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Footwear Insiders Deem Sustainability More Relevant to Sales Than Fashion

Sustainability finally trumped fashion as the more relevant sales factor in a semi-annual survey of footwear insiders.

The Portuguese Footwear, Components and Leather Goods Manufacturers’ Association (APICCAPS) released its fourth semi-annual World Footwear report this month. Its findings drew on the results of an online survey it conducted last month. Of the 141 respondents, 35 percent are involved in manufacturing, 20 percent in trade and distribution and 45 percent in related activities, such as trade associations, consultancy and journalism.

The association once again asked respondents about the factors they considered most relevant in determining the evolution of footwear sales, allowing them to select up to two options. Purchasing power (57 percent) and price (48 percent) continued to stand out as the most important drivers.

Sustainability concerns (39 percent) and fashion trends (38 percent), however, flipped places for the first time in the semi-annual report’s history. In the first run of APICCAPS’ survey—conducted in the latter half of 2019—roughly 50 percent had chosen fashion trends, compared to the less than 30 percent who picked sustainability concerns.

North America—14 percent of survey respondents hailed from the region—represented the only continent where fashion trends continued to surpass sustainability concerns in importance. Their relative importance, however, experienced a substantial drop-off from the previous edition of APICCAPS’ survey, falling from 80 percent to 45 percent. Those involved in trade and distribution also rated fashion trends more important than sustainability concerns.

Compared to half a year ago, the survey found significantly more respondents anticipating the quantity of footwear sold would grow over the next six months. Overall, 37 percent said they thought quantity would most likely increase, while 33 percent said it would most likely decrease. This positive four-point differential compared to a negative 23-point gap in the association’s previous report.

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APICCAPS noted broader differences in optimism regionally. Asia represented the only continent to present a positive balance, with 55 percent expecting an increase and only 14 percent anticipating a decrease. In Europe, 34 percent said quantity would likely rise, while 38 percent said it’ll likely fall. North America marked the only continent where a plurality, 45 percent, anticipated the quantity of sales would stabilize. Among these who anticipated a change, 25 percent predicted an increase and 30 percent a decrease.

The association noted “clear opposite views” when analyzing by line of business. While it found a six-point gap in favor of a decrease in quantity among manufacturers, those in the distribution sector responded in favor of a positive evolution by 21 points.

The outlook for prices appears better than that for quantity of sales. Only 16 percent of all respondents predicted a decrease in prices, while 52 percent said they expected they would stabilize and 32 percent said they would increase. Perspectives on prices were most cautious in Europe and Asia, where 16 percent and 24 percent, respectively, foresaw a decline. In North America, respondents were evenly split between an increase and stabilization, 45 percent to 45 percent, while 10 percent anticipated a decrease. Although South America and Africa were both evenly divided between prices increasing and stabilizing, no one from the former predicted a decline, while 14 percent from the latter did.

When given the opportunity to select up to three factors that they believed were the top difficulties faced by the footwear business, 50 percent chose “insufficient demand in our home market,” 48 percent said “insufficient demand in international markets,” 44 percent picked “financial difficulties” and 41 percent selected “cost of merchandise or raw materials.”

Other responses included “competition in international markets” (23 percent), “competition in our home market” (17 percent), “human resources problem (unavailability, lack of adequate training, etc.)” (12 percent) and “legal or administrative obstacles to international trade” (10 percent).

The APICCAPS noted that views on the evolution of the market share of different types of footwear did not change “significantly” from its previous report. Its panel continued to believe that sneakers and other sports-related footwear, as well as other footwear with textile uppers, would continue to gain market share in the near future.

Both waterproof and other plastic or rubber footwear turned around in respondents’ estimation, with the percent predicting an increase now larger the percent anticipating a decrease—a reversal from the previous survey. Prospects for classic leather footwear, particularly men’s, remained negative.

The survey found no significant change among respondents toward the evolution of digital channels, with the vast majority largely optimistic. Roughly four-fifths of respondents predicted general online sellers, multi-brand online shoe stores and own-brand online retail would all grow over the next three years. More than two-fifths said large-scale retail, multi-brand shoe stores and own-brand physical retail stores would decrease.

Based on its panel of experts, APICCAPS predicted consumption could grow by 2.8 percent in 2021, but believes business might remain below pre-Covid levels next year. On average, respondents expected consumption to return to pre-pandemic numbers during 2023.