The fastest-growing digital retailer of lifestyle footwear, apparel and accessories in the CEE region has a unique retail concept that goes beyond the traditional online and brick-and-mortar shopping model.
Footshop has become a love brand and integral part of sneaker subculture in Central and Eastern Europe, a cult brand on the cutting edge of new trends. Thanks to its wide customer base and stores in four European cities, the retailer has not only built exclusive relationships with its suppliers, but a fan base of over one million followers on social networks in 15 countries. In the course of the last two years, the company has almost doubled its turnover to CZK 760 million in 2019.
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The fastest-growing retailer of lifestyle footwear, apparel and accessories in the CEE region has a unique retail concept that goes beyond the traditional online and street shopping model. Originally operating only as an online store, it has expanded into 5 brick-and-mortar shops in Prague (2 locations), Bratislava, Budapest and Bucharest. Its product range includes more than 4,000 models of sneakers and many other styles of clothing and accessories. Working closely with the iconic brands such as Nike NBHD, adidas Consortium and Vans Vault, Footshop is, in many cases, the only retailer in the region to offer customers exclusive models from sought-after limited editions. With a turnover of CZK 760 million in 2019 and serving more than 300,000 customers in 15 languages, Footshop defines the sneaker subculture on the streets as well as online. Its strong connection with the local community and personalized approach is the basis of its successful and distinctly expansive business model.
More than just an online shop – a trendsetting love brand
Footshop was founded by Peter Hajduček and Marcel Vargaeštók in 2011 as an e-shop specializing in skateboard shoes. In an effort to further develop the brand, the founders carefully followed trends abroad and gradually expanded their focus to lifestyle sneakers, which helped the brand establish itself on the Czech and, subsequently, Slovak markets. Footshop has now become the brand of choice for trendy sneakers fans.
Footshop's online sales have continued to grow and the founders – even with competitive pressure from larger brands – have determined a need to approach customers in areas where they would be able to offer exclusive models from their limited editions. This gave rise to a unique retail concept, which is based on connecting the online world with the offline local community, also known as the sneaker subculture. The first brick-and-mortar store in Prague was soon followed by others and the company started to grow outside the Czech Republic. Their stylish spaces have become popular venues for meetings and the promotion of the subculture among customers in Bratislava, Budapest and, most recently, in Bucharest.
Footshop is more than just a footwear retailer – it has become the epicenter of streetwear culture, responding flexibly to the demands of the younger generation, creating a strong community, organizing events – but mainly connecting hundreds of local influencers and their Gen Y and Z fans through social networking, thereby gaining a loyal customer base.
Product exclusivity as a competitive advantage
Its wide variety of choice and unique relationships with manufacturers gives Footshop a significant advantage over both its online and offline competitors. The company offers its customers more than 4,000 models of lifestyle sneakers, including trendy streetwear clothing and accessories. Footshop is also unique by its product range. The key element of the company's business model is its close collaboration with popular brands, which allows the retailer to offer exclusive models and limited editions. The breakthrough in Footshop's growth was the launch of its official collaboration with Adidas, allowing Footshop to add Yeezy Boost sneakers from the Kanye West limited edition to its portfolio. Later on, Footshop became a member of the prestigious Adidas Consortium network of stores. Other major brands, such as Nike NBHD and Vans Vault, were added soon after. One of the conditions of being able to cooperate with the big brands and offer their exclusive models is the existence of brick-and-mortar stores, which in this respect are a significant strategic aspect of the Footshop brand.
Customer at the heart of the action
In 2019, Footshop served more than 300,000 customers, generating a turnover of CZK 760 million. Since 2017, the company has increased its total revenues by 40% (CAGR), with its share of returning customers increasing by 31%. These results also confirm the success of its business strategy, which is based on customer care. This fact is reflected by its lower number of product returns compared to the rest of the industry. Footshop provides customer support in 15 languages today through an experienced team with a clear organizational structure. The management team combines abundant experience in all areas of e-commerce with internal support from 40 marketing specialists and 30 IT experts. The team is completed by experienced external business consultants who help the company with product and geographic expansion. Flagship stores also play an important role in the customer base growth strategy, where Footshop shows its local presence through various community events and social networking activities.
One of the cornerstones of Footshop's attractiveness is, in addition to its leading market position in Central Europe, the growth of the lifestyle and streetwear footwear and clothing segment and its ongoing transition from shopping centers to the digital world. The value of the global e-commerce industry currently exceeds USD 500 billion. The footwear segment (the major part of Footshop's inventory) represents more than USD 100 billion. By 2022, the value of the entire industry will grow by about 10% (CAGR compared to 2018) to USD 700 billion and the footwear segment by almost 9% (CAGR compared to 2018) to USD 137 billion. In the CEE region, however, the growth in individual countries exceeds that value two to three times due to a significantly lower share of online sales in total retail.
Investing in further growth
Footshop's growth is mainly driven by a natural expansion of the core segment and the shift of customers' purchasing habits to the Internet. Brick-and-mortar stores play the role of a communications channel, a place for collecting orders or attending events where a new product can be shared with the online community. Paradoxically, the COVID-19 pandemic has acted as an additional catalyst for retail digitization enabling attractive acquisitions of existing e-shops and brick-and-mortar stores in selected markets. Despite the closure of its brick-and-mortar stores due to the COVID-19 pandemic, total sales in March 2020 increased by 23% compared to the previous month, driven by a 32% rise in online sales. However, Footshop's future value is also based on new digital projects that are at the forefront of global retail trends and will propel Footshop forward into the world streetwear retail league. The result is a continuous increase in the conversion rate, growth in the number of new customers and an increase in the share of repeat purchases by regular customers. Footshop and its team represent a business model that is unique in Central Europe. It has the potential to set trends for communities across Europe and to go far beyond its current reach.
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