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Sustainability, Athleisure to Shape Athletic and Outdoor Footwear Market in 2019

The global footwear industry is set to experience sustained growth in the coming years, fueled largely by what happens with sustainability and athleisure.

The value of the global footwear market stood at $222.4 billion in 2017 and is expected to reach $292.7 billion by 2026, expanding at a CAGR of 3.1 percent between 2018 and 2026, according to Credence Research. Sustainability—regarding both materials and production methods—and athleisure fashion are chief among the many factors that will help drive global growth of athletic and outdoor footwear in the year ahead.

On the sustainability front, many experts believe innovations in production will continue to gain traction worldwide. For example, shoe knitting technology is becoming more widespread, as leaders like Nike and Adidas focus on advancing in the area, which has contributed to less waste and reduced labor costs, and also lends itself to customization and speed to market.

The ongoing digitization of the creation process, such as the use of more advanced CAD programs, will also gain momentum in 2019, said Greg Diharce, chief product officer at Matmarket, a firm that specializes in materials design, R&D and materials sourcing.

“Digitization allows for access to better materials and is also a great way to create sample shoes without actually having to go to a factory and build them,” Diharce said. “Digital resolutions are now extremely high, making it easy to see complex design details, and the use of 3-D printing means that a brand can print a single shoe in multiple colorways, thus saving time and money in the selection process.”

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The use of sustainable and recycled materials and eco-friendly manufacturing processes are also a top priority.

“The key trend now dominating discussions among brands is sustainability: How to reduce waste in supply chains and at the factory, and how to use materials that are sustainable,” noted Andy Polk, senior vice president of the Footwear Distributors and Retailers of America (FDRA). Part of this involves things like transforming the operations process, Polk explained, and the other part requires companies to consider making adjustments in production and considering how they could reuse or sell waste instead of discarding it.

The athleisure movement, sometimes dubbed “outleisure” in the casual outdoor market, also has plenty of runway heading into 2019.

“The footwear market is constantly evolving to accommodate consumer behaviors and activities,” said Edited retail analyst Krista Corrigan. “For example, the tendency to multitask and lead an on-the-go lifestyle for many millennials has influenced the sneaker category substantially.”

Add to that the increasing purchasing power of this generation, and the sneaker category will only continue to grow.

Between December 2016 and 2018, the number of lifestyle sneakers in-stock across mass and value retailers increased 46 percent in the U.K. and 42 percent in the U.S., according to Edited data, outpacing total footwear, which grew by 9.7 percent in the U.K. and 4.5 percent in the U.S.”

The runway and the High Street have contributed dramatically to this trend, too, according to Corrigan.

“Across luxury and premium retailers, in-stock levels of lifestyle sneakers have skyrocketed in the U.K. by 289 percent since 2016 and 45 percent in the U.S. market—also growing faster than the total footwear category, up 240 percent in the U.K. and 19 percent in the U.S.,” she said.

Hike-inspired footwear across the past two years has also seen a 260 percent increase of products stocked in the luxury and premium markets, and Corrigan believes it’s only a matter of time until this trend trickles down to mass and value retailers alike.

Moreover, seasonal lines are blurring and so are consumer attitudes and usage when it comes to footwear, according to The NPD Group. Consumers now demand comfort, expect function and versatility, and want their footwear to be able to perform in a variety of settings. To succeed in the future, NPD also posited that brands must be innovative and embrace social- and eco-consciousness as this is key to the young consumer cohort that will soon comprise their largest customer base.

Another key issue that will help shape the industry in 2019 is the continuing production shift from China to Vietnam.

Asia Pacific dominated the footwear market in 2017 and is expected to remain the leader in the space through 2026, according the Credence Research report. However, trade uncertainty and ongoing concerns around counterfeit product will pose a significant concern for China and even a threat in a brand-driven footwear industry, as such products hamper the growth of sales and damage the original brand value.

Factors like these may also contribute to more brands and retailers looking outside of China for their shoe buys, particularly as the cost disparity that made some neighboring Asian nations more appealing from a cost of goods savings perspective continues to narrow.

“Athletic shoe imports into the U.S. continue to grow and Vietnam is becoming the new giant for athletic production,” said FDRA’s Polk, offering an example. “The challenge is there is little to no capacity and production costs are increasing substantially to the point where it’s near par to Chinese factory costs.”