Lee Munro doesn't own that many pairs of shoes but admits to being a little bit fixated.
"At various times I've been obsessed with what's on people's feet on the streets and looking down," he says. "I'm often looking at feet not faces."
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Amazon is coming to Australia
The US online retail behemoth confirms it will establish the first of many fulfillment centres in Australia, in a move that's sure to disrupt the local market.
It's all market research for Munro who is the managing director of Styletread, Australia's largest online shoe retailer, which just hit the milestone of $100 million in revenue since it was founded in 2010.
Keeping it in the family
The 34-year-old has been looking at shoes for most of his life as a member of Australian shoe royalty, the Munro family.
His father Graham Munro first started making shoes in Melbourne more than 50 years ago and continues to head up the family business along with his mother Kerrie who is the lead designer for the Munro Group's inhouse brands.
His brothers Jay and Bill both run other parts of the family business and Munro says "it's in your blood and we've been fortunate enough as a group to grow."
But the family keeps a low profile with no Rich List antics despite annual revenues across the Munro group of companies in excess of $150 million.
Munro says there are certain advantages to being part of a close-knit private family business.
"You can have a barney and a blow-up but knowing there's not going to be permanent damage," he says. "We were raised in a family where you had to have thick skin anyway so that helped. We do have our differences but there is always a resolution, there is always a way to overcome it. Family is more important to us than the business."
Growing Styletread
Family may come first but business is booming.
The Munros acquired Styletread, from founders Mark Rowland and Bjorn Behrendt in 2013 when the online retailer had revenue of $13 million.
Under Lee Munro's stewardship the business has grown to turnover of $23 million last financial year, a significant slice of the Australian online shoe market, valued by Ibisworld at $364 million last year.
Family is more important to us than the business.
Lee Munro
"I think the initial founders did an amazing job of promoting the business and it was visionary at the time to offer free delivery and free returns so they managed to scale the business quite quickly," Munro says. "The issue they had is they didn't have the business model and economics right to make that growth sustainable. They did definitely attract enough customers to make it sustainable with a few tweaks and optimisations to the business."
These tweaks and optimisations included cutting the marketing spend to focus on areas with greater return.
"In terms of return on investment the email channel has been a winner for us as we have dramatically increased our revenue and the other key area is advertising on Google and really targeting the right areas and the right key words to bring in customers who are likely to buy not just visit," Munro says. "We optimised the website itself to make purchasing as frictionless as possible."
Munro says the one thing he didn't want to change was Styletread's focus on customers.
"Excellent customer service means repeat business so then it's not as expensive to attract new customers," he says. "The beauty of excellent customer service is they will tell their friends and family."
Defying the retail downturn
According to Munro the retail environment is "definitely tougher" at the moment than it has been over the past few years.
"There are a couple of elements to that," he says. "One is slow wage growth which is definitely hurting. There is a move towards experiences as opposed to a physical product as a preference to where consumers are putting their disposable income, you look at restaurants and bars they are very full. The other huge factor is online is definitely changing the way people consume. We see it as complementary to a bricks-and-mortar offering but it is definitely changing the cost structures that have been in a bricks and mortar business."
But in a depressed retail environment Munro says there may be opportunities for the family business following its acquisition of Wanted and Mountfords in 2015.
"We feel that we have a good track record of turnarounds and optimising assets so we are always on the lookout," he says.
Competing with a retail goliath
The market is about to get tougher for Styletread with Amazon's impending arrival in Australia.
Bryan Raymond, analyst at Citi, expects Amazon to accelerate the transition to online from bricks and mortar more generally.
"Amazon should increase the penetration of online but will also make life harder for some of these online-only players," he says. "In a post-Amazon world they might find themselves looking like a mini Amazon without all the breadth that Amazon offers."
But Munro is not daunted.
"We don't see it as being huge competition for us because of the uniqueness of our product. Fashion and shoes are not a strength of Amazon," he says. "We know that international brands will be listed there but don't think as many local Australian brands will be. We also see it as an opportunity to partner with Amazon and have our products listed on there."
Going international
Rather than focusing on Amazon, Munro is working towards launching Styletread internationally in the second half of the year.
"We are definitely looking to go international and take the Australian brands that we have to the world market," he says. "We are looking to do that through opening up our website and partnering with a technology company [Border Free] that allows your website to be transacted in over 70 countries."
As he gets ready for Styletread's next phase, Munro has stopped looking down at feet.
"I haven't been doing that as much lately," he says. "Styletread is so technology driven that my focus has definitely been more on technology in the last 12 months."
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