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Editor's Note: The Heat Is On

A challenging selling season pushes the leaders to get tough(er).

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Michael Atmore

Photo By Illustration by Lara Timlin

FN Issue June 3, 2013

Photo By Thomas Iannaccone

It has been a spring like no other.

Ask a retailer or wholesaler about the season and their responses run the gamut from “what spring?” to “beyond challenging.”

While the actual results are being tallied, one thing is evident: A series of dramatic evolutionary, or dare I say revolutionary, changes at retail are playing out against the very specific challenges of unseasonable, unpredictable weather and a still-volatile economy. The resulting stew is dense, complicated and at times beyond difficult to comprehend.

While we are still dealing with all the issues, it is hard to see the upside. But with a gently improving economy, there is enormous potential for the nimble market leaders who are well positioned for the better times ahead.

Those leaders have learned to embrace the revolutionary changes, including the aggressive growth of online sales, rapidly shifting sourcing issues and the impact of social media on traditional marketing efforts that have had a huge impact so far this year.

Many brick-and-mortar stores are struggling against e-tailers’ free shipping-free return models, while smaller online players have had trouble competing against the Goliaths that are able to offer them. The unstoppable digital juggernaut will continue to reshape the playing field. With more time-crunched shoppers seeking online purchases, brick-and-mortar will be challenged to get bodies into the stores. While online players have been a godsend to many brands, they have profoundly impacted the way the consumer shops.

Simultaneously, the big retail and wholesale powers are working hard to understand the massive changes in marketing and promotion. They understand that the consumer’s awareness of new launches and collaborations is now challenged by an ever-changing raft of social media options, some of which are still difficult to evaluate in traditional terms.

If these larger issues have made life more complicated, this spring reminds us that the simple, unpredictable side of life will always play a key role. As I write this, the New York metro area is having its first real spell of warm weather, an experience few have felt anywhere in the country. For most, the spring selling season has been wet, cold and mired in uncertainty. There is no controlling Mother Nature.

Still, the best executives are focused on the factors they can control. And while many of them have had to cut prices to move product, the forward thinkers are already plotting how to make the margin back in the fall. Sourcing costs and pricing issues continue to dominate that conversation, as they have for the past couple of years. The great minds in the business have mastered this game before and weathered such periods of diminishing returns only to come roaring back when shopper appetites return to normal.

And so it will be soon enough. In the meantime, the aggressive shoe players have trimmed costs and managed product flow — two skills that will come in handy during the coming months as everyone casts a watchful eye on retail numbers.

If the economic recovery continues as expected, those numbers should improve. There is still enormous fascination for all things footwear, from athletic looks to the high end, and as the consumer returns to old shopping habits, that interest will only escalate.

Of course, the sector’s resilience has led to heightened competition, and despite a sluggish economy, the market is filled with new players and brand extensions that include footwear.

No question, this spring will result in the inevitable shuffling of the deck, as marginal players find the going too tough to sustain.

More-savvy operators will carry on, dropping items or whole collections that don’t find an audience in favor of product that does. At all ends of the market, many brands are experimenting with new growth areas, including men’s and children’s. The expanded mid-tier market has gotten a huge boost from the fierce competition among department store players and will certainly see a lot of action during the bulk of the year.

So, as the temperature finally starts to climb in many parts of the country, the heat is on for those competitive soles in the business. Dealing with both micro and macro trends simultaneously, the big guns in the business have to be both in the moment and years ahead of the game.

That duality of skill set may be trying for some, but the best in this business are setting a new bar for surmounting incredible obstacles.

They are making sure that 2013 will go down in the history books as a year in which the leadership of this industry handily met the day-to-day business and the bigger, more profound issues of the times.

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