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FDRA Summit: Focus on the Consumer

The Footwear Distributors and Retailers of America (FDRA) examined the state of footwear, retail, fashion and innovation at the 2017 Summit in Washington D.C. on Thursday. Here’s a look at some of the key takeaways from the industry event.

Everything has changed, but nothing has changed.
From the vertically-integrated chain stores of the 1960s to Amazon’s online takeover and Nordstrom’s recent $500 million investment in a New York City flagship, Deer Stags Concepts Principal and FDRA Chairman Rick Muskat traced the evolution of footwear retail, pointing out that while the vessel for selling footwear has changed, the focus remains the same. “The retailers who are struggling are struggling because they lost focus. If we stay focused on our customer, we’ll figure it out,” he said. Muskat also noted that, “the graveyard of brands and retailers that no longer exist,” should serve as a reminder of what happens when business owners lose sight of their customers’ demands.

Consumers thrive on instant gratification. Social media has dialed up the speed at which trends move and brands are learning how to catch up. “Our customer base has changed; the way retailers buy and shop have changed. It’s a global marketplace, but there’s more competition,” said Chinese Laundry President Tsering Namgyal. “Fashion is not as orchestrated as it used to be,” she added.

Katherine Nelson, vice president of Evolution Design Lab, makers of Jellypop, said the company had to accept that its customers across the country has the exact same view as someone in New York City or Milan. “[The consumer] might not be shopping more, but she’s researching more. Looking at YouTube, Instagram and blogs, educating herself. They shop whenever they want. They don’t have to wait for a drive to the mall,” she added.

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“The consumer today is smarter than ever. Instagram and social media tells them how to wear it,” said Matisse Footwear President and CEO Michael Katz. While the brand’s direct-to-consumer business grows each season, Katz said the company uses social media to train consumers to ask for the brand in stores. “The results are quantifiable. Boutiques come to us, saying they want to carry our brand,” he said. “These small towns and boutiques are filling the vacuum left by big department stores.”

Athleisure isn’t going away anytime soon. “No one ever said they’re not buying these [shoes] because they’re too comfortable,” quipped Katz.

As a fashion company targeting millennials, Namgyal of Chinese Laundry said it used to be better to look good than feel good, but that is changing. She believes Skechers’ use of memory foam has revolutionized the way fashion footwear consumers perceive comfort. “Comfort, even in the fashion industry, is becoming essential,” she said.

“Athleisure is the biggest growing category,” added Nelson of Evolution Design Lab. She sees the trend in athleisure moving toward more “cleaned up” looks that are not as detailed oriented.

Review your influencer policy. The FTC is cracking down on influencers to disclose their relationships to brands clearly and conspicuously when promoting or endorsing products through social media. Katz said Matisse was one of the more than 90 companies that recently received a letter from the FTC, even though the brand does not pay people to post.

“We have influencers and ask them to follow very specific guidelines,” said Deborah Norman, Caleres associate general counsel. The footwear company has a PR agency that identifies influencers and has them sign agreements to follow FTC regulation, but Norman pointed out that many mistakes happen innocently. For example, one of Caleres’ brands recently posted photos of old magazines. Norman said the post was meant to be a historical look at how the brand has evolved, but the company needed the license to show this magazine. “You have to be ready to post hashtag ‘ad’ to show transparency and honest,” she added.

Athletic brands need to groom their future consumers. “Retailers are not the only ones that go out of business—brands can too,” said Asics American President and CEO Gene McCarthy. The industry veteran said the athletic footwear industry is facing an uphill battle “selling athletic shoes to people who are not athletic,” adding that 10 million kids in the U.S. are inactive and 48 percent of high school do not offer physical education. “The kids who shop at Dick’s play sports, kids who shop at Foot Locker watch sports,” he said.

As a result, McCarthy sees a new definition of participation: televised video game tournaments and fantasy league teams. Instead of following the New England Patriots each week, children are following Tom Brady on their fantasy team. McCarthy pointed out that it is likely to get worse unless athletic brands begin to help jumpstart active lifestyles.

Asics announced a new partnership last week with Personal Health Investment Today (PHIT) America, a campaign dedicated to increasing physical activity and fitness to improve the health of all Americans. The partnership will support new physical activity programs throughout U.S. schools by leveraging the PHIT America GO! Grants program and in helping Congress pass the PHIT Act which will change current federal tax law to allow for the deduction or use of pre-tax dollars to cover expenses related to sports, fitness and other physical activities.