Have Nike and Adidas supplanted Choo and Louboutin as the footwear of choice for the sartorially savvy? Thanks to the casualization of the workplace and the loosening of office dress codes, sneakers have become much more than weekend wear for both men and women—they’ve become status symbols. Celebrity collaborations and athlete endorsements have continued to lend cachet to brands and a new wave of sneaker culture is evolving as the latest manifestation of the athleisure trend.
In 2016, the U.S. footwear market grew by less than 3%, but sales of athletic footwear outpaced all other categories with an 8% increase in overall sales. Nike continues to hold the lead in share, capturing almost 18% of the market. Skechers, the number two footwear brand in the U.S., follows with 3.5% share of market; Payless (2.6%), Adidas (2.4%), and Timberland (2%) round out the top five U.S. brands. Here, we look at some of the trends that we expect to impact the athletic footwear industry this year.
Scarcity Breeds Demand
Today’s consumers aren’t only interested in brand new kicks. Sneaker marketers, banking on limited edition product runs, have created demand for collectible shoes, spawning an entirely new billion-dollar industry. Resellers established StockX, a live bid/ask marketplace for buying and selling limited edition, high-demand sneakers; GOAT, an app dedicated to reselling sneakers, raised $25 million in funding in February; and upscale sneaker specialty consignment shops like Flight Club and Stadium Goods are more like museums than boutiques.
High Tech Footwear
Marketers see potential in footwear that helps drive performance through activity monitoring, automatic tracking, self-lacing technology, and feedback tools that offer insight on muscle fatigue. Nike, Under Armour, and New Balance, among others, have introduced shoes in the past year that offer performance enhancing tools.
Like fast fashion, footwear brands are working on speeding up their supply-chain cycles to reduce design-to-market timelines. Nike’s Express Lane uses data to monitor demand and sell-through to respond more rapidly to consumers. The brand is also cutting the production process in half by using advanced automation technologies and localized sourcing for faster lead times.
While it’s still in its infancy, 3D printed footwear could revolutionize the industry. Typically, it takes 9-18 months to bring a shoe from concept to shelf— 3-D printing technology could reduce the time to 6-9 months, or, ultimately, in-store or at home in a matter of hours. Moreover, beyond just color or design, 3-D printing could offer never-before-seen levels of customization. Nike, New Balance, Under Armour, and Adidas have launched limited edition 3-D printed shoes, and retailer DSW hosted a pop-up store for custom 3-D printed footwear company Feetz.
Amazon has emerged as the most-shopped retailer for footwear, so Nike’s recent announcement that they would be selling direct to consumer on Amazon did not come as a surprise. Nike has been a top selling brand on the site through third-party sellers and this move allows the company to take back control of its pricing and products. Nike only plans to sell a limited number of products on Amazon, but it sends a signal to other brands that exposure to Amazon’s growing audience (specifically Millennials) is critical.
Source: Fung Global Retail Market Trends in US and European Footwear 2017