This month Australian online store sensation ‘Shoes of Prey’ (a cult fashion start-up and darling of the media) went into liquidation. Here’s what you should learn from that.
Why did it happen?
Because the owners lost track of who their real customers were, and they took on funding without a clear plan of what to do to grow the business.
The problem
Back in 2009 Shoes of Prey started as an innovative online store to buy customised shoes (at an above average price, as you might expect). However they soon realised the niche market for ‘customised shoes’ wasn’t big enough for their ambitions (and for their investors). After trying alternate business models, which including catering for specific foot types and contract manufacturing, they eventually closed the business this month.
The lesson for business owners
The lesson they learned was (quoting co-founder Michael Fox) “mass market customers don’t want to create, they want to be inspired and shown what to wear”. Shoes of Prey relied on people wanting to take time to design their own shoe creations. But the majority of people (the mass market) didn’t want to do that.
Understand why your customer buys
And that is the lesson any business leader should heed.
You really need to understand what drives your ideal customers, not what you ‘want’ to be providing for them.
Stuart Ayling
Shoes of Prey was using investors money to figure all that out. Most businesses don’t have that luxury.
Make sure your Growth Plan makes sense.
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