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2020 Lacks a ‘Hot’ Footwear Brand, NPD’s Matt Powell Says

Without a true “hot” item, the U.S. sports retail industry—including performance apparel and footwear—will likely have another lackluster year in 2020, according to The NPD Group’s Matt Powell.

The athletic footwear market grew slightly in 2019, NPD said, but Powell doesn’t expect that to propel the category this year. It’s not just a lack of a hot item, however. There are no hot brands of scale either, Powell said, limiting the likelihood of a breakout brand in 2020.

Brands that are already successful are turning to direct-to-consumer (DTC) channels to “bleed” sales and margin away from their wholesale partners, with Nike as the prime example.

Amid a broader effort to limit the number of marketplaces in which its products are found, Nike has turned to its SNKRS app as an outlet for growth. In its most recent financial report, Nike credited its DTC channel as driving a 12 percent revenue increase.

In 2020, NPD expects brands to grow their direct platforms through aggressive, “very promotional” means, Powell said. This isn’t likely to result in organic growth, but could take share away from their wholesale partners, he added.

“More generally speaking, footwear brands will find mid-tier department stores and shoe chains to be a fertile area for growth, as there is a much more equitable brand scenario here,” Powell said. “I also wouldn’t be surprised if some footwear brands expand their product offerings within the mass merchants.”

Much of the little organic growth that is to be found will more than likely come from smaller brands in 2020, NPD’s data shows. But most of those gains will be driven by the sport lifestyle, or athleisure, segment, where retro sportswear is likely to continue dominating the market.

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There remains little hope of performance factoring into whatever success is to be found from a fashion angle.

NPD and Matt Powell are predicting a down year for performance footwear as a lack of hot brands and products will hold back growth in 2020.
Brands that expanded from fashion into athleisure might rethink that decision in 2020. Lyubov Levitskaya/Shutterstock

“For the time being, there is no sign that performance footwear will make a fashion comeback in 2020,” Powell wrote. “Brands that focus on performance will find it increasingly challenging.”

Performance basketball footwear may soon be consigned to the same fate facing cleats in football and baseball—fashionable only on the field or court. Basketball endorsements will continue their downward trend, shrinking the possibility of decent ROI for endorsement contracts, Powell predicted.

What’s more, Powell suspects that influencers will “play themselves out” in 2020 as consumers grow tired of the “inauthenticity” of paid advertisements on social media.

Activewear, which has relied on influencer endorsements in the past, should expect to have a soft year, though Powell sees smaller brands doing well in the market.

“In terms of brand stars, my prediction is that Lululemon will be the leader in activewear,” he said. “In the next one to two years, I believe Lululemon will become the largest women’s activewear brand in the U.S.”

Powell also expects many brands that expanded into performance from the fashion space will likely retreat back to their comfort zones to save face and margin in the coming months.