There was a sad announcement early this week that Grand Rapids mainstay Van Hoecks Shoes would be closing its doors for good. Van Hoecks was a retailer that had been located in downtown Grand Rapids for 70 years and attracted customers from all across West Michigan. With such a loyal following and such a known presence, what could have caused this retailer to close down? There are many entrepreneurial lessons that can be taken away from this situation.
Van Hoecks was the cause of its own demise. While the economy might have played a role, Van Hoecks unwillingness to vary from its business model caused the store to work itself out of a relevancy.
Lesson #1: Location, Location, Location
Van Hoecks refused to abandon its long time location on Monroe Center. This 8,500 square foot, behemoth of a location was an albatross from a number of reasons. The first is the overhead it created. That much space in a downtown location is going to come with a hefty rental payment. Van Hoecks also did not have its own parking area causing customers to pay for parking in order to visit the store. The final and biggest reason why their location was part of their downfall was the lack of customers. With few retail shoppers roaming the streets of Grand Rapids, Van Hoecks had to rely on shoppers making the specific trip to their store to buy shoes. This creates a fiercely loyal customer base but not a large customer base.
Lesson #2: Know your market
Van Hoecks business model was completely focused on a fading market. The style of shoes and their marketing efforts were completely geared toward generations of shoppers that grew up in times when downtown Grand Rapids was filled with large retail giants and US 16 was the rout you took to get from Detroit to Muskegon. With West Michigan’s average age now around 36, Van Hoecks needed to shift toward this market. A quick look at Van Hoecks’ website you can see that it was outdated when it was created 2 years ago and had not been updated since 2010. An entrepreneur has to know where the market is and adjust to it. A major web presence and shoes that geared toward a younger generation would have gone a long way to keeping Van Hoecks afloat.
Lesson #3: Be unique but in a good way
Van Hoecks was unique but not for the right reasons. It does not take long of perusing comments online that Van Hoecks was not known for its customer service despite being a sit-and-fit store. Van Hoecks hands on sales team could have projected customer service that was beyond anything people ever experience. They could have created a situation where people paid the extra $5-$10 over the online price of those shoes because of the service they could receive. There were other options available too. Van Hoecks could have created a New York City or Michigan Ave. feel with high end merchandise. They could have gone to all women’s shoes or provided men with a service to match shoes to their professional dress. Van Hoecks uniqueness that they were following an outdated business model that catered to fading market was bound to fail.
There are other lessons to be learned from this situation that I will not get into. The bottom line is the modern entrepreneur cannot maintain success with sticking to the status quo. Van Hoecks customers were extremely loyal to the retailer and in return Van Hoecks remained loyal to them by not changing much. While that is an admirable characteristic it is not a good business strategy. Van Hoecks would have been better served to either find a balance of entering a new market while still providing services to its current market or moving to a smaller space where it could provide service to its niche market without the overhead that brought it down. A willingness to change is vital in the world of business.
Source: "Why Van Hoecks Shoes is closing after 70 years as a downtown Grand Rapids mainstay” by Gerret Ellison