A return to retro has meant big bucks for the athletic footwear business—it’s also what seems to have kept the sector above water in a year roiled with uncertainty for retail.
The U.S. athletic footwear industry grew 3 percent to $17.5 billion in 2016, and unit sales were also up 3 percent, according to new data from The NPD Group.
“For more than a decade, U.S. sales of athletic footwear have averaged about a 4 percent annual increase, but 2016 will go down as a slightly below average year; however, given the sports retail landscape in 2016, it is understandable why this happened,” Matt Powell, NPD’s vice president and sports industry analyst, said.
The Sports Authority and Sports Chalet bankruptcies had their impact on the industry, most of which hit the fourth quarter the hardest. Powell said he expects the impact will still be felt through the first quarter, but things should return to normal after that.
In the athletic footwear category, classics saw the biggest success with sales increasing 26 percent to $4.4 billion, and the category has ramped its sales up by $1.7 billion in the past three years as more consumers turn to retro looks. Within classics, for example, running shoe sales were up 36 percent compared to sales of standard performance running footwear, which stayed flat. Casual classics also had a good 2016, with sales up 11 percent after two years of decline.
The gradual casualization of the United States and consumers’ increasing desire to wear athletic footwear have helped drive that growth, according to Footwear Distributors and Retailers of America (FDRA) president Matt Priest It’s had a lot to do with innovation too.
“I think that a lot of the innovation, a lot of the design, a lot of the colorways are very interesting within the athletic space,” Priest said. “Consumers want change all the time and the athletic space kind of drives that change.”
What’s more, millennials are wearing sneakers more than anyone else, and now that many are coming into greater spending power, more of those dollars are going to athletic footwear, Priest explained. Retailers in the athletic space have also been leaders in customization, and consumers want that personalization and differentiation from the market.
But apart from that, retro seems here to stay.
“Retro will remain the dominant fashion trend, but success won’t come easy. Competition will intensify and brands must constantly update their styles,” Powell said. “To further distinguish themselves and stay ahead of the competition, brands should focus their innovation on the manufacturing side, emphasizing speed and sustainability, as this impact will be long-lasting, regardless of where fashion moves the market.”