NEED FOR INNOVATION SURGES AS LOCAL FOOTWEAR RETAIL BOOMS

NEED FOR INNOVATION SURGES AS LOCAL FOOTWEAR RETAIL BOOMS

NEED FOR INNOVATION SURGES AS LOCAL FOOTWEAR RETAIL BOOMS

February 11, 2018

BY TAPOSH GHOSH

With easy access to raw materials, Bangladesh accounts for around 3% of the world’s leather demands. The sector is presumably the second largest contributor to exports for the country, after RMG. With multiple U.S. and European brands showing interest in Bangladesh for finished leather products, this sector has yet to contribute further as the country strives to achieve the status of a middle-income earning nation.

For a number of years now, export revenues from the leather industry have crossed the $1 billion mark, with $1.3 billion worth of export in the most recent fiscal year. The latest figures show that leather footwear industry itself contributes around 1.54% of the country’s total export earning with an average yearly growth of around 29.8% during the last five years. However, growth has been stagnant in recent years facing unrest in the Eurozone and environmental concerns for the industry. Factors such as poor labor conditions, river pollution and use of child labor have been discouraging foreign buyers, stagnating export growth as a result.

However, whatever ground lost in potential exports, is somewhat is being covered as the demand for domestic footwear grows rapidly. With economic progress and rising income levels, shoes are now more of a want than a need for the local population. Industry experts suggest that the per capita consumption of footwear has gone up to 3-pairs now, which was 1.7-pairs five years back. Such changes in consumer behavior as well as easy availability of raw materials, over the years, have attracted multiple manufacturers to invest in the footwear industry.

Bata, with its first mover advantage, is still the largest footwear producer in the nation and a huge crowd favorite for the affordability and durability of its products. Following suit, many new footwear-manufacturing industries have emerged, notable among which are Apex Footwear, Bay Emporium, Legacy Footwear, Express Leather Products Ltd., Paragon Leather & Footwear Industries, and many more yet to set foot into the market. Among the organized footwear manufacturers, Bata is the undoubtedly the largest and companies such as Apex, Bay, Jennys, Fortuna, and Lotto in Sports Category are among the biggest players currently operating in this sector.

Despite the tremendous growth and the ever-heating competition, the businesses have pretty much been as orthodox as ever when it comes to retailing their brands. In an era of convenience-seeking, the brick and mortar way of selling your products might always not be the best possible option. Where there are new technologies disrupting global retail industries every day, footwear retailing in Bangladesh has experienced little or no innovation at all when it comes to catering to its customers. However, in an industry which is growing fast, with new competitors in the pipeline, there are a lot of aspects these businesses can innovate in to remain competitive and ahead of the pack.

SELLING ONLINE
It is no secret that in today’s world of digital natives, it is imminent to be ever-present online in addition to existing physical stores. Online stores offer customers with the greatest levels of conveniences, allowing them to scuttle through more variety and options than it is ever possible in a physical store. Services such as cash-on-delivery, size replacement, home trials, etc. can boost sales for local footwear brands and allow them market access to locations with no physical stores in the vicinity. Currently, only Bata among the renowned brands is known to have its own online platform, with Apex trying to sell its products through Daraz.

KNOWING THE CONSUMER AUDIENCE
Leveraging on consumer data to increase sales is what most global retailers are accustoming themselves to do these days. Targeted marketing can often generate a greater return in comparison to a mass market stunt. So while many businesses still refuse to leave traditional roots, social media, if used correctly, can be a great platform for selling footwear, with millions of active daily users. Social media is often inexpensive and perfect for small businesses to market their shoes. Not limiting oneself to only Facebook, and moving beyond to Pinterest and Instagram, can prove to be effective by posting pictures of products that customers might be interested in and let customers post positive testimonials of their experiences with a brand’s shoes.

CROWDSOURCING
Moving further ahead with social media, crowdsourcing is a new advertising technique that is proving beneficial for the footwear industry. It involves using customers and fans to market products to the public. For example, Famous Footwear in the United States ran a Mother’s Day campaign in which it encouraged customers to share a video titled “A Letter to Mom” with their own mothers. Small businesses can have similar contests or offer customers a chance to submit their own videos, with the winner getting a free pair of shoes.

DESIGNING YOUR OWN SHOE
Another technique to draw in customers is giving them an opportunity to design their own shoes. This makes the product unique and more personalized to the needs of the customer, for which one might even be ready to pay a premium. NikeID does this on its website by letting customers choose from a list of colors and add their own icons or numbers. Some small businesses differentiate themselves further by letting customers upload designs that are then printed on the shoes.

INCREASED FRANCHISING WITH GLOBAL BRANDS
Famous footwear brands such as Nike, Adidas, Puma, etc. are yet to open their own retail stores in Bangladesh, and cashing on collaborating with such brands can be profitable for local growing businesses. Bata currently applies this strategy well, by offering a small selection of Nike and Adidas originals in some of its bigger stores, but there is still a huge market to be tapped into, with the youth, in particular, becoming more brand-conscious as the years pass by.

MORE MEGASTORES
One of the biggest complaints by consumers is not finding their desired design or size of the shoe they want at their nearest retail outlet. As businesses look to expand, they often end up opening an array of small stores, with a lack of variety and limited stock options. Perhaps opening a multitude of megastores in popular localities by cutting down on the multiple smaller stores can be a viable option to offer customers with a one-stop solution for their footwear needs.

KEY TO SUCCESS IN PERFECT ONLINE-OFFLINE CONNECTION
Bata recently launched showroom at Bashundhara City which is the largest Bata shoe store in Asia and the second largest Bata outlet in the whole Bata shoe organization globally. This example, in particular, shows the potential that lies in the domestic retail footwear industry. With a multitude of possibilities available to these brands, it is high time to engage in innovation to remain competitive. In order to succeed, every retailer has to adapt to both types of stores, brick and mortar and digital storefronts, essentially bringing them closer together, taking the best of both and giving a more unified experience.

 

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