Why did Shoes of Prey fail? Because it listened to customers

Jodie Fox Shoes of Prey

Shoes of Prey co-founder Jodie Fox.

Shoe retailer Shoes of Prey toppled over like Bambi in heels last week. And no wonder, because according to chief executive officer Michael Fox, the founders trusted what their customers told them.

In outlining the reasons Shoes of Prey failed, Fox pointed to a yawning gap between customer intent and actual behaviour: “While our mass market customer told us they wanted to customise …what they were consciously telling us and what they subconsciously wanted … were effectively polar opposites.”

And, “despite all the right trends towards personalisation and our success within the customisation niche, contrary to our market research the mass market fashion customer just didn’t respond as we expected”.

The problem? Most market research — whether it’s sending a survey to your customers or a full-blown qualitative and quantitative study — is based on what people say, not what they do. That means:

  • They say they want a better way to cut GLAD Wrap but freak out when the cutting bar is moved;
  • They say the new flavour Coke is better, but revolt when the original formula is replaced;
  • 50% of Victorians say they eat healthily but only 7% eat enough vegetables; and
  • 60% of Americans say they’ll vote but only 40% do.

Humans are faulty forecasters

As we’ve seen with Shoes of Prey, this chasm between intended and actual behaviour can destroy a business. It’s not that customers lie, it’s just they can’t tell you the truth because humans are faulty forecasters.

There are two key reasons for this.

Firstly, when you ask people about future behaviour, they answer as if they are responding for a stranger. This psychological distance makes it difficult for them to accurately empathise with their future self, leading them to be overly optimistic about the likelihood they may or may not do something.

‘Would you customise a shoe that’s right for you?’ ‘Of course! It’s what I’ve always wanted!’

Secondly, when you ask people a question, typically they answer using their ‘system two’ brain. System two is deliberate, fact-loving and logical thinking.

People use this when dealing with an unfamiliar, difficult and/or unexpected situation (like, I don’t know, market research). So when asked a question like ‘would you spend time conceptualising and customising a shoe?’ they answer ‘sure’.

The problem is, back in the real world, your customers spend most of their time in ‘system one’ land, where intuition, habits and emotions rule. When given the chance by Shoes of Prey, did they actually bother to customise shoes? No. As Fox writes: “We learnt the hard way that mass market customers don’t want to create, they want to be inspired and shown what to wear.”

Unless your research is tapping into system one, you are unlikely to be getting an accurate picture of likely behaviour.

How to ensure research is not rubbish

Market research can have a place, but don’t expect it to provide robust forecasts on customer behaviour. Sure, it might make you feel you have ‘listened’ to your market, but realise you are paying (a lot of money) to feel better rather than get real answers.

To make sure any research you pay for is not rubbish:

  • Be sure to interrogate your research team about how they will get to real rather than intended behaviour; and
  • Use it to spark hypotheses.

Think of market research as the starting point rather than the conclusion. Listen to what people have to say but take it with a huge grain of salt.

What you should be doing instead

If market research won’t give you answers, how can you anticipate what people will do? That’s what you and every other business really want to know.

‘If we do x, how will our market respond?’

For that, there’s behavioural economics.

You can use an understanding of the hard-wired biases and heuristics governing behaviour to anticipate how people will respond. Behavioural economics is based on observation and experimentation, so it avoids a lot of system two distortion, and through it, we finally have a way to bridge the ‘say versus do’ divide.

It’s available to you now by the way, so there’s no need to commission new and expensive research. Get started by checking out the backlog of articles I’ve written to see how it can be applied to everyday business issues.

Despite the best efforts of his team and with the hope of investors, customers and staff dashed, what would Shoes of Prey’s chief executive officer do differently?

There are customer research methods that enable you to peel back the layers of psychology to understand what a customer truly wants. While this type of customer research is difficult to get right and the results aren’t always clear cut, if I’m ever attempting to change consumer behaviour again, I will do this.” I pray you will too.

NOW READ: “We learnt the hard way”: Shoes of Prey collapses into liquidation, ending months of uncertainty

NOW READ: Build-a-Bear Australia placed into voluntary administration with 10 stores to close

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lisa murray
lisa murray
1 year ago

What a great article!

Michael
Michael
1 year ago

Excellent and accurate article.

Sowrabh Behl
Sowrabh Behl
1 year ago

They should have targeting a younger market – more tech savvy and favour highly personalised pieces. The older generation are too busy to care to customise and just want someone to show them what to wear. Shoes of Prey simply don’t really understand who their real customer was for customised shoes.

Alberto Savoia
Alberto Savoia
1 year ago

Great article and analysis Bri.

A sad, but all too common, outcome. Market data that comes without skin in the game is not to be trusted.

It’s much easier to get people to open their mouth than their wallet.

I made a couple of videos on the topic.

Skin In the Game Part I: https://youtu.be/uNnLj10cNQc
Skin In the Game Part II: https://youtu.be/B0gHA-GTDUA

Barbara Austin
Barbara Austin
1 year ago

Actually, the reason I quit buying from Shoes of Prey is not because I didn’t want custom shoes (I DID, and still DO). It’s because their shoes were terribly uncomfortable, and poorly made. After buying three pairs of shoes from SoP over the course of one year, I realized that I would much rather wear store-bought shoes because they’re so much more comfortable. My SoP shoes are beautiful, but I hardly ever wear them because I don’t want my feet to hurt. The SoP shoes feel like they’re made with a cardboard shape covered with expensive material. It was ridiculous to spend $100+ on such cheaply made shoes, when as I said before — store-bought shoes are not only more comfortable, but also less expensive. Even if that means I have to wear generic colors like black or taupe, instead of having the unique colors and patterns that SoP offered.

Faith
Faith
1 year ago

I disagree with your examples, with all respect and do not see the correlation in the respect of your examples. The boxes for Glad wrap that replaced the old boxes where the metal strip did cut the Glad wrap, did not cut the wrap. Coke’s new flavours did not taste nice, they tasted artificial and too much like lollies. Dieticians know much more, with studies from doctors over the last 20 years, with regard to what is good for us, as humans, for our diet. Shoes of Prey’s shoes were good shoes, Shoes of Prey did not advertise enough. The shoes from the big retailers are rubbish, uncomfortable, and ill fitting unless one has an A or B sized foot. I am so upset that Shoes of Prey folded, their business model was fantastic. Advertising, advertising, advertising. I hope that their ‘pause” is played and put into high gear.