Retail franchise The Athlete’s Foot has once again bucked the industry trend, delivering a like-for-like sales increase of 6.6% for the five months to November, as rival chains continue to suffer from discounting and an exodus to offshore retailers.
The result also comes as new research from Roy Morgan shows The Athlete’s Foot (TAF) recorded a 91% customer satisfaction rate in a recent survey.
In a market update released yesterday, RCG chairman Ivan Hammerschlag said the TAF brand is continuing to expand and that “we continue to be very pleased with the performance of the business”.
The success of the brand is an unusual one in a market of discounts, with such large players like the Reject Shop and Billabong suffering just weeks after they announced positive expectations for full-year results.
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“We believe that while competitive pressures and indifferent consumer sentiment are real challenges for all retailers, The Athlete’s Foot has a unique and defendable market position based on selling fit and function, rather than price and fashion,” Hammerschlag says.
Norman Morris, industry communications director for Roy Morgan Research, says TAF has created itself a good position as a specialist store and isn’t giving up any ground.
“Athlete’s Foot can be quite expensive but the level of service is outstanding, which is very important. They appear to know what they’re doing and reinforce this with their customer service and product knowledge,” he says.
“Specialist stores that appeal to a target market are definitely on the rise – that’s why department stores are having such a hard time. However, specialist stores have to make greater inroads than department stores.”
Earlier this year, Hammerschlag told SmartCompany some of the secrets to TAF’s success, and it’s a good time to revisit that advice in the lead-up to Christmas:
Part of TAF’s success is that each store trains the staff to be over-personable. When a customer walks in, they receive a shoe fitting, and the staff even go so far as to get on their knees and tie up the laces.
Hammerschlag told SmartCompany earlier this year he wants each store to even “over-service” each customer, which leads to brand loyalty.
“Anyone can compete on price. I have a view that if you are selling a pair of shoes that cost $150, you won’t bother saving $20 or $30 on that if you can go to The Athlete’s Foot and make sure you’re getting a high, personal level of service.”
“We have no doubt that the fact we’ve focused on personally fitting the customer, having staff with a high level of understanding and high stock levels, have led to these results, and we don’t lose sight of that.”
One of the key shifts within consumer behaviour as a result of the global financial crisis has been a renewed focus on family and community. Hammerschlag says TAF is leveraging that by connecting with local sporting groups and schools to create sponsorships and brand awareness.
“We are working across the line in sporting clubs, schools, and we are generating a lot of business from the outside. We don’t wait for customer to just arrive to us, we go out and get their business,” he says.
Growing in the right way
Expanding quickly isn’t a recipe for success – just ask the Reject Shop. Instead, TAF is renovating many of its stores to make way for new product ranges, which Hammerschlag says is a cheaper alternative to just opening new stores in locations that may or may not work.
“We will only open a store if it’s in the right position. This next year we’re looking at opening five stores. Instead we are converting our stores to bigger footprints, because the easiest way to make mistakes in retail is just to blindly open new stores.”
Any franchise is only as good as its individual franchisees, and Hammerschlag keeps a close watch on the hiring process.
“Our average franchisee is highly entrepreneurial. The franchise system is extremely profitable, and all of our franchisees are businessmen in their own right. They have worked in business in their own right before, and we put a large amount of trust in them.”
Targeting the right people
The Athlete’s Foot wants to portray a certain type of exclusivity. With so much renewed focus on health and fitness, TAF positions itself as “the place to be” when people want to get serious about going to the gym or playing a sport.
“Everyone is finding a way to live 10 years longer, people are trying to be healthier and people of my generation are out exercising when they never used to before. People aren’t going to hold back on their health, and that’s the market we try to target,” Hammerschlag says.
Morris agrees, saying that TAF needs to stick at it’s main demographic if it wants to continue performing well.
“You have to establish something unique about what you do and position yourself appropriately. For example, if you’re selling men’s shoes for $300 at the business end of Melbourne, you’re not about to start selling slippers at discount prices.”