Jodie Fox: We’re here for the long term
Mass customisation startup Shoes of Prey recently announced plans to close its David Jones concession and the six concessions it operates in the US department store chain Nordstrom. Internet Retailing spoke with Shoes of Prey founder Jodie Fox about the reasons behind this decision and why she thinks the conversation about offline vs. online misses the bigger picture.
Heather McIlvaine: You recently announced the decision to close your concessions in bricks and mortar stores. Can you walk me through that decision?
Jodie Fox: It’s an evolution in our strategy. We decided to wind down our offline retail presence and really focus on the pureplay channel. I think the maturity of where our business is now, and being ahead of the curve [in the mass customisation space], we’re ahead of the curve with our customers too. Right now where we see our customer, she is absolutely online and that’s where the lion’s share of the growth opportunities are for Shoes of Prey.
HM: What was the decision based on?
JF: When we looked at it from a number’s perspective, [the stores] took 25 per cent of our cost base and gave us a 15 per cent return. So just on the maths of it, we could see that while it was very interesting from a branding perspective in addition to sales, it just wasn’t the place we should be putting all our focus as a business right now.
I’m very comfortable that it was right to test [the store model], because we didn’t risk the business on it, we didn’t raise any cash, we have a very healthy runway sitting in front of us. I’m glad we tested it, but in thinking about the maths, when you consider the work we have done online previously and the maturity of our customers who are connected in with our new design interface, we really see the technology being able to deliver that retail experience.
HM: Why do you think the offline model was less profitable for you?
JF: The transition [to offline] needs more development and I think all of the world’s leading retail players are aware of it. If you look at Amazon, they’ve been experimenting with bricks and mortars for years but we still don’t see a large-scale roll out. I also think that more of our customers have matured into online shoppers as well. Whereas previously being part of the online market was a bit scary, e-commerce was new particularly in Australia, the online space is lifting up. We’re seeing our customers not only mature with us but also mature in their shopping habits.
HM: In operating offline stores for two plus years, you gained a good deal of brand awareness, which some people say is one of the main disadvantages of being online-only. Do you think in a way that this could be an effective strategy: to operate offline on a short-term basis and then move back to pureplay? Do you think there’s a scenario where retailers would flip back and forth between the two?
JF: There is something to that, and one way retailers are doing that is through pop-up stores. However, I think there is room for longevity in the omnichannel space, rather than flipping between the two. We’ve made the call in our strategy that we’re not going to explore [omnichannel] at the moment because we believe that dedicating those resources to online will be a much bigger play for us.
I do think there is a place for omnichannel to exist and I do believe in it, I just think we’re solving a much bigger problem which is around mass customisation and on-demand retail. If you look at what is happening in fashion right now, we’re seeing people go direct from the runway to consumer to shorten the supply chain. And it’s not just small brands doing it, it’s brands like Tom Ford and Burberry doing it as well. So there’s a question mark over whether [retailers] even have the right business model.
I firmly believe the on-demand part of this and the ability to customise – whether that’s by the consumer or by the distributor – helps us to shorten all of those [supply chains] and create a sustainable business.
We’re here for the long term. Shoes of Prey is not necessarily about shoes, it’s about getting customers what they want, when they want it, before they know they want it. The ‘before they know they want it’ is about the data that we need to harness.
HM: How do you see on-demand impacting the future of retail?
JF: The future should be a much bigger discussion than online and offline. There’s such a big role for manufacturing to play. Think about opening up your wardrobe and inside there’s a hologram or a screen and it says, Good morning, I checked your calendar, these are the meetings you have today, this is weather. I talked to the other wardrobes, so you won’t turn up wearing the same thing as anyone else in the meeting. Based on what you’ve been wearing lately, I think these shoes may be right for you. Would you like me to print them out for you?
And they’re printed out while you take a shower.
For me, there’s online, there’s offline and there’s home retail. I think the conversation should be about what’s the most convenient way for consumers to get their products. Maybe it’s not online or offline. Maybe it’s actually happening in your home. The conversation should always put the customer at the heart. That’s when we’re going to see the most exciting innovations in retail.
HM: In a scenario like that where on-demand manufacturing comes to the fore, what’s the role of the brand or retailer?
JF: There’s still absolutely an emotional connection in the things we choose to buy. There might be some [brands] that are more commodity based like what we see in the electronics industry. But I personally still have a brand bias. If we weren’t biased at all, then nobody would care about Apple. But if you look at fashion specifically, there is an emotion as to why you choose to put something on your body. What you wear says something about you. It may be that you picked up the item at a Colombian street market and only paid $30 for it, and that says that you like to travel, you’re adventurous and you know how to get value. So I think with fashion you absolutely do have to have a brand. Fashion is about why, it’s not about the mechanics of what and how.
HM: You mentioned that data is going to play a bigger role in how Shoes of Prey interacts with customers. What’s the next step for you in making that data actionable?
JF: I think we still have a long way to go with presenting people the right things at the right moment, and data will play a huge role in that. We have seven years of data and people have designed more than six million pairs of shoes with us, so we understand what it is women are looking for. The more we can harness that data, the more we can help people to avoid paralysis of choice, which is a very real thing.
What we need to be able to do next is collect and slice [data] in different ways. We have broader segmentation available, so we can generally ascertain why you’ve come to the website, the colourways and heel height you like to wear, because those are the things we see in your account.
But what we’re not doing is looking at your Instagram and seeing the styles you follow and what you might like to wear. Recently we’ve been looking at algorithms we can build to understand that and understand you, so we only present you with things you’re going to like. There’s a huge amount of data about everything online.
This interview has been lightly edited.