From cradle to grave
Transcending the generation gap to appeal to all age groups is one of the factors that underpins the success of Green Cross Manufacturing, South AfricaÔÇÖs largest privately owned footwear manufacturer. CEO Hatti Zeppel talked to Jayne Flannery.
The first thing that sets Green Cross apart is the companyÔÇÖs track record. It has an unbroken trading history dating back to 1975, when Green Cross was founded by Karl Heinz Zeppel, the late father of the current owner. As the company gears up to celebrate its 35th anniversary next year, CEO Hatti Zeppel can find much to feel proud of.
Last year, the company manufactured 650,000 pairs of shoes, generating a £52 million turnover and employment for some 600 people. Meanwhile, the retail division that was founded in 1998 has gone from strength to strength: in addition to being represented by many small stockists, Green Cross now has 25 stores of its own with new outlets scheduled to open shortly in Durban and Bloemfontein. By any measure, it is a formidable success story.
ÔÇ£We still operate in the close-knit, family environment that has always characterised the business. Our staff turnover rate is very low and everyone takes great pride in working with a quality product that will provide lasting comfort,ÔÇØ states Zeppel. ┬á
At some time or another, he believes that everyone has had the excruciating experience of wanting to scream out loud halfway through the day because of ill-fitting shoes, a scenario that should never happen with a Green Cross product, since comfort is the key proposition. In fact, so comfortable and durable are Green Cross shoes that a special corporate division has been created to address institutional and organisational needs where staff occupy roles that demand long hours on their feet. ÔÇ£Within the police force and airlines, for example, it is vital that staff are given the right support to both stay comfortable over many hours and also to encourage good posture,ÔÇØ he adds.
ÔÇ£We donÔÇÖt make mass-produced, cheap run-of-the-mill footwear which would involve us competing head on with imports from Asia,ÔÇØ he continues. ÔÇ£Neither are we interested in the high fashion end of the market which is also very competitive. Rather, we opt for a niche mid-market position that takes in all generations. We have a cradle to grave approach, starting with size one for toddlers and going up to the larger sizes available on the market.ÔÇØ
Unusually, the manufacturing facility at Cape Town is able to produce numerous types of footwearÔÇöfor example, it has the capability to produce wooden clogs, the only factory in South Africa that can do so. Similarly, the network of Green Cross retail outlets does not target particular market segments or age groups, but rather makes such an extensive offering that there is literally something for everyone.
ÔÇ£Having our own stores is a great opportunity to showcase our product range fully,ÔÇØ explains Zeppel. ÔÇ£Each of our stores stocks upwards of 4,500 pairs of shoes. Anybody who walks in must be able to walk out with a product that suits their needs. Unlike other stockists, we also offer a full seasonal selection. If someone wants sandals in the middle of winter, we will have them.ÔÇØ
Green Cross retail stores are distinguished by the level of customer service they offer, Zeppel says. ÔÇ£We take a very rigorous approach to trainingÔÇöespecially identifying the correct fitÔÇöand aim to make the whole shopping experience a memorable one that is geared to ensuring that the customer leaves with a product that is exactly right for them. This is what makes customers want to come back to us time and time again.ÔÇØ
The approach to customer service might sound old-fashioned, but the approach to marketing is thoroughly modern. ÔÇ£We have the biggest marketing spend in South Africa for a comfort brand, but it is always a challenge because we have so many different markets, all of whom rely on different communications media. Also, you have to bear in mind that there are 11 different languages in South Africa,ÔÇØ he says.
All retail outlets bear the Green Cross name and all marketing resources are mustered behind this single brand. In the past, shoes were promoted under different brand names, but this came to be seen as a dilution of marketing effort. Moreover, such is the strength of the brand that it makes sense to capitalise on it. ÔÇ£The new generation of black consumers, for example, take a great deal of pride in their footwear and are very brand conscious,ÔÇØ Zeppel says.┬á┬á┬á
As for talk of recession, the company is in no danger of catching a cold. ÔÇ£So far, our trading figures are well up. It has been a fantastic year,ÔÇØ he declares. ÔÇ£It came as something of a surprise because the global economic crisis inevitably impacts everywhere, including on our own stockists and suppliers.
ÔÇ£We were also concerned because of the excellent quality of our shoes, which makes them last longer,ÔÇØ he continues. ÔÇ£It had occurred to us that customers might opt to bring out last yearÔÇÖs shoes for the winter rather than buy new ones. It is a relief to say that this has definitely not been the case!ÔÇØ he jokes.
Zeppel has a carefully thought-out growth strategy in place, linked to South AfricaÔÇÖs strong trend towards a more urban population with many new shopping malls. Green Cross seeks to identify new geographic locations where there is a vacuum with no suitable stockists. There is also a considerable export business to neighbouring countries, including Namibia, Botswana and Swaziland. However, Zeppel realises that issues around logistics and international competition limit opportunities to move much further afield. He is not concernedÔÇöSouth AfricaÔÇÖs 45 million population offers quite enough scope.
As well as continuing to nurture Green Cross as a comfort footwear brand, Zeppel believes there are also rich opportunities to extend the brand into related accessory markets. The company already sells an extensive range of footcare products, but it now wants to expand on this. ÔÇ£We have already introduced handbags with great success in some stores. This winter we will also be trialling ladiesÔÇÖ purses and other small accessories. We see many opportunities for additional sales that build on the strength of the Green Cross brand and complement our core product range,ÔÇØ he concludes.
