Footwear Retailing - UK - May 2008

Abstract

As far as specialist shoe retailers are concerned, here is a market being attacked on all fronts. Low barriers to entry have seen a rapid rise in competitors that outshine in terms of both price and styling. So, where to next for the specialist shoe retailer? Are they doomed to disappear from the high street, or is their renaissance long over due?

It is questionable where any change will come from, given that consumers' expectations are now firmly rooted in readily-available, low-cost and fashionable footwear. Nevertheless, looking at consumers' attitudes to shoes, it is possible that comfort has been sacrificed at the altar of cheap footwear, and this may now provide a route back into the market.

Furthermore, with the consolidation of specialist retailers happening apace, the market may now be getting into shape to become more clearly focused on sectors other than the value fashion footwear segment that has dominated the current growth in the market.

Key themes:

• Price has been the pivotable point in the market. Lower manufacturing costs and value-priced retailers have driven down both the cost and selling price of a pair of shoes. Whether this can continue as costs rise, is debatable.
• Potentially however, rising prices could occur, as consumers will begin to crave quality over quantity.
• Everyone, from Amazon to Tesco, sells shoes. Low barriers to entry have brought many non-specialists into the market as they have looked to grow sales and brand loyalty. Whether they will all be able to make a success of shoes is debatable - there will undoubtedly be some losers along the way.
• More casualties amongst the specialists are likely, but which ones and why remains to be seen. It is not all doom and gloom for the specialists, however, with some bucking the trend. The reasons for their success of some outlets when others are failing are examined here.
• To succeed, retailers clearly need to differentiate themselves, whether through using the Internet or exploiting trends such as ethical and environmental friendly footwear. Some avenues may only provide niche opportunities, whereas others may enable struggling retailers to regain their share.