February 2014 by FOCUS ON FASHION RETAIL

FEBRUARY 2014 Nยบ 57

Armani Fashions Spring/Summer 2014

Things To Watch in 2014 Retail Changes in Global Footwear Sourcing

Fashion Trends

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FROM THE EDITOR

HIGH-END FASHION AND LUXURY LIFESTYLE TRADE MAGAZINE FOR AMERICAN RETAILERS

SHINE YOUR SELF! Dear Friends,

ON FASHION RETAIL EDITOR: Alex Geyman GENERAL MANAGER: Dmitry Nelipovich ART DIRECTOR: Allison Moryl GRAPHIC DESIGNER: Pay Fan GRAPHIC DESIGNER: Nadine Alvillar FASHION EDITOR: Francesca Trippoli SUBSCRIPTION: Sandra DaSilva RESEARCH: Shawn Lancaster SALES: Claudia Perez

As you can see, I am a little out of space for the traditional Editor’s letter welcoming and guiding you through the new issue. The great thing about the FOCUS’ audience is that YOU guys are far more intelligent than the audiences of all other sources and thus, by definition, you don’t need special guidance. I just hope that you will appreciate this issue for its useful content. Just recently I joined Facebook and am happy to making new friends everyday. Although… I am getting tired of a guy pretending to be Al Pacino posting dozens of real actor’s photos everyday. This schmuck (the impostor, I mean) also pollutes the air with somebody else’s quotes, pictures, recipes and even though they are wise and beautiful, they are not his. And if only that guy was alone! Seems like almost everybody nowadays finds it cool to lose their own identity and to assume somebody else’s - on Facebook, in life and in fashion. Fashion designers and shoemakers I meet at the events and private settings, all wearing Gucci and Schmucci, but nothing of their own? Nobody thinks independently, speaks genuinely, creates originally anymore? Just look around! Are you kidding me??? Well, as long as energy drinks sustain my life (but most likely will cause the end of it), my magazine will be bringing you the best in original fashion and learning experience to help you be successful in business and happy in life. Find the joy and fulfillment living your life as YOU, for yourself and others. And this is my message to you this month - SHINE YOUR SELF! As always, I would like to hear your thoughts. Please feel free to contact me at editor@focusonshoes.com with questions, comments, suggestions or topics you’d like to see covered in future issues. Serving you better is our goal and privilege.

And, please visit and LIKE us on Facebook! It’s www.facebook.com/focusonfashionretail Yours sincerely,

Alex Geyman Editor 6

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TABLE OF CONTENTS 6

FROM THE EDITOR: Shine Your Self!

ON THE COVER: Slava Zaitsev Pret-A-Porter De Luxe Show

FASHION TRENDS: Spring/Summer 2014

O p W P

FOOTWEAR MARKET: China Still Rules, But Global Footwear Sourcing Is Changing

MOTIVATION: Invest in Yourself: Add Value to You

TRADE SHOWS CALENDAR: February/March 2014

RETAIL 101: Dale Carnegie Quick Tips for Outstanding Customer Service

TRENDS REPORT: Leathers & Materials for Fall/ Winter 2014-15

CELEBRITES & FASHION:

BEING A LEADER: Risk Avoiders Are Opportunity Missers

LUXURY: What is Luxury?

TRADE SHOW TIPS: Buyers Beware!

RETAIL NEWS: Things to Watch in 2014

SUBSCRIPTION

YOUR OPINION COUNTS: Trade Shows Survey

All images and editorials in this issue are subject to copyright law and are the property of FFR and/or the owners/contributors. No images, designs or texts may be reproduced, copied, used whole or in part without written permission. FFR magazine disclaims responsibility for the statements, claims made by either advertisers or contributing authors. FFR magazine is not responsible in whole or any part of advertisement or typographical errors.

FOCUS ON FASHION RETAIL 25924 Viana Avenue, Suite 19 Lomita, CA 90717 USA TEL. (310) 784-0790 • FAX (310) 202-6027 GENERAL E-MAIL: info@focusonshoes.com WEB: www.focusonshoes.com © FFR - Focus On Fashion Retail

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It b in a fi C t C fa w a a c t s to w

ON THE COV ER

RafflWIN e TODAY! FOCUS magazine along with the sponsors Custom Nail Solutions (www.CustomNailSolutions.com) and DermaPür skin care (www. dermapurskincare.com) will give away these wonderful gifts to four lucky readers just for stopping by the booth of any featured advertiser in this issue at any trade show during the month of February! 1.

Custom Nail Solutions, the world’s only custom fit, non-toxic and everlasting artificial nail kit will be sent to two lucky winners! Retail Value $140 The nails are created using an impression system that’s similar to one dentists use and result in nails that are as unique to you as your fingerprint. They are thinner, stronger, reusable and virtually indestructible. Custom Nail Solutions then uses a state of the art laser process to create your one-of-a-kind nails and sends them back to you. You can paint them any color and apply any design. It’s as easy as that! The set Includes impression system kit, your beautiful complete custom nails, along with your nail maintenance system. www.CustomNailSolutions.com

DermaPür skin care, the maker of the world’s best anti-aging skin care products, will be giving away two sets of the following items: ULTRA RICH MOISTURIZER, a highly emollient and nutrient rich moisturizer containing Hyaluronic Acid, Green Tea and Grape Seed Extracts, Vitamin E, and Chamomile. It hydrates and nourishes the skin while revitalizing the appearance of dehydration and fine lines. Ultra Rich Moisturizer is great for dry, very dry, and sensitive skin types. Retail Value $46

SLAVA ZAITSEV On the cover of February issue: SLAVA ZAITSEV Pret-Aporter De Luxe show from the Mercedes-Benz Fashion Week Russia Spring/Summer 2014 in Moscow, Russia. Photo by Andreas Rentz. It is only now that the name of Slava Zaitsev has actually become synonymous with exquisite taste and high fashion in Russia. He was the first designer in the USSR to be allowed to put his label on clothing. In 1988 he was the first Soviet designer to show his collection at the Haute Couture Week in Paris. In 1974 he was named as one of the five top designers of the 20th century according to the Czech magazine “Kveta”. In 1982 he’s founded his own fashion house. It was there that he created the outfits which became synonymous with good taste within Russian artistic circles. Russian folklore tradition has always been an inspiration to Zaistev’s unique style. He expertly mixes classic shapes with traditional peasant costumes, surprising the public with his unconventional approach to fashion. He searches for harmony between form and content, trying to prove that a person can be not only an observer of the world’s beauty, but a firm part of it.

AGELESS EYE CREAM is a hydrating antioxidant and botanically rich formulation containing Peptides, Vitamin E, Echinacea Extract, Rosemary Extract, and Sea Kelp. This cream effectively reduces the signs of aging by softening the appearance of fine lines and wrinkles around the eye. www.dermapurskincare.com. Retail Value $21

r No purchase necessary. To enter the raffle simply come to the booth of any featured advertiser with this announcement, write a word “Raffle” on your business card and leave it with the person in charge. If you win, our friends from Custom Nail Solutions (www.CustomNailSolutions.com) and/or DermaPür skin care (www.dermapurskincare.com) will send you one of the listed items absolutely FREE. Only one item per recipient, no duplicate entries. The mailing address must be within continental U.S.A.

SLAVA ZAITSEV Pret-A-porter De Luxe show © FFR - Focus On Fashion Retail

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This raffle has been fully sponsored by Custom Nail Solutions and DermaPür skin care. Each of four lucky winners will receive one of the above mentioned pieces directly from the Sponsors, free of charge. The winners will be determined on March 1st, 2014 and the prizes will be sent to them within 6-8 weeks. Focus On Fashion Retail is not responsible for the content of this announcement approved by the Sponsors. Fe b r u a r y 2 0 1 4

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Light and Shadows Use of materials to create and play with volumes and forms. Lightness through volumizing layers creating shadowy effects. Freedom, comfort, fluidity make naturally relaxed silhouette. Usage of light colors like Majorelle Blue, in transparent dresses, tunics and pea coats, with touches of coral red, just like a magical garden beneath the sea. In evening dresses — embroidery and floral prints, front and back of front only. Trend in shoes — thong flat ankle boots.

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Ninfee (Water Lilies) The inspiration for the new Emporio Armani collection is the imagery of a garden lake, with reflections of clouds and flowers in its rippled or calm waters. Colors and shades of a bright blue horizon, gray, and dawn pink. Leafy, floral motifs in shapes and the shades of tropical blooms with minimal use of black. Lines limited to simple geometric shapes. Jackets made of soft technical fabric with flawlessly concealed seamless lines through heatsealing stitching. Slim-hip trousers with double pleats and flared legs stretching to the ankles. Sandals with floral motifs, lightweight tattoo-like colored leggings.

SPRING/ SUMMER 2014 ÂŠ FFR - Focus On Fashion Retail

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Spring/Summer 2014

FASHION

DOLORES CORTES

CUSTO BARCELONA

MONTSE BASSONS

ANDRÉS SARDÁ JUST CAVALLI

DONALD J PLINER

BARBARA BUI HARVEYS SEATBELT BAG 10

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FALLON

TOMMY HILFIGER

RALPH LAUREN

FIOCCA

DIESEL BLACK GOLD

Laser cut-outs, textures, fish-boning, macramé, and jacquards, transparent and micro-fiber materials.

Sunglasses Swimwear BALENCIAGA

BENJAMIN ADAMS

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Knots and braids are the new fringe. Bold, edgy detailing and femininae accents like ruffles are a few essentials that make a suit stand out from the rest, and what retailers are keeping their eyes peeled for this summer as they make crucial decisions for their 2014 buy.

Futuristic women’s sunglasses with bold architectural volumes, timeless elegance through wide butterfly shapes.

Shoes

Orange color is big, ethnic elements, reptilian skin or imitations for shoe uppers, wooden platforms or wood pattern covers, metal spikes. Fe b r u a r y 2 0 1 4

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Spring/Summer 2014

FASHION

DIANE VON FURSTENBERG

REBECCA MINKOFF

CARMEN MARC VALVO

MANAS - LEA FOSCATI HANNIBAL LAGUNA

DONALD J PLINER

CASADEI DSQUARED2

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Spring/Summer 2014

FASHION

ROBERTO CAVALLI

BARBARA BUI

MAYA HANSEN

JAEGER-LECOULTRE

GIOVANNI FABIANI MARINO FABIANI

FABI FALGUNI & SHANE PEACOCK

BARBARA BUI 14

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Spring/Summer 2014

FASHION CUSTO BARCELONA

DIESEL

ROBERTO VERINO

BARRACUDA TIMBERLAND

ROBERTO VERINO TESTOSTERONE FABI 16

December 2013

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MSTR

TODD SNYDER

FRANCESCHETTI

Geometric prints and scales against each other for dramatic fl air. Layering, color blocking. Sporty silhouettes, multi-color combinations. TOM FORD

Sunglasses SLAVA ZAITSEV

Retro feel and modern appeal, contrasting thickness and patterns. Variations on the aviator shapes with unconventional thick plastic front and temples delivering masculine look.

Shoes DONALD J PLINER

ÂŠ FFR - Focus On Fashion Retail

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Classic and retro styles, color blocking. Sporty look. December 2013

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FOOT W E AR MARK E T

China still Rules but Global Footwear Sourcing is Changing by Peter T. Mangione Managing Director, Global Footwear Partnerships LLC

“

p c p

With shoe production estimated at some 13.5 billion pair and footwear exports nearly 10.1 billion pair, China dwarfs all other producers.

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“

here is perhaps no more frequently asked question in the global shoe business than ‘What’s the next China?’ The short answer is ‘The next China is China.’ This is so even after a decade of intense global scrutiny by the world’s best shoe sourcing executives. Nevertheless, the ‘scramble’ to find suitable alternative sourcing options for China has produced a good pool of substitutes in some important niches. The pros and cons of the leading alternative sourcing countries are the subject of this article. The biggest issues are costs, worker availability and investment in shoe making infrastructure. As the following demonstrates, neither any one alternative country nor any combination of other sources will, anytime in the foreseeable future, draw the massive infrastructure investment needed to supplant China. While cost and labor availability issues will continue to plague shoe production in China, they will not derail its dominance as new sourcing options open up in China and existing infrastructure is modified to be more efficient. Of course a drastic run up in the value of the China Yuan versus the US dollar could make China

World Footwear Supply, Selected Countries (millions of pairs), 2012 Source: Industry estimates. ( ) % of change COUNTRY

PRODUCTION

EXPORTS

IMPORTS

China

13,500 (3.0)

10,071 (2.0)

50 (21)

India

2,065 (0)

115 (0)

79 (0)

Brazil

864 (5.5)

113 (0.3)

36 (4.9)

Vietnam

725 (5.0)

625 (4.0)

25 (10)

Indonesia

700 (6.7)

320 (7.0)

33 (10.0)

592 (2.0)

217 (11.9)

2,287.5 (-10.4)

Mexico

265 (4.7)

26 (18.2)

77 (15.0)

Thailand

250 (-10.0)

110 (-20.0)

45 (0)

Korea

85 (6.3)

30 (22.0)

169 (30.0)

Japan

69.2 (-6.5)

1.2 (0)

629 (1.6)

Taiwan

40 (0)

17.2 (3.6)

75 (5.6)

C d o l c s

G L

I o p g

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US Footwear Imports January — September 2013 COUNTRY

PAIRS

% CHANGE

VALUE

China (82.2%) Vietnam (9.4%)*

1,519.2

0.0

12,964.0

173.8

20.6

2,136.4

Indonesia (3.6%)*

66.7

25.1

890.1

28.3

13.34

2.6

Mexico (0.8%)

14.8

1.4

355.1

14.6

23.99

13.6

India (0.7%)*

12.3

21.8

208.5

7.1

16.95

4.1

UNIT VALUE

% CHANGE

0.0

8.53

0.0

21.2

12.29

0.0

Italy (0.6%)

11.3

2.7

940.1

7.1

83.19

-4.2

Brazil (0.4%)

7.7

-22.4

146.8

-9.5

19.07

17.7

Dom Rep (0.4%)*

6.7

9.8

171.1

15.9

25.54

5.5

Thailand (0.3%)*

6.1

0.0

86.8

6.1

14.22

6.0

Cambodia (0.3%)*

4.7

74.1

44.2

39.9

9.40

-19.9

Taiwan (0.2%)

3.7

-15.9

26.7

-23.9

7.27

-8.8

Hong Kong (0.2%)

3.6

33.3

33.6

24.9

9.33

-6.3

Spain (0.1%)

2.7

18.4

138.0

15.4

51.11

-1.7

WORLD TOTAL

1,847.4

2.9

18,576.7

4.2

10.56

1.4

production so expensive as to make sourcing companies desperate enough to try more producers in other countries. A shift to a much stronger currency in China does not seem too likely given the devastating effect it would have on millions of jobs in China’s vast export sectors. China’s leaders are much attuned to the adverse consequences that such a shift would have on social stability.

GLOBAL SOURCING LEADER — CHINA In 2012 China accounted for about two thirds of global shoe production among the largest producers and about the same proportion of global shoe exports. With shoe production estimated at some 13.5 billion pair and footwear exports nearly 10.1 billion pair, China dwarfs all other producers In fact it has more production and exports than the entire group of other major shoe producers in the world, as the table below demonstrates. In 2013, it is estimated that China’s shoe exports will increase by some 4.0% in units and nearly 7.0% in value, the largest export gain in recent years. This impressive export performance comes despite the quadrupling of factory worker costs to an average of about $2.00 per hour from less than $0.50 per hour in 2005. The run up is due to 1. Large and relentless government mandated minimum wage increases, 2. Stricter enforcement of overtime and social cost payments, © FFR - Focus On Fashion Retail

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% CHANGE

3. Chronic and systemic labor shortages, 4. Environmental law implementation, 5. Inflation in food, fuel, electricity, water, and perhaps most important 6. A China currency that is nearly 30% stronger today against the dollar than it was in 2005. Many producers are working to improve productivity in their existing investments. Others have added living space for couples, improved dormitory/meals conditions, expanded educational opportunities, etc., to help entice migrant workers to remain with the company longer. Increasingly though, entrepreneurs are recognizing the limits of improving worker labor issues at existing facilities in the Pearl River Delta. They are establishing either factory and/or stitching facilities inland in China where workers are still available and costs are lower than those in the Pearl River Delta area. Key inland destinations include (1) Jiangdu, Danyang, and Suzhou in Jiangsu, (2) Zhoukou in Henan, (3) Putian in Fujian, among many others in provinces such as Anhui, Jiangxi and Hunan. China’s road and rail infrastructure has made moving materials and executives (by the high speed rail system) all over China easy and efficient, opening many new and profitable options for keeping shoe production in China. Indeed, many overseas buyers have moved sourcing programs to well established China shoemaking clusters that have not traditionally been used by such buyers. These areas include (1) Wenzhou and Wenling in Zhejiang, (2) Jinjiang and Putian in Fujian, and (3) Chengdu

in Sichuan, among others. China’s dominance is perhaps best seen in its huge presence in the US shoe market. In 2013 China accounted for some 82% by volume of shoes imported into the US, about the same level it enjoyed a decade ago, but less than its all-time high of 89% of shoe imports it achieved before the Great Recession in 2008. (China has an import volume share in the EU of about 76%, but in Europe imports only account for 85% of the market, while they are 99% of the US market.) The decline in China’s share of the US market has been matched by increases from several other countries. As is detailed below, much of the shift out of China has been in sports shoes and in outdoor items, with additional, but far lesser amounts, in low price plastic and leather women’s products. The shifting has largely been due to the ample supply of workers and to significantly lower worker costs in other producing countries.

WORKERS AND THEIR COST MATTER What is most striking about the results, reproduced below, of the GFP survey of worker costs among the main shoe producing and exporting countries around the world is the fact that China today has the highest worker cost of any major producer in Asia. Those countries with hourly worker cost less than half of China’s include Ethiopia, Bangladesh, Cambodia, Vietnam, and India. The strengths and challenges of each are discussed below in order of their worker cost attractiveness. Fe b r u a r y 2 0 1 4

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foot w e ar mark e t Cost per hour includes all costs to the factory including wages, social benefits, bonuses, food, lodging, etc. The exclusive database is information provided to GFP by shoe factories from all over the world.

Ethiopia At present, there are at least three China investments in export shoe production including the major one by Huajian, the large Dongguan-based producer of better ladies shoes. This group now has some 3,000 workers in Ethiopia in four factories and is selling its output to leading customers in the US, which recorded shoe imports of more than 1.0 million pair from Ethiopia in 2013, up by more than 200% over 2012. Huajian has an ongoing intensive training program for groups of select Ethiopian workers at its China factory and its efforts at bridging the cultural divide are showing marked progress. (Given the linguistic and cultural distance between Ethiopians unaccustomed to disciplined factory work and the quality expectations of China producers, investment in worker acculturation is imperative.) The outlook for more foreign investment is optimistic, and the prospect for shoe production in materials other than the local leather, especially textile, is promising. In addition to its ample and super low cost labor force (about $0.32 per hour), Ethiopia has a government that is supportive of foreign investment in labor-intensive projects with pro-investment regulations and a new industrial park. Its currency is stable and favorable to the dollar, and it enjoys duty free treatment on imports into the US. The United Nations has sponsored leather industry projects there for decades and the result is a capable tanning sector, producing world quality sheep and goat leathers suitable for footwear. Regrettably, the dozen or so local shoe producers have not been up to sharing much in the export shoe business, and sector expansion seems to be solely dependent on outside investment. Long lead times and logistics remain a challenge with lengthy shipping periods and costly rates, but determined innovations by customers are narrowing the gap with China, and over time, as volumes increase, they may be much in line with Asian cycles/costs in the not too distant future. 20

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Most of the export factories for shoes and garments (the exports of which topped $100 million in 2012) are located in the area of the nationâ&#x20AC;&#x2122;s capital, Addis Ababa, a fairly modern city of some 4.2 million inhabitants, with a world-class international airport. The East African nation, with some 92 million inhabitants, is poor by any standard with GDP per capita less than $1,000 and with unemployment officially at near 20%. Located in the northeast of Africa, the nation is surrounded by Somalia, Kenya, Sudan, South Sudan and Eritrea with its tiny west coast neighbor, Djibouti, offering its only ocean port outlet. Despite the political turmoil among its neighbors, Ethiopia has a good record of stability and is a prime destination of investment from China, whose government is eager to develop its natural resources.

BangladEsh Much in the news lately for its labor strife in its huge export garment business, this South Asian country located east of India, has had a good sized foreign invested shoe sector for some time. Powerhouse export producers including Pou Chen, Stella International, and Golden

Chang, have invested in the country, principally to manufacture outdoor product, utilizing the local heavy leathers, for customers like Timberland, Wolverine World Wide, etc. The largest shoe producer is YoungOne, a South Korean sport shoe and garment enterprise, with a 30,000 worker footwear facility that makes some 100,000 pair per day. The group has numerous other plants in the country that make shoes and garments for export. The US recorded shoe imports from Bangladesh in 2012 of 1.4 million pair with a value of $26.7 million or about $19.00 per pair. Growth in volume to the US was modest in 2013 at about 6%. (Bangladesh is a bigger supplier to the EU with 14.9 million pair shipped in 2012, but with a lower priced product mix with an average FOB at $11.08.) With an ample supply of young workers and an hourly worker cost of only $0.44 per hour, the country has obvious advantages. The government is supportive of foreign investment offering tax advantages and other investment incentives. (Government implemented a significant minimum wage increase in December 2013. This is an attempt to placate unions and demonstrators, but it will move up

Shoe Worker Cost Comparison 2013 COUNTRY

COST PER HOUR 2013/2012 (all costs included)

COST % OF CHANGE 2013/2012

EXCHANGE RATE USD 2013/2012 (% of change)

Ethiopia

0.32/0.23

39.1%

18.8/17.7 (6.2%)

Bangladesh

0.44/NA

78/77.8 (0.5%)

Cambodia

0.61/NA

NA (USDs)

Vietnam

0.80/0.70

14.3%

21,223/20,795 (2.1%)

India

0.85/0.75

13.3%

59/55 (7.2%)

Nicaragua

1.22/1.23

0.0%

24.7/23.3 (6.0%) 31.27/31.35 (0.0%)

Thailand

1.32/1.28

3.0%

El Salvador

1.33/1.25

6.4%

1.00/1.00 (0.0%)

Indonesia

1.75/1.35

29.6%

10,200/9002 (13.3%)

Dominican Rep.

1.81/1.75

3.4%

41.89/38.56 (8.6%)

China

1.90/1.60

18.7%

6.1/6.3 (-3.2%)

Guatemala

2.15/NA

7.7/7.6 (1.3%)

Brazil

3.59/3.37

6.5%

2.22/2.02 (9.9%)

Mexico

3.87/3.01

28.5%

12.69/14.0 (-9.4%)

Portugal

6.35/NA

1.32/1.23 (-7.3%)

Italy

18.26/17.56

4.0%

1.32/1.23 (-7.3%)

Japan

25.66/32.48

-21.0%

100/79 (26.6%)

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1 o t a G u n w

f o ( i n k t

g a f c g g t i a w

A t m C 7 t o a W p m

i i f l a p

June data, costs in USDs ÂŠ FFR - Focus On Fashion Retail

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Factory in Vietnam

hourly costs, possibly threatening the country’s appeal to some foreign buyers.) While logistics are workable and not exorbitant, lead times are at least a month longer than China and inputs, except the local leather, are largely imported from China. Bangladesh is a huge country with some 155.0 million inhabitants, nearly 15.0 million of which reside in the capital of Dhaka, perhaps the most densely populated locale on the planet, and it is one of the poorest countries with a GDP per capita of less than $2,000. While unemployment is officially only 5%, it must be noted that Dhaka has some 400,000 rickshaws, whose human haulers cannot make very much. Bangladesh’s future as a destination for foreign shoe production investment is uncertain owing to its political instability, labor unrest (strikes are a way of life) and its largely ineffectual governments, local and national, neither of which has found a formula for keeping their constituents from protesting in the streets. Still, the contortions that EU and US garment importers have gone through to address the social responsibility issues arising from deadly fires and building collapses make clear that Bangladesh is likely to be an export garment hub going forward. In light of the garment commitment, it is not inconceivable that some additional shoe production investment could tag along – provided the labor and safety issues are resolved satisfactorily, which is by no means a certainty at this time.

Cambodia Among small scale Asian producers, none has taken advantage of the cost gap with China more than Vietnam’s neighbor to the west, Cambodia. Its US shoe imports are up nearly 75% in volume, and it is on track to send more than 6.0 million pair to the US in 2013. Most of the product is sports types or casuals with average FOB prices between $9.00 and $13.00. We know of only one large investment for production of low cost product for the US mass market. Nearly all the factories are China based investments and most groups have facilities in both countries. There are about 45 such factories in Cambodia. Most of these were launched to avoid the anti-dumping orders against Vietnam and China that were put in place 2006-2011 by the European Union (all © FFR - Focus On Fashion Retail

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of the orders are now permanently ended). Much of the production is still destined for customers in the EU, which recorded shoe imports from Cambodia of some 29.0 million pair in 2012 with an average FOB value of $13.55. Because nearly all shoe making inputs must be imported either from China or Vietnam, lead times are often several weeks longer than China. While the currency is stable and worker cost per hour is low ($0.61), there is officially no unemployment in the country of about 15.0 million. It is therefore a challenge sometimes to secure all the workers that shoe Shoe factory in Dukem, Ethiopia factories need. Moreover, the labor unions representing the workers are quite active, pressing for higher wages, footwear exporter behind China. shorter hours and in some cases air-conditioned Beginning from virtually no shoe exports dormitories. in the mid-1990s, Vietnam has drawn the With the labor supply situation already most foreign shoe investment except China, tight, the prospect for new and large scale and today is the world’s fourth largest shoe investment in the shoe sector is questionable producer, turning out some 725 million pair in despite having one of the lowest annual per 2012 with nearly 90% exported. capita incomes in the world at about $2,100. The foreign investment originally came Most production is within short driving range about in response to the restrictive quotas that of the capital, Phnom Penh, a fairly modern city the EU imposed on shoe imports from China of some 1.4 million. 1994-2004. With global shoe exports at about 40.0 US imports from Vietnam have soared million pair currently, the outlook for large during the last five years, doubling to 191 increases is doubtful, but increased output from million pair in 2012 from 97 million pair in the current group of factories is anticipated. 2007. Sales to the EU have remained around 200 million pair per year during this period, reflecting the earlier and broader scope of Vietnam supply provided to Europe. Given its low worker costs ($0.80 per This is the country that has captured the largest hour) and its large population, over 90 million quantity of production from China. The vast inhabitants, Vietnam would seem to be the best bulk of it has been in branded athletic items, alternative to China for the shoe industry. although there have been some recent increases Unfortunately, many other industries in low price models for mass distribution in the including high tech have the same idea, and US and EU, as well as some in better women’s there is presently stiff competition for workers product. especially in the nine million inhabitants Ho With shoe exports topping 600 million pair Chi Min City (HCMC) area in the south where in 2012, Vietnam is the world’s second largest Fe b r u a r y 2 0 1 4

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FOOT W E AR MARK E T

“

INDIA

…among the main shoe producing and exporting countries around the world… China today has the highest worker cost of any major producer in Asia.

“

most factories are located. Not surprisingly, there is also a high premium on land in the HCMC area and factory investment is, as a result, quite expensive. Also, the fact that there is virtually no unemployment in the country makes it pretty clear that there will be no large scale relocation of new shoe production from China to Vietnam. The one major shoe manufacturing investment in recent years was many hours away from HCMC, quite literally in the jungle area south and west of the city (an area that was hotly contested during the Vietnam War in the 1960s, as evidenced by the North Vietnam cemeteries in the region). Th is appears to be a ‘one of ’ as the project seems to have used up just about all of the available labor in the surrounding villages. Much like Cambodia, there does not appear to be enough available workers or enough reasonably priced land near to where workers live (unlike China, dormitories are not used in Vietnam) to support large scale new shoe making capacity. The huge shoe making infrastructure already in place will, no doubt, be leveraged to maximum capacity and exports of Vietnam’s core products, branded athletic shoes especially, will likely continue to grow smartly in the near term. 22

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As the world’s second largest producer of shoes, India seems a natural venue for replacing some of China’s shoe exports, but with only 115 million pair in annual shoe exports, the country is well out of the list of top global shoe exporters. According to industry reports, there does not seem to have been any marked increase in its export performance in recent years. Officially, India produces some 2.1 billion pair each year, but it must be noted that a large portion (as much as half or more) is made in small workshops for local consumption and is not of the type/quality suitable for export. With its low worker cost ($0.85 per hour), its weak currency against the dollar, its vast population of some 1.2 billion inhabitants, and its low per capita income (below $3,000), India’s lack of export sales must be explained by factors other than cost and worker availability. Several key ones follow. 1. India production is in leather product dominated by men’s and sandals, thus, leaving it out of the vast export businesses in other items. 2. Foreign investors have been few in the shoe sector in part due to India’s inflexible labor laws on hiring/firing, although there have been two fairly successful pilot programs in the branded export sport shoe business. 3. India has two major shoe producing clusters – one in Chennai on the southeast coast and the other in Agra in the north central – separated by the length of the entire country, a situation that adds costs and challenges to buyers trying to manage production. Still, India has a robust export sector with most of its product going to the EU, whose smaller retail groups and smaller brands work more comfortably with smaller suppliers (a reverse of China where mega factories service mega retailers and brands, principally from the US). India’s exports to the EU have hovered around 70 million pair annually in the $1.0 billion range, but there has been no growth in recent years (likely due to the dreadful shoe retail climate in Europe, which has been in recession since the financial crisis of 2008/9). While India has a much smaller market in the US, its place has expanded in recent years doubling to 13.5 million pair in 2012 from 6.6 million pair in 2002. Shipments to the US are better grade leather goods with an FOB around

$20 per pair, concentrated in men’s casuals and ‘handsewns’ for brands like Cole Haan. No doubt India’s shoe exports will increase in the near term, but unless and until it draws significant foreign investment, it is not likely to break out of its current pattern and become a major force in global shoe exports.

MANY OTHERS

INDONESIA As the world’s fi fth largest shoe producer, Indonesia is also the world’s third largest shoe exporter by volume. It is the world’s third largest producer of branded athletic shoes and is a probably the second largest exporter of these items after Vietnam (China has lost much of its sport shoe exports to these countries as the athletic brands take advantage of the lower costs, although China still produces these items in huge quantities for its local market). Again, lack of new foreign investment in the shoe sector is holding back a big export break out, and that lack of new funding is likely due to the escalation of worker costs (at $1.75 per hour), which now are close to China’s, and probably will go higher as the government pushes for a more equitable society. Like Vietnam, higher levels of exports from the infrastructure in place are anticipated but no large displacement of China product outside the sports space appears to be in the cards at the moment.

N m ( a b B c m c

f G t a d

W l ( d a

o i w a f t t a

U m

CENTRAL AMERICA

The leader here is the Dominican Republic (DR). It has worker costs ($1.81 per hour) similar to Indonesia and China. Unlike the two Asians, it is only days shipping away from the US and it enjoys duty free status into the US. It sent some 8.7 million pair to the US in 2012 with an average FOB of $24.21, reflecting the concentration of production in factories owned by leading US outdoor product companies including Timberland, Wolverine World Wide, Rocky Boot, etc. Despite the use of very low cost labor in its next door neighbor, Haiti, by some to feed the DR factories, the DR’s exports have not grown dramatically in recent years. A major investment recently by a large Brazilian group means that new exports of better leather © FFR - Focus On Fashion Retail

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Th t b j j c t t

v b d i u b

women’s products are in the pipeline. There is also Brazilian investment in Nicaragua in the leather casual’s space and there may be more as its worker costs are attractive ($1.22 per hour) as is its proximity to the US and its duty free status to the US. It must be noted, however, that another even larger Brazilian shoe producing investment recently closed up permanently (perhaps more due to management decisions and less to do with the country). Although there has been no recent foreign footwear investment in El Salvador or Guatemala, the situation in these places is not too dissimilar to Nicaragua (although costs are higher). Unlike Nicaragua, both have well developed local shoe producers.

MEXICO With a population of some 100 million, and a long history of blocking imports from China (currently the market is open with only regular duties applied to shoes from China), Mexico has a large and diverse local shoe industry. While its worker costs are nearly double those of China ($3.87 per hour, although it is lower in some rural areas), its strong skills in making women’s leather shoes as well as Western boots, along with its proximity to and duty free status from the US make it a good sourcing alternative to China for these niche products, especially if the brand relies on fast replenishment of its stock as a key business strategy. Mexico sent some 18.9 million pair to the US in 2012, up only marginally from the 15.7 million pair sent to the US in 2004.

Since much of the great exporting shoe capacity has shifted to local demand, moved to other countries or been shut down, it does not appear that there will be a large export increase even if the currency were to weaken significantly, which does not appear to be likely in any case.

The major shoe producer in Th ailand has also explored the possibility of feeder factories in Myanmar near the border with Thailand. At this time, it does not appear that any projects are moving forward, owing to the woeful lack of basic infrastructure and to the exorbitant costs for basic amenities in the major city, Rangoon, where the China investors seem most likely to establish their first projects.

THE EUROPEANS

SUMMING UP

Some of the finest shoes in the world still come from Italy, Spain and Portugal. There is no doubt that the first two will continue to excel in the leather luxury/fashion space, and the last one will move forward in the export of innovative designs and styles especially in the euro-comfort space. Sadly, none are likely to play any major role in the shifting of product out of China to alternatives.

MYANMAR Formerly known as Burma, this country west of Th ailand has some 60 million inhabitants and is one of the poorest places in the world, largely owing to its nearly two decades of isolation imposed by its military dictatorship. Recent political progress has resulted in the lifting of trade embargoes by the US and the EU. As perhaps the last frontier in Asia, Myanmar has drawn a lot of exploratory interest from the shoe sector and a few leading China producers have taken positions on land in the country.

Despite dire predictions and endless talk, China seems destined to continue its dominance of the global shoe export sector for years to come, barring macroeconomic upheavals. Overall, just about all the alternatives to China covered in this article have obstacles that limit their potential to become a really big player like China. Vietnam and Cambodia have tight labor availability and land costs in Vietnam are now a barrier, while Indonesia has worker costs almost as high as China’s, India lacks foreign investment and has tight labor regulations, and Bangladesh is hampered by labor strife. The Latin American countries have not drawn much overseas shoe sector investment and probably will not absent big upheavals in Asia. Perhaps the greatest potential is in Africa, and especially in Ethiopia, which seems to have not only a most attractive worker situation, but also has the support of the China government, which makes the place most welcoming to the vital foreign investment (most likely by China entrepreneurs) that will determine the shoe industry’s future.

BRAZIL The macroeconomic changes that have transformed this Latin giant into a worldbeating exporter of iron ore, soy beans, meat, juice, sugar, etc. have in the process ruined just about all labor intensive exporting. The currency has risen in value to the point where these previously formidable sectors have seen their exporting diminished substantially. Today, Brazil still makes some of the fi nest value women’s leather shoes in the world but its exports of them have fallen sharply due to the strong local currency. Much of its competitive shoe exports today are in the up market injected plastic space with global brands like Havaianas. © FFR - Focus On Fashion Retail

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PETER T. MANGIONE For more than 30 years, Mangione has been a leader in the global shoe sector, having served as president of the largest shoe trade association in the US, the Footwear Distributors and Retailers of America from 1981 to 2009, and now as managing director of Global Footwear Partnerships LLC, an international consulting practice with a wide range of clients in Asia, Latin America, and Europe. A lawyer by training, he has extensive knowledge and experience in most aspects of the shoe business including retailing, sourcing, logistics, factory social responsibility, product safety, customs, labeling, and government regulation of the international shoe trade. He can be reached at ptmangione@gmail.com.

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motI vatIon

Invest In yourself:

W i m w b r

S t u b k w t e y

Add Value to You By Walt Grassl

arl and Bob were good friends when they attended college. After they graduated from college, life happened and they slowly lost contact. They reconnected at their 20 year reunion. They were working for similarly sized companies, graduated with nearly identical GPAs and had the same work ethic. However, for some reason, Karl was two levels higher in his organization than Bob. At lunch a month later, Karl mentioned he had attended a training seminar in Dallas the past weekend. Bob lamented that, with the downturn in the economy, his company cut back on training, and he hasn’t been to a seminar in years. Karl shared that his company had cut back on training as well but that he paid for the training himself. Bob looked at Karl with a puzzled expression and said he didn’t understand how someone would pay for training out of his own pocket. It was an expense he couldn’t afford and besides, if the company didn’t pay for it, it must not be too important. Karl challenged Bob to think again. Karl explained that since he started with his company, he has always taken additional training that he paid for himself. He didn’t look at it as an expense, but as an investment in himself. Karl has the right attitude about investing in yourself. Your talent is your best asset. It can’t be taxed; it can’t be confiscated. You can take it with you, wherever you go. When you invest your time and money to improve yourself and learn new things, it is not an expense – it is the best investment you can make. Karl proceeded to explain to Bob the four benefits from investing in yourself:

1) Investing in yourself helps you

Investments come in the form of both time and money. You can invest in your mind by going to the library and getting a book to read to educate yourself in any area of improvement. This costs time, not money. You can attend training events that require an investment of time and money. You can invest in your health by investing 30 minutes a day to go for a walk.

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You can invest by hiring a personal trainer or joining a gym. When you enrich yourself, you can feel yourself grow and will feel better about yourself. It contributes to your happiness.

2) Investing in yourself helps those you touch

When you enrich yourself through your investments of time and money, you improve your relationships with others. Taking time to help others is not only an opportunity to be generous and giving with your time, it is almost always an opportunity to learn and grow, if you are present and “in the moment.” You may learn new information, gain new insights into how people behave, or develop new relationships. If I help you solve a problem with a spreadsheet at work, I will usually learn something as we figure it

❝

Your talent is your best asset. It can’t be taxed; it can’t be confiscated. You can take it with you, wherever you go. When you invest your time and money to improve yourself and learn new things, it is not an expense – it is the best investment you can make.

❞

out. Instead of, “I have to help you out,” I get to help you out and learn. Our relationship improves, as does my knowledge base. Your investing helps your ability to teach others. You can share what you learn and bring value to others. You become an expert in your “tribe.”

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3) Investing in yourself helps your career

When you invest in yourself it helps your career in two significant ways. It increases your value to your employer because your skillset grows. Maybe more importantly, it increases your earning potential over your peers, who only receive the company funded training. This translates into you becoming a more valuable asset and deserving of increased responsibility, resulting in increases in job titles and compensation.

4) Investing in yourself helps your business

Should you choose, or be forced, to become an entrepreneur, the asset that is your talent is transferrable. When you invest in yourself, your understanding of your corporate business environment improves. You are better positioned to run your own business. You not only know what you know, but more important, you know more of what you don’t know and will have the mindset to hire people to help you, rather than try to carry the entire load yourself. You will see hiring help as an investment, not an expense. Your breadth of knowledge will help you develop new ideas for your business and will increase your chances of financial success. Bob realized that, had he not been trying to get better on the cheap, his career might very well have advanced more like Karl’s. With another

20 years left in his career, he vowed to see personal training as an investment in himself, rather than as an expense.

Invest in yourself, Add Value to You Learning doesn’t stop with your formal education. Continue to read, take classes and invest in your talents. Your talent is your best asset. It is portable and it can’t be taxed or confiscated. Investing in yourself is the best investment you can make.

Walt Grassl conquered his crippling fear of public speaking at the age of 50, and through his Internet radio show, “Stand Up and Speak Up,” he is determined to help others do the same. Walt’s accomplishments include success in Toastmasters International speech contests, performing standup comedy at the Hollywood Improv and the Flamingo in Las Vegas. He is also the author of the book “Stand Up and Speak Up”. For more information on Walt Grassl, please visit WaltGrassl.com.

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MARCH

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X X

FFANY- The New York Shoe Expo Mercedes-Benz New York Fashion Week

New York, NY New York, NY

Memphis Gift & Jewelry Show

Memphis, TN

Atlanta, GA London, UK Munich, Germany Las Vegas, NV Las Vegas, NV Las Vegas, NV Las Vegas, NV Las Vegas, NV Las Vegas, NV Las Vegas, NV Las Vegas, NV Las Vegas, NV Las Vegas, NV Las Vegas, NV

X X X X X X X X

13-15 14-18 15-18 16-19 17-19 17-19 17-19 17-19 17-19 17-20 17-20 17-20 18-20 18-20

TASM- The Atlanta Shoe Market London Fashion Week PREMIUM order Munich OFFPRICE show AccessoriesTheShow Stitch MRket KIDShow Agenda Las Vegas WWIN- WomensWear In Nevada WSA@MAGIC SOURCING at MAGIC MAGIC Men’s MVMNT

18-20 18-20 18-20 18-20 18-20 18-20 19-22 22-24 23-25 23-25 23-25 23-25 23-25 23-25 23-25 29-3

FN PLATFORM The TENTS@Project Project Las Vegas WWDMAGIC Pool Trade Show ENKVegas ISPO Beijing Australian Shoe Fair Fame AccessoriesTheShow Moda Edit TMRW Coterie Sole Commerce Premiere Classe

Las Vegas, NV Las Vegas, NV Las Vegas, NV Las Vegas, NV Las Vegas, NV Las Vegas, NV Beijing, China Melbourne, Australia New York, NY New York, NY New York, NY New York, NY New York, NY New York, NY New York, NY Paris, France

2-4 2-5 2-5 8-10 9-11 12-14 12-14 13-15 16-18 24-26 24-27 25-26 26-29 27-30

SMOTA theMICAM MIPEL Modacalzado + Iberpiel Children’s Club GDS BIFF & BIL Mode Shanghai Transit- The Los Angeles Shoe Show theMICAMschanghai Mosshoes CHIK Sapica Dallas Apparel & Accessories Market

Fort Lauderdale, FL Milan, Italy Milan, Italy Madrid, Spain New York, NY Düsseldorf, Germany Bangkok, Thailand Shanghai, China Los Angeles, CA Schanghai, China Moscow, Russia Beijing, China Leon, Mexico Dallas, TX

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AC C

PA R

FEBRUARY

7-9

LOCATION Dusseldorf, Germany Chicago, IL Chicago, IL Chicago, IL Madrid, Spain

5-7 6-13

EVENT PREMIUM order Dusseldorf STYLEMAX Kidz at STYLEMAX The Chicago Collective SIMM- the Madrid Intl. Fashion Fair

FO OT

1-3 1-3 1-3 1-3 2-4

2014 TRADE SHOWS CALENDAR

February/March

DATE

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X SHOW X X X X X X X X X X X X X X X X X X X X X

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EL AC CE SSO RIE S

WEBSITE

FOCUS RATING

X X X X X

N/A (312) 527-7759 (312) 527-7570 (312) 527-7759 44-20-7886-3000

www.premiumexhibitions.com www.stylemaxonline.com www.kidzatstylemax.com www.chicagocollectiveonline.com www.semanamoda.ifema.es

N/A ★★ ★★ ★★

(212) 751-6422 (212) 489-8300 (630) 241-9865

www.ffany.org www.mbfashionweek.com www.helenbrett.com

(706) 923-0580 N/A N/A (262) 782-1600 (866) 696-6020 (866) 696-6020 (866) 696-6020 (305) 598-7019 (213) 223-5111 (702) 436-4081 (310) 857-7656 (310) 857-7500 (310) 857-7500 (310) 857-7500

www.atlantashoemarket.com www.londonfashionweek.co.uk www.premiumexhibitions.com www.offpriceshow.com www.accessoriestheshow.com www.stitchshows.com www.mrketshow.com www.lingerieshow.cc www.agendashow.com www.lingerieshow.cc www.magiconline.com www.magiconline.com www.magiconline.com www.magiconline.com

(310) 857-7624 (877) 554-4834 (212) 951-6654 (310) 857-7500 (877) 554-4834 (212) 759-8055 (415) 868-8882 613-9654-7773 (866) 696-6020 (866) 696-6020 (866) 696-6020 (866) 696-6020 (212) 759-8055 (212) 759-8055 (212) 759-8055 +33 (0)1-4013-7470

www.fnplatform.com www.magiconline.com www.projectshow.com www.magiconline.com www.pooltradeshow.com www.enkshows.com www.ispo.com www.aec.net.au www.fameshows.com www.accessoriestheshow.com www.modashows.com www.editshows.com www.enkshows.com www.enkshows.com www.enkshows.com www.premiere-classe.com

★★★★

(786) 331-9000 39-02438291 39-024997-7582 34-91722-5719 (212) 759-8055 (312) 781-5185 (323) 466-9645 (212) 759-8055 (213) 630-3616 +39 02 438291 (495) 781-3411 86-10-65053207 (477) 152-9000 (214) 655-6100

www.smota.com www.micamonline.com www.mipel.com www.ifema.es www.enkshows.com www.mdna.com www.biffandbil.com www.chinaexhibition.com www.californiamarketcenter.com www.themicamshanghai.com www.mosshoes.com www.chiconline.com.cn www.sapica.com www.dallasmarketcenter.com

★★★ ★★★★ ★★★ ★★ ★★ ★★★★ N/A N/A ★★ ★★ N/A N/A ★★★ ★★

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PHONE

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FFR’s ratings are based on reports from our correspondents, ased on contributors, vendors and and retailers retailers who attended these contri utors, vendors events. Ratings reflect people’s opinion of show organization, traffic, convenience and value for attending/participating businesses. usinesses. Show dates and locations were accurate at the time of printing and subject to change change without notice. Please contact su ject to venues directly for the latest information. Fe b r u a r y 2 0 1 4

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RE TAIL 101

•

Dale Carnegie Quick Tips for Outstanding Customer Service

•

K d

Principles from “How to Win Friends and Influence People”

•

Service Starts with Relationships Outstanding service starts with solid relationships. Here are nine ways to strengthen relationships with customers. 1. Don’t criticize, condemn, or complain. 2. Give honest, sincere appreciation. 3. Arouse in the other person an eager want. 4. Become genuinely interested in other people. 5. Be a good listener. Encourage others to talk about themselves. 6. Remember that a person’s name is to that person the sweetest and most important sound in any language. 7. Talk in terms of the other person’s interests. 8. Make the other person feel important — and do it sincerely. 9. Smile.

Complaint Resolution Process

Having a process to resolve complaints helps assure that we deal with the emotional and practical aspects of the issue.

1. Greet

• Elementary questions capture the basic facts of the problem. This gives us an opportunity to take some of the emotion out of the complaint. • Elaborative questions gather more details. This gives the customer a chance to expand on their issues and feelings. These questions should be relatively short, to encourage the customer to talk more. • Evaluative questions help us gain an understanding of the severity of the issue, in the mind of the customer. This is also where we evaluate what will satisfy the customer.

4. Empathize Find a point of agreement with the person. This does not necessarily mean that we agree with the complaint. This is where we show the customer that we heard and understood their concern, and we recognize that it is important to them.

5. Address the Issue Now that the emotional issues have been addressed, do everything in your power to resolve the practical aspects of the complaint. Take responsibility for the actions of your organization. This is your opportunity to turn a lemon into lemonade. People who have their problems successfully resolved tend to continue to do business with you.

Always answer the phone or greet people in person as though you are happy to hear from them. Begin in a friendly way. This is easy to say, but can be diﬃcult to do. We need to be able to “live in day-tight compartments” and separate previous negative experiences from this customer contact.

6. Test Questions

2. Listen

Ask what else you can do for this customer. This allows an opportunity to turn the conversation away from the complaint, which makes it easier to end on a positive note.

We often get the same kinds of complaints, so it becomes challenging to really listen to people. Give them an opportunity to vent some of their frustration. Be empathetic. Listen for facts and feelings. Resist the temptation to start responding too quickly. Show signs of active listening, like brief interjections or clarifying questions.

3. Questions Ask questions to clarify the concern. Again, we need to resist responding until we understand people and their issues. 28

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Ask questions to test how well you have resolved the emotional and practical sides of the complaint. Give the customer another opportunity to talk. Be a good listener.

7. Offer Additional Help

8. Follow Through Often, complaints cannot be resolved completely on the ﬁrst point of contact. If you need to get back to the customer, do so quickly and thoroughly. Even if the complaint has been resolved, create a reason to contact the customer again. For example, ﬁnd a way to give added value. Also, look for ways to solve the root causes of problems within your organization. © FFR - Focus On Fashion Retail

1/28/14 4:06 PM

•

Resolving Customer Complaints

• Find points of agreement with their concerns. Establish common ground to show the person you are listening.

Guidelines for Resolving Complaints • Don’t take it personally. • Listen empathetically. • Use the customer’s name. • Show respect for their point of view. • Take ownership of the problem.

• Always show a willingness to resolve the problem or conﬂict. Make the resolution seem as easy as possible.

• Avoid citing corporate guidelines or policies.

• Be genuine and show your personality. Respond as an understanding friend rather than citing policies.

• Create an opportunity to be a hero.

• Be ﬁrm but understanding with your answers.

• Treat the diseases, not the symptoms.

• As a last resort, oﬀer to have your supervisor talk to the caller. Your supervisor may say the same things as you, but sometimes hearing it from someone else has a positive eﬀect on the customer.

Dealing with Irate Customers Keeping these principles in mind will help us to improve, rather than deteriorate the situation with the customer. • Stay calm. Try to remain diplomatic and polite. Getting angry will only make the customer angrier. • Try to see things from the caller’s point of view. Perhaps you would feel as upset as they are, given the same situation.

Telephone Courtesy • Push your personality through the phone.

• Be a responsive listener.

• Be conversational.

• Call instead of using e-mail. • Take ownership. Don’t blame others.

• Use the customer’s name. • Give your full name.

• Thank the person for raising the concern and do it sincerely. Emphasize the importance of satisﬁed customers to you and your organization.

• Listen for understanding.

• Listen for understanding. Sometimes the irate caller just wants someone to listen to their story, even if you are unable to help them.

• Allow the person time to think and speak.

• Ask questions to get their facts and feelings. Listen to learn rather than just preparing your response. Don’t respond too quickly.

• Fill the silence when appropriate.

• Ask open-ended questions.

• Smile.

• Stand up when you can. • Ask permission before using speaker phone. • Speak at the same rate. • Pause between ideas for clarity. • Always thank the caller.

NEXT SHOWS FFANY ROOM #1426 FEB. 5-7 ATLANTA SHOE MARKET BOOTH #117/119 FEB. 13- 15 WSA MAGIC BOOTH #64612 FEB. 17-20 SMOTA SHOW BOOTH #727 MARCH 2-4

Insta

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@makersshoesinc

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Gaining a Referral When asking for referrals: • Think of your buyers as partners who can refer you to a steady stream of new business. • Don’t underestimate the power of a satisfied buyer’s good will or influence. • People who are referred are more likely to buy.

• Bear in mind that people who buy are more likely to refer others. • Ask for an introduction in writing, by phone, or in person.

Asking for a Referral How do we ask without feeling or sounding pushy or aggressive? We want to maintain a good relationship, and we want to create win-win-win scenarios. Having a simple, conversational process helps us know what to say and how to say it. The most important aspect is to remind ourselves of the benefits of asking, then just ask.

Example: I know that John Smith from Company ABC is a strong player at the chamber. You probably could think of other people from Company XYZ1, XYZ2, etc. In addition to directors, there are project managers, account executives, salespeople, managers. Who do you know outside of work, like your neighbors and friends? I know you are involved at ...

Step 5: Ask for an introduction. Ask your contact if he or she is willing to give you an introduction before you contact the new person. This will help make the process more friendly and open the door wider. Consider asking them to send an e-mail, make a phone call, or introduce you personally at a networking event. You could even suggest a conference call. Example: Could you call this person so he/she will know why I am calling? Or send an e-mail, including the results you experienced from working with us? When should I follow up with them, so I know they have heard from you?

A Process to Add Value

Step 1: Remind customer of their specific benefits.

1. Ask Questions

If you know these benefits, this becomes very easy. Paraphrase something they told you or relate something you know based on your own knowledge or experience. Ask for their agreement, in a conversational way. Example: Terri, I am so happy to hear that Dale Carnegie Training® has helped your team focus on resolving specific process issues and saved over $65,000 in reduced downtime. You told me your boss gave you recognition at the last staff meeting.

Effective questions help us and the buyer see additional opportunities: • Elementary Questions determine basic information about use levels, time frames,features required, user needs, technical specifications, etc. • Elaborative Questions unearth more details like sense of urgency, undiscovered needs, additional uses for the solution, etc. • Evaluative Questions test the waters to see if the customer is receptive to paying for added value.

Step 2: Describe your customer profile.

2. Open the Door

Briefly describe the range of challenges faced and benefits received by your customers This may remind your existing customer of opportunities they are missing It will also help them start to think of other people. Example: We work with a full spectrum of people, from plant managers to front line personnel Our company provides solutions for a wide variety of industries, including over 400 of the Fortune 500 companies. They are faced with shrinking budgets, fewer people, and higher demands, like you. They desperately need to get the most from their current staff, reduce staff turnover, develop the new generation of leadership, increase morale, and get bottom line results for top management. As you know, we are able to impact business results,and develop an empowered environment that creates accountability. We customize our solutions to address the key issues these people face.

Step 3: Identify a benefit for giving a referral. How could your current customer (or anyone) benefit from referring this person to you? Identify the value it creates for this person, not their company, the prospect, or you. Try honestly to see things from their point of view. Example: I know you are hoping to become a leader in the Chamber of Commerce. Being able to help some of your friends there could increase your profile.

Step 4: Suggest they already know someone. Provide examples of people or job positions who could benefit from your offerings. Make it easy for them. If you have a specific person or people in mind, mention them by name. Give a variety of names and positions, and talk slowly so the person has a chance to think. Listen. 30

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Say something brief to get favorable attention and help open the customer’s mind to options. • • • •

“Some of our customers appreciate …” “Did you know about the benefits of …” “You could save some time by …” “Here is a way to save some money …”

3. Present Added Value Tell the customer a specific benefit they can receive and the investment needed.

4. Test Question These are brief questions to see how the customer feels about making the additional investment. For example: • • • •

“What do you think?” “How would this help you?” “How do you like the extra benefits?” “How will this give you a return on your investment?”

To Learn how we can provide strategic, customized, and on-site Customer Service training for your organization, contact your local Dale Carnegie office today. dalecarnegie.com/office

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More than 1,800 lines all under one roof. The industry’s largest, most productive, most convenient, most important show of the season – every season.

RED TIE AFFAIR. THE ATLANTA SHOE MARKET | FEBRUARY 13-15, 2014 COBB GALLERIA CENTRE & RENAISSANCE WAVERLY HOTEL

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★

1 9 4 4 – 2 0 1 4

★

Celebrating

70Years

FOR SHOW INFORMATION CONTACT 706.923.0580

atlantashoemarket.com

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TREN DS REPORT

Leathers & Materials for

FALL/WINTER 2014-15 by Ellen Campuzano, President of the Committee for Colour and Trends

Luxurious Dark Leathers & Materials Are in Focus for Fall At Lineapelle, the displays were unusually dimly lit. No, there was not an electricity brown-out, rather the organizers wanted to get the point across that fall fashions will focus on rich, dark materials. And exhibitors certainly complied with exciting collections in deep, luxurious color palettes. Simultaneously, there was a quiet, classic leather story with shades of brown and traditional brights. Textures followed trends set by textiles; lots of quilting, interesting surface treatments, fur and felt, and novel animal prints. Twosided, reversible leathers (often reversing to a metal shade) continued from spring.

P p F s r p t r s t

Dark Glamour

Deeply oxidized bronze, silver and gold metallic finishes as well as colored metal sheen in rich dark shades are key trends of the season.

Antiba

Brotini

Pellegrini

Antiba

Timbrados Rubio

Saddle Up

Christina

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GB Leathers

Italpel

Tempesti

Traditional tans, camels and browns in smooth, pebble or novel croco grains are ideal for tailored boots and bags.

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C t t t i c

The next edition of Lineapelle will take place in Bologna, Italy from March 11-14, 2014

www.lineapelle-fair.it

3-D Options

Surface interest with a very tactile feel, puckered, embroidered or furry tapped into fashion proposals from the textile market.

Bopell

La Garzarana

Meridiana

Omnipel

Timbrados Rubio

Winter Brights

Pops of color punctuated collections. Forest green, purple and shades of blue and the red color family were prominent. Two tone/ two sided leathers often reversing to a metal shade continued a spring trend.

Brotini

Christina

Monfrini

Sicerp

Lively Patterns

From optic to menswear patterns to fresh animal print interpretations, bold patterns were often utilized to update black and white.

Biagio

Bopell

Carbipel

Italtan

Tuscania

Colortex

GB Leathers

La Garzarana

Sicerp

Cracked Up

Crackled, broken tile effects had more than vintage appeal, they looked lived in, conveying a comfortable mood.

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Victoria

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TREN DS REPORT Credits: Committee for Colour & Trends The complete forecasting source for shoes and accessories

www.colourandtrends.com

Hybrid Creatures

Animal patterns continued in novel fantasy versions, from perforated crocos, to zebras turning grey or brown, and snakes getting sparkly in new color combinations.

Atema

La Garzarana

Tuscania

Opulence

Paisley patterns, scrolls and vines, plus floral tapestries, either embossed, printed or embroidered on leather evoked a mood of grandeur.

Biagio

Carbipel

Meridiana

Pellegrini

All Puffed Up

Quilted satin nylon with lightweight linings crossed over from puffer coats to boot shaftsâ&#x20AC;Ś more quilting patterns in leather gave look of winter warmth. Christina

Colortex

Omnipel

Cozy Comfort

Boiled wool and felt evoked a mood of fireside coziness. Classic grey or new diff used colorful felt will make great boot cuffs and linings worthy to show off as well as a bag with fancy cut-outs. Bigagli

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Colortex

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For those of us who plan around our shoes.

January 21-23, 2014 | Pier 94, NYC New York’s First Men’s Contemporary Footwear Destination

February 18-20, 2014 | Las Vegas Convention Center, South Hall The International Show for Branded Footwear

February 17-20, 2014 | Las Vegas Convention Center, North Hall The Only Show Dedicated to Fast Fashion Footwear

February 23-25, 2014 | Javits Center, NYC The Women’s Luxury Footwear Show within Fashion Coterie

magiconline.com

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and

Celebrities

FASHION

Model Heidi Klum, the presenter, wore a Giorgio Armani black sleeveless gown that is fully encrusted with clear, black and blue Swarovski crystals scattered in a circular pattern at the People’s Choice Awards 2014 in Los Angeles, CA

Actor Robert Downey Jr. arrives at the premiere of Walt Disney Pictures’ Iron Man 3 at the El Capitan Theatre on April 24, 2013 in Hollywood, CA (Photo by Kevin Winter/Getty Images)

Actress Margot Robbie wore a Giorgio Armani Privè one shoulder white gown with bell sleeve and a black beaded opening on the hip at he premiere of The Wolf of Wall Street on December 17th, 2013 in New York City. 36

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Model Andre Van Noord attends the Bugatti and L’Uomo Vogue “The magic of la vie en bleu” Collection party as a part of Milan Fashion Week Menswear Fall/Winter 2014 on January 11, 2014 in Milan, Italy. (Photo by Vittorio Zunino Celotto/Getty Images for Bugatti)

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Eva Longoria wears Casadei’s black suede pumps with gold trim and the signature “Blade” heel while arriving at the Marriott Hotel in Anaheim Photo Courtesy of Celebzz

Actors Chris Pine, Keira Knightley and Kevin Costner arrive at the premiere of Paramount Pictures’ “Jack Ryan: Shadow Recruit” at TCL Chinese Theatre on January 15, 2014 in Hollywood, CA (Photo by Kevin Winter/Getty Images)

Designer Sue Wong, wearing one of her own designs, and Focus magazine editor Alex Geyman at the Designer and the Muse evening at the Sofitel Beverly Hills, CA on October 3rd 2013

Designer Tommy Hilfiger and wife Dee Hilfiger at dinner at Restaurant 34 in London, UK on January 6th, 2014

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red

from the

CARPETS

Giorgio Armani dresses GOLDEN GLOBE AWARDS winners and Participants Several winners nominees, presenters and guests of the Hollywood Foreign Press Association’s 71st Annual Golden Globe Awards were dressed by Giorgio Armani. Actress Cate Blanchett wore an Armani Privè black lace and tulle gown. The delicately embroidered dress is highlighted by a high neck, open back and cap sleeves creating a dramatic effect. The form-fitted bodice drapes into a gauzy layered skirt, dotted throughout with shimmering black Swarovski crystals, enhancing an elegant and regal silhouette. Blanchett won Best Performance by an Actress in a Motion Picture – Drama for her work in “Blue Jasmine.” Actor Leonardo DiCaprio wore a Giorgio Armani black two-button notch lapel tuxedo with a classic white evening shirt. DiCaprio won Best Actor – Motion Picture, Musical or Comedy, for his role as Jordan Belfort in “The Wolf of Wall Street.” Director Paolo Sorrentino wore a Giorgio Armani classic tuxedo. Sorrentino directed “The Great Beauty,” which was awarded as Best Foreign Language Film.

Leonardo DiCaprio

Cate Blanchett

Paolo Sorrentino

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BEING THE LE A DER

Risk Avoiders are Opportunity Missers: 10 Excuses Business Owners Make (and why they’re holding you back) By Tom Panaggio

Nobody likes the uncertainty and stress of going out on a limb and (let’s be honest) putting your business at risk. But making the safest bet rarely leads to success. Here, I share 10 excuses that keep you in your comfort zone—and missing great opportunities. Small business owners, can you relate to these scenarios? ■ It’s time to open a second retail store branch—and you fully intend to—but you’re not quite ready yet. You found a possible location but it doesn’t seem perfect, and besides, you’re not sure if the local marketplace conditions are right. Maybe next year would be better. ■ You’re ready to expand your customer base—almost. However, you’re certain it can’t be done without buying and mastering a certain software program that lets you personalize your marketing efforts. And since you’re not ready to do that yet, you’d better hold off. ■ Yesterday, you met the best natural salesperson ever. Instinctively, you know she’d be perfect for your team and she hinted that she might be in the market for 40

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a job change. You’d love to hire her, but the time doesn’t seem right to hire a new person—money is tight and you’re far too busy to go through the hiring and training process right now. These hypothetical owners may think they’re just avoiding unnecessary risk. But if you read the scenarios again—and if you’re honest with yourself—you’ll have to admit their reasons reek of excuse making. And here’s the real problem: Risk avoiders are also opportunity missers. When you’re in charge of running a company, it’s easy to convince yourself that playing it safe is the responsible choice. Especially if your business is new, going out on a limb is the last thing you want to do. But risk is needed if you want to do more than just scrape by—and it may be needed just to survive in this economy.

Hoping that sales will get better or that conditions will improve is the wimp’s approach. You can’t wait for everything to be perfect because it never will be. You have to take action—in other words, accept risk and make those things happen. Even with the best attitude and plan, there are times in every business when, as progress slows, confusion sets in. You may feel frozen and afraid that any move you make will be wrong. However, if you don’t want to stagnate, you have to move. Unfortunately, this type of risk is the most difficult one to take. You’ll probably want to find ways to avoid action, which is tantamount to sinking your own ship. Here, I help business owners identify the risk avoidance that may be holding them back by highlighting 10 of its most common forms:

Excuse # 1: “The timing isn’t right.” As a

young commodities broker right out of college, I recall receiving a call from a client named Steve each morning. Steve was a “prisoner of hope” who always asked the same question, “Where is gold this morning?” When gold was higher than the day before, he’d comment, “Ah, missed it again.” If it was trading lower, he said, “Let’s wait and get it at the bottom.” Steve © FFR - Focus On Fashion Retail

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m y m m

e a o c c r l t b

o f t l b A a l

w s P

part of your budget to producing a television commercial, for instance, but barely noticed any increase in your business. Or maybe you offered an online deal to new customers, only to realize that the discount you advertised was a little too generous and wouldn’t allow you to make any profits. Your one-time marketing failure has convinced you not to try again. Yes, marketing is far from certain. It can be expensive, and it’s hard to accurately predict what customers will respond to. But without proactive long-term and consistent marketing, businesses die. Avoiding investing in marketing—or even cutting back on it— because one campaign didn’t produce the desired results is a risk you can’t afford to take.

missed the biggest increase in gold in over 50 years because he waited for the exact moment to make a move, and based on his perception, that moment never came. All over the country, there are entrepreneurs—or wannabe entrepreneurs—who are just like Steve. Business plans sit in boxes or on hard drives as their creators wait for the right conditions: funding, free time, better economic conditions. And plenty of existing businesses remain less successful than their owners would like because those very same owners are hoping that tomorrow conditions will be just a little bit better for advancing their goals. Also, keep in mind that being a “prisoner of hope” doesn’t just apply to growth. Besides forgoing an opportunity for success because they are waiting for ideal conditions, many leaders fail to solve problems or correct mistakes because, in their minds, the timing wasn’t right. And when you’re bootstrapping a business, a mistake can be even more costly than not leveraging a chance for advancement.

Excuse # 2: “I tried that once, and it didn’t

work.” Those words are most often uttered by small business owners in reference to marketing. Perhaps you’ve been there: You allocated a large © FFR - Focus On Fashion Retail

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Excuse # 3: “If I just had XYZ gadget…” “If I just had faster computers, my team could respond to customer emails on a more timely basis.” “If I just had the latest supply chain management software, my company could fulfill orders more quickly.” When you’re an entrepreneur, there are a million “If I just had…”s, and often, they center around technology. Remember, though, you can spend forever waiting on the next best thing—and often that “next best thing” isn’t as necessary as you thought. On the infrequent occasions when the Internet in my office goes down, everyone has one concern: “What should we do now? Go to lunch?” My answer is always this: “If you were on a deserted island with no supermarket, would you just let yourself starve, or would you figure out a way to survive? You may not be online, but your phone still works. Pretend the Internet hasn’t been invented yet and call a few customers. Survive.” My point is, by viewing technology as a necessity, we create our own prison. We no longer use it as a tool. Instead, we are trapped by it. Remember, the road to success is through action, not accessories. Countless success stories have been written with nothing more than ink and paper, a rotary phone, and plain determination. While tools, technology, and accessories might be helpful, they do not guarantee success. Effort guarantees success— you have to keep your foot on the accelerator longer and more often than your competitor. Excuse # 4: “I’m still working on the

plan.” Let’s say that you want to move to the next level, whatever that happens to be for your business. So you begin planning, preparing for every possible scenario. You define contingencies with backup plans full

of redundancies. You sometimes wonder how anyone could fail with a plan that covers all possibilities and that offers each a solution. But here’s what you’re not taking into account: While your perfect plan might prevent you from failing, it will also hold you back from succeeding if it’s never executed. To be absolutely clear, planning is a good thing. However, for many entrepreneurs, the solution to avoiding the risk of reality is to keep planning. After all, they tell themselves, you must have a plan to be successful; “winging it” is a blueprint for failure. The fact is, with planning as a comfort zone, you can easily replace the reality of execution with theoretical forecasting and “what-if” modeling. For that reason, many risk-averse entrepreneurs miss opportunities and fail to build actual businesses in the act of building virtual businesses. Don’t make that mistake.

Excuse # 5: “It’s a good idea, but

circumstances have changed.” “I was ready to pull the trigger, but then the market changed and I had to reassess.” “I had to set back the original product launch date because I was just too busy to get everything ready.” “Preliminary research showed that this idea might not be as lucrative as we thought, so we scrapped it altogether and went back to the drawing board.” Sound familiar? If so, you may be moving the target. Basically, moving the target changes the objective, goal, or focus of your business and thus delays plan execution, innovation, or change. In other words, it means changing your plans every time you lack certainty or just don’t have enough motivation to move forward. The problem is, each time you move the target you have to stop and prepare to fire again. It’s possible to spend an indefinite amount of time making excuses in this way without ever accomplishing anything.

Excuse # 6: “I’ll get to it eventually.” I once knew a salesperson who did extensive research on each sales lead she got. Some of her research files contained more than a hundred printed pages of material. Her reasoning? She wanted to know as much as possible about a potential client before she called them. On the surface, this level of dedication sounds admirable. But, the salesperson in question was really procrastinating in order to put off the moment of truth. She was afraid of being rejected after making her pitch, and her research was a form of risk avoidance. A similar scenario plays out with business owners every day. No, you may not be making Fe b r u a r y 2 0 1 4

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BEING thE LE A DER Excuse # 8: “Nothing’s broken; why fix

“ Success comes only via constant forward progress, which requires making something happen.

“

sales calls, but there’s no shortage of delaying tactics that can be used as a buffer between you and risk. As an entrepreneur, you have to stop telling yourself the lie that you’ll “get to it eventually.” If you immerse yourself in busywork in order to avoid the true priorities, your business won’t last long enough for you to tackle them at some undefined point down the road.

Excuse # 7: “I’m playing a defensive game.” The hardest risks for cash-strapped entrepreneurs to take are often financial. Many business owners choose to cut costs and (at least attempt to) do more with less when what they really need is to hire new talent, invest more heavily in marketing, upgrade their machinery, or something else. Unfortunately for many owners, no business achieves greatness solely by pinching pennies— although financial responsibility is certainly a big part of sustainability and growth. The truth is, you can save your way to mediocrity, but not success. So don’t tell yourself that you’re playing the game if you never come off defense. Nobody ever wins without picking up the ball and running ahead in spite of obstacles. 42

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it?” When you’re facing a crisis that could damage or even sink your business, it’s (fairly) easy to take risks. After all, if you don’t act, you’re doomed—and in that situation, there’s probably not much to gain by holding back. But what about the times when things are going smoothly, when you may have more to lose by going out on a limb? Well, then it’s much easier to convince yourself that there’s no need to tamper with the status quo. When nothing is actively going down the toilet, it’s easy to tell yourself that things are fine, that the future is rosy, and that you don’t need to put yourself out there to improve. However, that kind of thinking is a good way to be left behind or to become irrelevant. Customers don’t always leave because they had a bad experience with your company…the reason is often that they simply had a better one with someone else. Remember, risks need to be taken when business is good and bad if you want to stay cutting-edge and competitive.

Excuse # 9: “…<crickets chirping, dust

falling, grass growing>…” That’s the sound of silence. You know, what you hear when you decide to let a project or initiative die over time instead of doing what’s necessary to bring it to fruition. Whether you simply lack motivation or your surrender is fear-driven, your riskavoidance behavior may be taking the form of lack of follow-through. For many business owners, the desire to succeed is there—and so are some good ideas—but they struggle with making the rubber meet the road. Maybe you’re afraid of being held accountable if you don’t meet expectations, or you simply find that you don’t want to put in the extra effort, after all. So you sit back and let projects peter out instead of

driving them forward, or definitively putting them out of their misery. (You may even be fooling yourself into thinking that others don’t notice that you talk a big game but don’t deliver.) Don’t allow your mind to sabotage your desire to meet your objectives.

Excuse # 10: “But I don’t avoid

risk!” Even if you, the business owner, have conquered your fear of risk and move into uncharted territory without hesitation, progress paralysis might still be affecting your company through the actions (or inaction) of your employees. If you as the owner don’t, well, take ownership of your team’s counterproductive behaviors, you could miss out on a lot of opportunities. Your salespeople might be stuck in the comfort zone of creating safe, but boring, pitches, for example, or your ad designer might be creating a backlog because she’s a prisoner of perfectionism. If that’s the case, maybe you’re simply so focused on leading your business that you haven’t kept a close eye on its inner workings, trusting your team to be as bold and efficient as you are. Or, more likely, you have noticed risk avoidance behaviors that are slowing your organization down, and are simply reluctant to confront your employees—a form of risk avoidance in and of itself! Risk avoiders live in a false reality. The temporary comfort you gain from rationalizing your inaction just postpones the inevitable. Hoping that something will change will result in defeat, the end of your dream. Success comes only via constant forward progress, which requires making something happen. As a leader, your example of enthusiastically seeking opportunity to execute, improve, and deliver results will be the beacon that guides all who follow you. So stop avoiding—and start acting.

Tom Panaggio is author of the new book The Risk Advantage:

Embracing the Entrepreneur’s Unexpected Edge (River Grove Books, 2013, ISBN: 978-1-938-41644-6, $14.95, www.TheRiskAdvantage. com). He has enjoyed a 30-year entrepreneurial career as cofounder of two successful direct marketing companies, Direct Mail Express and Response Mail Express. His practical approach to business concepts and leadership is grounded in the belief that success is the result of a commitment to embracing risk as a way to ensure opportunity. For more information, please visit www.TheRiskAdvantage.com.

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WHAT IS LUXURY? By Klaus Heine, www.worldluxurybranddirectory.com

uxury brands are regarded as images in the minds of consumers that comprise associations about a high level of price, quality, aesthetics, rarity, extraordinariness and a high degree of nonfunctional associations.

AESTHETICS: The brand behaves like a chic and vain dandy, who would never leave the house in less than perfect style. Whenever and wherever the brand is seen, it embodies a world of beauty and elegance.

Any potential luxury brand should be evaluated by the constitutive characteristics of luxury, which are:

RARITY: In contrast to mass-market brands, the brand needs to limit its production and tries not to disclose its (high) sales numbers. The brand plays hard to get and is not available at all times or places.

PRICE: The brand offers products which belong to the most expensive products of their category.

EXTRAORDINARINESS: The brand has a mind and style of its own and its products offer a “kick” and surprise with the “expected unexpected.”

QUALITY: The brand offers everlasting top-of-the-line products, which won’t be disposed of even after long utilization or defect, but rather repaired and which often even gain in value over time.

SYMBOLISM: The brand stands for “the best from the best for the best”; its charisma fills the room, and regardless of whether it is of a conspicuous or understated nature, deep inside, it is swollen with pride.

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TR A DE SHOW TIPS

f p 5

BUYERS BEWARE!

U f e o d s A t

Shopping Mistakes and How to Avoid Them by Tosha Cole Clemens for Focus on Fashion Retail

Ready… Set… Oh No!

I have just entered the lobby and seen the mile long line for registration! I only have this one day to attend market and now I am off schedule due to having to wait in line. When I finally walked through the doors, I see hundreds of booths and people everywhere. Where to start and where to go? Yes, this was me at my first market experience, stressed out and a nervous wreck before I even started my day! The event can be overwhelming and stressful for both buyers and sellers; I personally know this to be true with my experience. However, after years of experience, I have established that the event’s success or failure results in the time and effort placed preparing for the event. Let’s learn from my mistakes! First, register for the event online several weeks ahead of time. This will allow for the badge to be sent directly in the mail (resulting in the opportunity to go directly into the market). Another option, register

online and select to collect the badge at will call. This will eliminate the time at the registration booth. However, the badge will need to be redeemed at the will call desk (resulting in time spent in line waiting). Either way, registering online is a life saver! Second, bring lots of business cards, more than you think you will need. I made the mistake and ran out of cards half way through the event one year. No one enjoys having to write out their contact information. Also, bring a notepad and camera. This will help document what is seen and what needs to be revisited after the event is over. For me, I begin my day by going to appointments with the existing vendors I have. I review their current inventory by taking photos and requesting cost quotes of the desired styles. Finally, end my day shopping for new business and evaluating new trends. What does it take to close a deal? Like I stated earlier, I have learned that preparation for market week is critical. To help make the event a success for both Buyers and Sellers, the following should be considered when preparing for market:

BUYERS:

1. Register for the event online. 2.Don’t forget to bring business cards. 3. Bring a notepad and camera.

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Th a w p c h E

D a a d b w E

How to Purchase Accurately

Budget: Prior to market, buyers should assess the budget allocated for the season they intend to buy. The season allocation must also be divided into style categories. Be aware of the amount designated for dresses, tops, pants, and accessories per week. The dollars are then allotted into the different categories and dispersed into each style and minimums per style are established. Minimums are imperative, as it represents how many different styles can be offered in an assortment of merchandise. Each vendor has established minimums; a buyer should be knowledgeable of the realistic minimum range prior to market in order to assist in expediting the ordering process.

Margins: A fundamental factor in business is determining margins. Gross margin is the percentage of profit made between the cost of the product and the sale of the product. If a shirt was purchased for $5.00 LDP (Landed Duty Paid- shipping and duty is paid by vendor,) and the desired retail price is $20.00; the gross margin on this style is 75 percent. The gross margin can be calculated by subtracting the purchase price from the retail price, and dividing that number by the retail price. It is suggested never to set your gross margin less than 50 percent. This margin is too narrow when

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factoring in all other cost associated in determining the net margin or profit per unit. An efficient unit gross margin range can be found between 50 and 80 percent.

Calendar: Understanding a proper lead-time is crucial and allowing additional time for delivery is necessary. Be realistic in your production and delivery expectations in order to create accurate arrival projections. The creation of a seasonal delivery schedule calendar will assist in correctly identifying delivery dates by style and inventory availability. The calendar can also be shared with the vendor in order to gain a commitment for timely delivery. After receiving a written commitment, add a few more days to allow for the unforeseen events.

Style Count: The experience of market shopping can be much more effective when you are focused. The market exhibits an overwhelming array of vendors and without a style count and detailed budget, it is easy to get distracted. A prepared buyer will have a style count and budget in hand, so the focus can be directly placed on the style count list. A buyer should create a list highlighting the type of styles to be offered each week (tops, pants, dresses. Etc.). This will position the buyer to purchase confidently.

Trends: Demographic and target market varies by store. Buyer should research and recognize the trends for the buying season and understand customer application. The creation of a trend board or tear sheets demonstrating the desired colors, patterns, silhouettes, and overall theme for the season can be very helpful. Many unique elements and trends are offered at market, while this is always exciting, it can easily cloud the vision of the buyer. Establishing prime trends in advance will assist in staying focused.

sellers:

How to Prepare to Sell Sellers need to be equally prepared in order to maximize their exposure, exude confidence, and ultimately build their brand.

Capabilities: Product knowledge is very important. It becomes very frustrating for the buyer to become interested in a piece and not be able to purchase due to the lack of knowledge from the seller. Inaccurate information should never be presented to the buyer, as this will result in issues with the order and ultimately jeopardize the relationship for reorders. A prepared seller should have in depth knowledge of each piece and the purchase process. What questions will the buyer ask? What things does the buyer need to do to make a purchase today? What are the lead times, minimums (per style, per color), terms, and the price of each product? The goal should not only be to secure the first order but to establish a relationship to foster reorders and ultimately a long-standing client.

Terms: Payment requirements are determined prior to the market and the terms will vary according to the buyer’s status. A buyer representing a company new to the seller may not be offered the same payment terms as a buyer

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with an established company. New buyers should be prepared to provide company documentation, pay when placing the order, or often times a deposit is taken with the remaining balance upon delivery. Buyers with established relationships with the seller are offered payment options. The buyer and seller may agree to net terms, such as net 30 days. This would allow the buyer 30 days after delivery to pay the sellers invoice. A vendor manual should be requested to outline for both the buyer and seller any discounts given for late orders or damaged items. The discussion of these situations can eliminate unexpected fees.

Limits: Some buyers will buy the product as produced or “as is,” and other buyers will want to change some things on the product or “redevelop.” Sellers should be very aware of the factories limitations and capabilities. The establishment of a list per style highlighting the design options will educate the buyer on the opportunities offered. The buyer wants to feel a partnership and have confidence in the vendor and their ability and knowledge of the industry.

Market: Buyers are on a tight time schedule and information needs to be accessed quickly. The creation of a line sheet will prove to be very beneficial. The line sheet demonstrates what styles are offered by displaying CAD’s (photos of each style), colors offered, style number, price and minimums. If the buyers are unable to make a purchase in person, the information is available for evaluating later. It is common for buyers to deter the placement of orders until after the event. This process allows them to evaluate the vendors and obtain as much information as possible in making their decisions to purchase. The orders are often submitted the following week. Many buyers have limited time to attend the event. The understanding that buyers have different objectives while attending the show will better prepare the seller to meet their needs. Visuals will attract the buyers and knowledge and quality will retain them. The booth should be very inviting and reflect the brands quality and style. Buyers and sellers now have the knowledge to create a successful experience at market. Enjoy!

ToShA ColE ClEMENS

Tosha has over 10 years’ experience in fashion production, product development, design, merchandising and sourcing. She has represented top companies that include, BEBE, Wet Seal, Fredrick’s of Hollywood, and Fox Racing. She provides consulting and also is a contributing fashion writer for several magazines and the founder of: www.NittyGrittyFashion.com www.ToshaClemens.com www.Facebook.com/ ToshaColeClemens

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2014

RE TAIL NE WS

THINGS TO WATCH IN www.Postmates.com

COURIERS ON CALL

As speedier delivery comes to online ordering, the pressure is on to dispatch goods within hours. This means a new demand for couriers, some of whom will do both the shopping and the delivering. eBay Now’s “valets” track down and drop off items in markets where the service is available. Postmates’ couriers shuttle lunch, groceries or office supplies. In Chicago, the startup WeDeliver trains “delivery specialists” to work with local merchants.

AMBIENT COMMERCE As more “smart,” sensor-connected objects hit the marketplace, brands will seek to offer instant gratification by way of “ambient commerce”: anticipating consumer needs and wants and providing goods and services automatically. Consumers would set up guidelines in advance, then let technology take care of the rest. A hypothetical example from John Sheldon, eBay Enterprise Marketing Solutions head of strategy: using the Nike+ app to ensure that a new pair of running shoes arrives whenever the customer reaches 300 miles of usage. “Ambient commerce is about consumers turning over their trust to the machine,” he says.

BITCOINS BUST OUT Bitcoins are coming to the real world, quickly moving beyond the realm of online exchanges. Robocoin and Lamassu are among the companies installing bitcoin ATMs, which allow users to trade the peer-to-peer virtual currency for cash and vice versa. A smattering of restaurants and bars in cities from London to Sydney to New York are accepting bitcoin. Bitcoin Motor is developing a service that allows people to buy and sell cars using the currency. Virgin Galactic is accepting bitcoin for its commercial space flights. As more established brands accept the currency, watch bitcoin gain real- world legitimacy.

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3D PRINTER RETAIL HUBS

Retailers are getting into the 3D printing game by providing access to the technology for consumers not ready to invest in their own printer. In the U.S., early adopters include UPS, which is targeting small businesses and startups by introducing 3D printers to some locations. British supermarket Asda has been testing in-store 3D scanning and printing, enabling customers to replicate objects in ceramic. Tesco is exploring the idea of adding in-store 3D printers that could provide replacement parts and niche items.

FAIR TRADE APPAREL With consumers holding apparel brands accountable for the safety and humane treatment of factory workers, the Fair Trade concept will expand to apparel. The Higg Index, a platform that started with environmental goals, now includes social and labor measures. Fair Trade USA has developed a standards program for apparel, and while only a few small brands are currently offering certified products, Patagonia has pledged to introduce nine Fair Trade items in fall 2014.

FEEL-GOOD FASHION Consumers are becoming more aware of the human cost behind the apparel they buy thanks to a rash of massive tragedies at apparel factories. A crop of startups is vowing to make the business much more transparent. Honest By and Everlane detail the factories they use and even explain how much each item is marked up. Others in this space include Zady, co-founded by Foodspotting’s Soraya Darabi, Ethica and Cultures of Love.

Artist rendering of Devon Yard

BRANDED REAL ESTATE DEVELOPMENT Retailers are getting in on real estate development to create lifestyle-based town centers. Urbn Inc., owner of Urban Outfitters, is developing the 6.5-acre Devon Yard in suburban Philadelphia. The development will include the company’s Anthropologie store and Terrain garden center in addition to restaurants, a wellness facility, an exercise studio, a specialty food store and even a boutique hotel. Ikea is building a car-free private neighborhood in a rundown area of London and in Hamburg, Germany, filled with rental homes.

THE CIRCULAR ECONOMY As described by the Ellen MacArthur Foundations, a backer of this idea, the Circular Economy is a term for moving economies from the linear “take, make, dispose” model to a more circular system that, among other things, eliminates waste. Companies would become service providers, selling use of their products. The Guardian started a Circular Economy hub in 2013, and curbing food waste is becoming a bigger issue (one of our Things to Watch from 2012). Patagonia has started supporting ways to reduce, recycle, repair or reuse its products as part of its “Responsible Economy” initiative. © FFR - Focus On Fashion Retail

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SEAMLESS PAYMENTS Mobile apps are helping to make payments more seamless, speeding up transactions. With car services like Uber, payment is automatic within the app, so users simply hop out upon arrival. Apps from fast food companies including KFC (in the U.K. and Ireland), Five Guys and McDonald’s (a test in the U.S.) let users order and pay in advance, then pick up their food without waiting in line. Square’s mobile wallet system even lets users set up “hands-free checkout” for their favorite places, paying with just their name rather than the phone.

www.uber.com

JUMIA This online retailer is aiming to become the Amazon of Africa, where e-commerce is still in its formative stage. Based in Nigeria and currently offering delivery to five countries, the startup has attracted a reported $75 million from Western investment firms since its launch in 2012. In October 2013, the World Retail Congress named Jumia as the “Best New Retail Launch” of the year, fueling co-founder Jeremy Hodara’s ambitions: “We are in a game to become the biggest retailer of Africa, not the biggest e-commerce player,” he told Reuters.

SMART VENDING MACHINES The traditional coin-operated vending machine will increasingly be replaced with interactive machines featuring digital screens, Wi-Fi, sensors, video cameras and phone-charging stations. These capabilities enable the machines to accept card or mobile payments and interact with consumers in various ways. Beyond simple marketing messages, they open the door to game-based promotion, sampling, social media sharing, facial recognition and other unique features. While smart vending machines are much costlier than traditional machines, Frost & Sullivan forecasts that some 2 million of them will be operational by 2018.

SPEAKING VISUALLY At a time when consumers are shifting to a visual vocabulary that relies on photos, emojis, video snippets and other imagery—one of our 10 Trends for 2014—brands will increasingly communicate with images more than words. This will apply both in the digital world and offline, where visual cues will complement or replace text everywhere from packaging to menus and instruction manuals. The labels on the bottles of Motif Wine, for example, feature no copy, just different graphics for each varietal. © FFR - Focus On Fashion Retail

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UNCONVENTIONAL MODELS

VERIFIED REVIEWERS

With more brands featuring “real people” and a range of body types in their marketing, some are pushing the idea further and showcasing body abnormalities. Moffy, a crosseyed brunette, has signed as the new face of Storm models, the agency that discovered Kate Moss. British department store Debenhams enlisted a diverse array of real people for its summer 2013 look book, including some with missing limbs; the retailer declared that “anyone can look fabulous in our range.” And Pro Infirmis, a European advocacy organization for the disabled, teamed up with a clothing retailer on Bahnhofstrasse, Zurich’s main drag, on a series of mannequins depicting people with scoliosis, brittle bone disease and missing limbs.

Online reviews, the digital version of word-of-mouth, are notoriously unreliable: Some 10–15% of social media reviews are fake, according to a 2012 Gartner estimate. We’ll see more sites showing which reviewers aren’t hiding behind pseudonyms (akin to Amazon’s Real Name badge) or simply including real names as a default, as Google Play does. Bazaarvoice, which provides ratings and review services for retailers, vets comments using advanced algorithms and human analysis, and now offers a Trustmark logo for authenticated reviews.

BEACONS Low-cost transmitters that rely on Bluetooth technology, like Apple’s iBeacon, allow retailers to precisely track shoppers’ mobile phones and send highly targeted content tied to location and shopping habits. Qualcomm’s new Gimbal beacon is a similar device. Swirl Networks is a mobile marketing platform that relies on its own SecureCast Beacons. PayPal’s Beacon can identify and authenticate PayPal users when they enter a store and lets them pay with only verbal confirmation at checkout.

iBeacon

The beacons have great potential beyond retail. Museum visitors, for instance, could get tours tailored to their route. Major League Baseball has tested iBeacons to guide stadium visitors and send concession offers.

Paco Rabanne

SPACE-AGE FASHION MAKES A COMEBACK With private companies like Virgin Galactic aiming to make space travel a reality for anyone with a big enough budget, some fashion designers are revisiting the final frontier as a visual inspiration. Paco Rabanne’s latest collection, for instance, was celebrated for a futuristic look comprising heavy zippers, metallics and tailored latex. Galaxy prints have been popping up on everything from leggings to shoes, dresses and bags. The small label Shadowplaynyc, from “two space-crazed Parsons graduates,” features only galaxy-print designs. And the latest collection from Shenova, by designer Holly Renee, incorporates images from the Mars Curiousity rover expedition.

Motif Wine

JWT is the world’s best-known marketing communications brand that has been inventing pioneering ideas for the past 150 years. Headquartered in New York, JWT is a true global network with more than 200 offices in over 90 countries, employing nearly 10,000 marketing professionals. JWT consistently ranks among the top agency networks in the world and continues a dominant presence in the industry by staying on the leading edge—from producing the first-ever TV commercial in 1939 to developing award-winning branded content today. For more information, please visit www.jwt.com and follow us @JWT_Worldwide. Fe b r u a r y 2 0 1 4

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Focus on Fashion Retail is a direct mail business magazine, distributed ONLY to targeted audience. If you have received this copy of FFR with the mail, it’s because your business’ description matched the criteria set by our advertisers. Please fill out the marketing survey below to be included in our database for a consideration to receive FFR occasionally, regularly (or never again) - depending on marketing preferences of our advertisers (US retailers only).

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MARKETING SURVEY

Please fill out this form completely, answering ALL questions. Incomplete or inaccurate entries will not be considered. I certify that I am: oA Retailer__________________(signature) / oNot a Retailer

If a retailer, please tell about your store: Specialty: oMen oWomen oChildren

Age Group: oInfants And Kids oTeens o20-30 o30-45 o45+ Retail Price Point: oDiscount oBudget ($20-40) oModerate ($40-70) oUpper Moderate ($70-120) oLower High End ($120-$200) oHigh-End ($200-$400) oLuxury ($400+) Store Type: oIndependent oBoutique oDept. Store oChain Store 1-5 Locations oChain Store 5+ Locations Merchandise:

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oDress oCasual oAthletic oComfort oSpecial Occasions oWestern oDance oUrban oEthic oBeach oGothic/Alternative/Other __________________________________________________________________

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Your Primary Business Sources (describe): o Trade Magazines __________________________________________________________________________________ o Consumer Magazines _______________________________________________________________________________ o Trade Shows ______________________________________________________________________________________ o Internet oCatalogs How Do You Find New Merchandise?: oAt Trade Shows oResponding To Ads oSellers Contact You At Trade Shows You: o Know Exactly What You Need And Who Sells It o Know Exactly What You Need But Don’t Know Who Sells It o Just Looking How Frequently Do You Purchase Merchandise For Your Store?: o Every Month oEvery 3 Months oEvery 6 Months Your Average Purchase Is: oLess Than $1,000 o$1-5k o$5-10k o$10k+ Your Priorities Are (Please RATE, 1 is most important): oPrice oFashion oBrand o‪Quality oOther _____________ RETAILER: Please name your 3 biggest headaches to which you want to find a solution: 1. ________________________________________________________________________________________________ 2. ________________________________________________________________________________________________ 3. ________________________________________________________________________________________________ Any Suggestions/ Comments to help FFR to become more helpful to your business? __________________________ __________________________________________________________________________________________________ __________________________________________________________________________________________________ __________________________________________________________________________________________________

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Value for your business

Cost of attending/exhibiting

Services offered at the show

ShOw

Convenience

Upon completion, please send this form to us. Your personal information will not be disclosed, nor shared with anybody.

Value for your business

Cost of attending/exhibiting

Services offered at the show

Convenience

Attendance, Traffic

ShOw

Organization, Planning, and Promotion

As always, in the closing issue of the year (December) we will be announcing and reviewing the TOP 10 TRADE SHOWS of 2014. For that purpose, we will be conducting this survey throughout the year, offering to rate performance of various shows. Events collected the maximum score will make it to the final list.

• Rate the shows you have attended on the scale of 1 through 10, where 1 is awful and 10 is awesome • You must identify yourself (see opposite side) • Your opinion must be fair and objective • You must be an independent observer, not employed by, nor affiliated with any trade show • Please rate only those events that you have attended within last 6 months

Attendance, Traffic

As a service to our worldwide audience, Focus on Fashion Retail regularly conducts surveys to determine satisfaction with the various footwear, apparel and accessories trade shows and to rank our readers’ favorites. Being an independent media outlet not affiliated with any trade show, we believe that peoples’ opinion must be heard, it adds up to the value of our services as well as serves the needs of the industry.

If you have attended any of the shows listed below and would like to submit your opinion, please do so according to the following rules:

Organization, Planning, and Promotion

your opinion counts!

AccessoriesTheShow

Mosshoes

Agenda Las Vegas

MRket

Australian Shoe Fair

MVMNT

BIFF & BIL

OFFPRICE show

CHIK

Pool Trade Show

Children’s Club

Premiere Classe

Coterie

PREMIUM order Dusseldorf

Dallas Apparel & Accessories Market

PREMIUM order Munich

Edit

Project Las Vegas

ENKVegas

Sapica

Fame

SIMM- the Madrid Intll Fashion Fair

FFANY - The New York Shoe Expo

SMOTA

FN PLATFORM

Sole Commerce

GDS

SOURCING at MAGIC

ISPO Beijing

Stitch

KIDShow

STYLEMAX

Kidz at STYLEMAX

TASM - The Atlanta Shoe Market

London Fashion Week

The Chicago Collective

MAGIC Men’s

The TENTS@Project

Memphis Gift & Jewelry Show

theMICAM

Mercedes-Benz New York Fashion Week

theMICAMschanghai

MIPEL

TMRW

Moda

Transit- The Los Angeles Shoe Show

Modacalzado + Iberpiel

WSA@MAGIC

Mode Shanghai

WWDMAGIC

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WWIN- WomensWear In Nevada

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JUNE 3-5, 2014

TUESDAY–THURSDAY New York Hilton Midtown & Member Showrooms

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Shop FFANY 365 days a year–visit ffany365.com Special hotel rates at FFANY.ORG SAVE THE DATE: August 5-7, 2014 (Tuesday–Thursday) @ffanyshoeshow

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