DSW thinks it knows how to get shoppers excited about visiting its stores again.
The discount shoe retailer announced earlier this year that it had invested in a new strategic partnership with Feetz, the “digital shoe cobbler” which launched in 2013.
Co-founded by wife and husband team Lucy and Nigel Beard, Feetz will enable DSW to make use of the company’s unique 3D scanning technology, which from just three photos can collect 22 key measurements of fit for each foot using 5,000 data points.
According to Founder and CEO Lucy Beard, the initial idea was to think of how to make footwear as customizable as a cup of coffee.
“Two and half years ago I went shoe shopping and I just wanted a pair of basic flats. I tried on about 10 pairs and nothing fit right. I got fed up and I went to Starbucks and ordered a lovely coffee—double mocha shot, extra hot, soy milk—and I suddenly realized as they made it that your coffee is more customizable than your shoes,” she said.
Within the next year, DSW plans to incorporate Feetz technology into its stores, and although the company currently isn’t ready to reveal exactly how it will be implemented, Beard said it could be used for any number of ways—say, making custom footwear for customers on-site, or assisting in the purchase of shoes that fit properly.
“Most shoes today are bought in-store, and people want to see, they want to touch, they want to experience, so imagine going to a store you can scan your feet there, and see data and information on your feet and why they’re so interesting and unique,” she explained.
Beard said that Feetz has developed both a foot-scanning app for use at home as well as an in-store unit, “We could put 3D printers in stores and make them there, we could make them somewhere else. There’s a bunch of things that as technology progresses, and as customer’s appetite for this changes, we’ll be able to react to that,” she said.
The deal with Feetz comes as DSW struggles to kick-start same-store sales growth, which has remained flat at under 2 percent for the last three years. While sales were on track for a better 2016, a rocky first quarter saw same-store sales decline by 1.6%, demonstrating how fragile comebacks can be. A tepid second quarter did little to improve matters.
“[DSW] is making some really great strategic investments, knowing that retail is vastly changing, especially with online,” said Beard. “They’re saying—how are we going to look into this industry that’s changing? They’re starting some strategic relationships, and Feetz is one of them.”
DSW also faces a problem familiar to every other brick-and-mortar: Amazon. The e-commerce giant, which is quickly on track to become the nation’s largest apparel retailer by 2017, announced last year the acquisition of ShoeFitr, and already appears to be developing 3D technology to assist in online shoe purchases and reduce returns.
With more than 400 brands in its stores, Beard said Feetz can also be used to help DSW reduce its returns in a similar manner to the Amazon technology, which points shoppers to properly fitting shoes based on foot measurements, but that Feetz ultimately has higher ambitions.
“[Amazon] is trying to sell the model of today—how do we find what shoes fit you? Feetz is solving the problem of tomorrow—how do we make shoes that fit you? Which, in the end, is the biggest problem, and the much greater solution to solve for,” she said.
As the influence of fast fashion permeates the entire industry, DSW also views Feetz as a way of cutting down lead times, helping to deliver product to consumers on a more frequent basis.
“We recognize that the shoe manufacturing process is very long so this is one potential solution where we could shorten lead times, especially given how complex [customer] needs are,” said DSW Investor Relations Senior Director Christina Cheng.
Complex as those needs may be, Feetz has a lot going for it. Younger consumers care increasingly about issues of sustainability and sourcing. Feetz’ shoes use biodegradable materials, and because they’re not produced overseas, leave a carbon footprint 60 percent smaller than traditionally manufactured shoes.
“All manufacturing will solve for what consumers demand for,” said Beard. “Organic food was a very niche thing in the 80s and it’s only become more popular. Now every food store you go into they sell organic food and it’s because consumers asked for it.”
Consumers are excited about customization too—perhaps Feetz’ biggest selling point. According to research conducted last year by business advisory firm Deloitte, 36 percent of consumers say they are interested in personalized products or services, with Millenials showing the greatest interest (43 percent of 16-24 year-olds and 46 percent of 25-30 year-olds).
“1 in 3 customers are looking for customized products,” Beard reported. “So think of the coffee. I want this to be my coffee. We’re already looking for things to be unique to be as individual. And in the world of Twitter, we’re instant, how can we have that now?”
While 3D printing allows for virtually unlimited possibilities, material costs limit the market viability of more complicated footwear designs. Currently, Feetz sells a line of 3D-printed women’s flats through its website, along with a planned line of men’s shoes for the fall.
Whether or not consumers are ready to jump for a pair of $200 3D printed flats remains to be seen, but for DSW, the investment in Feetz represents what the company sees as part of the shoe-buying experience of the future.
“It’s a way to introduce a highly differentiated experience that’s very relevant to the customer today,” said DSW’s Cheng. “Today’s customer demands a very personalized product, and it’s one of those long-term ideas for us.”