8 SEP-OCT 17
This may come as a surprise to some of you but the largest increase in sales for independent shoe retailers in the past few years did not come from sandals or even booties but from non-footwear items. According to NSRA’s 2016-2017 Business Performance Report (BPR) “Sales of non-footwear items in a typical store increased 24.5% in 2015.” Let me translate. For a store doing my keyword000000 in sales non-footwear sales are now close to $250000. This is an increase of over 9% since the previous BPR was published. A quarter of a million dollars is not exactly small change – yet in my dealings with shoe merchants I often find this area of the business neglected and therefore under-performing.
Items Typically Associated with Non-Footwear Sales
- Socks
- Handbags
- Insoles and arch supports
- Shoe care products
- Belts
- Jewelry
- Apparel
Most of these items have some commonality that make them attractive add-on sales; they all have good initial markups most don’t require much space on the sales floor and they turn faster than footwear if managed properly. Since nearly one quarter of a shoe store’s sales volume can potentially come from non-footwear items it makes sense to reevaluate how these areas are being treated in the store. Most shoe stores carry socks and shoe care products; some even dabble in over-the-counter arch supports. What I find however is that in many instances these areas are dealt with as an afterthought instead of as the revenue centers that they should be.
The Importance of Socks
Let’s take socks for instance – they to me are a no-brainer. Every customer who purchases a pair of shoes should at the very least be afforded the opportunity to buy a new pair of socks. One might argue that to not offer the customer socks with a pair of new boots or shoes is potentially doing the customer a disservice. The hiking running and ski socks of today are so technologically superior to those of previous years that manufacturers provide a
Wealth of Product Information
Sales associates can use a wealth of product information to educate the customer. Patterned socks for both men and women also come into play—and most definitely should be part of the assortment plan. If the potential sales volume isn’t enough to convince you then perhaps the increased gross margin return on investment (GMROI) is. On average the GMROI for shoes is around 2. The GMROI for socks should be at least 3 and can achieve 4 depending on the margin and turns attained. This point alone should be a motivator to develop this category.
Brush Up the Selling Skills
Non-footwear items do require salesmanship. Good salesmanship begins with product knowledge. Vendors can be helpful here by providing training clinics and samples to sales associates when practical. Foot scans can be useful in selling arch supports and insoles. However they don’t do you much good if the scanners are kept in the back and no one understands how to use them.
Sales contests are a great way to get associates showing and selling accessories. Discuss new accessories with them at staff meetings. Shoe care products and insoles have many benefits; socks and apparel have features that should be understood and discussed. Visual merchandising is also an important component in a business that intends to be successful with accessories. Products must be easily accessible effectively displayed and well stocked at all times.
Case Study
I have a current client that we have worked with for many years. The client started as a women’s shoe store exclusively but about six years into the business decided to try a limited “test” of women’s apparel. To make a long story short without the significant contribution of apparel this store would most likely not exist today. The reason? Apparel now constitutes 75% of the revenue with a GMROI of 4.2 while the shoe department makes up the balance with a GMROI of 2.03. And the facts behind the reason are also simple.
Faster Turn and Customer Engagement
Ple: faster turn fewer sizes to contend with more frequent visits to the store additional customer base. You get the idea.
Competing with Online Retailers
As independent retailers struggle with ways to compete with online retailers remember to consider any classifications of merchandise that augment the current assortment add interest and diversity to the presentation and offer more choices to the customers. Or as retail experts keep reminding us expand the shopping experience.
About the Author
Ritchie Sayner is vice president of business development at RMSA Retail Solutions and author of Retail Revelations: Strategies for Improving Sales Margins and Turnover available through Amazon. He can be reached at rsayner@rmsa.com or via www.Facebook.com/RitchieSayner.
Publication Information
Published in the September/October 2017 issue of Shoe Retailing Today Copyright © 2017 National Shoe Retailers Association Tucson AZ www.nsra.org. All rights reserved.
Summary
Independent shoe retailers have seen a significant increase in sales from non-footwear items such as socks and apparel which now constitute a substantial portion of their revenue. These items offer high initial markups require minimal space and can turn faster than footwear if properly managed suggesting a need for shoe stores to treat them as key revenue centers. A case study highlights how a store’s shift to include apparel dramatically boosted its revenue underscoring the importance of expanding product offerings to compete with online retailers and enhance the customer shopping experience.
“Apparel now constitutes 75% of the revenue with a GMROI of 4.2 while the shoe department makes up the balance.”
Real-World Examples of Non-Footwear Sales Growth
Here are some real-world examples of how shoe retailers have successfully integrated non-footwear items to boost their sales and enhance customer experience.
- A local shoe store in Portland introduced a dedicated section for high-quality socks and insoles resulting in a 30% increase in overall sales. Customers appreciated the convenience of purchasing complementary items which also improved customer loyalty.
- An independent retailer in Austin capitalized on the trend of eco-friendly products by stocking sustainable handbags and belts. This initiative not only attracted environmentally-conscious customers but also increased the store’s non-footwear sales by 20% within the first year.
- A family-owned shoe store in Chicago began offering jewelry and apparel as part of their product line. By effectively merchandising these items alongside their footwear they managed to capture a new customer demographic leading to a 25% rise in revenue from non-footwear products.
