Monday, July 18, 2011

Design your own shoes - department stores

This post was first published to Power Retail.

As Yusuke has blogged about previously, we've been trialling a Shoes of Prey display in the new Marui store in Kyoto, Japan. The trial has been going really well and we're in discussions with Marui about rolling the concept out across more of their stores.

This has us excited about taking the department store concept to other countries. In the Australian market we have two department store chains, Myer and David Jones. Both are very similar though arguably David Jones pitch themselves as slightly more upmarket than Myer. Myer have 63 stores and David Jones have 37. Taking a look through the Myer and David Jones stores in Sydney's CBD I think our concept could work in either of them.

As we see it, there are 4 key benefits for Myer or David Jones to work with us.

1. Innovative retailing
We've blogged previously about where we see the future of online retail. While the concepts in that post are likely at least 10 years away, pieces of this are possible for us to do now. Imagine walking into a your local department store and being presented with a large screen with our shoe designer. Standing in front of the screen, together with your friends you can use gestures (we could integrate our designer with an XBox Kinect) to change the shape, structure and materials to design your perfect shoes. Once you've finished designing the webcam turns on and the screen appears like a mirror with you wearing the shoes you've just designed in an augmented reality view. You can then pick up a leather swatch book in the store to flick through the leathers and make changes to your design. And finally you can try the shoes on to determine which size shoe suits you best.

In my view this would be a fantastic retail experience. It's not been done before so would be a world first and it's a perfect example of multi-channel retailing, the experience combines the best of online and offline retailing into one experience that can't be replicated in either channel alone.

2. Driving online traffic offline
Our website conversion rate, while improving, is still lower than we'd like it to be. One of the most frequent comments we get from our customers is that they'd like to be able to try on our shoes and see, touch and feel them in person before ordering. I experienced this myself when I ordered my custom shoes from NikeID. Trying the shoes on and seeing the leathers and materials in store got my over the line to make my first purchase with them. What better way for Myer or David Jones to utilise online retail in a positive way than for us to drive some of our 6,000 daily website visitors into their stores to try on our shoes.

Both Myer and David Jones have recently come around to the idea that online retail has a future in Australia however both still at least partially view this as a threat rather than an opportunity for their businesses. Partnering with online retailers to drive that traffic into their stores is a great way to turn online retail from a threat into an opportunity for their businesses.

3. Upselling customers
The main reason Marui gave for getting in touch with us about trialling the Shoes of Prey concept in their stores was a deflation in the average purchase price of their shoes over the last decade. Reasonably priced, high quality shoes from China have been driving down the average sale price for women's shoes eating into the revenue figures of retailers. Marui wanted to partner with us as a way of encouraging their customers to trade up to a higher cost shoe increasing Marui's average sale price and revenues.

We recently surveyed 610 of our customers and 55% normally spend between $100-$200 on a pair of shoes with a further 23% averaging less than $100. Our average sale price is $280. Our customers have shown they're willing to trade up and pay extra for the experience of designing their own shoes.

4. Cross selling customers
The experience described in 1 above would provide a fantastic customer experience, but what about simplifying the process and having iPad's in the women's clothing department so that customers, when purchasing a dress, can design a pair of shoes to go with it? We could work with Myer or David Jones to incentivise their women's dress concession store holders to cross sell custom shoes. It's a much easier pitch when that can be done by the same dress salesperson and when we offer so many design possibilities rather than attempting to send the customer to a different floor and department to select a pair of shoes off the shelf.

What are your thoughts, do you think our concept will work offline in Australian department stores? Do you see any other benefits for these stores to work with us? Do you think either of Myer or David Jones would make a better fit for us?

We're in contact with both Myer and David Jones, we'll let you know how we get on.

1 comment:

  1. Awesome news guys. I think one of the potential advantages of custom in e-commerce is the ability to send swatches, in your case, to both add assurance and capture the imagination. I imagine it would be expensive, but a worthwhile customer acquisition cost? If you could get targeted people signing up for free fabric swatches, their giving you their home address, email and phone number, that's pretty meaningful. Worth a try?