The Austrian retail group, which is recovering from costly investments on other projects, will launch a new smartphone app before Christmas that will allow some of its Austrian clients to determine whether any of the shoes offered at its Humanic stores in the country will really fit them. It will be tested at two of its stores before being rolled out throughout the chain, but customers can already obtain that “perfect fit” in different ways when they walk into a Humanic store or order from the chain online.
That “perfect fit,” which everybody is looking for, is only possible if the clients have already registered with Humanic and had their feet - or those of their children - scanned by a revolutionary “Humanic Avatar.” It's a foot scanner, developed by Leder & Schuh and a Slovenian software partner, that uses a camera and light waves to draw an electronic 3-D picture of the client's feet in order to determine the most appropriate last for him or her. The scanner is already installed in about half of Leder & Schuh's 50-odd Humanic stores in Austria and will be gradually installed in all of them, with technological upgrades.
The customer's personal foot data are stored in Humanic's database and he or she will then get a password-protected account on the chain's website, www.humanic.net, with a code for the corresponding, best-fitting lasts. Humanic has already collected the data on about 100,000 feet, and between 1,000 and 2,000 feet are being measured at the chain's stores every week in Austria.
The system allows the scanned clients to find the right shoes because the interior of each model of shoes sold by Humanic online and offline has also been thoroughly 3-D scanned in every available size - for a total of more than 200,000 items offered every season - and given a specific code. The store personnel matches the personal codes with those of the shoes on sale to offer the best possible solutions to the customers.
So far, the process used by Humanic has been based on assisted service in the stores, but the new smartphone app will help the customers to do the matching themselves, on their phone. Additionally, the last part of the process has been simplified at a small Humanic store near Vienna's Cathedral, where the footfall is high, by the use of a conveyor belt that collects the package with the selected shoes from the storage room. The customer only has to press a button on a computer, called the Shoe Concierge, without waiting for a salesperson to attend to his or her needs.
Signaled by a funny character designed by a Danish studio, the Humanic Avatar has been a big success, especially for its application to children, whose parents have always had a hard time determining the fit of the shoes that they are selecting in the stores. It backs a claim that “Humanic passt immer” (Humanic always fits).
The management began to measure the inside chamber of the shoes with a 3-D scanner four seasons ago as part of a project to bring down the return rate for shoe ordered online. Less than 10 percent of Humanic's sales are generated on the web, which serves mainly as an information and advertising tool for its strong brick-and-mortar business. The return rate on its online transactions lies below 50 percent, which is better than at other websites.
Humanic subsequently decided to offer the service also at some of its larger stores, starting with a major campaign around Easter of 2013, focused on getting parents to find the right fit for their children's feet. The interaction with the customers has led the company to widen the target group to the adult population and to regard the Humanic Avatar as a major step in the direction of omni-channel retailing. The company is also considering it now as an important tool to establish a database of loyal customers, like the one that the chain's Stiefelkönig sister began to put together for its own loyalty program before its acquisition by Leder & Schuh in the middle of 2011.
The Humanic Avatar won the European Retail Technology Award from the EHI Retail Institute earlier this year, in conjunction with the Euroshop fair in Düsseldorf. The system is more sophisticated than other foot scanning systems used by competitors such as Deichmann or Reno, which only measure the length and width of the foot, as it also measures the height of the instep. Leder & Schuh has been able to use the system on an exclusive basis until now, but its Slovenian partner in the project, UCS, is planning to put it at the disposal of some other footwear brands.
Meanwhile, one of the two top executives of Leder & Schuh who have remained on its executive board, Heinzpeter Mandl, indicates that the company is beginning to make progress in its restructuring process after three years in the red, due to two main factors: the group's acquisition of the loss-making Stiefelkönig chain, which might otherwise have been taken over by a competitor, and its own excessive expansion into Eastern Europe just before the recent financial crisis.
On a consolidated basis, the operating losses of the group rose slightly in 2013 to €6.0 million from €5.5 million the year before, mainly due to extraordinary charges, but they declined in the first half of this year. Comparative store sales have been on the up until September, but it's not sure whether the progress will continue through the end of the year, as temperatures have remained too warm in October for customers to buy autumn/winter merchandise.
Stiefelkönig is still losing money, but the group's losses have declined following the closure of a total of 45 stores in Eastern Europe and Switzerland, which led the group to suffer a drop in consolidated sales to €533.0 million in the past year from €543.3 million in 2012. Some press media have published other figures, but they were not consolidated.
Leder & Schuh is left now with a little less than 100 stores in Eastern Europe, after paring down its Eastern European retail network, particularly in Hungary and Poland. It is aiming to shut down some other locations, provided it agrees on the termination fees with the landlords, but it also plans to open some new stores, including one in Bratislava.
As previously reported, the continuing losses have depleted Leder & Schuh's cash reserves, but the company has been able to negotiate new credit lines with the banks that will allow it to operate normally and to make new - and wiser - investments through 2016.