The experience of the head of the network, “Russia’s Shoes”: a loan for boots and shoes that came out of it.

Persuade banks in the viability of the idea was simple. Our partners are OTP Bank, “Russian Standard” and “Home Credit”, which gave us loans at 40% per annum. Funds for the payment of interest we should have to pay for themselves, as buyers shoes sold at 0% for five months. And the money we have – due to an increase in the rate of turnover. With the introduction of credit system of revenue growth amounted to 12-16%. The amount of the check average was higher, too, as people began to take on two or three pairs of shoes at once, which we were very surprised.

The question naturally arises about the percentage of defaults, as in all consumer loans. Shoes did not often buy spontaneously, it seriously and always measure the chosen, which certainly reduces the risk of fraud. Shoes in the loan becoming mostly government employees – teachers, workers of Medicine, retirees, and they are characterized by integrity in payments. For a long time we did not have any returns. At the moment, their number is not more than 1-2% across the network. Whatever it was, such a risk – this is the problem banks.

Once the issue was settled with the banks, we started the implementation of credit throughout the network. Each store set up a workplace equipped with a computer, put the bank’s program, and most importantly – have trained our salespeople to work with loans. Now it is our people make out loans, and banks are not experts, because the banks would be unprofitable to provide the manager for each store, the day the number of issued credits from one point quite small. We receive large volumes due to a network, rather than by individual stores.

In setting up the equipment, connect all the systems, staff training, we spent a reissue of the year. Over time it became clear that the technical component – not the only difficulty of the project. The human factor is also brought about changes – how many give out loans depends on the sellers and their relationship to this method of trading. For some time staff did not perceive the new service, it seemed strange to sell shoes on credit. What should I do? We have developed a system of awards: one issued by a loan officer brings a bonus. In addition, we have issued their vendors also as managers of the bank, and banks, in turn, give them additional salaries and bonuses. Such motivation is immediately changed the way staff store at the conclusion of credit agreements.

In order to attract customers’ attention to the new service, we changed the design of the store: stickers pasted on the floor “credit for shoes,” placed near the cash registers explanatory information. When you start the project, we conducted a large-scale advertising campaign of our consumer loans, and it was the ads and commercials on television. Thus, we are told the information to a wide range of potential customers – in our audience were quite mobile people, income levels are slightly below average, with the family, and for them the question of buying shoes is quite important.

By 2008, we have included work on all points of sale of loans, the project started working in full force and increase our momentum. During the year we were given credit for 130 million rubles. Before entering the service credit buyers were limited to one pair of shoes for a purchase and the loan began to take shoes for the whole family at once – a few pairs. It got up to eight pairs of shoes on a check! No discounts are not bringing results such as cheap loans.

And then came the crisis. And immediately, the demand for our loans for shoes. Increased number of clients, but began to buy small: only came for one pair of shoes. Banks are not pulled funding for the increased demand, do not take 70-80% of applications due to lack of liquidity. In addition, banks have ceased to support the campaign with interest-free credit, which certainly had an effect on sales.

By the summer of 2009 “Footwear of Russia” has updated its credit policy, restoring the pre-crisis conditions of the shares. With the support of OTP Bank, our customers can use credit to buy shoes without the first payment for up to five months. Another good concession on the part of the bank has reduced the minimum limit on the loan, with three thousand rubles to two. After that, immediately increased the number of purchases of shoes on credit, and by the spring of 2010 we have almost reached the previous lending. In 2011 we rescued from the credit sales of footwear 120 million rubles.