Who doesn’t love the feel of a new pair of shoes? While footwear remains one of our most beloved retail purchases, few industries experience more frequent shifts in consumer behaviors, preferences, and demands. To help marketers better understand these shoppers, we present our In the Buyer's Head episode series, where we answer the question: “Why do people shop where they shop?”
In this episode of The Marketing Remix, Charles Wiedenhoft, VP of Strategic Planning, explores where shoppers are buying their footwear, the impact of e-commerce, and how footwear brands can improve their digital shopping experiences.
What does the current footwear retail landscape look like?
Charles: I think it's a really exciting time if you're into fashion and footwear or certainly into sneakers, the sneakerheads in the world. There's so much competition going on between legacy brands as well as startups that are more like digital natives, like Allbirds, they're releasing just a ton of limited edition products, special editions, collaborations, tons of innovation with materials. There's just so much more available to people now, and I think accessibility obviously is better than it ever has been before, 'cause we can shop anywhere we want, on our phones, on our laptops and tablets, or in the real world, so it's a pretty cool time. And on the retail front as the experience economy, as we like to call it, takes hold there's a lot of cool things that brands are doing with retail outlets, with various types of activation, coaching clubs, running clubs for athletic brands. So there's a ton of cool stuff happening and it's an exciting time to be working with clients like ASICS.
Reid: Yeah, it's a lot of things changing out there, and we've been tracking this, you've been doing a lot of research on the category, but we're here to talk about why people shop where they shop to make these decisions. Are consumers in the space leaning more toward online or offline, or a mixture of both when they're looking at the different buying channels they have?
Charles: It's definitely a mixture of both, I think, depending on the brand. The digital natives, like I mentioned earlier, they have very limited offline retail presence, so the majority of those consumers are buying through their websites. In terms of product discovery, we see more of that happening online now in the research that we've done, specifically social media, Instagram, search engines. Consumers are spending a lot more time there discovering new products compared to traditional channels like TV and print.
Reid: Oh, yeah, always within the feed you're seeing the new shoes, the Allbirds, all that stuff, getting a glimpse of the latest stuff.
Charles: Constantly, yeah, it's hard to escape it. [chuckle]
Reid: I guess it's maybe directed uniquely at me, I don't know. I guess I have quite a few pairs of shoes. [chuckle]
Charles: Yeah, I know, Reid, you have quite a collection [laughter] and you know I do, too, so I don't know, could be why.
Reid: So, then in the in-store experience, how is that then different from a discovery standpoint? People are going there as a mechanism to just get a look, feel, touch, that sort of thing, are they really using it also as a discovery channel?
Charles: People are obviously still shopping offline, and that's where a majority of purchases still happen. The research we did showed that 70% of footwear purchases happened in physical retail stores now compared to online e-commerce. But the reason why purchasing is happening more offline, is because people are concerned about finding the right fit, finding something that's comfortable. So that's really the number one reason why people still shop offline.
Reid: Touch it, feel it, that sort of thing. I think that there also has to be a social component to some of this stuff, of really being out in the wild and experiencing the shopping feel in a different venue.
Charles: I think so, definitely with shoes. It's one of those things where, depending on the types of shoes you're looking for, you're out and about with people and want their input and feedback, so it gives you something to do. And the stores themselves can be interesting places to visit and almost be an experience all by themselves.
When consumers purchase online what buying channels are they gravitating towards?
Charles: Retail websites and brand websites make up about half of those purchases. So those retailers we were talking about are almost more like mass merchants, so the DSWs, the Zappos, companies like that. Amazon in the research that we did makes up 35% of footwear purchasing from the people who completed our surveys. That's a pretty significant number when you look at it that way. And 18% of those people intend to buy more footwear on Amazon in the upcoming years, so it's definitely something to monitor. We did some analysis between Amazon.com, those retailer sites like DSW and Foot Locker and Zappos, and then brand dot-com websites, including brands like Foot Locker, Birkenstock. And it's interesting to see traffic over the past year decline on those more mass merchant retail sites, however, traffic on the brand dot-com sites appears to be holding pretty even, if not increasing a bit. And so it almost appears like Amazon is taking more share away from the retailers than the brands themselves, and there may be a number of reasons for that, but again, it'll be an interesting trend to monitor as we get into 2019 and moving forward.
Reid: Yeah, we did actually another podcast episode to plug that one on Amazon and some of the interesting stuff, the juxtaposition of that, is the influence of search and searching via Google or something like that, where brands or specific retailers that are focused within a particular category have a little bit of an advantage over a broad retailer like an Amazon or something like that, where they're going to Amazon to find something they're looking for, they may initiate a search there if they're looking for it, but in other places where they're looking to satisfy a particular need, or then like you're talking about with a brand like an ASICS or something where they wanna just go, "I know I want that, I'm going right to that brand," because there isn't a ton of advantage from that standpoint to go to Amazon there, aside from shipping and things like that, which now a lot of these retailers and dot-coms, brand dot-coms are offering free shipping and things on minimum purchases and stuff.
Charles: They can be just as competitive now these days, and they typically are with offering convenient, easy, inexpensive shipping and returns, and so they don't really need to rely on Amazon for that. And like you were saying, there's even a lot of unbranded search traffic that the brand dot-com sites can compete for along phrases, how-to phrases or any kind of search phrase that would be not specific actually to the brand itself, but related to what people are trying to accomplish, which shoe goes best with X, Y, or Z, or how can I get a shoe that allows me to run better or play basketball better or things like that.
Reid: The brand end can own that equity, brand equity, and search equity a little better than a broad retailer like an Amazon can. So that's an advantage where I think people are seeing that competition for search as certainly an influencing factor. So back in the idea of why people buy where they buy or why they shop where they shop, what factors most influence the purchase decisions, whether offline or online, what are those key factors you feel like are critical?
Charles: The biggest one that we've found is that need to find the proper fit, so ensuring that you're not only making available inventory that's sufficient and diverse, but also making people feel confident in choosing the right size. And so offline people depend on the obvious experience of trying on the shoe and the salesperson, but online they depend more on sizing information, true fit sizing, runs, exercise, large or small, if you're in the middle there. Customer reviews are really influential at getting people to feel confident about what the sizing is like. And really beyond that it's just crossing over the omnichannel bridge between showing inventory that's available at local stores, so if people don't quite feel confident buying it online they can drop into a physical store to do the transaction, reserve the product in a physical store from a website, and making it really clear that returns are gonna be as easy as they can be, inexpensive. Especially for people who are purchasing from a retailer or a brand dot-com site for the first time, it's really essential to offer definitely free shipping on those first orders.
What are some ways brands can improve their digital shopping experience?
Charles: Well, one thing is definitely to have a mobile optimized site experience. We see about over half people purchasing shoes on smart phones now, which is more than any other type of device, so that's really critical. Most sites have moved that direction but not all of them. You mentioned a few things there, realistic portrayal of products is super important, so providing multiple image angles, 3D models if possible, videos of the products, demonstrations with models. Some of the cool things that brands are exploring now, too, are using augmented reality, so you can hold your phone over your foot and see a picture of a shoe that you're looking at and be able to see what that looks like with your whatever style pants or jeans that you're wearing. So there's some interesting features.
Charles: Brands are doing cool stuff, too, with just omnichannel capabilities, using mobile apps and messaging to create awareness of things like pop-up events that they might be doing, connecting with influencers, getting them to create attention of different types of events that are happening offline potentially in retail stores or just events that the brands are hosting, so crossing over again the real world and digital shopping experience through different ways of messaging and targeting.
Reid: You've done similar research in many different categories. I am curious, what do you think was one of the more standout pieces of information you feel like you got out of this footwear category? What's different about this category than some of the others?
Charles: Yeah, I think with footwear and apparel the overall category is gonna be the importance of making people feel confident about choosing something that's gonna be a right fit, the fabric's going to be comfortable, they have other people talking about those things, and so it builds that confidence. And making it easy to do things like shipping and returns either online or offline, that's really been the biggest thing in footwear, and I think it'll probably continue to be that way. And so for brands it's especially important, too, they want to ensure they're presenting products in a manner that's realistic and using different tools like guided selling tools, having users answer a series of questions about how they're gonna use the products, or different styles that they favor or find likeable, and then providing personalized recommendations either with a first-time purchase on a website or over time using their customer data to do a better job at providing recommendations.
Reid: That makes sense. I think as technology progresses and features progress, everything is going to be around fit and that confidence element, so there's a lot that brands can continue to explore in that category, and it'll be interesting to see how this evolves then into next year when we do this research again.
Reid: Charles, thanks for joining us on this episode and breaking it down for us. And so much of what you talked about was research available for download in our full 2018 Footwear Shoppers Report. And, again, Charles Wiedenhoft being the primary author of all that great research, so thank you again for joining us.
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