4 TODAY MAY-JUN 22
One can easily spend an entire day perusing articles on the internet about what is or will be trending in retail for this year. Most were written at the end of December or early January. I have reviewed many though obviously not all trying to find common themes that might pertain to footwear retailers as we move forward in 2022. I have also received input from footwear retailers who were not the least bit shy when it came to expressing their concerns about where the shoe business was trending. In no particular order I have put together a compilation of ideas trending in the retail footwear business. Some may be important to your operation others not so much.
Supply Chain Challenges
Clearly the Number One issue facing the footwear industry currently. Issues with the supply chain are undoubtedly going to be with us throughout the year (at this point) and will cost retailers millions of dollars in lost revenue. Coupled with those losses retailers can expect prices to rise due to materials increases container air freight and trucking spikes and labor shortages.
As an independent retailer there isn’t much you can do to change these things but what you CAN do is focus on what you can control. Things like reviewing your current merchandise assortment mix to include products you can get more reliable deliveries on would be a good start. A good example of this is a multi-store retailer I work with that had several locations tied only to one brand. When deliveries became unreliable and impossible to plan a decision was made to pivot from the single brand concept and restructure the assortment mix to include many top brands. This way if one brand can’t or won’t deliver there are other options available.
Embrace E-commerce/Virtual Shopping
I don’t run across many footwear retailers in this day and age that do not have some sort of online presence. Correction
E-commerce
I don’t run into any. That said just having a website that provides store information will not cut it moving forward. You must provide a way for your customers to transact business with you online or they will find merchants who will. According to dropshipping app Oberlo there were 900 million more digital buyers in 2021 than there were in 2020. That is an increase of 4.4%. Consumers who never considered buying online became comfortable with the technology during the pandemic and are changing the way they shop.
Younger customers especially want to do their homework prior to shopping in your store. Stoic staid pictures on your website won’t excite this crowd. They want to connect with your store and your products “live.” I know this sounds futuristic but it could be closer than you think. They are connected to social media Facebook Pinterest Instagram etc. that are more appealing to them than simple email marketing. You need to be aware of this.
Inflation
With prices rising on everything from gasoline to food it stands to reason that footwear costs will and are rising as well. The good news is that progressive retailers are finding ways to combat rising costs through aggressive sourcing. I spoke with one retailer whose purchasing from Milan accounts for 10% of his total OTB with an initial markup of 70%. Unless you find a way to increase initial markups on the front end like this merchant has inflation will most likely erode margins.
Workforce
It seems like everywhere you turn these days there are signs saying the Footwear Industry Retail Trends for 2022
Ritchie Sayner
Seven Trends/Concerns Facing Shoe Retailers in 2022
- Supply Chain
- E-commerce
- Inflation
- Workforce
- DTC Selling
- Transparency
- Inventory Management
01SRT_05-06.22.indd 401SRT_05-06.22.indd 4 3/23/22 5:53 PM3/23/22 5:53 PMPublished in the May/June 2022 issue of Shoe Retailing Today Copyright © 2022
National Shoe Retailers Association
Tucson AZ www.nsra.org. All rights reserved. NSRA.org business is looking for help.
On one occasion the owner of a store I spoke with was actually working the sales floor so an overworked salesperson could have a day off. Another shoe merchant actually claimed that staffing was not an issue this year.
When I inquired what he was doing differently he explained that he pays sales associates $20 an hour versus a 10% commission and that nobody was making $20 an hour. Incentive-based pay not only increases sales but also reduces selling costs when managed properly.
Perks at this store include:
As the saying goes “if you pay peanuts you get monkeys.” Finding and training good sales associates is challenging and costly. Keeping them is important. Don’t lose good sales associates over a few bucks.
If they want to earn more money consider an incentive-based plan. If you have a salesperson that isn’t interested in more money there is a strong likelihood that you have the wrong person.
DTC Selling
By this point most retailers have had at least some exposure to Direct-to-Consumer marketing. From a vendor’s perspective the benefits are obvious. By definition the vendor controls every aspect of the transaction from presentation to pricing develops a relationship with the consumer and does all of this at higher margins than by distributing exclusively through a retailer.
On the surface this arrangement might appear to be detrimental to the retailer and in some cases it might be. However there are more and more examples both within the footwear industry and outside of it where vendors and retailers are working together for their mutual benefit.
Since DTC represents an ever-growing percentage of vendor sales 30-50% according to some sources finding ways…
Collaboration Between Vendors and Retailers
For vendors and retailers to collaborate seems imperative. Instead of creating a competitive situation where one entity wins and one loses what harm would come from finding a solution where the outcome is positive for both parties?
One solution employed by an ever-growing number of vendors in and out of the shoe business would be for the vendor to direct the sale to the nearest retailer in the area. This is currently being done with locally.com whereby inventory is exported to the platform and updated several times per day. When a customer searches “XYZ brand near me” the site locates the item and asks the consumer if they would prefer to reserve online pickup in store or buy online pickup in store. Retailers using this service have reported dramatic increases in Google rankings. Both entities make their respective margins and both maintain a strong relationship with the consumer.
A scenario such as the one described could serve to create a stronger bond between vendor and retailer and help foster a true partnership.
Transparency
Customers can appreciate and will accept an honest explanation about when merchandise is coming in as well as why prices are going up. You live with these issues every day; they don’t. A $20 price increase on a boot that can’t be delivered for three months might be the current reality. Under normal circumstances what could have been a lost sale might end up with a positive result if fully explained.
One retailer I spoke with has customers who are very loyal to brands that align with their personal values. Since they do a substantial work boot business customers are willing to wait and pay more for boots if they are made in the USA. This is just one example; I am sure there are many others.
Inventory Management
Retailers commented to me that having a merchandise plan that adjusts to current trends is vital to managing today’s ever-changing retail climate.
One retailer’s strategy
One retailer’s strategy is to overbuy their current plan knowing that deliveries are most likely going to be late if not cancelled. By monitoring monthly stock-to-sales ratios they are ensuring proper inventory levels while keeping a constant flow of fresh inventory coming in. If business does slow down orders are modified all the while enjoying prices that were locked in when the future orders were written.
Trends and concerns in 2022
What trends or concerns are you experiencing in 2022? Feel free to share your thoughts with me. This is by no means meant to be an exclusive list.
■ Ritchie Sayner is with Advanced Retail Strategies LLC an affiliate of Management One. Sayner’s book Retail Revelations: Strategies for Improving Sales Margins and Turnover (2nd Ed.) is available on Amazon. He can be reached at advancedretailstrategies.com.
Sarah Barr Director of Operations and Client Services for Management One contributed to this article.
Supply chain issues
Issues with the supply chain are undoubtedly going to be with us throughout the year (at this point) and will cost retailers millions of dollars in lost revenue. Coupled with those losses retailers can expect prices to rise due to materials increases container air freight and trucking spikes and labor shortages.
Summary of Retail Footwear Trends in 2022
The retail footwear industry in 2022 faces significant challenges including supply chain disruptions and rising costs due to inflation which are affecting revenue and pricing. Retailers are advised to adapt by diversifying their merchandise enhancing e-commerce capabilities and collaborating with vendors for mutual benefits. Additionally workforce management through incentive-based pay and maintaining transparency with customers regarding product availability and pricing are crucial strategies for success.
“Supply chain issues are undoubtedly going to be with us throughout the year and will cost retailers millions of dollars in lost revenue.”
Real-World Examples of Retail Trends
Here are some real-world examples illustrating the retail trends discussed in the article particularly in the footwear industry.
- A well-known footwear retailer in the United States faced significant supply chain disruptions. To mitigate this they diversified their supplier base and began sourcing from multiple brands allowing them to maintain stock levels and offer a wider variety of products to their customers.
- An online shoe retailer enhanced their e-commerce platform by integrating virtual shopping experiences such as live video consultations and augmented reality features enabling customers to try on shoes virtually. This innovation increased their online sales by 30% in 2022.
- A European footwear brand adopted a direct-to-consumer (DTC) approach while also collaborating with local retailers. They used platforms like locally.com to direct online traffic to nearby physical stores resulting in a 25% increase in foot traffic for partner retailers.
