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New ways of buying

Keeping ahead of the pack

Nick Sampson December 2009
keeping ahead

When Mike MacKenzie bought into an established family shoe business, he and his business partners wanted to create a new kind of specialist sports shoe store, and “set new standards in sports shoe retailing”. Almost 20 years later this vision and some good old fashioned business nous have seen Smith’s Shoe Store achieve double digit, month-on-month, sales growth during the recession.

When Smith’s opened it was the biggest store of its type in the country, offering "a selection of shoes second to none and great value for money". Unlike competitor stores, Smith’s customers were encouraged to pick product up and touch it. But what really set the shop apart was its technical service.

“Today we run three video gait analysis systems using silicon coach software, we have regular in store podiatry sessions for customers, staff include several podiatry students and others doing associated fields of study", explains Mike.

This highly innovative approach at the time has been combined with a pro-active (and some might say old-fashioned) approach to customer service.

“All customers must be shown respect, regardless of who they are, what they’re spending, where they’re from, and what they do. I’d hope any customer would feel comfortable, special and looked after by any one of my staff”, says Mike, adding that “all of my staff are keen sports people, have an affinity with the products we sell, have a genuine interest, and believe in what we do”.

He also believes that "being part of and being involved in your local community is vitally important. 50% of our turnover probably comes from a 20km radius around our store”.

It’s an approach many of the bigger retailers struggle to match. And it’s the big chains that have had most impact in what’s become a saturated sector over the last decade.

“When Rebel Sport, originally an Australian discount chain, came into the market it changed the landscaped dramatically. It was really a supermarket type mentality to sports wear. Large format stores, minimum service, big selection, big discounts and huge marketing campaigns.”

Mike believes this approach leads to many customers making "an uninformed decision on their footwear because of a lack of knowledge from the salesperson”. Although he notes he doesn’t mind too much, as “it makes our job easier”.

Smith’s carries most of the major brands and also picks up many end of line or discontinued models. “This allows us to offer fantastic value to our customers”, says Mike. He also notes a particular affinity with four brands, Asics, New Balance, Mizuno and Brooks because “they all offer high quality product, still believe in the personal touch, have flexibility, and believe in building partnerships with their customers. Not surprisingly three out of the four are smaller, privately owned companies that aren’t dictated to by overseas parent companies.”

While the retail sector has been hard hit by the recession Smith’s Shoe Store’s approach has seen it kick the norm.

“We’ve had a spectacular year of growth with double digit increases month on month.” Mike says. The reasons for this are twofold. 

“Why have we survived? We run a tight ship and put a bit aside in good times to take advantage of opportunities when things get tighter, and there are plenty of opportunities. So when others are pulling back we’ve gone into attack mode. We’ve also been able to secure great deals on clearance product, picked up great advertising deals and have just pushed things along.”

But perhaps most importantly Mike knows that “when things get tight people are more careful…so our reputation for great value has really helped.” By applying what many would see as an ‘old fashioned’ approach to customer care, Smith’s has built a strong and growing client base that appreciates the distinction between price and value. That’s gold dust in the retail world.  

Read our full interview with Mike:

DNA’s Aaron Carson spoke to Mike MacKenzie about Smith’s Shoes:

AC: How long have you been involved with the store and in what capacity?

MS: I’ve been involved with the store since day one as part owner, which is around 19 years.

AC: Why did you get involved?

MS: This was a great opportunity for me to get into my own business.

C: What did you hope to achieve? MS: We wanted to set new standards in sports shoe retailing and create a specialist sports shoes superstore. When we opened this was by far the largest store of its type with over 6000 sq foot showroom and over 4000 pairs of shoes.

AC: What is your business built on?

MS: We are a 60 year old privately owned family business. Chris’s grandfather started it at 344 Dominion rd in 1949, his son Martin took it over and then his son Chris. Our business is based on integrity, honesty and giving everyone a fair deal, not only our customers, but also our staff and suppliers.

AC: What did you/do you want to do differently to other sports shoe retailers?

MS: To start with we offered a selection of shoes second to none, we offered great customer service with a technical edge, and we provided great value for money. We’ve encouraged customers to pick the product up and touch it. We measure customer’s feet so they try on the right size. We offer the video gait analysis so they are getting the right type of shoe to suit their foot type. We have two treadmills that customers can use to try out their footwear. We also offer a 28 day fit and comfort guarantee. Our approach still holds well in the current market.

AC: How has the market changed in the last 10 years?

MS: On one hand it’s a very technical market now, probably one of the most technical in the world. But the market’s also become pretty saturated and you have a major player which is really driven by numbers. When Rebel Sport, originally an Australian discount chain, came into the market it changed the retail landscaped quite dramatically. It was really a supermarket type mentality to sports wear. Large format stores, minimum service, big selection, big discounts and huge marketing campaigns. Since then we’ve had other chains such as Athletes Foot and Footlocker come into the market, as well as local specialist stores like Shoe Science and Shoe clinic.

AC: What can/do you offer that others can’t /don’t? MS: Our technical service. We run three video gait analysis systems using silicon coach software, we have regular in store podiatry sessions for customers, we have relatively mature staff including several podiatry students and others doing associated fields of study. We have most of the major brands and carry extensive ranges of footwear. As well as the latest releases, we also pick up a large amount of end of line or discontinued models. This allows us to offer fantastic value to our customers.

AC: What annoys you most about the generic sports shoe store shop experience associated with a large chain store?

MS: The customer making an uninformed decision on their footwear because of a lack of knowledge from the salesperson - although it doesn’t really annoy me because it makes our job easier.

AC: What kind of person is typical of your repeat customer?

MS: A smart one I suppose. We have third and fourth generation customers. We also get a lot of families coming to us. We really do cater from five years to 85. They might be serious runners who purchase five or six pairs a year and we have customers who purchase a pair every three or four years.

AC: As an owner what’s most important as far as how you treat your customers?

MS: All customers must be shown respect, regardless of who they are, what their spending, where they’re from and what they do.

AC: How important is it for you to work in your business rather than on it?

MS: I think there is a balance here. You need to work in your business so you can fully appreciate what you need to work on. But I don’t believe I need to be the face of the business and would hope any customer would feel comfortable, special and looked after by any one of my staff. But I do like to know what is happening, when, where and why.

AC: Is it hard to find the right staff? What’s important?

MS: Generally I have been pretty lucky and staff turnover has been relatively low. I only have two fulltime with my other’s being part time. All of them are keen sports people, have an affinity with the products we sell, have a genuine interest, and believe in what we do.

AC: How much has the recession affected your business and why have you survived?

MS: Believe it or not we’ve had a spectacular year of growth with double digit increases month on month. Why have we survived? Being in business for 60 years this isn’t our first recession. We try and run a tight ship and put a bit aside in good times to take advantage of opportunities when things get tighter, and there are plenty of opportunities. So when others are pulling back we’ve gone into attack mode. We’ve been able to secure great deals on clearance product, picked up great advertising deals and have just pushed things along. When things get tight people are more careful with their money and if they can make a saving they will. So our reputation for great value has really helped.

AC: How much does your online presence drive sales?

MS: At this stage it is minimal but looking forward I’m sure it will play a bigger part.

AC: How important is a CRM database to you?

MS: Currently not at all, but we do see this playing a major part in our future and are currently working with a database company. We will have our first newsletter going out at the end of the month.

AC: Who have/are you partnering with in the promotion of running in general, and/or the store?

MS: We have traditional advertising partners but we also work with local clubs, schools, podiatrists and other health professionals to promote the store.

AC: How important are these associations?

MS: Being part of and being involved in your local community is vitally important. 50% of our turnover probably comes from a 20km radius around our store.

AC: If you had to choose three brands your store feels most comfortable being associated with what would they be and why?

MS: Asics, New Balance, Mizuno and Brooks. I picked four because I can’t split them. They all offer high quality product, still believe in the personal touch, have flexibility, and believe in building partnerships with their customers. Not surprisingly three out of the four are smaller, privately owned companies that aren’t dictated to by overseas parent companies.

AC: How much paid advertising /marketing/promotion have you done verses using non-paying channels?

MS:Being a stand alone store in Auckland we have always spent a reasonable amount in advertising. If we didn’t we’d be struggling. But in saying that, our associations and organic promotions provide a good balance and keeps our advertising budget at a sustainable level.

AC: What will be the next movement in sports shoe retailing?

MS: Unfortunately there are two trends happening, neither of which is great for the traditional retailer. First is online selling, it’s still in its infancy in New Zealand but it will only get bigger. Secondly, company owned retail stores, the wholesalers and manufactures setting up their own retail and outlet stores, trying to have the best of both worlds.

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