The Shipping Crisis Is Pummeling the Footwear Industry, But Independent Shoe Stores Might Be Hurting the Most
As the holiday shopping season looms, the shipping crisis is still in full swing.
Pandemic-related shipping slowdowns, factory and store shutdowns, clogged ports and worker shortages have forced retailers to seek out solutions for moving product in time for the holidays. In many cases, these methods come at a much higher price point and often involve pre-ordering product at a higher rate to account for slowdowns.
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On July 8, the Footwear Distributors and Retailers of America sent a letter to President Joe Biden asking for him to help alleviate rising shipping costs and delays. The National Retail Federation and numerous other industry have made similar calls to action.
For smaller, independent footwear retailers, coping with the shipping crisis has been especially difficult.
“It’s been an absolute nightmare,” said Dave Levy, co-owner of Hawley Lane Shoes in Connecticut. Levy generally purchases inventory for his family business of five stores six months in advance from vendors. But factory shutdowns and shipping delays have made it so that orders are being pushed back every day. In some cases, Levy has resorted to purchasing shoes directly off a vendor’s website to avoid losing a customer from his lack of inventory.
“Though we spend a lot of time planning our business, it doesn’t seem like that’s making much of a difference,” he said, explaining how his solution to the problem has also involved making some additional orders as well as “a lot of praying.”
Large retailers and footwear companies have developed systems to manage in the current environment. Walmart and Target both said in their earnings calls earlier this month that they were securing supply early and chartering vessels to prepare for Q3 and Q4. Deckers and VF Corp. have shelled out for air freight to expedite shipping. Kohl’s said in its recent earnings call that it was expediting orders and adding carrier pickups to allow inventory to flow to stores faster.
But in many cases, smaller footwear stores lack the capital and storage space needed to carry out such projects. As such, these businesses have had to get creative to navigate delays.
“Independent retailers are resilient and over the last 18 months have adapted to the changes in the supply chain,” said Mark Denkler, president of the National Shoe Retailers Association, a nonprofit that supports independent shoe store owners in the U.S. and Canada. “With that in mind, many have projected their orders and have done more future orders than ever in the past. This includes the holiday season.”
Lester Wasserman, owner of Tip Top Shoes, said he programmed and planned out his orders to account for backups if needed. He has been refilling his stock more frequently as opposed to making massive orders less often since his New York City-based store offers little storage space.
“While larger retailers are taking larger and more aggressive positions in addition to flying shoes in, your average independent is unable to do that,” Wasserman said.
Adam Beck, CEO of family-owned retail chain Beck’s Shoes, said he has been working directly with suppliers and vendor partners to plan ahead and order more shoes upfront for his 21 stores across five states. He estimates that he has accumulated 20,000 pairs over the last year in preparation for expected shortages this holiday season.
“We constantly are in communication with our vendor representatives,” Beck said, explaining how he constantly checks his vendors’ B2B website to make early purchases based on what he predicts will sell. “Because obviously when the vendors are sold out, they’re sold out and that’s it.”
To store his pre-purchased inventory, Beck said he had to get “creative” to due to the high costs of rent in his home base of San Jose, Calif. He purchased 10-by-20-foot shipping containers that he uses to store his inventory. He also converted any unused space into storage and extended his shelving units to stockpile product needed for the anticipated shortage in Q4 and Q1 of 2022.
“It’s all about solutions,” Beck said. “We have a very solutions-driven mindset here at Beck’s Shoes. We don’t look at problems, we only look at solutions.”
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