Paper short abstract:

Previous research suggests small and medium-sized retailers can survive by specializing. However, it is difficult to do so since their resources are limited. This study shows one way of becoming specialized through the case of shoe industry in Japan; shoe retailers learned internationally together.

Paper long abstract:

Research suggests three ways for small and medium-sized retailers to survive: (1) joining franchised chains or the Keiretsu distribution system, (2) becoming large by staying independent and developing chain stores, and (3) specializing, staying independent and relatively small.

When such retailers pursue the third strategy, how they can become specialized enough to satisfy certain consumer needs? Since their resources are limited, this is difficult for them. Through a case study of the shoe industry in Japan in the 1990s and 2000s, this study examines one way small and medium-sized retailers can specialize and survive. This study contributes to the research on the survival strategy of such retailers by demonstrating how they can specialize.

The case study reveals two points. (1) Specialized knowledge that does not exist within the country can be learned from other countries. Small and medium-sized retailers do not necessarily create specialized knowledge themselves. (2) The cost of learning can be shared by forming a group. They do not necessarily do it alone.

About 30 small and medium-sized shoe retailers in Japan survived in the 1990s and 2000s, though the competitive environment was severe. The bubble economy collapsed in 1991, and the shoe retail market did not grow. The competition increased against large chain stores, department stores, supermarkets or general merchandise stores (GMS), and "roadside shops," which are comparable to category killer discount stores in the suburbs. Small and medium-sized shoe retailers cooperated and imported specialized knowledge and techniques for foot health and comfort shoes from Europe, especially Germany. Therefore, they were able to offer comfortable and properly fitted shoes, and those met the potential needs of consumers.

This study provides a detailed description of the process through which small and medium-sized shoe retailers became specialized stores, and survived by triangulating primary and secondary sources. Data were obtained from interviews with 12 shoe retailers, magazine and newspaper articles, and books on the shoe industry.