5 Lessons From Shooshoos On Going Global
You're reading Entrepreneur South Africa, an international franchise of Entrepreneur Media.
- Players: Gill Bowen and Tim Hartzenberg
- Company: Shooshoos
- Launched: 1996, purchased by Gill and Tim in 2014
- Visit: shooshoos.com
When Gill Bowen and her husband, Tim Hartzenberg bought Shooshoos in 2014, it was because they loved the product and could see its potential. Over the past three years they’ve grown the business by 35%, although this hasn’t been their core focus. Instead, they’ve been laying the foundations for much bigger growth, both locally and abroad
Here are five ways that Gill and Tim have taken a 20-year-old business, and revitalised the brand while building a solid base from which to grow exponentially.
1. Never become complacent — quality and choice keep brands relevant
Even the best brands are in danger of becoming complacent. Shooshoos was no exception. When Gill and Tim took over in 2014, they realised that although they loved the brand, it hadn’t changed much in 17 years. The result was a rise in competitors, lack-lustre retail buyers and an indifferent market.
“When Shooshoos entered the UK market for example, there was nothing like them,” says Gill. “They were new and different, and offered exceptional quality. There were no competitors on the market that even vaguely resembled them.”
But time passed, and the company did not innovate. Styles remained the same, buyers got bored of the same choices they’d had the year before, and competitors started offering their own leather baby and toddler shoes — with more variety.
“One of the first things we did was give our range a facelift. We now have 150 new styles every six months.”
However, Gill is learning that there’s a fine line between variety and too much variety. “We’re pulling our options back for two reasons. First, it will save on our imported leather costs, and these are savings we can pass on to our consumers. Second, this new strategy allows us to release limited ranges. For the true Shooshoos fan, this means something new and different, and when the range is gone, it’s gone.”
The lesson: Brand longevity requires two core ingredients: Dependable quality and fresh designs and options. By combining both, Shooshoos has become a more desirable brand.
2. A single distribution channel grows the value of a brand
ill and Tim discovered a second problem with the business’s international growth strategy: Shooshoos had no proper trade agreements in place, and were happy to sell to anyone. The result was three distributors competing with each other for shelf space in big-box retailers and niche baby stores alike.
“This didn’t equate to more business; it did the exact opposite,” says Gill. “It drove down prices as they were all trying to get to the retailers first, and offering discounts to do so. They’d also do deals on consignment, instead of cash on delivery. This devalued our brand, because it was too easy to acquire, and retailers just waited for the biggest discount.”
The lesson: A strong distributor who understands and supports your brand strategy is vital to the overall growth and value of your brand. It’s pointless pursuing one strategy if your distributor is under-cutting the market.
3. Consolidate before you focus on growth
“When we bought the business it wasn’t geared for growth. No focus had been placed on developing systems and processes, or streamlining costs,” says Gill.
The company operated out of two separate buildings (manufacturing and offices) that were a 45-minute drive apart. “It was extremely inefficient, from a cost and time perspective,” says Gill. “One of the first things we did was consolidate into one building that houses our offices, manufacturing plant
The lesson: It’s difficult to manage a disorganised work space. Inefficiencies result in hidden costs and delays. By consolidating the business under one roof, Gill and Tim were able to implement proper processes and trim costs — even though their staff complement increased from 50 to 60 employees. Firm systems and processes have given the business a sound base from which to grow.
4. Building an export market takes time, so lay good foundations
When Gill and Tim took over Shooshoos, the business had an international footprint, but there was no international growth strategy in place. “The US was an online store for old stock, and the UK was in disarray.”
There are two key points to consider when approaching an export market: Are you geared for its seasonality (and the long tail of exporting), and do you have a proper go-to-market strategy in place?
“We understood seasonality, and were prepared for it. You need to work 12 months ahead, because buyers will generally order eight months in advance, and their season cycles are different to yours, which requires two completely different manufacturing lines. It took 30 months to ramp the business and orders up to a decent level that we can build from.”
Gill and Tim’s go-to-market strategy has focused on trade shows, a tactic that is working well for the business, even if it got off to a rocky start.
“The organisers of our first show assumed we were a cheap brand and stuck us in a corner. No one walked past our stand. Fortunately, we had put a lot of effort into making it look incredible, and so while no one saw our products, the organisers did — and apologised profusely for where they put us. I was able to negotiate a stand up-front at the entrance for their next show based on that. It was a prime spot, and we made our mark.”
By exhibiting at trade shows, Gill and Tim have launched the brand and been approached by Kevin Harrington’s team.
“Kevin was one of the first Sharks on the US Shark Tank. He’s the inventor of the infomercial. They filmed our advert for a small production fee, and will air it for a full year, building our brand through their channels. From the second year, they take a 10% commission on every sale.
“They also host a product think tank that we were selected to attend, where we can share ideas with fellow entrepreneurs at an international scale.”
An essential component of a good go-to-market strategy is making it as easy as possible for consumers to buy from you.
“Tim spent weeks filling in a mountain of paperwork, but the end result was that we were able to open a local bank account in the US. This means customers can pay us without worrying about minimum orders and international money transfers. This has been an essential part of our US strategy.”
The lesson: As with any brand, you need visibility in the market. Trade shows are a good way to learn what other brands are in the market, what customers are looking for, and to make local contacts. However, it’s not a hit-and-run strategy. It’s a continuous strategy that ensures you remain prominent.
5. Find a price point that serves the business, but that the market can tolerate
Pricing can be tricky. On the one hand, the business needs to make a profit. Undercutting yourself and competitors can lead to small (or non-existent) margins, and eventually your business will go under. The same is true of discounts, which also undervalue your brand.
Price too high and you’ll harm the business because value and price doesn’t align in consumer minds. You need to be competitive, and your value proposition must be clear.
As the local economy has tightened, Gill has recognised two key characteristics in buyer behaviour. First, where customers used to purchase three pairs of Shooshoos per basket, they now buy one or two. Second, the styles they choose tend to be essentials that can go with anything.
“Our focus is to continue growing, and we’re doing it in another recession. Exporting has spread our risk, particularly because we earn in different currencies, but we can’t lower our standards to save costs. We won’t compromise the product.”
Instead, Gill has conducted focus groups with retailers and customers to understand how they’re making purchasing decisions, and the price points that the market can tolerate.
“We’ve adjusted our strategy. We still offer colourful Shooshoos made from imported leather that customers love, but we are launching a second ‘by Shooshoos’ brand that is affordable and focuses on simpler designs and colours — the ‘everyday’ baby and toddler shoe.”
The lesson: Research your target market. For example, European and US markets care about non-toxic and eco-friendly products. In South Africa, fit and price are more important. Any growth strategy must be cognisant of buying patterns and what your customers care about — and will pay for.