Kulkin, former CEO of fancy footwear firm Stuart Weitzman, still aims to meet a standard retail goal of selling $1,000 per square foot in the Fifth Avenue space. But the larger idea, he said, is to forge a connection between customers and shoes that they may have only occurred online, at least for the last year and a half.
“Instead of running a print ad, you have people feel your story, touch your product and connect,” he said. He currently has a six-month lease on the space but said he would stick around if the landlord was willing at the end of the term. The company also has 800 U.S. online and brick-and-mortar retailers who carry P448s.
That’s a large part of the strategy that San Francisco, Calif.-based Allbirds, another sneaker start-up, which has a location on New York City’s Upper West Side revealed in its recent paperwork as it prepares to go public. Though only 11% of revenue comes from its 27 global stores, it believes its stores “serve as billboards while providing an immersive and tactile introduction to the brand.”
Allbirds’s Boston-area web traffic, for example, increased by 15% in the three months after it opened its store there, thanks to new local awareness, it said.
For Hoka, the experience for customers is perhaps more pragmatic.
Runners who have discovered Hoka’s supportive shoes over the last decade, through e-commerce or other retailers, can go to its new Flatiron pop-up store to have their feet scanned by high-tech devices that can help them discover the best Hoka styles for feet with high arches or prone to supination.
Though hardly a start-up, Nordstrom, the Seattle-based department store that opened a New York City flagship in the fall of 2019, picked up on the experiential trends when it devoted its entire lower level to a shoe store with offerings like cobblers who can fix shoes, stations for e-commerce returns and even shoe-tying classes for children.
“They are fulfilling a niche in a physical location, providing the experience that the Gen X and Z folks want,” said Michael Londrigan, an associate professor who focuses on retail and supply chain management at LIM College.
Yet their own physical locations could grow in importance, even for companies that have established e-commerce and wholesale channels, he said. That is partly proven out by the long lines at specialty shoe companies when the city’s sneakerheads—folks that collect limited-edition sneakers—come out to try to get a pair of limited-edition sneakers at one of the city’s specialty sneaker retailers.
They can also save the companies money on returns. Currently, apparel, footwear, and accessories represent nearly 30% of all U.S. e-commerce retail sales. But clothing and shoes have a high return rate, around 30 to 40%, more than the rate of return at real stores, according to Londrigan, a cost and inventory issue for the companies.
Allbirds, for example, said it is in the early stage of a brick-and-mortar ramp up that could see it opening hundreds of new stores in the near future.
There are 52,100 clothing and accessories jobs in New York City, about 80% of their pre-pandemic level and more than double the number in June of last year.
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