Boston — The future of America's shoe industry may hinge on sharp marketing more than on import protection. Industry observers say shoemakers -- many of them family-run operations -- need to narrow their markets and create new ones to survive.
On Wednesday President Reagan rejected the International Trade Commission's recommendation of quotas for shoe imports, although he did recommend adopting a small tariff. Still, that may not be enough to quell protectionist sentiment in Congress, where some 300 protectionist bills are pending.
The US shoe business has been overwhelmed by cheap imports, which now account for 77 percent of the shoes sold here, according to the Footwear Industries of America. Since 1968, 500 plants have been shut down, with 92 closing last year. In the last 15 years, 95,000 people have lost their jobs as employment dropped from 215,000 to 120,000.
Free-trade advocates say the cost of saving jobs in this industry is too high. They cite an ITC study that concluded that imposing quotas would cost $50,000 for every job saved. The Footwear Industries group disputes that figure, claiming quotas would save jobs, lower prices (because of increased domestic production), and be a net gain for the economy.
The workers hardest hit by imports are primarily women over 50 who stitch boots and do other manual tasks. ``Most of the women have spent most of their working years in the shop, and they find that they have very few skills to fall back on'' when they are laid off, says Paul Newman at the Maine Department of Labor.
Though wages for shoe workers are among the lowest of any US industry -- $5.27 an hour, without fringe benefits -- they are several times higher than those in Taiwan ($1.39 an hour), South Korea ($1.07), and Brazil ($0.87). That kind of wage gap can't be closed by automating, because many of the steps in making a shoe, such as the stitching, are best done by hand.
Technology ``isn't a sufficient factor for making money in this business,'' says Tom Duchesneau, a professor at the University of Maine. In a National Science Foundation study of 70 companies, he found that ``some had computer-controlled sewing and lost money; some used little or no technology and made lots of money.''
If technology alone won't solve the labor-cost problem, is there any way the domestic shoe business can survive? Dr. Duchesneau says there are several things shoe companies could do. First, they should recognize what markets they can compete in -- medium-priced leather shoes, for example -- and which ones they may want to cede to producers abroad. A low-priced, synthetic-materials shoe requires a low skill level and can be made abroad. Expensive fashion shoes usually come out of Italy, a tradition
that would be hard to uproot.
Where technology becomes important, he says, is in marketing research -- knowing customers and supplying them with the shoes they want. ``Shoe companies don't even do a minimum of test marketing,'' he says. ``They make a bunch of styles, throw them out on the table and see which ones sell.'' The shoe industry, he says, should take advantage of computerization and marketing techniques to exploit or create its own market.
These words are gold for the Timberland Company, whose boots and shoes are the rage here and abroad, even in Italy. Through a mixture of foresight and happenstance, Timberland caught the fashion wave of the 1970s -- the rugged look of the urban backpacker -- before anyone else. The company was then persuaded to advertise heavily, market to the Bloomingdale's set, and raise their prices. (Timberland boots retail for $80 to $150.) Sales have tripled since 1980.
Today, says company president Herman Swartz, Timberland spends 10 to 12 percent of its revenues on advertising, commissions its advertising agency to do focus reports on the industry, and includes cards in shoe boxes so customers can fill out information about themselves, so they know who to market to.
Because the industry is a ``roller coaster,'' he says, most family-run businesses have traditionally put away profits for the lean year instead of investing in new technology, research, and advertising. ``If you can find or create a niche or anticipate the market, you can save yourself, but that's very difficult to do'' if you don't beat the bushes to find customer needs, he says.