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The future is coming, and I don’t like what I see

1st Jun 2013 , Phillip Nutt; Wenco

SA should lead way in making the rest of Africa a world source of footwear

Columnist Phillip Nutt’s article in this issue was sparked by news that the predominantly Indian-owned independent retail community is facing a growing challenge from foreign retailers. “Unfortunately, it’s brought on by stupid decisions made for globalization,” he writes, “and it’s just the beginning. Retailers in North America are dying off as the Chinese want to do it all, and shortly they will, I’m sure, start their own international brand marketing to max their profits and power.”

In just my lifetime in a working environment, I have passed through numerous evolutions of technology.

I can remember the ‘one ringy dingy’ circular telephones of South Africa where, if you didn’t want to take an overseas call that could have been a problem, it was easy to get cut off knowing that it might take another day before they could get through. We saw the large, shoebox-sized hand-held telephones of the Vietnam War, and saw that evolve quite quickly into smaller and smaller devices, to the point where they stated to get larger again and do just about anything you want them to do as IPADS.

It was the same with cars. They got bigger and bigger, faster and faster, costing more and more to the point that even a million dollars for a car was not a dream but a possible reality for someone with a black American Express card. Now they’re getting smaller and smaller, some powered with alternative forms of energy.

When I came into the shoe industry in 1964, no-one had heard of offshore resourcing, be it manufacturing or services.

Off-price retailing was the bailiwick, in the UK, of FW Woolworths and Kresges, and similar retailers in other countries – in South Africa, OK Bazaars.

Bata had its international empire, with each company primarily servicing its local market. Clarks had a major presence in the ‘white’ Commonwealth countries. Hush Puppies by Wolverine was introducing the world to the concept of lightweight casual footwear. Doc Martens was beginning to rise from being a work boot alternative to being a fashion statement, and probably the last UK shoe brand to take over the world for a period.

This was a time when being in the shoe industry was considered a good career, when people would say: ‘Everyone needs shoes, so it’s a safe business to be in.’

But then we got sold out by our politicians during the Reagan/Thatcher years in the name of globalization and corporate greed.

In South Africa, you were luckier for a while. It took a little longer for you to feel the pain that quickly saturated every aching part of the manufacturing and retail world of the West.

The logic that the West, and primarily US brands, would be able to offload temperamental, costly, unionised workers and factories, and concentrate on the less labour intensive sales skills, did not take into account how major retailers, and later giant corporations, would forget that their consumer base needed employed people to buy their goods. Instead they rushed to the lowest price source for their supplies, and via great hype, quality became a perception, not a reality.

I have long said that the 1950s to the end of the 1960s were blissful for domestic manufacturing.

Then in the 1980s to the 1990s, it was the decades of importing as a wholesale medium and manufacturing started to slip into oblivion.

During the 1990s, up to the new Millennium, it was the international giant brands which went direct to Asia and started to do their deals with the off-price retailers, and importers began to slip in influence, caught in the middle between demanding resource suppliers and even more demanding retail clients.

By 2000, the brands started to open their own stores, and the old school department stores and traditional retailers stated to feel the heat of discounting.

It was also the beginning of an ever-widening chasm between the NEW industries (computers and electronics in all their forms) and the OLD industries, of which footwear is one.

It saw the emergence of extravagance for some, sheer survival for others.

Millions of jobs were lost as computer technology changed the face of middle class employment. Today, the biggest single demographic group among the unemployed, in the West, are males in the age group 18-30. They are living at home, depressed, unemployed and emasculated, with no visible future in sight, and few politicians seem to care either, even in the face of the Occupy movement flaring up in many corners of the world.

Why am I going on with this diatribe?

You in South Africa may be coming rather belatedly to the impact of what globalisation – ill thought-out and ill-managed – has wrought.

Incredibly, the world is going though similar traumas, with similar influences, before World War I. The EU isn’t working. The USA is in need of resuscitation. The Chinese are everywhere. Religious extremism is polarising. People are unhappy with their governments and life options. We aren’t sure we want to be ‘citizens of the world’, and would rather go back to the wholesome, patriotic and idealised scenarios of our childhood.

The concept of George Orwell’s 1984 seems to be more prophetic now than ever before.

In South Africa, you have opportunities, but free trade agreements and the ease of migration are most certainly going to change the face of your industry domestically. Traditional ways of doing retail will disappear as new players change the rules, just as it has happened in the West.

As I see it, the opportunity is to take your African experiences to the rest of Africa. These countries are desperate to become global resource players, no matter the product offering.

Some of their educated leaders seem to me to have learnt from the disasters of the West, and they now want to maximise the value added content of their export offerings. They see an opportunity for upper sourcing, leather accessories, finished quality leathers, even rubber sole unit production, rather than selling crepe sap.

I see all this as a wonderful marketing opportunity for South African shoemaking technology and marketing skills to ‘Go north, young man’.

In fact, my vision for SA is this – just as American industry rushed off to Asia to source, so South Africa should be doing the same in the rest of Africa. You shouldn’t be waiting for the Americans to come do it – they have enough problems to deal with. Only the Germans seem to have a love affair with what Africa has to offer.

The South African industry will not survive by trying to bring back the old status quo. As an industry, our Western politicians have abandoned us. We have to survive on our own, and that means we need new ways, new products, new approaches.

Trust me, you are not alone. Even my business has had to reinvent itself at least 4 or 5 times over its 25-year existence to stay relevant.

Use this magazine as a voice for a united front to reinvent what the next generation of the South African footwear scene should look like. – Phillip Nutt [Email: wenco@rogers.com]

Phillip Nutt is the president of Wenco International Footwear Consultants, based in Canada. His intimate knowledge of South Africa comes from a fondly remembered stint with Bata SA in Pinetown. An outline of his services is available on his website, www.wenco.ca




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