Friday, September 17, 2021
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Interview with Rok Črepinšek from The Athletes Foot

Rok Črepinšek, Regional Manager of The Athletes Foot, gives us insights into how the popular streetwear brand is progressing in southeast Europe.

Please give us an overview of your brand and your position within the company.

The Athlete’s Foot (TAF),  celebrating its 50th anniversary this year, is a streetwear brand originating from the USA. It is also known as one of the major pioneers of the “sneaker culture”.

In Central and Eastern Europe, TAF is present under the umbrella of Intersport, a leading global sporting goods retailer.

Inside our company Intersport ISI d.o.o., owned by Polish investment fund Enterprise Investors and led by CEO Andrej Ažbe, I am the Regional Manager for TAF.

What makes your brand stand out in comparison to your competition?

TAF is a fresh addition to the sneaker environment that focuses on a head-to-toe offer. We want to deliver a seamless consumer experience with a 360-degree approach that creates the same look & feel everywhere, in-store and online. Sustainability is also a very important topic for us, as well as gender equality and neutrality. We strive to provide premium products and an elevated shopping experience for our consumers while offering a different type of merchandise compared to our competition.

Tell us about your retail network and have you had any new store openings or new market entries during the pandemic and where?

TAF was established in 1971 and is currently present with around 500 stores globally. Its strongest footprint is in the USA, Mexico, and Holland.

In southeast Europe, we are present since 2017 with eight stores in Croatia, seven in Serbia, six in Slovenia, and one store each in Bosnia and Herzegovina, and Albania. On top of our brick and mortar stores, we also operate webshops in all countries which is nowadays a must.

Our expansion strategy was quite aggressive from the very beginning. First store openings took place in the second half of 2017 in Slovenia, Croatia, and Serbia. Since then we have had a very intense schedule of openings each year. Currently, we are at 23 stores, all operated by ourselves except in Albania where we work via our franchisee partner.

Our latest footprint was left in Bosnia and Herzegovina, where we recently opened a store in Sarajevo within a new Bingo mall. Our recent store openings marked an important milestone for us as we presented a new store concept.

Our future plans are connected to strengthening our position within countries where we are already present and optimizing our store portfolio. Until the end of the year, we are entering the North Macedonian market with a store in East Gate Mall – Skopje.

What is the typical size of your stores and what locations are interesting for your further expansion (shopping centers, retail parks, or high street)?

Our store sizes range from 130 to 250 sqm.

The concept of TAF stores is premium and is suitable for bigger cities that have higher purchasing power. We do not limit ourselves to certain types of locations but we have a high priority towards micro-locations that offer high levels of traffic.

We like high street locations as they are closer to our target consumers. Our shoppers are of 14 to 30 years of age, that are street-style-oriented sneaker enthusiasts, who like to be bold, cool, and who stand for equality.

Since the beginning of the pandemic, what forms of marketing do you implement? 

Our main target is to have a successful e-commerce business and we can only do this if we have high enough traffic. Attracting a large number of consumers is easier when we use various channels. Each day we are searching for new opportunities to make our e-commerce business stronger. The TAF marketing strategy is fully connected with social media which is our way to communicate with youngsters who are a very demanding consumer group.

Gen-Z generation is the first video generation, who has forced us to be actively present with video content throughout new platforms such as TIK TOK. Influencers help us reach our target group by creating fresh and appealing content.

We try to have “one voice – one message” throughout all our communication channels. We use the slogan #DARETOPLAY to make it easy for consumers to recognize our brand. We also unify all of our marketing materials with guidelines that are part of our omnichannel approach.

One of the most successful marketing campaigns was definitely called “Love story” for Valentine’s day. We surprised our young consumers with a visual of two golden-age lovers, sitting on stairs, dressed as youngsters in TAF outfits. The photo which was full of emotions went viral through our channels and some magazines. It brought us great results as the idea was to trigger our consumers with something fresh, bold, and unexpected.

As e-commerce is rising in popularity, tell us how has your online sales performed since the beginning of the pandemic, and do you believe that online shopping will replace the need for physical stores in the future?

Even though e-commerce was one of the key priorities of our company before the outburst of the pandemic, it escalated overall expectations and caught us a bit off guard. After store closures, the number of online orders heavily grew, up to ten times in certain periods, and our stores ended up serving as e-commerce fulfillment centers.

In those wild days, we were constantly applying changes, while following all health and safety protocols and monitoring how they affected the delivery time. In the end, we found the right balance and optimized all processes to help us create a much speedier delivery time.

We can say that the experience of Covid-19 forced all of us to change faster than we would have otherwise. Our e-commerce business went up heavily and remained on a strong level also this year by reaching roughly 30% shares in total sales.

We have learned that e-commerce is a never-ending business and an incredibly important investment for every retail company now. The need for physical stores will surely remain but the share of e-commerce in global sales will additionally grow in the upcoming years. Also, the connection between online and offline sales channels will become even stronger. Consumers nowadays can get all possible information in a blink of an eye and that is what makes it so difficult or interesting for retailers.

In a few decades, when the generations that were born in the digital era dominate the overall population, online shopping will be fully adopted. But I believe that shopping malls will exist, just probably on a smaller scale.

In your opinion how has the retail market changed since the beginning of the pandemic and have consumer habits changed? 

The lifestyle or fashion segment, where TAF operates, was heavily hit by the pandemic due to the fact that people were not allowed to socialize, go to school, travel, shop, or in other words, they were limited to enjoy a normal life. A lot of things that we sell are treated as luxury goods and were not a priority to shoppers during the pandemic.

Consumers were still prepared to buy our luxury products but they were focused more on getting really good deals with low prices, so the impact on our gross margin was huge. It is also important to mention that it was difficult to make up for the losses of brick-and-mortar stores by relying only on e-commerce sales.

What is next for your brand?

Let’s put it this way. TAF in southeast Europe is still a four-year-old child that needs a lot of care but it has a very high potential to grow. With a relatively short track record in this region, we already see a lot of positive signs. Sales are increasing on all levels, brand awareness is growing each day, we are expanding to new territories, and we see old consumers returning which is a very positive sign.

We are also realistic. The pandemic has left some damages to the lifestyle fashion retail segment, which is struggling as consumer habits change. There are still issues with late deliveries due to the limited production capacity in the Far East. The sneaker business in this region is also super competitive, with retailers that came to the market before us.

Thankfully, as an international chain, we have support from the strongest brands in the industry. They are also looking at ways to optimize and apply some distribution changes to the market. We are constantly in search of fresh products and we will continue to bring the latest trends to consumers while making TAF their favorite place to shop.

With all of that in mind, we can comfortably say that we expect positive results in the upcoming years.

How do you see the future of retail? How do you see the future of physical stores and in your opinion what changes need to be made within shopping centers?

The future of retail will change in a dramatic fashion and will become even faster and more digital. In our case, we already see brands directly approaching consumers (D2C) which is a challenge as they can offer a lot of USPs – exclusive access, the best prices, complete assortments, etc.

We already see everybody mentioning Gen Z which are the game changers in the market, as they are the next generation of high spenders. They are comfortable with online shopping, they are not brand loyal, they have high values, and are price sensitive. As they are used to new technologies we are already looking at how to approach them and to be cool in their eyes.

Most lately we presented the first virtual 3D shopping experience for all of our pinnacle doors in Zagreb, Ljubljana, and Belgrade. This is a virtual store walk-through where you can shop for your favorite pairs of sneakers with a single click.

Physical stores will need to serve as e-commerce hubs where consumers will not go there just to shop but also to engage with others, enjoy and gather information for upcoming events. Shopping centers will need to make changes to dedicate more space for fun activities which will make them more appealing and interesting to future consumers, as they will also be competing with the digital world.

Nevena Kostichttp://www.retailsee.com
Nevena Kostic is a retail real estate expert that worked as a retail consultant since 2006, leasing out shopping centers and helping out international retailers expand in the SEE region. In 2013 she founded retailsee.com, with an aim to promote real estate projects and retail companies to the international business real estate community.
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