The footwear market can be challenging, but Shoe Carnival Inc. sets itself apart by stocking more shoes than any other retailer, Vice President of Real Estate Michael Smith says. “Our average store will stock 28,000 pairs of shoes,” he says. “That is far superior to our competitors.

“We can carry more colors, more sizes, and that [gives] us the ability to satisfy the consumer on a consistent basis,” he continues. “We have everything from athletic shoes to work boots to sandals and slides. We provide quality brands at a reasonable price, which is why most of our customers buy multiple pairs.” 

Based in Evansville, Ind., Shoe Carnival has 368 stores in 33 states and Puerto Rico. When building stores, “We look for locations in large metropolitan areas, as well as what we would call ‘single store markets,’” he says, noting that these areas tend to have populations of at least 150,000 people in the trade area.

Shoe Carnival has operated since the mid-1980s and has enjoyed its success thanks to its staff of 5,000 employees, Smith says. “The people here in this organization are focused on the success of the company,” he asserts.

Its workers, he notes, believe in the concept. “They do everything they can to make it better and be the best in our industry,” Smith continues. “When you’ve got the best people, you can accomplish pretty much anything.”

The company’s store sizes also give it an advantage, he says. “Our average store is over 11,000 square feet, and we are not afraid to open big stores where there is significant opportunity, as evidenced by the number of stores that are 15,000 to 25,000 square feet,” he says.

A Good Fit

This year, Shoe Carnival plans to build 33 more stores in 18 states and Puerto Rico, Smith says. “We have covered a great deal of geography to achieve these numbers,” he says, noting that the company’s concept lends itself well to customers in Puerto Rico.

“They love our concept, the selection and they like the brands,” he says. However, Smith admits that the company has used some different practices in Puerto Rico than it uses in the States. 

For example, as it hired locals, Shoe Carnival needed to bring them to the mainland for training on its retail concept and how to operate the stores. “After 10 months, they were back to open our stores,” Smith recalls.

Shoe Carnival also had to send its merchandising team to Puerto Rico to research what locals liked to buy. After multiple trips, “We tailored our product mix to that customer,” he says.

One example, he notes, is the difference in women’s shoes. In Puerto Rico, “They tend to be more colorful [and have] more height on the heels,” he says.

Building a Brand

When Shoe Carnival moves into new, large markets, it can be challenging, Smith admits. Because the company does not yet advertise nationally, “The consumer doesn’t know who you are and what you’re all about,” he says. 

But as it moves into the market, “We have to advertise at a level so we can achieve brand recognition as soon as possible,” he says. One example, he notes, is how the company moved into the Dallas market last year.

Shoe Carnival opened six stores in Dallas on the same day. The company invested money to fund its advertising campaign. “The more stores you have, the more money you can put towards advertising in that market, and the quicker you can build your brand,” he says. 

He notes that the company has plans to change its advertising strategy. “We believe that as we move towards a national advertising platform, it will enable us to enter new, larger metro markets with less pressure of having to cluster so many new stores into one opening period, in order to have adequate advertising in the market,” Smith says.

Beyond the Register

Shoe Carnival has looked at ways it can make sales with state-of-the-art technology, Smith says. In some of its smaller stores, the company has placed kiosks, which customers can use if they do not find what they are looking for in the stores. 

“They can have it shipped to their house or shipped to the store,” he says. “It takes the entire Shoe Carnival collection and provides it to every store. We want to make sure every Shoe Carnival customer is satisfied, and this is one more way to use technology to make that happen.”

The company also conducts sales through its web site, www.shoecarnival.com, which it launched two years ago. “We believe it can be a very successful platform and we continue to make improvements to the online experience,” Smith says.

For instance, the company is at work on a feature that would allow customers to find a shoe they like at one of its locations and then go to the store to try them on and make a purchase. “Ultimately, if you’re a brick-and-mortar retailer, you want the ability to bring that consumer who’s shopping on your web site to the store,” he says.

Enjoying the Perks

Customer rewards programs have not passed Shoe Carnival by, Smith says. “Our program is called ‘Shoe Perks’ and we are growing the memberships in the program at a significant pace,” he says.

Shoe Carnival has a plan to double its memberships in the program in 2013, as well as 2014. “Our stores are doing a great job with executing this strategy,” Smith praises. 

“We do not share information with anyone outside of the company, but we do use that information to communicate with the customer about promotions and products that are important to them,” he states. “Our Shoe Perks program has huge upside potential, and we are committed to growing it rapidly.”

Team-oriented

Smith, who has been with Shoe Carnival more than six years, says the company has a very teamwork-oriented culture. “Our management team believes that decisions should be inclusive, and we seek out the input from our various departments, so that we have the best information, with which to make a decision, and there is a broad base of buy-in across the departments affected,” he says.

Its board of directors is also fully engaged in the business. “We review key initiatives and strategies related to real estate on a quarterly basis,” Smith says. “Every member of the board shares their ideas, as there is a commitment to grow the company profitably. It’s a great time to be a shareholder of Shoe Carnival.”

Smith has promoted the teamwork philosophy as he has managed Shoe Carnival’s real estate department. “We share information, contacts and use our relationships to help one another,” he says. “The sharing of ideas and willingness to accept input from others had been a key factor in our success, and will be going forward.”

He also promotes strong integrity. “This is not easy work and it’s not for everyone,” Smith admits. “But, when hard work done the right way leads to successful growth, it results in a tremendous sense of satisfaction.”

Smith sees a strong future for Shoe Carnival as it plans to double its size. “We’ve done the market plans and we’ve done the studies, so if we can grow the company at 30 to 35 stores a year, we can easily get there within 10 [to] 11 years,” he says.