Skechers launches 70 outlets in SE Asia, builds stronger online presence amid COVID crisis
By Celine Chen
SINGAPORE, NNA - While many businesses were forced to downsize, cull jobs or even close shop for good because of the coronavirus crisis, America shoe chain Skechers' Singapore branch has been helping it expand with dozens of more new outlets and building a stronger digital presence in Southeast Asia.
NNA speaks to Zann Lee, Skechers vice-president for the region, on how she tackles pandemic challenges head-on to grow the brand.
Q: How did Skechers manage its business in Southeast Asia when China shut down earlier in the year to contain the coronavirus outbreak?
A: When China implemented lockdowns in February, the pre-planned delivery volume of products from our factories in China was not too high for that period. This was followed by lockdowns implemented in Southeast Asia in March. Hence, Skechers was not affected when factories were not able to produce.
By the time China reopened, we had to skip the shoe launches for one season. Fortunately, as there are no drastic seasonal changes in mostly tropical Southeast Asia, the current product range is still suitable for the market.
Q: What did you do when the coronavirus outbreak spread to Singapore and Southeast Asia especially after lockdowns were enforced?
A: We worked to speed up the digitalization process in various aspects of our business. We redesigned the job responsibilities of our employees to support the needs of the market. We also implemented a customer relationship management program which provides better ways to analyze consumer data in order to have a deep understanding of the market. Businesses need to react as fast as possible in order to mitigate impact and other risks.
We had to prepare for the further development of the COVID-19 pandemic and its possible scenarios. So, we keep our focus on business continuity management which covers infrastructure, cyber-security, employee, business, operational and communication risks. We need to manage these new challenges and risks to ensure continuity of operations. Having an adequate digitalization strategy is also the way to ensure continued growth.
Q: How did you boost e-commerce as people turned to online shopping?
A: We were already partnering with marketplaces like Lazada and Shopee, and they have been able to fulfil our e-commerce and online operations. We started online sales on these marketplaces so that our team can build a foundation first. Thus, when we start our own e-commerce sites, we would already have adequate channels in place to generate sales.
The e-commerce site for each market in Southeast Asia is independent. The Thai site was just launched this month, while those for Singapore, Malaysia and Vietnam are slated to be live by end-2020.
Q: You mentioned the adoption of a customer relationship management system. How has data analytics on consumer behavior helped the business?
A: When we found out that there was a stronger market demand for athleisure walking shoes, we promoted the shoes further and brought back the Skechers Friendship Walk, transforming it from a physical event to a virtual one this year, with synergistic links with the walking shoe range.
Last year’s one-day event in Singapore, which was held around the Marina Bay area, saw more than 3,000 people taking part. The friendship walk was also held in Malaysia and Thailand. This year, we converted the event into a virtual walk in all three countries. People could walk or run three, five or 10 kilometers at their own time and location, whether on a treadmill at home or outdoors in a neighbourhood park over a longer period of time. Their achievement was tracked by fitness apps.
Q: Was the response to the virtual walk better than last year's event?
A: Yes, the response was overwhelming. Last year, a total of 9,200 people took part in the friendship walk. More than 4,200 in Malaysia, 3,000 in Malaysia, and 2,000 in Thailand. The virtual event this year drew much higher numbers, with more than 28,000 taking part. We had over 12,600 participants from Singapore, 10,000 from Malaysia and more than 5,500 from Thailand.
To promote the virtual walk, we rewarded customer loyalty with 30-percent discounts for those who registered for the event. We also gave one-for-one deals to all participants who completed their walk. In addition, we held a lucky draw for them and gave 12 pairs of shoes to one lucky winner. Many people posted their participation on Instagram, which helped boost the Skechers brand. It also reinforced the importance of engagement with customers through innovative ways on digital platforms.
Q: Skechers has been actively expanding its network of outlets throughout Southeast Asia even in the pandemic era. What has enabled you to do so?
A: We see challenges as opportunities, so this is a good time for us to expand with good store locations which have been freed up, as there are brands exiting Singapore or even the region entirely. The decision to expand with new stores had been taken even before the pandemic, as Skechers was able to achieve double-digit sales growth in January and February this year.
Also, a healthy recovery in June-July allowed us to proceed with new store openings and expansion. In addition, the landlords have also been reassessing their rental rates, which helps in making the opening of new stores possible in this current climate.
Q: How many outlets is Skechers opening in the region?
A: In Singapore, we opened five new shops in July and August, and expanded the shop space of two existing outlets. We will open one more store and expand the space of another by year-end.
In Southeast Asia, we had a total of 863 points-of-sale including concept stores, outlets within department stores, wholesale and franchise stores as of June. We are expanding the number to 935 outlets across Southeast Asia by December 2020, including Malaysia, Thailand, Laos, Myanmar and Brunei.
Q: How important is omni-channel retailing to Skechers as more people are shifting to online shopping?
A: I think customers still largely appreciate the social and sensory aspects of shopping in stores, and trying out shoes for fitting and looks. But there are some consumers who like to have convenience in online shopping, so we have to ensure that we are well covered on both online and offline channels now.
Q: How else can offline retailers survive better in the new normal?
A: We are in constant negotiations with landlords to reduce rental rates and secure better store locations. We hope to see landlords reduce operating expenses, so that brick-and-mortar store businesses like ours can still remain viable; and for logistics companies to reduce their storage, operating and courier charges.
In addition, training support from governments and other relevant organizations would be greatly helpful to both front-line retail and back-end operations staff, to equip them with new skills in various aspects from customer service to digital innovation.