, while C&J Clark is focusing on clarifying the customer positioning of the Clarks, K Shoes and Ravel fascia.
In the lower half of the mass market are a number of fascia which still need further work on defining their differentiation relative to one another: Barratts, Saxone, Olivers Timpson and Stead & Simpson. This part of the market remains crowded in Verdict’s opinion.
The bottom of the market has the most opportunities following the demise of Freeman Hardy Willis, Curtess and the downsizing of Shoe Express. Bensons, Shoefayre and a smaller core of Shoe Express outlets are the main players in this sector. Shoefayre is a robust operator but Bensons could be at risk if Shoe Express is nursed back to financial health. Stylo’s Bacons and Oliver’s Shoeright are also pitched at this bottom end. But both seem to be formats designed to maximise sales and minimise costs in locations that are not worth investing in.
The shoe shops’ future is entirely in their own hands. Consumers have shown willingness to buy their shoes in non-specialists, primarily clothing shops.
The task facing shoe specialists is to win back this trade by being customer-driven. Verdict is finding evidence that this is happening and is encouraged to believe that prospects for specialist shoe shops will improve.