The hypothetical story of a failed retailer – Palm Beach Shoes

cheaper than on-line sign in shop windowI was walking down one of Sydney’s most popular shopping strips yesterday – Oxford Street. In the window of Palm Beach Shoes was this sign (pictured above). At first it surprised me. A well known boutique retailer of pretty decent shoes has resorted to adding a desperate handmade sign to cut through. It reminded me of signs homeless people create that tell their story about how they ended up without a place to live.

The hypothetical story behind Palm Beach’s sign is probably this: A couple rent a tiny shop on Oxford St. With high competition but massive footfall they decide their key points of difference will be range and price. As one Yelp reviewer commented, ‘they’ve got pretty much one of every shoe that’s in fashion right now.’ Another one proclaims, that ‘you get the shoes you desire at a reasonable price. Great value for money.’ High sales result from strong word of mouth marketing and shoppers wanting a bargain in one of Sydney’s most expensive shopping precincts. Meanwhile, owners sip strawberry daiquiris at the Paddington Inn every Friday night.

Then something happens. Sales decline. The owners freak out and put a massive orange ‘SALE’ sign on their front window to reinforce their great prices. They continue to sell the same range of trendy shoes but sales still continue to drop. The GFC doesn’t help but Australia dodged the bullet compared to the rest of the world. What is really happening?


‘What’s that?’ the owners of Palm Beach Shoes must have asked. I’m confident that you know what the internet is. You probably also know that online shopping is on the rise and shop shopping is on the decline. A recent Swinburne University study shows Australians shop online more regularly than people in most other countries, spending on average $206 a month.

Palm’s target market (16-40 year old females who want a bargain pair of fashionable shoes) are savvy and online. With online shops like ASOS, Threadless and Next Direct they can get great prices for well made merchandise. Decent return policies and secure transactions reassure the savvy shoppers who, at the end of the day, won’t have to battle the crowds, wait in line or try and find a rockstar park.

There are two versions of the next chapter for shops like Palm Beach Shoes. The first is that they go into liquidation (cue 1990’s Dr. Evil finger to the mouth). The second is that they get a website (cue 2010’s Austin Powers).

In the not too distant future we will buy everything online. Shops will just be collection points or return shoots. They will be judged not on their customer service but on their UX. Shopping around will be done in clicks and not in days. The consumer will win.

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2 thoughts on “The hypothetical story of a failed retailer – Palm Beach Shoes

  1. Samuel says:

    Interesting ! So their business is obviously struggling- but it’s like they are ignoring but recognising at the same time ?!!!..
    It can’t be that hard for a retailer to set up an Amazon or Ebay shopfront : ) The old ” if you can’t beat ’em join ’em ” attitude is what’s needed here !
    Keep up the good work Pete ! S


  2. Helen A says:

    Great post Pete and very true.


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