Footwear is not for the faint of heart. It’s one of the toughest segments in the retail industry. New product introduction cycles are long, development costs are high, and manufacturing is complicated. In the end, only one in five styles is successful in the market.
Euromonitor predicted that footwear sales will outpace apparel sales until at least 2020, and thus millions of dollars in sales are still up for grabs for those smart retailers and brands that can produce one or two winning styles.
But what is the secret sauce that can make or break a successful footwear brand? According to Alex Del Cielo, chief executive officer of Camuto Group, a multibillion-dollar private company and long-standing First Insight customer, success starts by being able to predict and keep pace with consumer demand.
Here are some key points Alex shared with us as ways footwear brands and retailers can do just that.
Talk to Your Consumer
With most footwear manufacturing moving to Asia to save on costs, reorders can take up to six months. This means brands and retailers no longer have the luxury of waiting to see a trend develop. By the time the products arrive in store, consumer tastes may have changed again. Retailers and brands have to hit the right style and the right price every time.
Now more than ever, retailers and brands need to embrace new technology solutions like predictive analytics that connect them directly with consumers to evaluate style and pricing appetites before a product hits the shelves.
“We’ve used predictive analytics for more than a year now to determine inventory positions on styles we believe in, and to determine how to best price products for the consumer as well as predict the average unit retail over the life cycle of the item,” Del Cielo says. “We are seeing positive results across the board in terms of initial pricing and margin enhancement.”
Focus on a Handful of Best Sellers
With nearly limitless options and armed with their smart phones, consumers come into the store more educated, researched and ready to buy. Retailers and brands need to meet these “see now, buy now” expectations.
By leveraging predictive analytics, retailers have the greatest chance of offering the hottest styles of the season at a price point that can increase margins, as well as enable the retailer to have the right quantities in stock.
“The proliferation of fashion information on the Internet is changing consumer shopping behavior and shopping expectations,” Del Cielo says. “Consumers want the ability to transact quickly. They could be in store, but simultaneously researching products and reviews and purchasing the product online. Those brands able to identify just a handful of best sellers every year will avoid the pricing pressures that erode margins.”
Utilize Research
Retailers and brands should also utilize research and technology to amplify the customer experience online, in-store and with retail partners.
“Camuto Group has teams that analyze trends by looking at the runway shows, shopping the world and evaluating what is working in their business. We rely on our in-house merchant team to provide us with real-time analyses of opportunities in all channels of distribution,” Del Cielo commented.
Work with Retail Partners
Del Cielo said that when Camuto Group evaluates new opportunities, they speak with their retail partners to ensure there is an appetite for brand development and extensions. “We also listen to our partners who may see opportunities for us to develop new classifications within a brand in order to enhance our market share and brand reach.”
Offer Value at Every Touch Point
Del Cielo is focused on delivering customer value and quality: “We always want the customer to pick our product because it looks great, feels comfortable and offers amazing value.”
It’s clear that while the footwear industry is rife with opportunity, retailers and brands wanting to take advantage of this must correctly anticipate consumer style, pricing and experience expectations in order to address supply chain challenges. Those that do will be able to claim greater share, and profits, in the growing footwear industry.
