Unichel: our goal is to give the lowest price on genuine leather shoes

As in an era of high competition and low purchasing power, not only to stay afloat, but also to increase sales by 20%, SR said Vladimir Denisenko, General Director of Unichel shoe company.

Vladimir Denisenko - CEO “Unichel shoe company”, vice-president of the Russian Union of tanners and shoe-makers (RSKO)

How do you characterize the current market situation?

In recent years, 5 we have seen a decrease in purchasing power. This is a general trend, which manifests itself to varying degrees in different areas. There is a flow of buyers to the lower segment, and the price became the determining factor in the purchase. Everyone feels the tension in the trade. Last year, we were able to maintain our previous sales volume only by opening new stores.

We see from our customers that people began to choose, compare prices and quality more carefully. And, despite brand loyalty, they are looking for an alternative in other segments.

What pricing strategy do you follow?

To save our customers, we must move in price. Because it is impossible not to admit that there is cheap synthetics, a lot of contraband shoes. Yes, this product is unhealthy, but people choose it when they have the task of putting on shoes for two or three children. Therefore, we conducted a large-scale work with suppliers of materials and components for the search for similar in all its properties, but at a lower price. In addition, they convinced suppliers not to raise prices due to rising VAT. In some models, the leather lining was replaced with textile or more economical leather, the lining split is the same leather that has the properties of leather in terms of wear and all other characteristics, but outwardly it may not look so prestigious. You can use more economical materials, the main thing is that the desire to reduce the cost of production should not affect the quality. This means that we will continue to use Italian glue - the best in the world, high-quality German threads, which today are the most expensive on the market. At the same time, we are not completely leaving for another, lower segment.

What other price containment mechanisms do you use?

We do many things ourselves. We produce the sole ourselves, this allows us to save up to 150 rubles on one pair. Considering that we are laying profitability at the level of 100 rubles, this is a significant saving, which becomes our price advantage. We have our own transport department to make delivery cheaper. Due to the managed company network, we have reduced the trade margin. As a result of all these actions, we managed not only to not raise prices in the first quarter, but even to reduce them a little. And it affected the demand so much that today we are seeing sales growth by the last year 20%. In addition, we made serious discounts on old collections. The buyer responds instantly. People buy winter models because they see big discounts and understand that in the fall it will be much more expensive. This economical behavior of buyers has recently become the norm and trend, and you just need to adapt to it.

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Yes, we save on everything, including profit. You may have to work it out for a year and a half. We understand that this is a work to zero, but we will retain turnover, employees and our customers in the hope of better times.

Few people can repeat your strategy, and, therefore, compete with you for the price ...

With full confidence, we can say that no one has lower prices for leather children's and women's shoes. Even Chinese imported shoes, if they are made of genuine leather, are more expensive. Because in China today, wages are higher than in Russia, and the average price of materials around the world is the same. It is difficult for us to compete in price only with explicit smuggling, and with official imports we really feel fine. The main thing is to make the right assortment, we analyze it and constantly expand it both in terms of the model range and new technologies. We started producing shoes based on injection molded polyurethane soles. As a result, the models are light, airy, comfortable. This gives confidence in the success of the summer collection.

Perhaps, next year, labeling will affect the market situation, as well as changes in the tax system. As for the labeling, the measure is certainly necessary, and we will do it. But, unfortunately, I don't expect a big effect from this project. There would be a desire - and now they would put things in order, stop the smuggling of shoes and their sale. The President gave the assignment to the power structures, but it is not being fulfilled. Marking will create undoubted difficulties for smugglers and partially whitewash the market, as happened with the fur market. Therefore, we are optimistic about the future.

Unichel official website