Sports shoe franchise The Athlete’s Foot has finally opened an online store in a move to fight back against online overseas retailers.
Ivan Hammerschlag, chairman of franchisor RCG Corporation – which owns and operates The Athlete’s Foot – told SmartCompany the shoe retailer had left its move online a little late.
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“This project has been 18 months in the making; it is not a matter of just switching it on. I think all of us Australian retailers were caught flat-footed,” he says.
“We are late, but we are on.”
“Did [our competitors] get there first? Yes. The first mover advantage is sometimes an advantage, but we have a big trust component. We have a brand that people trust.”
Hammerschlag says The Athlete’s Foot had no choice but to try tackling its internet competitors head-on, but it would be unable to match other stores on price.
“Our customers want to shop there; they do a lot of research on the internet. They are coming into store there. They want to order online and pick up in-store,” he says.
“We think part of our business has been flowing offshore and we want to capture that.
“It is the way of the world and any retailer who doesn’t respond will lose their business.
“We think what is happening in Australia is 80% consumer sentiment and 20% structural and we think people will pay a little bit more for brands they trust.”
Hammerschlag says RCG Corporation’s other retail chain, Shoe Superstore, now drew 15% of sales from online and successfully used a “click and collect” model where consumers could order online and pick up in-store.
“At Shoe Superstore, we have found very substantially they order online, pick up in-store or order online, get delivered and change in-store,” he says.
Hammerschlag says Shoe Superstore does not even have stores in South Australia, but is getting “substantial orders” from there.
He claims The Athlete’s Foot is not threatened by the move to online and will be able to translate its in-store focus on customer service to online.
“A lot of retailers see [online] as a threat and we see it as an opportunity and a way to serve our customers,” says Hammerschlag.
“We are very focused on selling function and fit. We have a fitting algorithm that takes the customer through the whole process and asks a range of questions; we also encourage customers to go in-store and have a free fitting service for them.”
Customers who have an in-store fitting and then order shoes online will have 100 days to return their purchase for a full refund, provided the shoes have not been worn. The Athlete’s Foot will offer free delivery and returns.
Hammerschlag says the launch of The Athlete’s Foot website is unlikely to lead to the closure of any of the retailer’s 140 bricks and mortar stores.
“We believe it is additional to the store. We are always re-examining our stores and rationalising them, but we have no plans to close.”
The Athlete’s Foot made $200 million in revenue last year, but Hammerschlag says the retailer has not released any projections to the market for this year’s revenue, and does not know how the internet store will contribute to revenue.
“The answer is we don’t know, but we are told it will get to 5% of revenue pretty fast. Shoe Superstore is already in excess of 10% -15%,” he says.
Shannon Walker, executive director of the Australian Sporting Goods Association, says the association has been encouraging companies in its sector to go online and take advantage of those opportunities.
“I think that companies need to take into account their own business models, own markets and potential new markets,” he says.
“The Americans in particular have probably beaten a lot of us to the punch, but Australians are innovative and I am confident that Australians can succeed online.
“That does not change the fact that all Aussie retailers are still hurt by the low-value threshold and we need to work with the government to create a level playing field for them.”