About

Founded in 2008, Shoe Sensation sells moderately priced, branded footwear at over 240 stores across the United States.³ The retailer primarily serves smaller, rural towns with residents who often need to travel long distances to purchase similar products. Shoe Sensation prides itself on being an integral part of the communities it serves, hiring locally and actively participating in local events, charities and other initiatives.

The challenge

As Shoe Sensation continued to grow, it wanted to take a more accurate approach to decision-making.³ For years, the retailer had invested in and relied on third-party providers to gain data and insights.³ However, these analytics were often algorithm-based and drawn from small, non-specific data sets—not Shoe Sensation’s actual customers. This sometimes led to less accurate and more expensive decision-making.³

The solution

When J.P. Morgan Payments invited Shoe Sensation to join the pilot program for Customer Insights, Shoe Sensation found a solution to its data challenges. The Customer Insights solution provides anonymized, aggregated data that protects individual privacy while offering valuable insights into consumer behavior, journeys and preferences.³

Unlike algorithm-based data, which often relies on models inferred from limited samples of data and assumptions, the insights provided by Customer Insights are grounded in actual consumer behavior and rely on the power of payments data. This gives Shoe Sensation a new level of confidence in its decision-making, which will help guide its continued growth.³

In late 2023, the company began to implement two of the four modules offered by the Customer Insights solution: Sales and Geographics. As Shoe Sensation began rolling out the modules, the retailer quickly started making changes based on the data that it uncovered.³

Using the Sales module, Shoe Sensation has realigned its headcount staffing to ensure that the appropriate number of employees are on the floor during sales peak and slow periods.

Additionally, the Geographics module has provided valuable insights for Shoe Sensation’s busiest time of the year: the back-to-school season.⁴ By analyzing customer data within a certain radius of stores, the retailer can adjust its marketing strategies to effectively engage the right customers and drive sales during this crucial period. The company has experienced a 20 basis point improvement in its ROI on advertising spend.⁴

Shoe Sensation has also used the Geographics Insights module to determine the optimal location zip codes for two new stores in Pennsylvania, based on customer migration patterns and community sizes. Choosing the wrong location for a new store can result in hundreds of thousands of dollars of underperformance in sales due to lower-than-expected traffic from wrong customer demographics.⁵ With Customer Insights, Shoe Sensation can make informed decisions about store placement, thereby reducing the risk of these costly mistakes.⁵

“The ease of use of the dashboards, the ability to search and pinpoint specific locations and the visuals provided by Customer Insights have been very helpful,” says Price. “As our team works through the insights, I can easily show executives what we’re looking at and explain what the data is telling us – thereby improving the effectiveness and efficiency in making the right decisions.”

The results

With this solution, Shoe Sensation improved store labor allocations, focused advertising spend on high-probability areas and identified locations for new store growth, all of which contributed to improved EBITDA margins by 110 bps by increasing sales and lowering expenses.

Shoe Sensation is still implementing the Loyalty and Benchmarks modules, expecting these insights to hold significant promise for future improvements.⁵ The Loyalty module focuses on repeat purchase behavior and customer lifetime value, helping to identify and refine marketing efforts to regular customers.⁶ The Benchmarks module provides anonymous insights into competitors’ performance. Shoe Sensation will use these new modules to develop targeted campaigns and offers, clearly understand its market position and prioritize future investments based on its relative positioning in the shoe industry.⁷

Disclaimer

*Future capabilities of Customer Insights are under development; features and timelines are subject to change at the Bank’s sole discretion.

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