You will be redirected back to your article in seconds
Skip to main content

NPD: Fashion Footwear Falters, But DTC is Taking Off

While it can’t compete with video games for wallet share in the U.S., footwear can still call itself a growing industry.

In remarks at FN Platform Monday, Beth Goldstein, executive director and fashion footwear and accessories industry analyst for NPD, said the overall footwear category has grown 3 percent year-to-date, and hasn’t yet been affected by the trade woes now dominating brands’ board room discussions.

Across the U.S. over the past year, consumers have spent the most on video games, small appliances like kitchen gadgets, and consumer technology like Google Voice and Amazon Alexa (up 13 percent, 6 percent and 4 percent, respectively). Despite tech’s takeover, the $76 billion footwear industry is seeing slow, incremental growth as average prices rise slightly.

Effects of China tariffs

Goldstein conjectures that much of the growth the sector has seen over the past year is due to naturally-occurring price increases, not the sale of more product. Thus far, the relatively minor shift hasn’t impacted consumer appetite much, she said. But the additional 10 percent tariff on Chinese footwear and apparel set to take effect in either September or December, depending on the product, has the potential to make consumers think twice about their next footwear purchases.

“It’s going to be a little messy,” she told Sourcing Journal. “I think you’re going to see some leveling up, in terms of price. I don’t expect to see a mass industry average price rise by 10 percent, but we may see a couple of points looking toward the end of the year, and we’ll have to see how consumers respond to that.”

With rising prices at retail, Goldstein predicts impacts on units sold in the back half of the year. With the industry’s growth already slowing, offering consumers pricier product as they head into the holiday season may grind that growth to a halt.

Related Stories

“I think some brands may be able to get away with it, and others may not. It’s going to be really interesting to see how savvy the consumer is on this issue.”

Fashion in decline, athleisure to the rescue

Fashion and performance footwear have declined in 2019, Goldstein said, though performance has been waning for a few seasons now in favor of casual, athletic-inspired styles. In fact, “sport leisure” was the only category that demonstrated a small amount of growth this past year, while fashion footwear declined by 2 percent over the past six months.

The reason, Goldstein said, is that consumers are increasingly looking for comfort, even in traditional wear-to-work styles. “I mean, tailored in itself is not necessarily declining,” she said. “It’s more about lower, thicker heels, and the comfort elements in them. Everyone’s more casual, and they’re styling themselves more casually.”

Instead of stilettos, women are looking to elevated, yet comfortable styles like espadrilles, platform sandals and jute-wrapped sneakerdrilles (sneaker-espadrille hybrids) for that fashion quotient at the office and on the weekends. They’re also looking to shoes that combine athletic inspiration—like thick white outsoles—with more streamlined, trendy uppers, bringing comfort and support to fashion-forward styles.

“Trends come and go and they’re cyclical. But I think as long as the athleisure trend is still out there, fashion will follow it.”

DTC is the next frontier

The fashion footwear shopping channels driving growth are value-driven (off-price, discount, mass market retailers), sports or athleisure-focused specialty stores and outlets, and direct-to-consumer brands and brand websites.

“Value, direct-to-consumer and sports. What you don’t see are department stores, which are challenged,” Goldstein said.

Though online has shown meteoric growth over the past decade, it’s inevitably slowing and heading toward a plateau. Even bigger online pure-plays are beginning to stagnate.

The bright spots are in direct-to-consumer brands, which have invaded Instagram with the force of an army, capturing the attention of millennial and especially Gen Z consumers. Established brands who are investing more into their own site experiences are also seeing growth, Goldstein said.

After declining in spending on fashion footwear the year prior, constantly-connected Gen Z consumers accounted for 40 percent of fashion footwear sales since last June.

Enticing younger consumers

“Sustainability is a new way of life particularly for younger consumers,” Goldstein said, echoing the buzzword that has dominated the footwear and apparel industries in recent seasons.

According to Goldstein and NPD, a quarter of overall consumers (and a third of young, Gen Z consumers) have said that they would pay more for sustainable products—but not by much. More education is needed, Goldstein explained, when it comes to key materials and supply chain processes that impact the environment as well as pricing, but the interest is there. Older consumers are disproportionately concerned about energy and water conservation compared with their young counterparts.

Social responsibility is also on Gen Z’s radar, with inclusivity as a top-of-mind consideration for young consumers assessing brands. Adaptive fashion, or specially designed garments that provide an easier and more comfortable dressing experience for consumers with disabilities, has become a point of interest and advocacy.

Gen Z is also behind the snowballing demand for alternative payment services like Afterpay, Quadpay and Klarna, which have been popular in Europe for some time but are just staking a claim in the U.S. market. Rental and resale programs and platforms are also popular with millennial and Gen Z consumers, though they haven’t yet tackled the footwear space.

That day may soon be coming, Goldstein said.

Summer sales are the new holidays

“July will start to become a bigger piece of the business, but August is the real prime time,” Goldstein said. With now-defunct Payless’ market share up for grabs, it’s likely that big box retailers like Target, Kohl’s and Walmart will move in on the once high-grossing BTS favorite’s turf.

And while July’s Amazon Prime Day experienced an 8 percent increase in sales from last year, Goldstein said that the majority of BTS shopping is still done a month later—and it’s done in-store. Amazon hasn’t yet released targeted data on footwear sales from this year, but Goldstein believes heavy promotion of comfort, fashion and athletic styles could have given the category a lift.

Goldstein also pointed to Nordstrom’s Anniversary sale, which happened about a week after Prime Day this year, as a bastion of summer selling. With those sales becoming July landmarks, Walmart and Target have launched copycat efforts of their own to stave off the fear of missing out, Goldstein said.