Shoe Zone is thinking big with stores, customers and pricing.
Like most retail bosses, Nick Davis, chief executive of Shoe Zone, has been thinking about stores. Over the past year, the value footwear retailer has rolled out its “big box” format – a brave change of direction that aims to attract an entirely new demographic without alienating its existing customer base.
More premium, more modern and offering third-party brands, the new format was trialled in August 2016 and has since spread rapidly. The first big box stores opened in Launceston in Cornwall, Durham, Aberdeen and Kirkstall, Leeds.
Between mid-August and mid-September 2017, further big box stores have opened in Norwich, Cowley in Oxfordshire, Martlesham in Suffolk, and the first in London, at Gallions Reach Shopping Park in the east of the city.
Until recently, Shoe Zone’s strategy concentrated on a value offer in smaller stores, Davis explains: “If you take somewhere like York, it’s quite challenging to get the traditional Shoe Zone to stack up. The strength of our model historically is we buy lots of volume and get really great margins, and we concentrated on a demographic that is very value focused. Our target with the big box format will be the more mid-market towns where Shoe Zone would have struggled to survive previously.”
Size is key in appealing to this mid-market customer base. The average Shoe Zone store in the original concept is around 1,400 sq ft, making it difficult to increase the product offering. The big box stores allow Shoe Zone to offer third-party brands, such as Skechers, Clarks and Rieker, as well as its own line. The target consumer, Davis says, is one who might also shop at Marks & Spencer and Next. As well as selected town centres, Shoe Zone is also introducing the big box format to retail parks and is set to open in the yet-to-be completed St James retail parks in Sheffield and Dover.
“Given the size of the average Shoe Zone sales floor, we’re coming from a very small footprint,” he adds. “We needed a concept that can operate in the mid-market and increase our offering. In a smaller store, we literally can’t get any more styles in.”
The demise of rival Brantano, which went into administration in March this year and shuttered its last store in June, has also provided a welcome, if unexpected, boost to the new format.
“Brantano was a big out-of-town player and quite a few of the shops were very profitable. Our stores in Cowley and Martlesham are both ex-Brantano sites, and we’re really seeing the benefit of opening in that kind of space, because there’s a natural footwear footfall in those destinations.”
Looking at Brantano also helped Shoe Zone settle on exactly how big to go with its new format. Drapers meets Davis at the Gallions Reach store – at 3,800 sq ft, it is considerably larger than much of the existing estate, but is still not huge. As Davis puts it, Shoe Zone will not be competing for stores against retailers such as furniture retailer DFS, which opts for super-sized spaces, any time soon.
“Brantano was one of our competitors and what it did was very good, but some of its challenges were because it was in some very big units of 5,000 to 10,000 sq ft,” he explains. “We quickly concluded that 3,000 to 5,000 sq ft is the sweet spot for a big box branded unit.”
The Gallions Reach store is more polished than Shoe Zone’s original format. On the exterior, the brand’s logo has been given a more contemporary spin in a new white font with a cyan trim, which replaces the former bright orange. Unlike other Shoe Zone stores, there are no bargain baskets with discounted products outside, and windows are not given over to promotional posters. Instead, they feature simple but effective displays of autumn product from Skechers and men’s footwear brand Red Tape.
Inside, the branded offer is displayed in the middle of the store and own product lines the walls. Again, there is less promotional signage than would be found in other Shoe Zone stores, and what is there is subtle. The store is light and bright, and, although there is a lot of product, it still feels spacious and easy to navigate.
Additional product, such as bags and purses, is displayed throughout the shop in service of Davis’s next goal: to improve average transaction values. The result is still recognisably a Shoe Zone store, but has a more premium feel to reassure the M&S and Next shopper, as well as third-party brands.
There is also more of a focus on customer service. In the original format, the aim is to make sure customers can find the product they like in their size, and pay quickly and easily.
“The traditional model is assisted self-service,” Davis explains. “We make sure we’ve got every line out with every size in stock and really, there should never be a hole in availability. It is almost like a supermarket model. In the new concept, there’s a bigger emphasis on talking to people, particularly around kids when we’re doing fits, because it increases conversion on higher-price products.”
Prices in the big box stores go up to £100, compared with around £40 in the original Shoe Zone format. At the Gallions Reach store, staff are interacting with customers, chatting and greeting them in way that has been missing on Drapers’ previous trips to existing Shoe Zone stores for mystery shopping series Hit or Miss.
There are 12 employees, a mix of full and part time. Currently, the big box stores have more staff than the traditional stores, although Davis admits he is still trying to find the “sweet spot”.
Some challenges have arisen along the way of introducing the big box concept, says Davis, not least matching the rollout with stock: “I could open 10 stores tomorrow in the smaller format and I wouldn’t have to really think about stock or staff – when you have such a big critical mass, everything is easy.
“With the new stores, the big pressure has been marrying openings to stock. In the very early days, some of the bigger brands needed to be convinced to come on board with what they identified as a value retailer, but now they’ve really embraced it.”
All retailers with a bricks-and-mortar presence are thinking carefully about what best to do with stores, whether that is focusing on experiences, trying new locations or downsizing. While still recognisably a Shoe Zone store, the more modern and sleeker big box format should help the retailer in its bid to conquer a new demographic without alienating existing customers.