Feature
This shoe retailer has reinvented itself multiple times
Summary:
- Leisures Shoe Boutique has had to reinvent itself multiple times in response to changing customer behaviour.
- Throughout these challenges, the business has stayed competitive because of its product range, reputation for quality service and its approach to sourcing shoes.
- Now, Leisures is focussing its efforts on developing its nation-wide online presence. The women’s shoes industry is facing its biggest challenge yet, and the business will need to fight to stay competitive.
Story:
When Mike Newton-Brown established his business, Leisures (Shoe Boutique), he knew that there would be challenges, but he did not anticipate how significant they would be. As the years passed he would have to reinvent Leisures several times as customer behaviour fluctuated dramatically in response to changing behaviour around digital purchasing, plummeting spending power and the COVID-19 pandemic.
Now, as the world begins to recover from COVID-19, Mike is planning for the future. Opportunity abounds, he says, but competition will be tough.
“We wouldn’t have survived”
Mike founded Leisures in 1999 after a lifetime of experience in his family business, another shoe retailer. Starting Leisures wasn’t so much a case of breaking away from his family’s business, he says, it was simply a way to support his family that would also satisfy his lust for adventure.
Mike has always had a penchant for risk. In 1994, he relocated with his wife and young child to Africa as a missionary, working in relief and development in response to genocides, floods, droughts and civil wars. “Everywhere I went, there was a challenge. Everywhere I went, there seemed to be leadership management roles,” he says. Then when he moved back to Sydney in 1998 it was time to find – or build – a new opportunity. Initially, Mike went back to work in the family business before starting his own footwear business.
In the early days, Leisures sold exclusively through 4 retail stores (to which the business later added two more), serving Sydney’s affluent Northern suburbs and the regional city of Orange, NSW. The business stocked brands like Diana Ferrari, Sandler and Hush Puppies, competing with department and chain stores that sold mid-range priced shoes.
Then, in the late-2000s, new cheaper competitors emerged, pushing the cost of shoes down and driving a change in customer behaviour as people wanted these brands cheaper. An increasing number of people were wanting to buy $120 shoes for $60, says Mike. “If Leisures had continued to price itself in the middle, it would be dead,” he continues. “So I decided to go up.”
Leisures invested in some new, high-quality European shoes that were more expensive. Starting small, with just a few styles in each brand on the shelves, the business began to sell more and more of these shoes and in doing so “climbed up”, says Mike. Because Leisures’ stores sat in higher socio-ecomonic areas, there was a wealthier customer base that the business could tap into. If that hadn’t been the case, Leisures wouldn’t have survived.
The next challenge was the GFC, which hit in 2008. Spending dried up as customer buying power dwindled and Leisures’ net profit was quickly dropping. “There was a meltdown,” says Mike, “there was, at the very least, a lot of nervousness and when consumers are nervous they pull in their discretionary spending.”
Then, in 2020, COVID-19 threw retailers across the world into shock. “For the first time in the history of commerce, it was against the law for me to have human beings into my premises to buy my product,” says Mike. “But it was not against the law for my landlords and my service providers, Telstra, for example, to charge me.” Leisures’ Telstra bills alone cost tens of thousands of dollars per year. On top of that was rent, staff wages, etc.
Fortunately, says Mike, the government brought in an ethical code for landlords and business tenants to “work out a way forward, to share the pain”, where landlords were required to give a certain discount to their tenants. Then there were the government grants which helped keep Mike’s business, and others like his, afloat.
Mike also invested more than ever in an omnichannel approach to sales. Leisures’ online sales had been 5% or less of its total sales prior to COVID-19, but they skyrocketed to four times as much over the course of the two years of the pandemic. Leisures invested in paid advertising to increase brand salience as COVID-19 hit and the business has now acquired many thousands of customers across the country, which has given what was once a local NSW business a national footprint.
Nowadays, Leisures operates nationally via its website, leisures.com.au. The business positions as a premium service retailer of high quality shoes and specifically targets women aged 35 and over seeking comfort and durability in their footwear. “We don’t do a lot of high heels, we focus on casual fashion and “everyday” footwear. Real quality footwear made from the best materials with genuine comfort,” Mike says.
A reputation for quality service
Mike attributes much of Leisures’ survival through COVID-19 to its loyal customer base, accrued through close attention to bespoke, caring customer service. This applies to online sales as well as offline. Leisures has invested in a personalised approach to the sales funnel and to customer retention, even allowing for individual phone calls to clients to ask how their shoes are and offer them assistance if needed. This has enhanced their loyal customer base of people who choose Leisures when they need a new pair of shoes.
“We send out electronic mail, we make phone calls, there’s lots of ways in which we [connect with customers],” says Mike. “Phone calls, for example, after you buy from us, you might get a call a week later [saying] “Hi [customer], it’s Michael here from leisures. I just thought I’d ring and see how that beautiful pair of Spanish espadrilles that you bought are going”.”
Leisures has also positioned itself ahead of its competition, says Mike, by buying shoes directly from the factories rather than through wholesalers who put their own margins on top of the factory price. In this way the business maintains a competitive profit margin, more than its smaller struggling competitors (which typically buy from wholesalers), allowing some pricing autonomy with Leisures branded shoes . Leisures therefore offers its customers regular sales and promotional discounts while still making a profit.
“That gives me more margin than in the old days,” says Mike, “it also means with many of these factories Leisures logos are on the shoes.” Mike handles everything, from the freight and handling (and the shipping delays or logistical mishaps that come with it) to processing the containers in his warehouse.
Tacit Knowledge
Something Mike has learned over the years is the importance of making the best possible decisions early enough for them to be effective. He has learned to be proactive and flexible, and to endure through difficulty. “Never ever give up,” he says.
Looking to the future, Mike sees both challenge and opportunity for Leisures. The business’ reputation and online presence will be key to maintaining its competitive edge going forward, he says, as will continued efforts to increase brand awareness through online marketing and advertising. “I believe there are many millions, perhaps 10s of millions of dollars of opportunity because really, any small business now can have a national platform, even if you are just a local business with a store,” says Mike.
Mike wants to expand the reach of the Leisures’ brand. This is best done digitally via his website & social media platforms. There is the potential to open a few strategically placed stores around Australia, so that people can go in-store in their area to try on the shoes they see online.
But even as future opportunities open up, the ladies’ shoes market is itself contracting, says Mike. Many independent smaller footwear retailers have already closed their doors. More will follow. Perhaps up to 50% of traditional shoe retailers may close their doors in the coming few years, he predicts, as more sales move online and discounting continues to dominate.
For now, Leisures will continue to grow through omnichannel sales, says Mike – he is “a brick and mortar man” and still sees profit from his online stores. He has no plans to sell, aiming instead to focus on broadening his business’ market and growing its revenue. Most importantly, he says, he continues to have faith – both spiritually and in relation to his team, his capability and his decisions.
“You have to have faith,” he says, “because there’s just a lot you can’t control.”