Hot Footwear Challenges in 2013 & Technology Solutions

The global footwear market is highly competitive and fragmented with a few major players and a seemingly endless array of smaller players, including designers, marketers, manufacturers and retailers, all vying for share.

The footwear Industry consists of a multitude of footwear manufacturers, wholesalers, and retailers. The major wholesalers in the US market are owners of a brand name and typically source their shoes from independent manufacturers. The retail segment of the industry ranges from owners of large multinational chains to small local businesses. Many shoe companies operate in both the retail and wholesale arenas. Footwear companies covered by Value Line generally adhere to the standard industrial page format.


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Market Trends & Analysis

The global footwear market is experiencing a stable growth rate due to changing fashion trends. This market has exhibited sustainable development owing to driving factors such as rising demand for innovative designs, growing awareness about healthy and active lifestyle, rising population and disposable income levels, and rise in retail culture.

Based on type of distribution, footwear retailing is subdivided into store-based and non-store retailing. Store-based footwear retailing accounted for most of the footwear market revenue and is valued at USD 173.6 billion in 2011. Non-store footwear retailing is expected to gain pace in future and is expected to grow at a CAGR of 6.9% from 2011 to 2018 to reach USD 18,588 million by 2018, according to a new market report published by Transparency Market Research ”Footwear Market – Global Industry Size, Market Share, Trends, Analysis, and Forecast, 2012 – 2018.”

Industry Leaders

Key players on the global footwear market include Bata, Deckers, Brown Shoes, Wolverine, Weyco, ECCO, Kenneth Cole, Nine West, Timberland, Puma, Gucci, Lacrosse, Vans, San Paulo & Alpargatas, R.G. Barry, Nike and Adidas.


A Challenging Road Ahead

  • The US Footwear market is a USD 25 Billion market consisting of over 1500 wholesales and 30,000 retail outlets. However, the retail segment is highly concentrated and the largest 50 chains account for over 80% of revenue.
  • In the UK the footwear industry is approximately GBP 6.1 Billion, but account for only 6% of the total consumer spending – the lowest proportion in history.

The above statistics definitely give an indicator of the challenges that a small and medium footwear retailer faces in today’s tough economic conditions.

Fast changing fashion trends, an extremely cost sensitive consumer, stiff competition from departmental store with well appointed shoe departments; discount shoe stores and outlets, as well as general merchandise discounters such as Wal-Mart, exert additional pressure on the footwear retailer to remain competitive.

Trade regulations aside, retailers heavily rely on imports from Far East at extremely competitive prices. Not only is the logistics of delivery critical, it is equally important to source the right mix of style, size and color. Ability to collate, analyze and act on consumer buying patterns, sales trends and changes in fashion industry are imperative to succeed in the footwear industry.

A Footwear Retailer is faced with the challenge to:

1 – Managing assortments

Footwear retailers need to keep similar and matching products together. They want to be sure that they are receiving products in a sensible manner so that they can be allocated and stored correctly without trouble. They strive for a procedure for inventory management, prevent losses and handle any concerns that may arise throughout business procedures. If they are able to effectively and efficiently manage assortments, they can easily grow as a business unit.

2 – Efficient Stock Transfer

Stock transfers between the head office to retail shops and also between retail shops is a major concern for footwear retailers and suppliers. There’s a definite need of point of sale system for retailing that may help them in transfer of the stock and also the demands and supply of the stock between head office and retail shops. Retail stores seeks more efficient point of sale system, returns management and data exchange in their retail chain.

3 – Stock Transfer Visibility

Tracking of the stock in the head office and retail outlets is also a big opportunity for footwear retailers and suppliers. They need an inventory tracking software that can help them to manage the flow of items throughout the retail chain. Small business software provide services of warehouse management by providing and inventory system. that helps the organizations to be efficient in inventory tracking as well as cutting short the chances of loss.

4 – Increasing sales with minimum stock levels

Footwear retailers needs a business management solution that helps them to understand diverse & unique demands of customers to monitor sales trend. An inventory management system that integrates all business processes from the point of sale at store to the management at the head office decreasing the overall cost of operations, managing stock levels and analyzing what the customer demands helps retailers to increase sale and return on investment. Retail Management software helps the retailers and manufacturers to increase customer loyalty and satisfaction with customer relationship management tools that support multiple channels and employ powerful analysis tools.

5 – Cross Channel Sales Visibility

Manufacturer needs to have a clear view of the demand of their items in the market so they can produce items accordingly. Managing production can help businesses to cut down the costs of producing goods with lesser demand in the market. Also they can easily analyze the buying pattern of their target market. Software provide inventory and sale patterns so the manufacturer has a clear view of the inventory and sale ratio. Also it helps them to leverage cross-channel selling to satisfy the customers with styles and sizes they want from anywhere across the network.

 Footwear Retail Store

Issues in current Technology Used

Organizations in the Apparel, Footwear, and Fashion industry typically invest in multiple, best-of-breed technologies in a bid to improve operational efficiency, customer service, and usability. While this approach may be viable in the short term, over the long run it ceases to pay dividends and becomes an albatross that hampers sustainability, scalability, and growth.

Challenges faced by the Apparel, Footwear, and Fashion industry would be difficult to magnify. There is a significant misalignment in the degree of sophistication and features offered by different systems and applications within the industry. This complexity can be found anywhere, making companies old fashioned because of outdated systems.

Footwear retailers need to replace them with integrated solution offerings that are proven, standardized, leverage industry best practices, and at their core – designed and developed to better support scalability and realize growth objectives.


Salient Features for Retailers in Latest Technology

A good retails management suite for footwear retailers should have the ability to preserve the existing technology investments. It should also address the business and operational challenges faced by the footwear industry. The application suite allows footwear retailers to:

Extend the Capabilities of Existing Applications & Integrate New Software

There are pretty solid options offered by some of the leading software vendors to retain the existing software while integrating it with the new software filling the existing gaps. It is advised not to throw away the existing technology investments just because the software vendors think so. A good retails technology consultant can  help you save lot of investments. RMSConsulting can help you answer your questions here.

Stay connected with business operations

Latest Retail solution comes as an end-to-end retail management solution for footwear retailers, seamlessly integrating point of sale, in store inventory management, logistics, back office store and head office operations.

Retail solutions nowadays provide complete business management solutions that integrate RMS to other ERPs and accounting applications through its APIs. This integration with an ERP / accounting application keeps the head office always connected with store operations across the complete retail chain.

Inventory control and replenishment planning

Head office operations get complete visibility of stock across the retail chain and can effectively replenish stocks rather than relying on store requisitions. Additionally the merchandising department can raise purchase orders in time to avoid stock out situations.

Store Managers and POS operators can gain complete visibility of stock across stores or at the main warehouse / distribution centers right from the POS interface.

Promotions that maximize profitability

Footwear retailers can manage targeted promotions in multiple formats by easily analyzing detailed customer trends at individual stores and across the retail chain.

Retain customers and manage customer communication

Retail management solution allows retailers to define flexible / attractive campaigns, ensuring customer loyalty. A good retails management software has a major role to play here – but you need to deeply understand the available opportunities. Having a software and optimally using the software are two different things.


Way Forward

Footwear and apparel industry has its own challenges and trends. One major distinguishing characteristic is the speed of goods to the market – tastes in this industry change all the time. The supply chain plays a huge part of how successfully a company can respond to demands for the latest new fashion.

As the specialist organization operating in the retail management and distribution sector that supplies businesses retails management system integrated with the existing ERP/Business Operations systems; RMS Consulting have cross vendor expertise at the same time introducing  Retail Management System Candela with unmatched features for the footwear manufacturers, suppliers, and retailers.

Candela has a proven track record of helping Apparel retailers in (clothing and footwear industries) in their growth and increased profitability. Candela is working at single location stores and also multi-location chain stores in United States & Canada – maintains single version of truth across the business and the supply chain.

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