When UK based brands Clarks was launched in India in 2005, many industry experts weren’t too optimistic of its survival in the country. The reason was simple – the brand’s the price points. There were veterans from the industry who strongly felt that the Indian market wasn’t ready to welcome such a high-end footwear brand and rightly so. Around 15 years ago, the brand did face many challenges to establish itself in India. From fighting it out to convincing people on the price points to getting their attention on the salient features of the brand, there was tremendous pressure being faced by them back then.
Today, 14 years down the line, the brand is well accepted by Indian shoppers and besides having a strong online presence, is available at all prominent malls across the country. It would not be an exaggeration to say that Clarks led the way for many international high end brands to enter India. Currently, there is a healthy competition between national and international brands, most of which are housed adjacent to each other in malls and on high streets.
Soumi Banik, Managing Director, Ajanta Footwear highlights the current dynamics of the footwear industry in India stating, “The industry includes various types of footwear including athletic and non-athletic shoes used by individuals of all age groups and gender. The global footwear market is segmented by type of footwear, end users of footwear, various platforms for sale of footwear, material used, and their sales across various geographies. Leather footwear occupies a significant market share in the global market as well. Additionally, rising health concerns are influencing individuals to perform indoor and outdoor physical activities. This trend has generated a high demand for athletic (sports) shoes, in turn increasing the demand for footwear.In addition, changing lifestyles and rising number of working professionals are leading the demand for non-athletic footwear segment. The improved spending capabilities of individuals, changing lifestyles, and rising number of working professionals has increased the spending capability of individuals. This is occurring especially in the developing countries and leading to further expansion of the overall market for footwear.”
The growth story of Metro Brands Ltd. that is home to a network of 527 company-owned-company-operated stores spread across 119 cities, accentuates the growing potential of footwear retailing in India.
The company houses brands like Metro Shoes, Mochi, Walkway, DaVinci and it also operates retail stores for Crocs. Besides having such a robust offline presence, their online presence not only includes being available on marketplaces like Flipkart, Myntra, Amazon etc. but they also run their exclusive portals for their brands Mochi and Metro Shoes. On the expansion the brand witnessed in 2018-19, Farah Malik Bhanji, CEO Metro Brands Ltd. shares, “At an overall level, there has been a comparatively faster network expansion. We crossed the 500th store mark in 2018-19.”
Citing the reasons for the ever increasing demand for footwear in India, she explains, “With the digital and social media expansion, awareness and the aspiration to look trendy and fashionable every time has increased. Customers today are spoilt for choices. The share of the shoe in the wardrobe has increased. Today’s customer is well aware of what she wants. They want variety, choice and trendy footwear with great service at all times with little effort. We also see a reversal of roles with the youth guiding adults on what looks good and what to buy.”
Where Metro Brands Ltd. has options to suit different budgets, it is interesting to note that brands that sell at a premium too are witnessing a growth in demand.
Speaking of which, the journey of Heel & Buckle is worth a mention. Launched as a bespoke studio in London’s Hampstead, in 2011, it was launched in India by the DAR Group from Delhi who formed Heel & Buckle Luxury Pvt. Ltd. The group further launched a luxury multi-brand retailer of footwear and accessories called Berleigh. With a presence in Mumbai, New Delhi, Gurgaon, Chandigarh, Raipur and Indore, the brand with its excellent craftsmanship is catching the fancy of Indians who do not mind paying a premium for their footwear.
Elaborating on their presence, Shashank Arya, Executive Director, DAR Group says, “The brand is also available online on Myntra and we also have an exclusive e-commerce portal through which we deliver our products pan India. A major milestone that we have achieved in 2018-19 is making our brand available to the target audience across the country through our website.”
Another homegrown brand whose journey is worth tracking is Lakhani Infinity Footwear Pvt. Ltd. that has a strong presence across the country through its dealer network. Mayank Lakhani, Managing Director, Lakhani Infinity Footcare Pvt. Ltd. shares, “The company was incorporated in the year 2013 with an initial capital of just Rs 1 lakh. The commercial operations started in August 2014 and in our inaugural year itself, the company achieved an annual turnover of Rs 10 crore with a staff of only 20 people. In 2016, our turnover was Rs 50 crore and if we look at the current year, we have already achieved a total turnover of Rs 105 crore.”
He attributes the growth in their market share owing to their ability to cater to the needs of the average Indian middle class. “We also have a whole new segment of highly trending fashion sportswear 2018 for the youth ranging from Rs 799 to Rs 1,299/ which has picked up really well and improved our market share. Our new, affordable office/ formal wear range called STATUS by the house of Lakhani Vardaan has gained popularity among the office goers,” he adds.
Just like Lakhani, Kolkata based brand Ajanta footwear too has witnessed an interesting growth over the years. Banik shares,
“Ajanta as a brand has grown on a very large scale. We have already expanded to 120+ stores and have plan to augment in another 50 new cities in this financial year. We are planning to take our products to “every nook and corner” of the country. The company currently has 10 super stockists and more than 10,000 distributors supplying to MBOs in different parts of the country. We have 50+ EBOs currently, spread across Eastern India. The company is also present with the major e-commerce marketplaces and our own website, catering on an all-India basis.”
Interestingly, Ajanta is now also venturing into B2B online sales wherein we are catering to small retailers directly. Sharing further details on their exclusive presence, Banik shares, “We have opened our first store in Odisha and Bihar, which has been a major milestone for our company in the year 2018-19. Since then, we have 5 operational stores in Bihar and 2 in Odisha, with many more in the queue.”
Essentials of Footwear Retailing
Contrary to what one may think, more than just bombarding the shopper with endless options to choose from, footwear retailing is more about extending her the right choices.
Bhanji explains, “We strongly believe in regional sensitivity. Just as the choice of clothes and dressing style changes from one region to other, so does the choice and preference of footwear diff er. Over the years of experience our merchandisers have great insights on what style, colour, heel, category works in which region. These insights are used for right merchandising. The mix of casual, formal, occasion wear etc. also differs from place to place, depending upon the need of the city/ area the store is located in. We are also continuously adding freshness to our range on a weekly basis to meet customer demands. We auto replenish fast moving items to ensure they are never out of stock.”
Reiterating Bhanji’s take on the importance of having regional sensibilities in mind for effective retailing, Arya talks about the plan of action in place that they have for Heel & Buckle saying, “All our styles are curated as per the markets we operate in. This is especially done to meet the needs of the customers. For instance, we will ensure a larger stock of boots in Delhi as compared to our warehouse in Mumbai. We select products that are in tune with the latest international trends as our customer base is highly well traveled and well informed.”
If one looks closely at the standalone stores of brands that are housed in malls to those at high streets, it isn’t too difficult to spot the difference in the range being off ered in terms of price and design. For e.g. one wouldn’t easily fi nd black or white school shoes in different sizes at a Bata store that is in a mall though the Bata store outside a mall is well stocked with school shoes irrespective of the size one is looking for.
Highlighting the criterion of price being an important factor that determines the success of footwear retailing in India, Lakhani explains, “Majority of the sales come from the common man, so while introducing a new product range, we ensure that the company’s vision to be a household name of the nation is preserved. We provide our customers with products within the desired price range and introduce various SKUs of the very same product in different price segments, making it affordable for every type of customer. For example, under our sports collection, we off er shoes in the price segment of Rs 499, Rs 599, Rs 799, Rs 899, Rs 999, Rs 1,099, Rs 1,299 and Rs 1,499 ensuring that all the products come under the same brand name PACE. Every price segment has a minimum of 10-15 SKUs giving different options across trends, colours, and price points to our customers. We give them every option so that they can choose exactly what they are looking for as our options cover all possible existing trends in their desired price range.”
A key component of retailing that tops the chart remains of being present at the right location. Narrowing down on the location remains one of the most challenging tasks in retailing and for brands that are robust with their footprint expansion, the challenge is all the more difficult to overcome.
Bhanji reveals the factors that guide her team when deciding on a new location, “We have a very robust process for site selection. There are many factors that are kept in mind – e.g. potential of the area, competition, our own footprint in the city, distance and cannibalization from the closet store and many more. We have focused teams who work on new store opening, by evaluating at least 40 data points. As we are not present in MBOs, the chances of cannibalization are lower.”
At Ajanta, the feasibility of the locations is determined on a whole lot of factors which includes presence of competition, visibility in traffic etc. Banik elaborates, “We have a detailed survey plan whenever we propose to open a new store in a new location. This includes an array of parameters which help us to determine the viability of the new store, financially, legally and as well as the regulatory environment. We follow the demographics of our customers, the population of the area, the purchase capacity of the probable target customers. The presence of competition and neighbors is also accounted. The accessibility, visibility and traffic of the proposed store location. The signage and planning of the store is also accounted in this. The Store area, the storage capacity, the in-store display capacity is also looked into along with the location cost. Also, some of the concerns are the availability of restrooms for staff and customers, adequate fire and safety protection, sanitation service and business restrictions if any.”
The ability to deal with the difference between the temperament of a male shopper to that of a female shopper at the floor level plays a vital role in determining the success of footwear retailing as well. The sales executive has to be trained to understand the subtle nuances.
Arya shares, “Men and women approach shopping with different motives, perspectives, rationales and considerations. Men’s motives for shopping appears to be more utilitarian, whereas women’s shopping motives tend to be hedonic. Men want quick and effortless process whereas women will enjoy browsing and looking through products several times before making up their mind to purchase something.”
Bhanji adds, “Women are comparatively price conscious. They would prefer buying multiple pairs for various occasions at a good price point. Women give more preference to style and look based on the occasion they are buying for. Men are ready to spend comparatively higher. Quality and comfort precede the decision tree. The change in trend is that men are buying lower cost casual footwear and women are premiumising especially for work-wear.”
Lakhani shares an interesting observation based on how men aren’t too keen on finding out about prevailing offers but rather have their mind set on features of the pair, “Men are specific about the highlights of an item they wish to purchase, and they compare same category items for specific highlights and availability. They are less aware of offers from a brand, and they compromise with their budget if they are satisfied with the quality. So, men’s shopping is usually item focused. Ladies, on the other hand, are more specific about the brand they buy. Additionally, they are enthused about available offers and discounts.”
Visual Merchandising &Footwear Retailing
Offline retailing is about creating an experience for the customer. This includes not just unmatched customer service, but it is also imperative that the visual appeal of the store welcomes the customer and connects with her as well. Based on the target audience one is looking at, the visual merchandising (VM) of the store needs to be designed and executed.
Where brands that are present through their exclusive store have the liberty to work on their VM without any constraints, brands like Lakhani that are sold through footwear MBOs face a challenge when it comes to attracting the customer while she is at the store and has the option to check other brands present there as well.
Lakhani reveals, “Since a majority of our sales come from distributors who further sell to retailers also selling products from other Indian brands also such as Relaxo, Campus etc., the space and shelf counter areas are limited and a big constraint for us. With the help of our promotion and advertising budgets, we send posters and LED boards to promote our new products every season to retailers so that our products can be viewed by the customers more easily in this competitive market. We also send retailers easy-to-assemble small product display counters with our branding, which gives them extra space to display our products without them having to spend any extra money.”
Sharing details on the VM practice in place for her brands, Bhanji shares, “It is important to give a story to the consumer. We create stories in the store – whether it is based on style, theme, season or even colour. Hi-points and good windows help in getting highlighting the latest trends and stories. The latest fashionable trends and fast selling items will always be at eye level. Cross merchandising helps you upsell to the customer. We also ensure that shelf space is allocated based on the range’s contribution to sales. It is fluid basis that store’s clientele.”
Elaborating on the VM essential followed at Ajanta, Banik shares, “We follow the 5 key elements of VM. The Color brings out the essence of the display, Landscaping of the product, Contrast in Texture, Communication of the Sales staff and the décor of the store. Along with this, we off er to display the premium range of our products near the entrance, so that the customer has a feel good factor while entering. Separate segmentation is done for in-store display according to the gender and kids section, followed by the categorization of the products like office wear, casuals, sports etc.”
Dealing with the E-Commerce Challenge
Unlike in apparels, the fit overrides the decision criteria when it comes to footwear. This perhaps still makes customers visit the stores to pick their pair up. Though it is absolutely another thing that once they narrow down on the design, the deal hunters may end up buying online if available on a discount on some marketplace e-commerce websites.
Bhanji elaborates, “Fit and comfort is important, but design and style is also gaining a lot of prominence. However, when a product is listed on any marketplace or even on an e-commerce site, all specifications are mentioned, which makes it easy for the customer to decide based on the fit. However, returns are a major challenge faced by our industry, especially in the fashion segment. We are continuously analysing data and finding fixes to minimise returns.”
Lakhani talks about how his company deals with return stating, “Almost all companies these days have refunds and exchange offers, allowing the customer to freely spend his money over a shoe-trial at his doorstep. This does add an extra cost for a company to carry the return goods back, but we sell the returned goods at a discounted rate in our retail shops making it a win-win for the customer as well as the company. The returned goods from our online segment generate around 25 percent of our total online sales.”
Where big brands have the advantage of setting their offline as well as online stores, for young entrepreneurs, online offers them the medium to reach out to their customers irrespective of having an offline presence. Komal Panchal’s www. kanvaskloset.com has been in existence since 2014 but it was only a couple of years ago that the brand started catching the attention of its target audience. The response received compelled Panchal to associate her brand with major e-commerce portals. On what drives her collection, she attributes the reason to the need of the generation to, “look like celebs but at dirt-cheap rates.”
Apart from that, Panchal further states the influence of digital marketing and bloggers on the choice of footwear/ apparels of the newage customer.
Panchal cites that the difference between an offline and online customers rests more with their fashion consciousness levels. She adds, “Majority of the online buyers are return customers who already own a pair of the band hence are comfortable shopping online without trying.”
Brands are also offering value-added services online to lure more customers. For instance, besides offering his patrons to shop online without having to worry about refund and returns, Arya also has an exclusive service called Privé where they offer our customers an exclusive home shopping and styling service accompanied by a fashion styling expert. The customer can speak to the brand’s in-house stylist stating their shoe size, preferred style, colour, likes and dislikes. Based on the feedback received, the stylist then curates a selection according to the client’s preference and takes it to the customer’s desired location, where the customer can choose whatever best suits them. Rests of the styles are then taken back to the store.
Customer Centricity to Rule Footwear Retailing
The range, price points, fit, comfort and durability no doubt will always remain significant but retailing across categories today has its prime focus on Customer Centricity, footwear category being no exception. Arya aptly accentuates the importance of customer centricity saying, “A majority of companies have been trying to adopt a customer friendly approach initiative for nearly 20 years now.”
“The biggest barrier to customer dissatisfaction is the lack of a customer centric initiative. A fashion intuitive and supportive customer experience can catapult a brand,” he concludes.