How important is the Indian market for the Aldo Group? Where does it stack up in the larger scheme of things?
Right now, the Indian market for the Aldo Group is extremely small. However, we believe this market has a lot of potential and we are very well accepted here. Our business here has been growing at a very fast rate over the last two years or so. Even though we have been here for the last many years, we haven’t given this market the attention it needs. And today, we realize that India has been growing at a phenomenal pace and we want to be part of that growth. We expect growth to be fuelled by increased access to our physical stores as well as e-commerce, especially in smaller Indian cities.
Globally, an increasing number of people are steering clear of bricks-and-mortar stores, buying everything from shoes and clothes to groceries, online. How do you pull people back into stores?
Basically, retailing around the globe is really transforming itself. While it amounts to approximately 15% today, e-commerce will easily represent 30-35% of our sales moving forward. What’s happening is that there is a change in consumer behaviour. Not only are they shopping online, consumers are also doing their research online before venturing out into a store to buy. So, we are investing a huge amount of money to ensure we have a reliable platform to serve our customers both online and in the actual, physical store. Today, if we don’t have a size that the customer wants in the store, we will ship it to their home from another store, or even another country! What we’re also doing is to improve the store experience, with new systems, store renovations and staff development. Take technology, for example, when consumers walk into the store, there are additional incentives if they are registered on the Aldo app. The minute they walk into the store, the app signals their presence to a salesperson who will already know their name and shoe size. Moreover, the sales staff is armed with tablets, which helps them to check inventory and request a pair for the customer, without leaving the customer’s side. A runner from the back will bring out the shoe for the customer to try on. Moreover, we also have technology which will help consumers see how the shoe or bag will look with different types of clothing.
Fast fashion brands such as Zara and H&M, among others, are trying to draw more shoppers by strengthening their selection of shoes and accessories. How do you compete with that?
We are specialists, a brand that offers a wide array of choices to our consumers as compared to other brands. We also wholesale the brand in department stores, and build brands for other stores such as Target, among others. To be certain, these products are very different from what Aldo has to offer. But as a company we have retail stores, we wholesale our own brands, build lines for other retailers, and we also sell online. So, we are trying to cover every possible opportunity in this space.
Do consumers in different countries buy shoes differently? Does it pay to focus on local tastes?
It’s strange, because the bestseller in New York is the same as in Mumbai, Paris or Milan. Yes, surely, there will be certain categories that do well in certain countries. For instance, historically, people from South America love high-heeled sandals. People in Europe or India are more casual or athletic in that sense. At the same time fashion is also moving towards more sporty, casual footwear. Typically, 80% of the collection you see in stores is what you will see globally. Twenty per cent of the product selection tends to focus on local tastes. In Saudi Arabia, for instance, you would see men showing a preference for loafers and sandals rather than laced shoes, because they pray five times a day and need to remove the shoes very often. Here, in Mumbai, people tend to prefer open shoes, while Delhi tends to buy more boots because the weather is different.
How do you engage with millennial consumers who are known to be fickle?
We don’t look at millennials as a segment. What we do look at is consumer segmentation around the world and ask ourselves, which consumer segment are we going to serve? We determine one segment, we call them the style seeker, the segment that Aldo goes after. They exhibit a particular behaviour, and we study that behaviour and pattern every three months. We look at them, study their choices, their tastes, the changes they are making. We are constantly trying to see what they are looking for and we try to answer their need. Style seekers are not just millennials, they could be from generation X, Y or even the technologically adept generation Z, which are high users of social media! We go after these style seekers, go to their house, look at their closet, ask them why they buy a pair of shoes? How they pair different elements, such as a hat or a dress together… Do they buy it because it’s from a particular brand? Do they buy it because they connect with the brand? Or because they like what the brand stands for? And that is where we have to be very careful. Being socially responsible is very important to us. When we created the company, we wanted to create something that was a model for the world. Where you care about the environment, the community, the less privileged, you care about giving people the right opportunity so that they can reach their full potential. We were one of the first companies in the world to raise money for and create awareness about AIDS. We raise a lot of money for cancer research each year. It also makes good business sense, but then again, wouldn’t you want to be a better person? When you go out and buy a pair of shoes at Aldo, you know that you’re buying from a socially responsible company.
What are some of the key global trends?
The key trend is that people want to associate themselves with a company that they feel represents their value. They don’t want to associate with something that is not meaningful or something that has no gravitas. Our consumer is interested in the latest fashion, and something that is going to make them feel good about who they are. Something that complements their personality, they don’t want to copy anyone, they want to have their own individual style. As far as consumer preference in terms of style is concerned, over the last three-four years we have seen a shift from high-heeled shoes to more casual shoes. And that shift is going all the way towards athletic. And now, you basically have a cross between an athletic and a dressy shoe which is very popular.
When you dropped out of Cornell, your father stopped your monthly allowance. You sold Collier’s encyclopedias door-to-door for a year. What did you learn?
I have to say that the foundation of my business has been laid by the values that were given to me by my parents. But, yes, the experience did teach me that if you want to achieve something, you were willing to do what it takes to reach that goal. With no safety net you have no choice but to persevere. In my case I wanted to go back to university, I wanted to go back to Cornell. You need to be willing to go through hardship, and not give up even if you have failure on your way.