Fabulous Letters From Lisbon: Paez Portugal: What You N-E-E-D to Know

Dear Letter Lovers,

Today lets talk about Paez.

If you're Portuguese you know what I'm talking about. If you're Latin American, you know what I'm talking about.

If you're neither of the above you might know what I'm talking about, but for those of you who don't allow me to make the formal introduction.

PAEZ

Paez is an Argentinian brand that sells Espadrilles.

Some of you may be thinking "Like Tom's shoes?". Yes like Tom's shoes, but different, very different. And for you Fair Trade fanatics, it's time to pay very close attention.

Paez has made its way in to the ♥♥♥ of so many Portuguese consumers that I simply couldn't resist writing about their success story. Not because I have 5 pairs or know the owners, but because the whole concept surrounding the brand and its local corporate culture is truly unique.

I proceeded to contact Carlos Coutinho, one of the local founders, and ask him if he could spare a moment or two and give me a first-hand account of how Paez has progressed during the past 3 years to the point where the entire 2011 summer collection was being sported by more than 75% of the my friends earlier this year...

General Facts and Figures regarding PAEZ

Paez was founded in 2007 based on the idea of giving a twist to a simple & comfortable shoe used on an everyday basis by the Argentinean people.

It's all about "simplicity, comfort & innovation".

All of the shoes and merchandise are produced in the Argentinian Paez factory.

Fair trade is a key factor in the corporate culture.

The brand is currently present and up and running in 65 countries and sold in over 600 stores.

Paez currently produces espadrilles, sneakers, boots and accessories such as beach bags.

Paez Portugal

Upon arriving at the Paez Flagship store which was at the time located at Rua das Janelas Verdes Nº102, I'm greeted by Carlos Coutinho.

Carlos is one of those super-nice-super-relaxed-super-easy-going-it's-all-good-guys that makes the rest of us, especially me, feel like we're far too formal and uptight.

He's been involved in the project since Day 1 but began his career at Paez as a friendly advisor or as he likes to say "moderator". What do I mean? Carlos wasn't the one to bring Paez to Portugal. That was Francisco Penim and Ricardo Ortigão Ramos.

Francisco and Ricardo were studying in Argentina when they learnt about the brand in one of their classes and thought the overall concept could be interesting and more importantly, profitable in the Portuguese market.

Paez makes a point of exporting its shoes internationally with the help of young entrepreneurs, more specifically those who are fresh out of business school.

Francisco and Ricardo dealt with the bureaucracy and started selling the shoes in Portugal. And then came Carlos. While Francisco and Ricardo had a great deal of initiative, they were both still studying and needed some guidance as to how they were going to effectively set up the brand in Portugal.

In other words, they needed clients, retailers and investors. This is where Carlos came in. He started off by setting them up with the key to any business man's success: A Roladex of clients he had acquired while working as a sales rep for Nike.

How did the boys go about approaching retailers? It was very simple (just like Paez). They bought a suitcase bought at the supermarket, stuffed it with shoes and traveled the country looking for stores interested in selling them.

"We started in Pedras del Rey and tried to find one retailer per area, just to ensure exclusivity." And the rest is history. Let's examine some of the key success factors related to this booming trend the three young entrepreneurs created in Portugal.

Balanced Ambition: "Fazemos Isto Por Paixão"

The point of any business is to make money. But there are different ways of going about it. There are those whose aim is to grow as fast as possible and cash in quickly. And there are those who opt for a more organic, slow paced version of growth.

We're not in this to get rich quickly and sell quickly. This is a brand we want to have and run for the rest of our lives and watch grow old with us."

Carlos can't emphasis this enough.

This year they sold 10,000 pairs of shoes. They could have sold much more. But the boys prefer to grow the brand out of their own back garden than to invest in aggressive marketing and promotional campaigns as well as expanding their number of retailers at the risk of damaging the overall culture and vision they have for Paez in Portugal.

Nonetheless, the boys have done well for themselves in the past three years. Portugal is currently the country in which most Paez are sold (from an Income Per Capita Ratio of course...) It is still pretty impressive. Of course this achievement is linked to a number of other variables that we still need to discuss. So let's move on.

Cultural Compatibility: Portugal & Argentina

"A onde argêntina é muito parecida com a nossa":

The Latin Culture. Huge success factor.

Huge advantage for doing business with Paez.

Huge part of the brand.

Being a Latino European myself, I can perfectly relate to the very nonchalant, relaxed, everything done at the last moment lifestyle and more importantly business environment.

Everything is late, business lunches usually are more about lunch than business and last over an hour and no more really starts working before 10 am.

During the summer we all take as much time off as possible to run off to the beach and bask in the sun. The basking is also usually carried out in esplanadas or any area located in the close proximity of the river/sea:

Why did I go to the trouble of describing this?

Because culture is related to climate, and in this particular case, climate and culture have a huge influence on the sales and success of Paez in Portugal.

This year, summer lasted until the 3rd week of October boasting 30º C temperatures. Beach was therefore a prime time activity leading to the extended high sales rate of seasonal products such as ice-creams, flip-flops, bikinis and Paez. Thankfully the Argentinians are as relaxed about business as we are and were quick enough to realize the potential of casual beach friendly footwear in sun-kissed climates.

FYI: After a year of selling Paez in Portugal, Carlos felt it was time to travel to Argentina and meet the brains and founders of the brand:

"I couldn't keep doing business with these guys without meeting them face to face, visiting the factory and sharing some beers".

Fantastic.
B-A-C-A-N-O.
Just the way we like to do business.

Fair Trade: The Cherry on top of the Cake vs Key Success Factor

Paez is Fair Trade CERTIFIED (Which FYI Tom's Shoes is not) . As previously mentioned, all products are produced in Argentina in Paez's very own factory.

Fair wages are paid, working hours are restricted and national production is stimulated.

One could argue that this ethically and socially responsible business model bears great fruits among Fair Trade fanatic consumers who purchase coffee exclusively from Starbucks for the greater good of mankind, taking a stand against the trends of the free market. And it probably does.

But to what extent are the fair trade policies mentioned above key variables in Portuguese consumers' purchasing decisions?

Carlos is of the opinion that is not that big of a deal to his local consumers:

"Scandinavian consumers are much more sensitive regarding the Fair Trade factor".

For now, it remains the cherry on the cake made of many other important ingredients valued by consumers.

Word-of-Mouth
This is of course a blatantly obvious success factor.

Anyone who knows anything about business is aware that the first thing you do when you launch a product or a service is to try and generate word-of-mouth.

The important point to be made is that in Portugal as we are a modest 10 million, word-of-mouth is one of the easiest ways of creating awareness simply because we all know each other and when the correct people are approached, it works like a wonder.

Why do Portuguese consumers love PAEZ?

Design &Variety

Comfort

Utility and Authenticity

"The shoes are light and fresh."

Favourites? For Men Panama Pimenta

For Women: The Lilac Model

Yes the shoes are cool, boho chic, hipster, socially responsible and very trendy. But what really moved me about the brand and more importantly about its local brains (aka Carlos, Ricardo and Francisco) is their Authentic Management Approach.

"I don't like to sell a pair of Paez half-heartedly."

Paez are more than just a pair of shoes.

They represent a concept, an ideology, a mindset, a way of life.

They're about comfort, style, tradition, philanthropy, energy and people who are young at heart!

"Sometimes I'll get a guy who will come into the store and who will spend ages looking for the right pair. He'll try them on, they take them off, then put them back on again, hesitate some more and I can tell he's just not ready.

"I would say":

'"Dude, it's OK, you're just not mentally there yet. Come back in a few months and I'll find you a pair that's just right."'"

Because each of the boys spent a great deal of time in the actual flagship store, meeting and greeting customers and selling shoes, they know they market like no other.

"Being there makes all of the difference, people like coming in and learning about the brand, finding the pair that's just right and kicking back".

And nothing's better for a brand than daily interaction and feedback from its customers. The personal touch approach, which is considered the most effective from a CRM point of view, ensures enhaced customer satisfaction and capacity for innovation.

The Romantic Vision: A Visão Romântica

Carlos has a romantic vision for the brand:

"O meu sonho é calçar os sem-abrigo todos do pais."

....

"My dream is to put shoes on the feet of all of the underprivileged"

As mentioned previously, Paez is a Fair Trade certified brand that seeks to provide proper work conditions to the local Argentinian producers.

But Carlos, Ricardo and Francisco go beyond that...

"When we started we very low on cash, so we would approach other young entrepreneurs to help us out with the campaigns and the store design and layout."

"I'd be like, guys, you design me a logo for the site and I'll give you a free pair of Paez and make sure your get the deserved credit".

And this is what I ♥ most about Paez Portugal:

It's very "you scratch my back and I'll scratch yours".

Instead of spending unnecessary resources on going to a large advertising company, the boys look for up-and-coming production companies and give them a chance to show the world what they're made of.

Francisco Steinwall and João Pedro Nunes' Pipoca Filmes managed to bag the Paez account for the brand's most recent ad campaign.

CHECK OUT THE NEW PAEZ AD CAMPAIGN:

PAEZ É from Pipoca Filmes on Vimeo.

...PAEZ PORTUGAL...

It's about Team Work and Being Courageous enough to Take and Give a Chance to People with Initiative and Great Ideas:

So to conclude and as we say in Portuguese:

UM GRANDE BEM HAJA Á PAEZ

Let's give it up to a dynamic young at heart brand for keeping it real.

P.S: Carlos confided the next step is the negotiation of the production of

Paez in P-O-R-T-U-G-A-L

Just to see if we can boost the economy, create some jobs and make the most of our

Fantastic Textile Industry

♥

P.P.S This week we'll be posting the photos of the Opening of New Paez Flagship Store and Winter Collection
& An Interview with Ricardo Ortigão Ramos