Jammin' Up the Shoes: Shoe Carnival's Daring Remake
Billion-Dollar Boot Strides: The Ascent of Shoe Carnival Over Time
Shoe Carnival is shaking things up, tossing its old strategy out the window - along with its carpets.
"We're moving away from a traditional, basic experience," says Mark Worden, the new CEO, over the phone. "We want Shoe Carnival to be the ultimate shopping adventure - the most exciting destination for customers. We believe the winners will be those who entice customers to ditch their phones and immerse themselves in a truly entertaining shopping experience. Shoe Carnival is ready to invest to make it happen."
After witnessing a steady flow of new customers flocking to their reimagined stores, the footwear retailer has sped up its remodeling project. In their latest quarter, the "Shoe Perks" loyalty program surged over 10% year over year, with a total membership exceeding 28.5 million, according to a press release from the company. In the first nine months of the year, ended October 30, the company managed to exceed a billion dollars in net sales, a significant improvement from the $722.9 million recorded in the same period last year. The company has upped its forecast for the year, anticipating net sales to hover around about $1.29 billion.
Worden couldn't be more thrilled with the results. "The response from our customers has been overwhelming," he says. "Conversion, comps, traffic, units per transaction, margins – any dimension you can think of."
By next spring, around 100 stores will undergo renovations, swapping out the traditional carpeting for gleaming new floors. Digital interactive engagements, pop-ups showcasing the hottest brands or new products, and cozy seating areas are planned to break up the monotony of shoe displays. However, the retailer isn't just seeking to modernize the appearance; they're aiming for a new level of customer service that's rare in the value shoe industry, even exceeding what's typically offered at some department stores.
A few years ago, for instance, Macy's replaced its conventional shoe sales areas with self-service racks at its smaller and medium-sized stores in an effort to streamline store operations and cut costs. But at Shoe Carnival, customers have the choice between self-service and assistance, including foot measurements and other helpful services. Worden explains, "If you don't want help, we'll leave you alone. If you do want help, we're here. Unlike many in the industry, our employees are exclusively focused on customer service."
The rebranding doesn't stop at remodels. The retailer has completed a phase of store closures and is now readying for expansion. Currently, they run 377 Shoe Carnival stores across 35 states and Puerto Rico, and they expect to shift to net store openings as they enter 2022. For now, store openings will focus on existing geographies, but Worden hints that this too will broaden in the future. Shoe Carnival took a decisive stride in December, acquiring the family-held Shoe Station with its 21 stores in the Southeast for $67 million.
While the future might look bright for Shoe Carnival, their plans could pose challenges for enclosed malls. Shoe Carnival prefers strip-style and open-air locations, where 90% of its fleet currently resides. Worden is confident, saying, "Our stores are posted up in the best centers – open-air, safe, and featuring the best co-tenants, such as Ulta, Target, Home Goods, and T.J. Maxx."
Similar to many retailers, Shoe Carnival has noticed that consumers are increasingly willing to pay full price or near full price. Gone are the days of BOGO promotions. Worden declares, "We discovered during the pandemic that we were providing our best product at a lower price than customers really wanted, thanks to our buy-one, get-one-half-off approach. Now, we're using our customer relationship management program to deliver personalized offers for specific products without diluting profits across the board."
Of course, fresh concerns about the pandemic loom, posing potential challenges to retailers, particularly those that heavily rely on brick-and-mortar stores like Shoe Carnival. But Worden is optimistic, having cultivated strong relationships with vendors to minimize supply chain troubles and confident in the retailer's momentum.
"Our main challenge is convincing new customers to become repeat shoppers in 2022," he says. "The majority of our growth is due to our efforts to acquire new customers and take market share."
Enrichment Data:
- Store Remodels: Shoe Carnival's store remodels focus on increasing the overall shopping environment and customer satisfaction, aiming to enhance the overall Shoe Carnival experience[1][5].
- Shoe Station: The Shoe Station concept emphasizes premium, trend-driven footwear and streamlined in-store experiences, leading to positive sales growth in Shoe Station locations[1][5].
- Technology: Shoe Carnival has adopted Salesforce Composable Commerce, allowing the company to quickly respond to customer needs and market trends by reducing technical debt and increasing agility in rolling out new features[4].
- Shoe Carnival is revamping its business strategy, aiming to transform stores into the ultimate shopping adventure, leveraging technology like Salesforce Composable Commerce to stay agile.
- The retail industry is evolving, with companies like Shoe Carnival investing in AI-powered interactive engagements, pop-ups showcasing the latest fashion trends, and comfortable seating areas to provide an immersive experience.
- The shoe retailer is not only focusing on modernizing the appearance of stores but also enhancing customer service, offering both self-service and assistance, including foot measurements, a rare feature in the value shoe industry.
- In the future, Shoe Carnival plans to expand its business, aiming to shift to net store openings in 2022, with a focus on existing geographies and eventually broadening its reach.
- Shoe Carnival's recent acquisition of Shoe Station, a family-held retailer with 21 stores in the Southeast, is a strategic move to strengthen its position in the shoe industry.
- The retail landscape is changing, with customers increasingly willing to pay full price for premium products, as demonstrated by Shoe Carnival's success in restructuring promotional offers using customer relationship management programs.
- As the world continues to grapple with the pandemic, retailers like Shoe Carnival must tread carefully, cultivating strong relationships with vendors to maintain a steady supply chain and navigate ongoing challenges in the brick-and-mortar retail sector.
- Shoe Carnival's CEO, Mark Worden, recognizes the importance of winning customer loyalty, prioritizing efforts to turn new shoppers into repeat customers in the coming year, signifying the retailer's commitment to growth and success in the footwear industry.
