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Payless Wants to Make 30% of Collections Online-Exclusive

When Payless made its grand return to North America in August, the value-priced footwear seller made it very clear that the omnichannel experience was going to be pivotal for a successful second go-around. So far, it appears the company is headed in the right direction.

In the months after relaunching its North American website, Payless is reporting seen a steady month-over-month increase in sales. And between August and November, the shoe chain saw a growth rate of 500 percent, illustrating its ability to bring shoppers back across all channels.

Powering the reimagined online experience for Payless, both in the U.S. and in several Latin American countries, is end-to-end commerce solution Vtex. Presently, the footwear brand has e-commerce sites operating in Guatemala, Ecuador and El Salvador, but online stores in Honduras and Peru are slated to go live early this year. The rest of their markets are gradually following suit online “in the near future,” according to a company blog post.

Payless has high goals in place through its partnership with Vtex to bridge the gap between stores and e-commerce. For one, the shoe seller is looking to ship 100 percent of its Latin American market orders directly from brick-and-mortar locations to reduce delivery times.

“We are betting on the omnichannel approach, because we want to take advantage of our 450 stores with exceptional locations,” said Justo Fuentes, CEO of Payless, LATAM, in a statement. “Many people select the shoes in e-commerce, but prefer to go to the store to try them on, where they tend to buy additional items.”

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Additionally, Payless wants to exclusively dedicate 30 percent of its collections to e-commerce to encourage customers to buy online, and also expand its online store to include 10,000 product lines. Currently, Payless said its physical stores carry only 800 lines. The new management of Payless estimates that, in five years’ time, 40 percent of its sales will come from e-commerce.

The company aims to provide customers with a more efficient service experience, a more diverse inventory and the ability to score Payless Club loyalty points across all channels. The retailer also says it will look to cut unnecessary logistics costs since the Vtex platform will deliver a more unified view of inventory.

Payless shuttered and liquidated all 2,100 remaining North America stores in 2019 after filing for bankruptcy for a second time in less than two years. International stores in Latin America, the Middle East and Asia weren’t affected. The company exited the second bankruptcy in January 2020 with a new management team led by CEO Jared Margolis to reestablish the brand’s presence in North America.

As part of the revival, Payless moved its headquarters from its original Kansas outpost in Topeka, where it was founded in 1956, to Miami.

Payless currently operates 700 stores around the world, but Margolis said that as part of the omnichannel rollout, the company’s goal is to open 300 to 500 freestanding stores across North America over the next three to five years following a prototype store launch in Miami.

Like the old Payless, the retailer is focusing on providing value-priced footwear to consumers, but also wants to offer more recognizable, high profile, pop culture-heavy brands.

Thus far, Payless.com features the Kendall + Kylie collection of shoes, backpacks and other accessories, alongside shoes and accessories from brands like American Eagle and Disney and throwback brands like Airwalk, Mudd and LA Gear.

“The role of brands for e-commerce consumers is more relevant than for brick-and-mortar consumers,” Fuentes said. “When you don’t offer the option to touch and try the products, the only thing giving credibility to your merchandise is brands.”

Payless’ e-commerce operations should be in good hands. Vtex had a successful 2020 in the midst of the consumer shift to online during the pandemic, landing $225 million in funding in October and $365 million in total funding for the full year. The company, with 3,000 customers including Walmart, Adidas, Levi’s snd Vans, saw U.S. customer gross merchandise value grow 1,274 percent year over year. In December alone, sales for Vtex jumped 342 percent year over year.