A member of the Bay Area-based chain Euro Walk Shoes, Robert Krohn Shoes fell victim to the difficult economy and powerful online competitors, according to owner John Riker.
"We just really felt the need to downsize to get healthy," said Riker, who as the president of Euro Walk Shoes currently operates four other stores in Los Gatos, Danville, Rockridge and Davis, under the name Shuz. Euro Walk Shoes previously operated nine stores throughout northern California, according to a 2008 Weekly article.
Robert and Marlene Krohn co-founded Robert Krohn Shoes in 1969 and moved the store to 825 El Camino Real, just outside Town & Country, in 1985. In 2001, Robert Krohn retired and sold the store to Riker. The store returned to Town & Country Village in 2008.
But customer volume had decreased in recent years, Riker said, as a casualty of bargain-savvy consumer spending.
"Brick-and-mortar stores can't survive when you can buy the same thing online for 20 percent less," Riker said. "It's hard to compete with that."
Internet retail giants like Zappos.com are often exempt from the fixed costs that physical stores have to pay. Many Internet stores can afford to offer incentives like free shipping both ways and tax-free sales, thanks to headquarters in sales tax-free states.
Online stores are "not paying sales reps, not paying rent," said Paula Sandas, CEO of the Palo Alto Chamber of Commerce. "And the retailer can pay for shipping. For the customer, it's a win-win situation."
Customers have certainly noticed. Nielsen reported in 2008 that 94 percent of American Internet users shop online. The highest amount of them had purchased books (41 percent), closely followed by shoes, clothing, and accessories (36 percent).
"People come into stores, try on shoes, and then buy them online at a discount," Sandas said.
But not all is lost to the Internet. Brick-and-mortar shoe stores have one thing that online stores cannot have, according to Alan Miklofsky, chairman of the board of directors of the National Shoe Retailers Association and president of the Tucson, Ariz.-based Alan's Shoe House chain.
"You can't experience the comfort of footwear just by looking at the product," Miklofsky said. "We offer full service and sizing. ... We pay attention to the customer. Many people are willing to pay for this."
Miklofsky also cited other pressures that impact sellers including the world economy, heightened exchange rates between China and the United States, and increasing costs of materials, not just the spread of e-commerce. Many small businesses are studying the changes in the retail environment and repositioning themselves accordingly, Miklofsky said.
Bill Burruss of Know Knew Books in Palo Alto could be a poster child for this type of repositioning. As owner of his used book store for 23 years, Burruss operates both his California Avenue store as well as an online store on bookseller rival Amazon.com. Amazon's popular and highly successful model allows everyday sellers to list used books online for free, then pay transaction fees if the book is sold. (Frequent sellers are charged a flat rate of $40 per month.)
"You can't stop progress, so you better learn to live with it and use it to your advantage," Burruss said.
Still, his expansion online has not saved his bricks-and-mortar business. The Know Knew Books store is scheduled to close "unless some miracle happens," Burruss said. But his Internet store provides an avenue for him to continue selling used books, if in a less community-oriented forum.
"It's sad because I do think the store is valuable," Burruss said, recalling the store's community events that featured everything from break dancing to Stanford student plays. "But I will be able to drop the expense of the store. Actually, I do hope to gain more of a presence on the Internet."
Not all is lost for Robert Krohn Shoes, either. Riker plans to expand Euro Walk Shoes once the economy stabilizes — and even hopes to return to Palo Alto.
"We wanted to downsize basically to show we could get bigger in the future," Riker said. "We're just going away for a short period of time."
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