A Shoe Store
As I mentioned previously, Rita worked in a Stride Rite children’s shoe store for a few years while I was a graduate student. She seemed to enjoy it for the most part and had learned a lot about the children’s shoe business.
Shortly after Amanda was born, we went to the local Stride Rite to get shoes for Caleb and saw they were closing. We inquired about this and were told the owners were getting divorced and selling the story to divide the assets. Since Rita had experience managing a children’s shoe store, we discussed buying it. Looking at their tax returns for the prior three years, it was pretty clear the store was making money. We knew they were pretty desperate to sell, so we simply offered to purchase the inventory. They accepted, and we were owners of a children’s shoe store.
It was pretty clear in 2002 that the future of retail was online, but I thought parents would really want to have their children try shoes on before buying them. Plus, I had looked into e-commerce software and thought it wouldn’t be too hard to develop an online presence that might combine the ease of online shopping with the benefits of making sure the shoes fit. By the time we closed the store, even Stride Rite, who had always emphasized how the people at their stores had been trained to make sure the shoes fit well, was selling online. However, I think the two things that really hurt the business were Zappos’ free delivery/returns and not competing on selection. I’d heard from several colleagues that they would buy three or four pairs from Zappos and return those that didn’t fit well. Obviously, the price of shipping was included in the price of the shoes, but the convenience outweighed the higher cost for most people.
With the ability to store shoes in cheap warehouse space–not in a small retail store–and deep pockets to keep many shoes in stock, Zappos could simply offer people a much wider selection than we could. One of the difficulties in the shoe business, especially the children’s shoe business, is maintaining inventory. When you multiply the number of styles by the number of sizes and then by two or three different widths, you get some huge numbers. Plus, you needed to place orders months in advance, and there is usually no way to replenish inventory once popular styles sell out. I think large chain stores had more clout with the manufacturers to refresh inventory, and they also had the ability to move shoes from store to store.
A change we made at the outset was to no longer be an official Stride Rite franchise. There was no franchise fee, but Stride Rite required that 80% of your inventory had to be their shoes. Rita wanted to sell New Balance, Sketchers, Elefanten, and Nike shoes, and Robeez slippers. There was no way we would be able to maintain an 80% Stride Rite inventory. In hindsight, I’m not sure how they would have really ever known since I don’t recall a Stride Rite representative visiting the store. Although, maybe if we kept the Stride Rite name, they would have checked. We decided to call the store Small Feats Footwear.
With all of the turmoil in our lives at that time, I think this was not a very smart decision in hindsight. I was still an assistant professor, and while Caleb was doing well, we knew Amanda had a lot ahead of her. The plan was to hire people to work there for a few years as things with Amanda stabilized. Unfortunately, it was hard to find reliable employees, although we did find a few. However, they were often students who moved on when they graduated. Plus, we could really only afford to have one person there at a time. This resulted in a lot of laziness because there was no other person to tell us their coworker was not doing anything.
I also learned that running a small business is a lot of work. Advertising is something that I don’t think we ever really understood well. It was expensive and hard to tell if it was working. We advertised on the radio and local television a bit but never really could quantify how or if it benefitted sales. We also sent out many mailers and participated in coupon packs you often get in the mail. The postcard advertisements we send were probably the most effective as they were targeted at prior customers. They were also relatively cheap. If we still operated the store, I’m sure we would have replaced these with email, which would have been significantly cheaper without having the postcards printed and paying the postage to mail them.
I developed a point-of-sale system that could also act as a website for online sales, which we never really deployed. I used an open-source e-commerce web application called osCommerce written in the scripting language PHP and used an open-source database to store information. One benefit of this was that it allowed me to learn to program in PHP and interface software with a database. I made many custom modifications to osCommerce to fit the needs of a shoe store and added inventory tracking and payroll/accounting pieces to it.
One of the problems I saw with the normal shoe store model of having samples on display and a back room full of inventory was that most of the time, kids left disappointed because they would see a style they really liked on the showroom floor. However, the particular size they needed was not in stock. When we moved locations, we decided to use a new strategy of having everything on display. I built about 20 large shelving units with sloped shelves at eye level for displaying shoes and cabinets above and below for storing the boxes. To try to prevent theft, we kept one shoe on display and the other in the box in the cabinets. With this arrangement, parents could simply have their kids’ feet measured and take them to the section containing their size to pick from what we had. This seemed to work well.
Unfortunately, the shoe store never made any money, and we wound up with a lot of debt from it. While the Robeez slippers always sold well, we simply could not compete with the inventory and convenience of Zappos. We tried buying and selling used children’s clothes for a while, but that didn’t seem to help things much. I learned a lot from that experience, but the lessons were costly.