Source: Facebook | Kizik
Was Kizik’s Digital-First Shoe Brand Made For Brick & Mortar Stores?
Kizik is a digital-first shoe startup that sells a new kind of sneaker, which lets wearers put the shoe on and take it off without unlacing it or breaking the heel’s upper part in the process. The brand’s value proposition has attracted a minority stake investment from Nike. Now Kizik is trying on a shoe store for size as it launches its first standalone physical retail presence.
Kizik Fashion Place opened in the brand’s hometown of Salt Lake City earlier this month, Forbes reported. The launch of the location comes two months after the brand partnered to put its products in a small number of Nordstrom stores, representing a quick move from being an online-only business to one with both wholesale relationships and a permanent physical one. The brand is already reporting increased conversions in-store due to customers having the opportunity to try out the shoes’ unique design in person. Kizik is also anticipating fewer returns, increased average order value and more visibility leading to more website conversions.
Kizik’s expectations of more online customers because of a physical presence tracks with the results of a 2018 ICSC study, which found that retailers with physical stores experience more web traffic. According to the study, opening a new physical store leads to an average 37 percent increase in web traffic, with the digital presence experiencing a “halo effect” from the physical store.
Data likewise shows that e-commerce apparel operations lose far more on returns than non-online retailers, with average return rates reaching 30 percent or 40 percent (depending on the study) and 50 percent around the holidays. Shoes were the most returned apparel product within a 12-month period, coming in slightly ahead of bags and accessories, according to a 2022 Statista forecast.
Kizik is not the first direct-to-consumer shoe brand to appear on Nordstrom’s shelves. Allbirds, in June 2022, announced that it would be partnering to sell products through Nordstrom and a few other select retailers. Allbirds products, before that, had only been available online and through the company’s branded retail outlets.
Discussion Questions
DISCUSSION QUESTIONS: How much do you see a brand like Kizik benefiting from a single store? What steps can a digital-only brand take to ensure success and maximize ROI from a standalone retail store?
Poll
Loading …BrainTrust
DeAnn Campbell
Head of Retail Insights, AAG Consulting Group
Jeff Sward
Founding Partner, Merchandising Metrics
A single store strikes me as more of a branding exercise over a strategy, perhaps with a measure of “trial balloon” added to the recipe to see how it is received. To ensure success I like the partnership with Nordstrom-learn from that before you start investing in professionals who understand the retail industry.
My advice, whether you have one store or 800, is to make sure you consider the customer experience BEFORE you solidify your business strategy. Brands need to determine the role of each channel in the customer journey, not just the benefits to their sales having more distribution channels. A single store can work as a flagship, but it should be complimented with pop ups and store in store moments to scale. Kizik needs to define the role of their store: press space, influencer stop, showroom, sales channel, part of the start of a unified commerce model. They should discuss how they manage the inventory/assortment, returns, promotion strategy and staff training.
Fit in apparel is important. Fit in footwear is exponentially important. This shoe begs to be tried on, not only for fit, but also for comfort while walking. Does the engineering that makes the on/off process possible hold up under use? New products with new engineering trying to cultivate new customers beg for an in-person experience. And then repeat customers can buy on-line with confidence. Isn’t this part of the big lesson learned from the stores + ecomm equation?
Talk about going against the grain.
Few categories are more frequently bought online than sneakers. Hopefully, for Kizik this is a learning exercise and not a long-term strategy. Consider the challenges Foot Locker is facing.
The slip-on product isn’t even unique. Zappos has over 200 slip-on offerings. Few sneaker brands don’t offer slip-on. Sketchers is advertising slip-on almost exclusively.
A working lab used by real customers has far more value than a mock-up sitting in a corner of the HQ offices. Of course one store won’t move the sale needle, but it will teach Kizik invaluable lessons they can use to grow more effectively into physical retail partnerships.
I’m sure Kizik wants to see profit from their investment in building out a store. However, break-even will work, especially if it gives some brand recognition to their online business. Strategically placed stores can strengthen brand awareness and be a great marketing strategy.
In my opinion, Kizik’s transformation from an online-only business to adopting an omnichannel approach is an excellent move that will allow them to offer a consistent shopping experience. The retailer has already initiated the first step of launching a physical retail store, so naturally the intention is to expand more depending on the future success.
Kizik isn’t the pioneer digital-first brand to follow this path and it won’t be the last. Earlier, Warby Parker was an online-only retailer as well, however with time they expanded their operations and now have a strong presence in both online and offline retail.
Modern retailers realize the importance of leveraging both channels to their advantage. An omnichannel initiative like “Buy Online Pick-Up In Store” is not only cost-effective for retailers but also ensures quicker order fulfillment for customers. Additionally, when the customers come to pick-up their orders, they can physically examine the product in-store itself before collecting it, which helps retailers in reducing the rate of returns.