Footwear Insight

Comfort Zone footwearinsight.com January/February 2018 ~ Footwear Insight • 27 David Kahan, CEO, Birkenstock Americas How do you see the overall footwear market in terms of growth, challenges and opportunities for 2018? "Overall, I believe the footwear category will be fair at best. Athletic will continue to outpace brown shoe, but even athletic will begin to moderate. The majority of the footwear business has become far too promotional, too many me-too products, and at least in my opinion, too little distribution discipline on the part of the brands. For Birkenstock, we will continue to do what we have over the past five years and will once again experience significant growth and share gain. For brands that have strong consumer relevance, the opportunity is tremendous." What are you reacting to with new product and direction? "In the spring, which is our peak season, we will innovate with new materials and versions of our key sandal silhouettes. Also, our presence in key retail partners will be significantly higher. For Fall/Winter, we are quickly establishing ourselves as a true 365 brand. Fall 2018 has a complete product range of closed toe, clogs, shoes and boots that have received tremendous reaction from our best retail partners." How do you see the retail market? What are the successful stores doing? "The retail market is in a constant state of flux. Even if consumer spending is up, the shift is where people are spending and what products they are spending on. It's become two distinct business models — one is the transaction supplier/vendor/retailer, and the other is the management of strong brands that consumers have an emotional connection with and the relationship between brand/retailer and consumer is far more significant. "Successful stores are choosing brands that help them make this consumer connection. Successful stores are choosing brands that manage the distribution so that they aren't just high-overhead showrooms for online marketplace shopping. Footwear stores that are just selling shoes the same way they have for five, 10, even 20-plus years are not keeping pace with consumer shopping patterns and are losing share. Those that are creating environments where consumers can engage with great brands and who are creating a multi-channel means to connect with their consumers – social media included – are winning." If you could offer any advice to retailers, what would it be? "Number one is take steps and invest so that you can own your consumer. You do not want transactional shoppers who buy from you this week and anyone else the next. You want loyal fans. Use social media, create consumer databases, mine your most loyal consumers for insights and interaction. Be creative in doing this. It's not just the 'old trunk show/meet your rep' event. "Number two is you have the buying pen. Use it to support brands that share your future well-being. If a vendor is offering you the exact same product it sells to an online marketplace, you will lose. If a vendor is now doing 25 percent of its brand's business with one online marketplace, you will lose. "Also, stop complaining about vendors selling direct. Please, it's 2018 and strong consumer brands must act in a manner that best communicates their brand equity to the market. If a brand is managing distribution, it can grow in its own D-to-C business and also grow with retail partners. Trust and support the brand partners that have created policies that allow them to do all of the above in a disciplined manner. If not, then complaining about matching internet prices and rampant discounting will be their norm." If you could offer any advice to online sellers, what would it be? "The few best pure-play online retailers are doing a great job in telling brand and product stories — not 'just' selling shoes. Online markets sell shoes — online retailers replicate the best retail experience in an online manner. Any brand with a physical presence and an online presence must replicate both across all mediums." O "The retail market is in a constant state of flux." Birkenstock's Bakki Boot, $190, a suede and shearling boot in Mocha-Mocha. B R A N D S T R A T E G I E S 2018

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