Download The Global Footwear Market: Athletic and non

The Global Footwear Market:
Athletic and non-Athletic Shoes
August 2009
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THE GLOBAL FOOTWEAR MARKET:
ATHLETIC AND NON-ATHLETIC SHOES
AUGUST 2009
The Global Footwear Market: Athletic and non-Athletic Shoes has been prepared by
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Publication Date
August 2009
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The Global Footwear Market
Table of Contents
Table of Contents
The Global Footwear Market:
Athletic and non-Athletic Shoes
Chapter 1: Executive Summary .................................................. 1
Scope of Report .........................................................................................1
Product Categories.............................................................................................. 1
Methodology...............................................................................................2
Global Footwear Market .............................................................. 3
Global Footwear Market Rises 2% Driven by Asia, Latin America ........3
Figure 1–1: Global Footwear Retail Market, 2004–2008 (in billions $)................ 3
Unit Volume Declines Globally .................................................................4
Figure 1–2: Global Footwear Retail Market Unit Volume, 2004–2008
(in millions of pairs)......................................................................................... 4
U.S. Footwear Retail Market........................................................ 5
U.S. Footwear Market Flat .........................................................................5
Figure 1–3: U.S. Footwear Retail Market and Percent of Global Footwear
Market, 2004–2008 (in billions $).................................................................... 5
U.S. Unit Volume Declines ........................................................................6
Figure 1–4: U.S. Footwear Apparent Consumption by Volume and Percent of
Global Footwear Market, 2004–2008 (in millions of pairs) ............................. 6
Imports Dominate U.S. Market ..................................................................6
Figure 1–5: Share U.S. Footwear Import Volume by Top 10 Countries of
Origin, 2008 (%).............................................................................................. 7
U.S. Footwear Sales by Consumer Group & Major Product Category ..7
Figure 1–6: Share of U.S. Footwear Retail Sales by Consumer Group and
Major Product Category, 2008 (%) ................................................................. 8
Global Footwear Market Forecast .............................................. 9
Global Footwear Market to Reach $238 Billion by 2013 .........................9
Figure 1–7: Global Footwear Retail Market Forecast, 2008–2013 (in billions $). 9
Global Unit Volume Consumption to Reach 12.1 Billion Pairs .......................... 10
Figure 1–8: Global Footwear Retail Market Unit Volume Forecast, 2008–2013
(in millions of pairs)....................................................................................... 10
U.S. Footwear Market ................................................................ 11
U.S. Footwear Market to Suffer from Thriftier Consumer Habits.........11
Figure 1–9: U.S. Footwear Retail Market Forecast, 2008–2013 (in billions $) .. 11
Unit Volume Declines Globally .......................................................................... 12
Figure 1–10: U.S. Footwear Retail Market Unit Volume Forecast, 2008–2013
(in millions of pairs)....................................................................................... 12
Footwear Retail Sales by Major Channels............................... 13
Figure 1–11: Share of U.S. Footwear Sales by Major Channel, 2008 (%) ........ 13
August 2009
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Table of Contents
The Global Footwear Market
Chapter 1: Executive Summary [cont.]
Competitive Landscape .............................................................14
Footwear Market Highly Fragmented .................................................... 14
Table 1–1: Selected Footwear Marketers with Footwear Sales Greater Than
$1 Billion, 2004–2008 (in millions $)............................................................. 14
Marketplace and Consumer Trends..........................................15
Down Economy Means Thriftier Consumer .......................................... 15
Fashion and Footwear Industries Feeling the Pinch ......................................... 15
Figure 1–12: Quarterly Clothing and Clothing Accessory Store Sales,
1992–Q1, 2009 (in billions $)........................................................................ 16
Consumer Footwear Expenditures ........................................................ 16
Kids Footwear Has Three Protections................................................... 16
Company Ethics and Added Values Important to Consumers............ 17
Counterfeiting, a Dangerous Business ................................................. 17
Industry Hopes to See End Depression-Era Tax .................................. 18
Style and Innovation Trends: Personalized Footwear ......................... 18
Comfort versus Style: Footwear No longer Easily Categorized.......... 19
Technology Offers Good Shoes and Good Health ............................... 19
Aggressive Designs Versus Staid Style................................................ 20
Marketing Outreach....................................................................21
Recession Time to Engage Loyal Consumers...................................... 21
Integration Important as Media Preferences Shift ............................................. 21
Jimmy Choo Out of The Shoe Box Thinking ..................................................... 22
Virtual Marketing and Etail Make Most of Recession Dollars.............. 22
All the Simplicity of Email .................................................................................. 22
Make Use of Alternative Advertising Media .......................................... 23
The Puma Past Masher..................................................................................... 23
Behavioral Targeting in Diverse Consumer Market ............................. 23
Word-of-Mouth Increasingly Important ................................................. 24
Social Networking to Play Big Part in WOM...................................................... 24
Don’t Forget the Human Touch ......................................................................... 24
Product Placement Opportunities Abound........................................... 24
Nike Active in Broadcast Placement ................................................................. 25
Reliance on Sports Icons Shifting More to Celebrity ........................... 25
Payless and Summer Rayne Oakes Go Green................................................. 26
Footwear Consumer...................................................................27
Men’s Athletic Footwear Penetration Levels Highest at 20%.............. 27
Table 1–2: Total Consumer Penetration Levels for Men’s Footwear Bought
in the Past 12 Months, 2004-2009 (%) ......................................................... 27
Women’s Non-Athletic Footwear Penetration Levels Highest at
23%....................................................................................................... 28
Table 1–3: Consumer Penetration Levels for Women’s Footwear Bought in
the Past 12 Months, 2004-2009 (%) ............................................................. 28
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Table of Contents
Chapter 1: Executive Summary [cont.]
For Footwear, Consumers Shop Wal-Mart Most ...................................28
Table 1–4: Consumer Penetration Levels for Stores Shopped Most Often
for Shoes, by Women, Men and Total Population, 2006-2008 (%) .........30-31
Chapter 2: The Market ............................................................... 33
Scope of Report .......................................................................................33
Product Categories............................................................................................ 33
Methodology.............................................................................................34
Global Footwear Market ............................................................ 35
Global Footwear Market Rises 2% Driven by Asia, Latin America ......35
European Growth Tempers ............................................................................... 35
U.S. Drags the Global Market Down ................................................................. 35
Figure 2–1: Global Footwear Retail Market, 2004–2008 (in billions $).............. 36
Global Five-Year Growth at 6%......................................................................... 36
Table 2–1: Global Footwear Retail Market and Year-over-Year Percentage
Change, 2004–2008 (in millions $) ............................................................... 37
Unit Volume Declines Globally ...............................................................37
Figure 2–2: Global Footwear Retail Market Unit Volume, 2004–2008 (in millions
of pairs)......................................................................................................... 38
Table 2–2: Global Footwear Retail Market Unit Volume and Year-over-Year
Percentage Change, 2004–2008 (in millions of pairs).................................. 38
U.S. Footwear Retail Market...................................................... 39
U.S. Footwear Market Flat .......................................................................39
Figure 2–3: U.S. Footwear Retail Market and Percent of Global Footwear
Market, 2004–2008 (in billions $).................................................................. 39
U.S. Market Losing Global Dominance ............................................................. 40
Table 2–3: U.S. Footwear Retail Market and Year-over-Year Percentage
Change, 2004–2008 (in millions $) ............................................................... 40
U.S. Unit Volume Declines ......................................................................40
Figure 2–4: U.S. Footwear Apparent Consumption by Volume and Percent of
Global Footwear Market, 2004–2008 (in millions of pairs) ........................... 41
Table 2–4: U.S. Footwear Apparent Consumption by Volume and Year-overYear Percentage Change, 2004–2008 (in millions of pairs) ......................... 41
Imports Dominate U.S. Market ................................................................42
Figure 2–5: U.S. Footwear Import Volume and Percent of Apparent
Consumption, 2004–2008 (in millions of pairs)............................................ 42
Table 2–5: U.S. Footwear Import Volume and Year-over-Year Percentage
Change, 2004–2008 (in millions of pairs) ..................................................... 43
China Imports Declining .................................................................................... 43
Is Vietnam the New China for U.S. Imports?..................................................... 43
Table 2–6: U.S. Footwear Import Volume by Top 10 Countries of Origin, 2004–
2008 (in millions of pairs).............................................................................. 44
Figure 2–6: U.S. Footwear Import Volume Shares, by Top 10 Countries of
Origin, 2008 (%)............................................................................................ 44
August 2009
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The Global Footwear Market
Chapter 2: The Market [cont.]
U.S. Footwear Sales by Consumer Group: Women, Men, Kids .......... 45
Table 2–7: U.S. Footwear Retail Market by Consumer Group, Women, Men,
Kids, 2004–2008 (in millions $) .................................................................... 45
Figure 2–7: Share of U.S. Footwear Retail Market by Consumer Group,
2008 (%)....................................................................................................... 46
U.S. Footwear Sales by Major Product Category ................................. 46
Table 2–8: U.S. Footwear Retail Market by Major Product Category,
2004–2008 (in millions $) ............................................................................. 47
Figure 2–8: Share of U.S. Footwear Retail Market by Major Product Category,
2008 (%) ....................................................................................................... 47
U.S. Footwear Sales by Consumer Group & Major Product
Category................................................................................................. 48
Women’s, Children’s Athletic Footwear Strong ................................................. 48
Men’s, Children’s Non-Athletic Decline ............................................................. 48
Table 2–9: U.S. Footwear Retail Market by Consumer & Major Product Type,
2004–2008 (in millions $) ............................................................................. 48
Women’s Non-Athletic, Men’s Athletic Growth Stable....................................... 49
Figure 2–9: Share of U.S. Footwear Retail Sales by Consumer Group and
Major Product Category, 2008 (%)................................................................ 49
Global Footwear Market Forecast.............................................50
Global Footwear Market to Reach $238 Billion by 2013....................... 50
Figure 2–10: Global Footwear Retail Market Forecast, 2008–2013
(in billions $) ................................................................................................. 50
Global Growth at Annual Rate of 4% ................................................................ 51
Table 2–10: Global Footwear Retail Market and Year-over-Year Percentage
Change, 2008–2013 (in millions $)............................................................... 51
Global Unit Volume Consumption to Reach 12.1 Billion Pairs .......................... 51
Figure 2–11: Global Footwear Retail Market Unit Volume Forecast,
2008–2013 (in millions of pairs) ................................................................... 52
Table 2–11: Global Footwear Retail Market Unit Volume Forecast and
Year-over-Year Percentage Change, 2008–2013 (in millions of pairs)........ 52
U.S. Footwear Market .................................................................53
U.S. Footwear Market to Suffer from Thriftier Consumer Habits ........ 53
Figure 2–12: U.S. Footwear Retail Market Forecast, 2008–2013
(in billions $) ................................................................................................. 53
U.S. Global Market Share to Drop Two Points by 2013 .................................... 54
Overall Growth Estimated at 1% Annually to Reach $48.4 Billion .................... 54
Table 2–12: U.S. Footwear Retail Market Forecast and Year-over-Year
Percentage Change, 2004–2008 (in millions $) .......................................... 54
Segments to Show Similar Growth.................................................................... 54
Table 2–13: U.S. Footwear Retail Market Forecast by Consumer Group &
Major Product Category, 2008–2013 (in millions $)...................................... 55
Unit Volume Declines Globally .......................................................................... 55
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August 2009
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Table of Contents
Chapter 2: The Market [cont.]
Figure 2–13: U.S. Footwear Retail Market Unit Volume Forecast,
2008–2013 (in millions of pairs) ................................................................... 56
Table 2–14: U.S. Footwear Retail Market Unit Volume Forecast and
Year-over-Year Percentage Change, 2004–2008 (in millions of pairs) ........ 56
Chapter 3: Retail & Distribution................................................ 57
Overview...................................................................................................57
Footwear Distribution Method and Class ..............................................57
Method: Wholesale or Direct ............................................................................. 57
Class: Authorized or Mass................................................................................. 58
Footwear Retail Channels Overview ......................................................58
Shoe Stores....................................................................................................... 59
Discount Shoe Stores........................................................................................ 59
Sporting Goods and Athletic Shoe Stores ......................................................... 59
General Merchandise: Mass Discounters.......................................................... 60
General Merchandise: Department Stores and National Chains....................... 60
Apparel: Specialty Apparel Stores..................................................................... 60
Apparel: Off-Pricers ........................................................................................... 60
Non-Store Retail: Catalog ................................................................................. 60
Non-Store Retail: The Internet .......................................................................... 61
Footwear Retail Sales by Major Channels............................... 62
Shoe Stores Remain the Medium of Choice ..................................................... 62
Table 3–1: U.S. Footwear Retail Market by Major Channel, 2004–2008
(in millions $)................................................................................................. 62
General Merchandise Stores Still Second, but Struggling................................. 63
Apparel Stores Less of a Force ......................................................................... 63
Sporting Goods Stores on the Rise ................................................................... 63
Catalogs Tried and True, Internet Still on Trial.................................................. 63
Zappos.com Gets in Step .................................................................................. 64
Figure 3–1: Share of U.S. Footwear Sales by Major Channel, 2008 (%) .......... 65
Footwear as a Percent of Retailer Sales by Channel........................................ 65
Table 3–2: U.S. Footwear Retail Sales as a Percent of Selected Retail
Channel Sales, 2004–2008 (%).................................................................... 66
Retail Channels and Stores by Consumer Preference........... 67
Footwear Consumers Prefer to Shop at Specialty Apparel Stores.................... 67
Figure 3-2: Consumer Penetration Levels for Type of Retail Shopped Most
Often for Shoes, by Adult Users, 2008 (%).................................................. 67
Wal-Mart, Payless Still Top Choice for Consumers........................................... 68
Kohl’s Hopes Celebrity Will Kick Sales Up a Notch........................................... 68
Economy Hard on Off-Pricers Too .................................................................... 68
And from Behind Comes Famous Footwear ..................................................... 68
Table 3-3: Consumer Penetration Levels for Stores Shopped Most Often
for Shoes, by Adult Users, 2006-2008 (%) ..............................................69-70
August 2009
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Chapter 4: Competitive Landscape...........................................71
Overview .................................................................................................. 71
Footwear Market Highly Fragmented .................................................... 71
Nike the Global Leader...................................................................................... 71
Adidas at Number 2........................................................................................... 71
Other Top Competitors: Puma, Asics, New Balance, C&J Clark ...................... 72
Table 4–1: Selected Footwear Marketers with Footwear Sales Greater Than
$1.0 Billion, 2004–2008 (in millions $).......................................................... 72
Athletic Footwear Market More Concentrated at Top........................................ 72
Niche Athletic Sales Lower but Offerings Diverse............................................. 73
Nike Leads U.S. Footwear Market with Double-Digit Share.............................. 73
Followed By Adidas, Jones Apparel in Single Digits ......................................... 73
Privately Held Companies Share Considerable ................................................ 73
Table 4–2: Selected Global Footwear Marketers with U.S. Sales,
2004–2008 (in millions $) ............................................................................. 74
Figure 4–1: Share of U.S. Footwear Wholesale Market by Selected
Company, 2008 (%)...................................................................................... 75
Consolidation and Strategic Acquisitions All but Stopped................. 75
Nike on the Prowl? ............................................................................................ 76
Skechers Diggin’ in Its Heelys........................................................................... 76
LaCrosse Footwear, Inc. Expands with Sustainable Acquisition....................... 77
Selected Company Profiles .......................................................78
Nike, Inc.......................................................................................78
Overview .................................................................................................. 78
Performance ............................................................................................ 79
Figure 4–2: Nike, Inc. Total Net Sales, 2005–2009 (in millions $) .................... 80
Table 4–3: Nike, Inc. Total Net Sales and Year-over-Year Percentage
Change, 2005–2009 (in millions $)............................................................... 80
Sales by Product Category................................................................................ 81
Figure 4–3: Share of Nike, Inc. Total Net Sales by Product Category, 2009
(%) ................................................................................................................ 81
Sales by Geographic Region............................................................................. 82
Figure 4–4: Share of Nike, Inc. Total Net Sales by Geographic Region, 2009
(%) ................................................................................................................ 82
Footwear Sales Solid Despite Economy ........................................................... 83
Figure 4–5: Nike, Inc. Footwear Net Sales and Percent of Total Net Sales,
2005–2009 (in millions $) ............................................................................. 83
Table 4–4: Nike, Inc. Total Net Sales and Year-over-Year Percentage
Change, 2005–2009 (in millions $)............................................................... 84
Cole Haan, Converse and Other Sales Did Suffer ............................................ 84
Figure 4–6: Nike, Inc. Net Sales of Cole Haan, Converse & Other Products
and Percent of Total Net Sales, 2005–2009 (in millions $) .......................... 85
Table 4–5: Nike, Inc. Total Net Sales and Year-over-Year Percentage
Change, 2005–2009 (in millions $)............................................................... 85
Brand Portfolio ........................................................................................ 86
Table 4–6: Nike Brand Portfolio ........................................................................ 86
Timeline of Significant Events ............................................................... 87
Table 4–7: Nike Timeline of Significant Events ................................................. 87
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Table of Contents
Chapter 4: Competitive Landscape [cont.]
Under Armour, Inc. .................................................................... 88
Overview...................................................................................................88
Performance .............................................................................................88
Figure 4–7: Under Armour, Inc. Total Net Sales, 2004–2008 (in millions $) ..... 89
Table 4–8: Under Armour, Inc. Total Net Sales and Year-over-Year
Percentage Change, 2004–2008 (in millions $)............................................ 90
Sales by Product Category................................................................................ 90
Figure 4–8: Share of Under Armour, Inc. Total Net Sales by Product
Category, 2008 (%)....................................................................................... 91
Sales by Geographic Region............................................................................. 92
Figure 4–9: Share of Under Armour, Inc. Total Net Sales by Geographic
Region, 2008 (%).......................................................................................... 92
Footwear Sales See Astounding Incremental Growth....................................... 92
Figure 4–10: Under Armour, Inc. Footwear Net Sales and Percent of Total
Net Sales, 2004–2008 (in millions $) ............................................................ 93
Table 4–9: Under Armour, Inc. Total Net Sales and Year-over-Year
Percentage Change, 2004–2008 (in millions $)............................................ 93
Product Portfolio......................................................................................94
Table 4–10: Under Armour Footwear Product Portfolio .................................... 94
Timeline of Significant Events ................................................................95
Table 4–11: Under Armour Timeline of Significant Events................................ 95
Skechers, USA Inc. .................................................................... 96
Overview...................................................................................................96
Performance .............................................................................................97
Figure 4–11: Skechers USA, Inc. Total Net Sales, 2004–2008 (in millions $) .. 97
Table 4–12: Skechers USA, Inc. Total Net Sales and Year-over-Year
Percentage Change, 2004–2008 (in millions $)............................................ 98
Sales by Channel .............................................................................................. 98
Figure 4–12: Share of Skechers USA, Inc. Total Net Sales by Channel,
2008 (%) ....................................................................................................... 98
Sales by Geographic Region............................................................................. 99
Figure 4–13: Share of Skechers USA, Inc. Total Net Sales by Geographic
Region, 2008 (%).......................................................................................... 99
Product Portfolio......................................................................................99
Table 4–13: Skechers USA Footwear Product Portfolio.................................. 100
Table 4–14: Skechers USA Licensed Footwear Product Portfolio .................. 101
Timeline of Significant Events ..............................................................102
Table 4–15: Skechers USA Timeline of Significant Events ............................. 102
Jones Apparel Group .............................................................. 103
Overview.................................................................................................103
Performance ...........................................................................................104
Figure 4–14: Jones Apparel Group Total Net Sales, 2004–2008
(in millions $)............................................................................................... 105
August 2009
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Chapter 4: Competitive Landscape [cont.]
Table 4–16: Jones Apparel Group Total Net Sales and Year-over-Year
Percentage Change, 2004–2008 (in millions $) ......................................... 105
Sales by Channel ............................................................................................ 106
Figure 4–15: Share of Jones Apparel Group Total Net Sales by Channel,
2008 (%) ..................................................................................................... 106
Sales by Geographic Region........................................................................... 107
Figure 4–16: Share of Jones Apparel Group Total Net Sales by Geographic
Region, 2008 (%)........................................................................................ 107
Footwear Sales ............................................................................................... 107
Figure 4–17: Jones Apparel Group Footwear & Accessories Net Sales and
Percent of Total Net Sales, 2004–2008 (in millions $)) .............................. 108
Table 4–17: Jones Apparel Group Total Net Sales and Year-over-Year
Percentage Change, 2004–2008 (in millions $) ......................................... 108
Brand & Product Portfolio .................................................................... 109
Table 4–18: Jones Apparel Group Footwear Product Portfolio....................... 109
Timeline of Significant Events ............................................................. 110
Table 4–19: Jones Apparel Group Timeline of Significant Events .................. 110
Deckers Outdoor Corporation.................................................111
Overview ................................................................................................ 111
Performance .......................................................................................... 111
Figure 4–18: Deckers Outdoor Total Net Sales, 2004–2008 (in millions $) .... 112
Table 4–20: Deckers Outdoor Total Net Sales and Year-over-Year
Percentage Change, 2004–2008 (in millions $) ......................................... 112
Sales by Channel ............................................................................................ 113
Figure 4–19: Share of Deckers Outdoor Total Net Sales by Channel, 2008
(%) .............................................................................................................. 113
Sales by Geographic Region........................................................................... 114
Figure 4–20: Share of Deckers Outdoor Total Net Sales by Geographic
Region, 2008 (%)........................................................................................ 114
Brand Portfolio ...................................................................................... 115
Table 4–21: Deckers Outdoor Footwear Product Portfolio.............................. 115
Timeline of Significant Events ............................................................. 116
Table 4–22: Deckers Outdoor Timeline of Significant Events ......................... 116
Adidas AG .................................................................................117
Overview ................................................................................................ 117
Performance .......................................................................................... 118
Figure 4–21: Adidas AG Total Net Sales, 2004–2008 (in millions $) .............. 118
Table 4–23: Adidas AG Total Net Sales and Year-over-Year Percentage
Change, 2004–2008 (in millions $)............................................................. 119
Sales by Product ............................................................................................. 119
Figure 4–22: Share of Adidas AG Total Net Sales by Channel, 2008 (%) ...... 120
Sales by Geographic Region........................................................................... 120
Figure 4–23: Share of Adidas AG Total Net Sales by Geographic Region,
2008 (%) ..................................................................................................... 121
Sales by Division ............................................................................................. 122
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Table of Contents
Chapter 4: Competitive Landscape [cont.]
Figure 4–24: Share of Adidas AG Total Net Sales by Geographic Region,
2008 (%) ..................................................................................................... 122
Footwear Sales Grew 11% in 2008 ................................................................. 123
Figure 4–25: Adidas AG Total Footwear Net Sales and Percent of Total Net
Sales, 2004–2008 (in millions $)................................................................. 123
Table 4–24: Adidas AG Total Footwear Net Sales and Year-over-Year
Percentage Change, 2004–2008 (in millions $)......................................... 124
Brand Portfolio.......................................................................................124
Table 4–25: Adidas AG Footwear Brand Portfolio........................................... 124
Timeline of Significant Events ..............................................................125
Table 4–26: Adidas AG Timeline of Significant Events ................................... 125
Genesco, Inc. ........................................................................... 126
Overview.................................................................................................126
Performance ...........................................................................................127
Figure 4–26: Genesco Inc. Total Net Sales, 2004–2008 (in millions $) .......... 127
Table 4–27: Adidas AG Total Net Sales and Year-over-Year Percentage
Change, 2004–2008 (in millions $) ............................................................. 128
Sales by Division ............................................................................................. 128
Figure 4–27: Share of Genesco Inc. Total Net Sales by Division, 2008 (%) ... 129
Brand Portfolio.......................................................................................129
Table 4–28: Genesco Inc. Footwear Brand Portfolio....................................... 130
Timeline of Significant Events ..............................................................130
Table 4–29: Genesco Inc. Timeline of Significant Events ............................... 130
Crocs......................................................................................... 131
Overview.................................................................................................131
Performance ...........................................................................................131
Figure 4–28: Crocs, Inc. Total Net Sales, 2004–2008 (in millions $) .............. 133
Table 4–30: Crocs, Inc. Total Net Sales and Year-over-Year Percentage
Change, 2004–2008 (in millions $) ............................................................. 133
Sales by Product ............................................................................................. 133
Figure 4–29: Share of Crocs, Inc. Total Net Sales by Channel, 2008 (%) ...... 134
Sales by Geographic Region........................................................................... 134
Figure 4–30: Share of Crocs, Inc. Total Net Sales by Geographic Region,
2008 (%) ..................................................................................................... 135
Footwear Sales ............................................................................................... 135
Figure 4–31: Crocs, Inc. Total Footwear Net Sales and Percent of Total
Net Sales, 2004–2008 (in millions $) .......................................................... 136
Table 4–31: Crocs, Inc. Total Footwear Net Sales and Year-over-Year
Percentage Change, 2004–2008 (in millions $).......................................... 136
Brand Portfolio.......................................................................................137
Table 4–32: Crocs, Inc. Footwear Brand Portfolio........................................... 137
Timeline of Significant Events ..............................................................138
Table 4–33: Crocs, Inc. Timeline of Significant Events ................................... 138
August 2009
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Chapter 5: Marketplace and Consumer Trends .....................139
Thriftiness Hot in a Down Economy .................................................... 139
The Return of the Cobbler............................................................................... 139
Figure 5–1: Total Sales for Footwear and Leather Goods Repair
Establishments, 2003–2007 (in millions $) ................................................. 140
Consumers Cut Back ...................................................................................... 140
Figure 5–2: Quarterly Retail & Foodservice Sales, 1992–Q1, 2009
(in billions $) ............................................................................................... 141
Figure 5–3: Quarterly Personal Consumption Expenditures (PCE),
1992–Q1, 2009 (in trillions $) ..................................................................... 142
Fashion and Footwear Industries Feeling the Pinch ....................................... 142
Figure 5–4: Quarterly Clothing and Clothing Accessory Store Sales,
1992–Q1, 2009 (in billions $)...................................................................... 143
High-End Branded Footwear Toughing it Out ................................................. 144
Consumer Footwear Expenditures ...................................................... 144
Figure 5–5: Average Annual Footwear Expenditure Per Consumer Unit: All
Consumers Units, 2003–2007 ($)............................................................... 145
Table 5–1: Average Annual Footwear Expenditure Per Consumer Unit by
Household Income Before Tax, 2003–2007 ($).......................................... 146
Table 5–2: Average Annual Footwear Expenditure Per Consumer Unit by
Age of Reference Person, 2003–2007 ($) .................................................. 146
Table 5–3: Average Annual Footwear Expenditure Per Consumer Unit by
Race or Ethnic Origin of Reference Person, 2003–2007 ($) ..................... 147
Table 5–4: Average Annual Footwear Expenditure Per Consumer Unit by
Region, 2003–2007 ($)............................................................................... 147
Table 5–5: Average Annual Footwear Expenditure Per Consumer Unit by
Education Level, 2003–2007($)................................................................. 147
Kids Footwear Has Built-In Protections .............................................. 148
38 Million Kids by 1212 ................................................................................... 148
Figure 5–6: Population Forecast of U.S. Kids Age 3–11, 2008–2012
(in millions) ................................................................................................. 149
An Influential Force with Buying Power........................................................... 149
Figure 5–7: Spending Power Forecast of U.S. Kids Age 3–11, 2008–2012
(in billions $) ............................................................................................... 150
Cool Licenses Trump All ................................................................................. 150
Figure 5-8: The Inchworm Shoe...................................................................... 151
Kids Express Themselves with Crocs’s Jibbitz Charms.................................. 152
Company Ethics and Added Values Important to Consumers.......... 152
Global Consumers: Will Spend More on Ethical Brands ................................. 152
Green Particularly Important to Youth to a (Price) Point ................................. 153
Sustainable Initiatives are Financially Viable .................................................. 153
Deckers Finds a Simple Way to Sustainability ................................................ 153
Naturalizer and Dress for Success.................................................................. 154
TOMS Shoes One for One .............................................................................. 154
Danner and the Fallen Officers Drive .............................................................. 154
Counterfeiting, a Dangerous Business ............................................... 155
Staggering Consequences .............................................................................. 155
Counterfeit Counter-Intelligence...................................................................... 156
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Table of Contents
Chapter 5: Marketplace and Consumer Trends [cont.]
Industry Hopes to See End Depression-Era Tax.................................156
Style and Innovation Trends................................................... 158
Free to Re-Invent Me..............................................................................158
Make Me Unique: Personalized Footwear............................................158
Figure 5-9: Adidas’ Customizable Mi Originals................................................ 159
Work Shoes Get the Custom Treatment ......................................................... 159
Emotional Pulls the Shoes Strings Too ........................................................... 159
High End Activity ............................................................................................. 160
Interchangeable Shoes ................................................................................... 160
Figure 5-10: Sandals with Interchangeable Upper or Band............................. 160
Finding Comfort in a Pair of Shoes ......................................................161
Comfort versus Style: Footwear No Longer Easily Categorized ..................... 161
Shoe Comfort Gets More Accessible .............................................................. 161
Comfort Shoe Brands Break the Mold............................................................. 161
Figure 5-11: Privo’s Acacia Slip-on with Flex-Fit ............................................. 162
Figure 5-12: Indigo’s Sweetie Pump with ABS Heel........................................ 162
Figure 5-13: Unstructured’s Un.radke Ankle Boot ........................................... 162
Figure 5-14: Kigo Footwear ............................................................................. 163
Fashion Finds Comfort .................................................................................... 163
Figure 5-15: RSVP Lyndsey Cushioned by Foot Petals.................................. 163
The Science of Footwear.......................................................................163
Figure 5-16: Optimus Prime inspired Nike Air Trainer "Transformers"............ 164
Under Armour Gets Sophisticated................................................................... 164
Technology Offers Good Shoes and Good Health .......................................... 165
Better Health Through Earthly Footwear at Sky-High prices........................... 165
Spas, Fitness Experts Saw Opportunity .......................................................... 165
Figure 5-17: Masai Barefoot Technology Kaya ............................................... 166
Figure 5-18: Fit Flops Sandal .......................................................................... 166
Figure 5-19: Z-Coil Freedom ........................................................................... 166
Experts Conflicted on Fitness Shoe Promises ................................................ 166
Fall Footwear Stylings: 1980s Revisited, Strong Embellishments
and Colors, Aggressive Heels and Boots,.......................................167
Women’s Footwear Goes Retro, Aggressive .................................................. 167
Retro Designs Not New ................................................................................... 168
A No-Frills Backlash in the Offing?.................................................................. 168
Chapter 6: Marketing Outreach............................................... 169
Recession Time to Engage Loyal Consumers ....................................169
Integration Important as Media Preferences Shift ........................................... 169
Jimmy Choo Takes It Down a Notch ............................................................... 170
More Strategies to Reach Price Conscious Consumers ................................. 170
Virtual Marketing and Etail Make Most of Recession Dollars ............171
More People Cocooning and Online in Recession .......................................... 171
All the Simplicity of Email ................................................................................ 171
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Chapter 6: Marketing Outreach [cont.]
Make Use of Alternative Advertising Media ........................................ 173
Alternative Media Increasingly Important, Especially Among the Young ........ 173
The Puma Past Masher................................................................................... 174
Behavioral Targeting in Diverse Consumer Market ........................... 174
Word-of-Mouth: Added-Value for Marketers and Consumers ........... 175
Footwear Clubs Breed WOM .......................................................................... 175
Social Networking to Play Big Part in WOM.................................................... 175
Proof That WOM Works .................................................................................. 176
Don’t Forget the Human Touch ....................................................................... 176
Product Placement Opportunities Abound......................................... 177
Nike Active in Broadcast Placement ............................................................... 177
Reliance on Sports Icons Shifting More to Celebrity ......................... 177
What Do Kelly Ripa and Eddie Van Halen Have in Common? ....................... 178
Appropriate and Authentic Celebrity Relationships ......................................... 178
Payless and Summer Rayne Oakes Go Green............................................... 179
Candie’s Taps Britney to Connect with Young Consumers............................. 179
If the License Fits, Wear It .................................................................... 180
Table 6-1: License! Global Selected Top Global Licensees in the Footwear
Category, 2008 ........................................................................................... 181
Do-Good Marketing ............................................................................... 181
Do-Good Marketing Part of a Whole Brand’s Image ....................................... 182
Timberland Taps Double Benefit..................................................................... 182
Chapter 7: The Footwear Consumer.......................................183
Note on Experian Simmons Market Research Bureau Consumer
Data .................................................................................................... 183
Note on BIGresearch Data.................................................................... 183
Men’s Athletic Footwear Penetration Levels Highest at 20%............ 184
Table 7-1: Total Consumer Penetration Levels for Men’s Footwear Bought
in the Past 12 Months, 2004-2009 (%) ....................................................... 184
Figure 7–1: Total Consumer Penetration Levels for Men’s Footwear Bought
in the Past 12 Months, 2004-2009 (%) ....................................................... 185
Women’s Non-Athletic Footwear Penetration Levels Highest
at 23% ................................................................................................ 185
Table 7-2: Consumer Penetration Levels for Women’s Footwear Bought
in the Past 12 Months, 2004-2009 (%) ....................................................... 186
Figure 7–2: Total Consumer Penetration Levels for Women’s Footwear
Bought in the Past 12 Months, 2004-2009 (%)........................................... 186
Penetration When Purchasing for the Opposite Sex Typical ............ 187
Table 7-3: Consumer Penetration Levels for Men’s and Women’s
Footwear Bought in the Past 12 Months by Member of the Opposite
Sex, 2004-2009 (%).................................................................................... 187
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Table of Contents
Chapter 7: The Footwear Consumer [cont.]
Top Footwear Segment Consumer Demographics by Sex ................187
Male and Female Athletic Shoe Purchasers Characteristics Upwardly
Mobile ......................................................................................................... 187
Table 7-4: Demographic Characteristics of Male Athletic Shoe Purchasers,
2009 (index)................................................................................................ 188
Table 7-5: Demographic Characteristics of Female Athletic Shoe Purchasers,
2009 (index)................................................................................................ 189
Male and Female Non-Athletic Shoe Purchasers Characteristics Also
Upwardly Mobile ......................................................................................... 189
Table 7-6: Demographic Characteristics of Male Non-Athletic Shoe
Purchasers, 2009 (index)............................................................................ 190
Table 7-7: Demographic Characteristics of Female Non-Athletic Shoe
Purchasers, 2009 (index)............................................................................ 190
Male and Female Boot Purchasers Showed Dramatically Different
Characteristics ............................................................................................ 191
Table 7-8: Demographic Characteristics of Male Boot Purchasers, 2009
(index)......................................................................................................... 192
Table 7-9: Demographic Characteristics of Female Boot Purchasers, 2009
(index)......................................................................................................... 193
Male and Female Boot Purchasers Showed Dramatically Different
Characteristics ............................................................................................ 193
Table 7-10: Demographic Characteristics of Male Slipper Purchasers, 2009
(index)......................................................................................................... 194
Table 7-11: Demographic Characteristics of Female Slipper Purchasers,
2009 (index)................................................................................................ 195
Consumer Agreement with Select Attitudinal Statements .................195
Surprise! Shoe Shopping a Favorite Pastime for Women ............................... 195
Table 7-12: Top Demographic Characteristics of Consumers who ‘Agree a
Lot’ with the Statement: Shopping For Shoes is Favorite Pastime, 2009
(index)......................................................................................................... 196
Brand/Designer Important to Urbanites ........................................................... 196
Table 7-13: Top Demographic Characteristics of Consumers who Agree
a Lot with the Statement: Shoe Brand or Designer is Important, 2009
(index)......................................................................................................... 197
Fewer Purchases and Less Expensive Purchases Among the More
Disenfranchised .......................................................................................... 197
Table 7-14: Top Demographic Characteristics of Consumers who Agree
a Lot with the Statement: I am Buying Fewer Shoes Because of the
Economy, 2009 (index)............................................................................... 198
Table 7-15: Top Demographic Characteristics of Consumers who Agree
a Lot with the Statement: I am Buying Less Expensive Shoes Because
of the Economy, 2009 (index)..................................................................... 198
Function over Form Skewed Older.................................................................. 199
Table 7-16 Top Demographic Characteristics of Consumers who Agree
a Lot with the Statement: In Buying Shoes, I Prioritize Function Over
Style, 2009 (index)...................................................................................... 199
Footwear Consumer at Retail ................................................. 200
August 2009
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Chapter 7: The Footwear Consumer [cont.]
For Footwear, Consumers Shop Wal-Mart Most................................. 200
Table 7-17: Consumer Penetration Levels for Type of Retail Shopped Most
Often for Shoes, by Adult Users, Men and Women, 2006-2008 (%) .......... 200
Specialty for Young, Department Store for Old ............................................... 200
Preference by HHI Plays Out Along Socio-Economic Lines ........................... 201
Blacks and Hispanics Prefer to Shop at Specialty Apparel ............................. 201
Table 7-18: Consumer Penetration Levels for Type of Retail Shopped Most
Often for Shoes, by Age, Household Income and Race, 2008 (%) ............ 201
For Footwear, Consumers Shop Wal-Mart Most................................. 202
Table 7-19: Consumer Penetration Levels for Stores Shopped Most
Often for Shoes, by Women, Men and Total Population, 2006-2008
(%) .......................................................................................................203-204
Age, HHI and Race Affect Retail Preference ....................................... 204
Department Stores Should Address Aging Consumer .................................... 204
High Income Households Shop Value, but Branding Important ...................... 205
Racial Preference Decidedly Different ............................................................ 205
Table 7-20: Consumer Penetration Levels for Top 15 Stores Shopped Most
Often for Shoes, by Age, Household Income and Race, 2008 (%) ........... 206
Price, Selection, Quality and Location Top Shoe Retail Drivers ....... 206
Table 7-21: Top Consumer Shoe Retail Drivers for Men and Women,
2008 (%) ..................................................................................................... 207
Average Monthly Spend on Shoes in 2008: $25 ................................. 207
Table 7-22: Average Monthly Spend on Shoes, by Adults, Men and Women,
2006-2008 (%)............................................................................................ 208
The Younger You are the More You Spend .................................................... 208
Wealthier More Likely to Spend on More Expensive Footwear....................... 208
Whites Show Lowest Average Spend Levels.................................................. 208
Table 7-23: Average Monthly Spend on Shoes, by Age, HHI and Race,
2008 (%) ..................................................................................................... 209
Consumers Likely to Spend Less ........................................................ 209
Table 7- 24: Consumer Response to the Question, “Over the next 90 days
(July, August and September), do you plan on spending more, the same
or less on footwear than you would normally spend at this time of the
year?” by Adults, Women and Men, 2006-2008 (%)................................... 209
Table 7- 25: Consumer Response to the Question, “Over the next 90 days
(July, August and September), do you plan on spending more, the same
or less on footwear than you would normally spend at this time of the
year?” by Age, HHI and Race, 2008 (%) .................................................... 210
Chapter 8: The Athletic Footwear Consumer.........................211
Note on Simmons Market Research Bureau Consumer Data ........... 211
Sneaker, Athletic and Sport Shoes Penetration Higher for Women
at 63% ................................................................................................ 211
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Table of Contents
Chapter 8: The Athletic Footwear Consumer [cont.]
Table 8-1: Total Consumer Penetration Levels for Sneakers, Athletic
Shoes, or Sports Shoes Bought in the Past 12 Months, by Sex and
Total Population, 2009 (%) ......................................................................... 212
Casual Sneakers Top Among Both Men and Women.........................212
Table 8-2: Total Consumer Penetration Levels for Sneakers, Athletic Shoes,
or Sports Shoes Product Segments Bought in the Past 12 Months, by
Sex and Total Population, 2009 (%) ........................................................... 212
Top Demographic Characteristics by Sneakers, Athletic Shoes, or
Sports Shoes Type ............................................................................213
Casual Sneaker Purchasers More Likely Than Average to Be Young Living
on East or West Coast................................................................................ 213
Table 8-3: Demographic Characteristics of Casual Sneaker Purchasers,
by Sex, 2009 (index)................................................................................... 214
Exercise and Walking Purchasers Skew Much Older, Retired........................ 214
Table 8-4: Demographic Characteristics of Exercise and Walking Shoe
Purchasers, by Sex, 2009 (index)............................................................... 215
Jogging or Running Purchasers More Likely Than Average to be Educated,
White-Collar, Family-oriented ..................................................................... 215
Table 8-5: Demographic Characteristics of Jogging and Running Shoe
Purchasers, by Sex, 2009 (index)............................................................... 216
Cross Trainers Similar to Joggers ................................................................... 217
Table 8-6: Demographic Characteristics of Cross Training Shoe Purchasers,
by Sex, 2009 (index)................................................................................... 218
Female Basketball Shoe Purchasers High Earners versus Male .................... 218
Table 8-7: Demographic Characteristics of Basketball Shoe Purchasers,
by Sex, 2009 (index)................................................................................... 219
Tennis Shoe Purchasers Not Necessarily the Country Club Stereotype......... 220
Table 8-8: Demographic Characteristics of Tennis Shoe Purchasers,
by Sex, 2009 (index)................................................................................... 220
Aerobic Sneaker Purchasers More Likely Than Average to be High-income
Women ....................................................................................................... 221
Table 8-9: Demographic Characteristics of Aerobic Shoe Purchasers,
by Sex, 2009 (index)................................................................................... 221
Hiking Purchasers More Likely Than Average to be Educated, West Coast... 222
Table 8-10: Demographic Characteristics of Hiking Shoe Purchasers,
by Sex, 2009 (index)................................................................................... 222
Nike and New Balance Only Brands with Double Digit Penetration
Levels .................................................................................................222
Table 8-11: Total Consumer Penetration Levels for Sneakers, Athletic
Shoes, or Sports Shoes Brands Bought in the Past 12 Months, by
Sex and Total Population, 2009 (%) ........................................................... 223
Top Demographic and Psychographic Characteristics by
Selected Sneakers, Athletic Shoes, or Sports Shoes Brand .........223
Nike Purchasers Demographics and Psychographics..................................... 223
Table 8-12: Demographic Characteristics of Nike Shoe Purchasers,
by Sex, 2009 (index)................................................................................... 224
August 2009
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Table of Contents
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Chapter 8: The Athletic Footwear Consumer [cont.]
Table 8-13: Psychographic Characteristics of Nike Shoe Purchasers, 2009
(index)......................................................................................................... 225
New Balance Purchasers Demographics and Psychographics ...................... 225
Table 8-14: Demographic Characteristics of New Balance Shoe Purchasers,
by Sex, 2009 (index)................................................................................... 226
Table 8-15: Psychographic Characteristics of New Balance Shoe
Purchasers, 2009 (index) ........................................................................... 227
Adidas Purchasers Demographics and Psychographics................................. 227
Table 8-16: Demographic Characteristics of Adidas Shoe Purchasers,
by Sex, 2009 (index)................................................................................... 228
Table 8-17: Psychographic Characteristics of Adidas Shoe Purchasers,
2009 (index)................................................................................................ 229
Reebok Purchasers Demographics and Psychographics ............................... 229
Table 8-18: Demographic Characteristics of Reebok Shoe Purchasers,
by Sex, 2009 (index)................................................................................... 230
Table 8-19: Psychographic Characteristics of Reebok Shoe Purchasers,
2009 (index)................................................................................................ 231
Skechers Purchasers Demographics and Psychographics............................. 231
Table 8-20: Demographic Characteristics of Skechers Shoe Purchasers,
by Sex, 2009 (index)................................................................................... 232
Table 8-21: Psychographic Characteristics of Skechers Shoe Purchasers,
2009 (index)................................................................................................ 233
Asics Purchasers Demographics and Psychographics ................................... 233
Table 8-22: Demographic Characteristics of Asics Shoe Purchasers, by Sex,
2009 (index)................................................................................................ 234
Table 8-23: Psychographic Characteristics of Asics Shoe Purchasers,
2009 (index)................................................................................................ 235
Converse Purchasers Demographics and Psychographics ............................ 235
Table 8-24: Demographic Characteristics of Converse Shoe Purchasers,
by Sex, 2009 (index)................................................................................... 236
Table 8-25: Psychographic Characteristics of Converse Shoe Purchasers,
2009 (index)................................................................................................ 237
Puma Purchasers Demographics and Psychographics .................................. 237
Table 8-26: Demographic Characteristics of Puma Shoe Purchasers,
by Sex, 2009 (index)................................................................................... 238
Table 8-27: Psychographic Characteristics of Puma Shoe Purchasers,
2009 (index)................................................................................................ 239
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© Packaged Facts
August 2009
The Global Footwear Market
Chapter 1
Chapter 1: Executive Summary
Executive Summary
Scope of Report
This Packaged Facts report analyzes the U.S. footwear market sold through retail channels
and includes a look at the global market for comparison. The report covers the market in
terms of value and unit volume consumption and details U.S. dollar retail sales estimates by
major retail channel, major product type, and consumer segment. Also included is an
overview of the competitive landscape and profiles of selected players within the space. The
report discusses major trends affecting the market including economic factors, design and
marketing, and provides detailed analysis of consumer preferences by major product category
and retail preferences.
Product Categories
Footwear products covered in the scope of this report include essentially every type and
style—from athletic to zories (flip-flops). In presenting the U.S. retail market, Packaged Facts
has categorized footwear by two major types as follows:
•
Athletic Footwear includes athletic, sport, and active lifestyle footwear for men
women and children. Major athletic brands include Adidas, Asics, Fila, K-Swiss,
New Balance, Nike, Puma, Reebok, and Saucony. Athletic footwear also includes
footwear that is not specifically for a specific individual or team sport but may be
performance inspired or intended for other activities. Products include “outdoor”
footwear (hiking boots and sandals) by brands such as Merrell and Teva, and casual
sneakers by brands such as Converse, Skechers, and Vans. Products such as ski and
snowboard boots are included in the market numbers but are not the focus of
discussion.
•
Non-Athletic Footwear covers casual and dress footwear for men, women and
children such as pumps, loafers, or Mary Janes. It also includes house slippers,
various types of work shoes and boots.
Products not in the scope of this report include footwear accessories (i.e. shoe trees, bags,
polishes, laces) gaiters, parts of shoes, socks, and foot care products.
August 2009
© Packaged Facts
1
Chapter 1: Executive Summary
The Global Footwear Market
Methodology
The information presented in this report was obtained from primary and secondary research.
Primary research entailed on-site examination of footwear products in retail stores and
consultations with footwear industry observers and executives. Secondary research involved
canvassing information from financial, marketing, and trade publications, company literature,
and independent research reports, plus reviews of websites, industry groups such as the
American Apparel and Footwear Association, blogs and readers’ comments posted on these
sites.
Market figures in this report are predominantly estimates by Packaged Facts based on data
from the U.S Department of Commerce’s U.S. Census Bureau and major players in the
industry. Data from the U.S. Census Bureau included the Economic Census (1997, 2002, and
2007), primarily for retail sales numbers, Annual Survey of Manufacturers (ASM) for
product shipment statistics, Advanced Monthly Sales for Retail and Foodservice and the
Annual Retail Trade Survey for additional retail figures. Other market data sources include
the U.S. Bureau of Economic Analysis (BEA), the U.S. Bureau of Labor Statistics (BLS), and
the U.S. International Trade Commission (USITC).
The analysis of consumer behavior and demographics is based on data from the Experian
Simmons Market Research Bureau (New York NY) Winter 2008 Study of Media and
Markets, which is based on the responses of over 20,000 adults age 18 and over, and from
BIGresearch Consumer Intentions & Actions Survey (CIA), a monthly online surveys of
8,000+ consumers.
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© Packaged Facts
August 2009
The Global Footwear Market
Chapter 1: Executive Summary
Global Footwear Market
Global Footwear Market Rises 2% Driven by Asia, Latin America
Packaged Facts estimates the global footwear market at retail grew two percent over the 2007
level of $189.3 billion to $192.3 billion in 2008. The 2008 gain was the lowest during the
five-year period spanning 2004 through 2008 and was due largely to increased sales in the
emerging economies of Latin America and Asia. For the 2004–2008 period, the global
footwear market grew at a compound annual growth rate of six percent.
Figure 1–1
Global Footwear Retail Market, 2004–2008
(in billions $)
200.0
189.3
192.3
2007
2008
181.4
175.0
166.2
150.0
153.2
125.0
100.0
75.0
50.0
25.0
0.0
2004
2005
2006
Global Footwear Retail Market
Source: Packaged Facts
August 2009
© Packaged Facts
3
Chapter 1: Executive Summary
The Global Footwear Market
Unit Volume Declines Globally
Packaged Facts estimates total volume declined two percent form the 2007 level 10.5 billion
pairs to 10.3 billion pairs in 2008. The decline was driven largely by the slow down in the
United States;
however, Packaged Facts estimates that all international markets in the aggregate still
showed a slight decline of one percent. For the 2004–2008 period, footwear volume grew at a
CAGR of six percent.
Figure 1–2
Global Footwear Retail Market Unit Volume, 2004–2008
(in millions of pairs)
12,000.0
10,000.0
10,056.3
10,486.5
10,275.4
9,141.5
8,000.0
8,288.7
6,000.0
4,000.0
2,000.0
0.0
2004
2005
2006
2007
2008
Global Footwear Retail Market Unit Volume
Source: Packaged Facts
4
© Packaged Facts
August 2009
The Global Footwear Market
Chapter 1: Executive Summary
U.S. Footwear Retail Market
U.S. Footwear Market Flat
Packaged Facts estimates the U.S. retail footwear market rose just 0.3% over the 2007 level
of $46.6 billion to reach $46.8 billion in 2008 to account for 24% of the global market. The
U.S. market had seen greater gains in earlier years—most notably 10% gains in the boom
years for the U.S. economy 2005 and 2006 adding $4 billion in market value. For the 2004–
2008 period, the U.S. retail footwear market grew at a CAGR of three percent.
Figure 1–3
U.S. Footwear Retail Market and Percent of Global Footwear Market, 2004–2008
(in billions $)
60.0
27.3%
30%
26.6%
25.7%
50.0
46.6
24.6%
24.3%
46.6
46.8
25%
44.2
40.0
20%
41.8
30.0
15%
20.0
10%
10.0
5%
0.0
0%
2004
2005
2006
U.S. Footwear Retail Market
2007
2008
% of Global Footwear Retail Market
Source: Packaged Facts
August 2009
© Packaged Facts
5
Chapter 1: Executive Summary
The Global Footwear Market
U.S. Unit Volume Declines
Packaged Facts estimates footwear volume declined seven percent from the 2007 level of 2.5
billion pairs to less than 2.4 billion pairs in 2008. As a percent of global consumption, the
United States accounted for 28% of total footwear volume, but fell to just 23% by 2008. For
the 2004–2008 period, footwear volume grew at a CAGR of one percent.
Figure 1–4
U.S. Footwear Apparent Consumption by Volume and Percent of Global Footwear
Market, 2004–2008
(in millions of pairs)
3,500.0
30%
27.5%
26.1%
24.8%
24.0%
2,800.0
2,100.0
2,278.5
24%
2,515.4
2,491.8
2,382.6
22.9%
2,352.9
18%
1,400.0
12%
700.0
6%
0.0
0%
2004
2005
2006
U.S. Footwear Market
*2007
*2008
% of Global Footwear Market
* Estimated by Packaged Facts.
Source: U.S. Census Bureau; U.S. International Trade Commission (2004–2006)
Imports Dominate U.S. Market
Virtually all footwear (96%) sold in the United States is produced overseas by contract
manufacturers. China accounted for 87% of total footwear import volume in 2008 while
imports from Vietnam have replaced Brazil as the second largest supplier of U.S. footwear
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© Packaged Facts
August 2009
The Global Footwear Market
Chapter 1: Executive Summary
since 2006. Vietnam imports grew at a CAGR of 24% for the 2004–2008 period growing its
share of the U.S. market from two percent in 2004 to five percent in 2008.
Figure 1–5
Share U.S. Footwear Import Volume by Top 10 Countries of Origin, 2008
(%)
Vietnam
5.0%
China
86.9%
Brazil
1.7%
Indonesia
1.7%
Italy
0.9%
Thailand
0.8%
Taiwan
0.6%
Mexico
0.4%
All others
1.2%
India
0.5%
Hong Kong
0.3%
Source: U.S. International Trade Commission (2004–2006); calculated by Packaged Facts
U.S. Footwear Sales by Consumer Group & Major Product
Category
Packaged Facts estimates all women’s footwear accounted for 50% of total footwear sales
through retail in 2008, up slightly from 49% in 2004, while men’s footwear accounted for
36% in 2008 down from 38% in 2004. Children’s footwear was unchanged at 13% of the
market. Non-athletic footwear remained the dominant product type in 2008 accounting for
55% of the total U.S. market with athletic footwear capturing the remaining 45%.
Perhaps not surprisingly, women’s non-athletic footwear captured the largest share of the
market at 35% while men’s athletic footwear made up 22%. Women’s athletic footwear
August 2009
© Packaged Facts
7
Chapter 1: Executive Summary
The Global Footwear Market
accounted for 15% of the market while children’s athletic footwear made up eight percent.
Men’s non-athletic footwear accounted for 15% while children’s non-athletic footwear made
up six percent.
Figure 1–6
Share of U.S. Footwear Retail Sales by Consumer Group and Major Product Category,
2008
(%)
Men's athletic
footwear, incl
sneakers &
outdoor/hiking
boots
21.8%
Women's athletic
footwear, incl
sneakers &
outdoor/hiking
boots
15.2%
Men's footwear,
including dress &
casual footwear
14.6%
Children's athletic
footwear,incl
sneakers &
outdoor/hiking
boots
7.7%
Children's
footwear, incl
boys, girls,
infants, &
toddlers
5.5%
Women's
footwear,
including dress &
casual footwear
35.3%
Source: Packaged Facts.
8
© Packaged Facts
August 2009
The Global Footwear Market
Chapter 1: Executive Summary
Global Footwear Market Forecast
Global Footwear Market to Reach $238 Billion by 2013
Packaged Facts forecasts the global market for footwear to grow much slower than in
previous years at a compound annual growth rate (CAGR) of four percent to reach $238
billion by 2013. Sales in 2009 are expected fall six percent from the 2008 level of $192
billion to settle below the $182 billion mark. However, the market should rebound in 2010
with a seven percent gain to $194 billion. Expect gains around the seven percent mark
thereafter through 2013.
Figure 1–7
Global Footwear Retail Market Forecast, 2008–2013
(in billions $)
250.0
238.2
222.9
200.0
207.6
193.8
192.3
181.7
150.0
100.0
50.0
0.0
2008
2009
2010
2011
2012
2013
Global Footwear Retail Market Forecast
Source: Packaged Facts
August 2009
© Packaged Facts
9
Chapter 1: Executive Summary
The Global Footwear Market
Global Unit Volume Consumption to Reach 12.1 Billion Pairs
On a unit volume basis, Packaged Facts expects a six percent decline from the 2008 level of
10.3 billion to 9.7 billion in 2009. The drop will be led by slower consumption all around, but
with more acute declines in the United States and Europe. Six percent growth is expected
thereafter as the United States and Europe return to more modest growth rates and emerging
economies see consumption rates rise. For the 2008–2013 period unit volume is expected to
grow at a CAGR of three percent.
Figure 1–8
Global Footwear Retail Market Unit Volume Forecast, 2008–2013
(in millions of pairs)
14,000.0
12,000.0
12,074.2
11,421.3
10,000.0
10,802.0
10,275.4
10,214.6
9,658.3
8,000.0
6,000.0
4,000.0
2,000.0
0.0
2008
2009
2010
2011
2012
2013
Global Footwear Retail Market Unit Volume Forecast
Source: Packaged Facts
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August 2009
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Chapter 1: Executive Summary
U.S. Footwear Market
U.S. Footwear Market to Suffer from Thriftier Consumer Habits
In the United States, Packaged Facts estimates more timid overall growth as consumers work
through a paradigm shift in the shopping mindset. Packaged Facts estimates sales of footwear
in the United States will drop 14% from the 2008 level of $46.8 billion to just $40.1 billion in
2009. However, the sharp drop in 2009 will be greeted by a welcomed eight percent gain to
$43.3 billion in 2010 as consumers return to stores. Expect growth rates to wane thereafter to
about the three percent mark by 2013 reaching $$48.4 billion.
Figure 1–9
U.S. Footwear Retail Market Forecast, 2008–2013
(in billions $)
25%
60.0
24.3%
22.1%
22.4%
22.0%
21.2%
20.3%
48.0
46.8
45.6
47.2
48.4
20%
43.3
40.1
36.0
15%
24.0
10%
12.0
5%
0%
0.0
2008
2009
2010
2011
2012
2013
U.S. Footwear Retail Market Forecast
% of Global Footwear Retail Market Forecast
Source: Packaged Facts
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Unit Volume Declines Globally
It is estimated that footwear consumption in unit volume terms will decline 11% from the
2008 level of 2.4 billion pairs to settle at 2.1 billion pairs in 2009— a level not seen since
2003. Packaged Facts sees seven percent growth in 2010 to near the 2.3 billion pair mark.
However, growth thereafter will slow, eventually to two percent by 2013 when consumption
will near the 2.5 billion mark.
Figure 1–10
U.S. Footwear Retail Market Unit Volume Forecast, 2008–2013
(in millions of pairs)
3,500.0
22.9%
25%
21.8%
22.1%
21.9%
21.3%
20.4%
20%
2,800.0
2,352.9
2,100.0
2,262.0
2,365.9
2,430.2
2,468.1
15%
2,105.7
10%
1,400.0
5%
700.0
0%
0.0
2008
2009
2010
2011
2012
2013
U.S. Footwear Retail Market Unit Volume Forecast
% of Global Footwear Retail Market Unit Volume Forecast
Source: Packaged Facts
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Footwear Retail Sales by Major Channels
Packaged Facts estimates shoe stores accounted for 54% of total footwear retail sales in the
United States in 2008. General merchandise stores, (i.e. superstores, department, discounters)
saw their share dwindle in the 2004–2008 period from 23% of the footwear market to 19%.
Footwear sales at apparel stores accounted for 12% while sporting goods stores made up
seven percent of the total footwear retail market. Finally, non-store retailers (i.e. catalogs,
etailers) captured six percent of footwear sales.
Figure 1–11
Share of U.S. Footwear Sales by Major Channel, 2008
(%)
General
merchandise
stores
18.6%
Clothing stores
12.0%
Shoe stores
53.6%
Sporting goods
stores
6.9%
Nonstore retailers
5.6%
All other
3.3%
Note: Non-store retailers includes catalog sales and ecommerce sales.
* Also includes hobby, book, and music stores.
Source: Packaged Facts.
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The Global Footwear Market
Competitive Landscape
Footwear Market Highly Fragmented
The global footwear market is highly competitive and fragmented with a few major players
and a seemingly endless array of smaller players, including designers, marketers,
manufacturers and retailers, all vying for share. Globally, several companies crack the $1.0
billion dollar barrier in footwear sales but only Nike, Inc. and Adidas AG bring in more than
$5.0 billion.
Table 1–1
Selected Footwear Marketers with Footwear Sales Greater Than $1 Billion, 2004–2008
(in millions $)
Company
2004
2005
2006
2007
2008
04–08
CAGR
Nike, Inc.
$7,580.4
$8,387.1
$9,025.1
$10,472.9
$10,894.2
9.5%
Adidas AG
5,689.2
5,956.9
5,945.7
6,512.4
7,237.5
6.2
Puma AG
1,258.0
1,463.3
1,783.8
1,902.5
2,110.3
13.8
Asics Corporation
824.3
1,023.8
1,162.6
1,419.1
1,728.6
20.3
Geox SpA
423.0
566.6
769.1
1,055.7
1,313.2
32.7
Skechers USA Inc.
738.7
797.8
956.6
1,098.9
1,139.6
11.4
Wolverine Worldwide Inc.
903.6
964.5
1,036.9
1,099.2
1,106.1
5.2
Ecco Sko A/S
523.6
589.6
707.6
911.3
1,012.2
17.9
The Timberland Company
1,153.2
1,200.1
1,126.9
1,004.8
974.3
-4.1
Jones Apparel Group
1,002.4
978.6
941.1
955.8
938.3
-1.6
Note: Nike footwear sales are for the 12-month period ending November 30, 2008 and include estimates for Cole
Haan, Converse, Hurley, Nike Golf, and Umbro. Adidas AG sales include Reebok sales for the entire period on a pro
forma basis. Some companies’ sales include retail sales in addition to wholesale. Jones Apparel Group figures
include wholesale footwear and accessories, but do not include footwear sold through retail locations. Sales for
Adidas AG, Puma AG, Asics Corporation, Geox SpA, Ecco Sko A/S have been translated to U.S. dollars using the
average annual exchange rate for their respective home currencies.
Source: Compiled by Packaged Facts from annual reports.
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Chapter 1: Executive Summary
Marketplace and Consumer Trends
Down Economy Means Thriftier Consumer
In a time of economic crisis, more consumers will conclude that conspicuous consumption is
no longer acceptable. Instead of feeling good about expensive brands, many consumers will
increasingly feel good about getting the best value or not spending at all in 2009.
Fashion and Footwear Industries Feeling the Pinch
In all, total retail sales (adjusted for seasonality, holidays, etc.) for clothing and clothing
accessories stores, which includes footwear retail, for the fourth quarter of 2008 fell six
percent from the third quarter and eight percent from the same period in 2007 to $51.5
billion. The first quarter of 2009 saw sales pick up three percent over the fourth quarter of
2008, but were still down five percent from the first quarter of 2008 to $52.9 billion.
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Figure 1–12
Quarterly Clothing and Clothing Accessory Store Sales, 1992–Q1, 2009
(in billions $)
60
50
40
30
20
10
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
0
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Source: U.S. Census Bureau; calculated from monthly data by Packaged Facts.
Consumer Footwear Expenditures
According to the U.S. Bureau of Labor Statistics, average annual expenditures on footwear
per consumer unit1 totaled $327 in 2007, up eight percent from the 2006 level of $304.
Generally, average footwear spending has remained in the low $300 range, dipping lower
during times of low economic growth and rising during better economic times.
Kids Footwear Has Three Protections
The trends affecting the adult footwear category—higher fuel and material costs, a weak U.S.
dollar, rising labor costs in China, increased retail demand for discount shoes at mass, and a
1
The terms consumer unit, family, and household are often used interchangeably for convenience. However, according to the
U.S. Bureau of Labor Statistics, the proper technical term for purposes of the Consumer Expenditure Survey is consumer unit.
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Chapter 1: Executive Summary
lessened consumer spending in reaction to the recession—are also pressuring the $6.2 billion
kids’ footwear category, but kids’ footwear has built-in protections. One, the kids
demographic is growing at a greater rate than the general population. Two, kids’ footwear
needs constant replacing. Three, kids (and parents) are eternally susceptible to the attentiongrabbing power of licensing.
Company Ethics and Added Values Important to Consumers
As consumers have gotten smarter, they have also gotten more curious. Not only do they
want to know the specific functional benefits of products, they also want to know about the
core brand and associated company values and beliefs. Some industry experts think this will
take a back seat amid recession concerns, whereas others believe it is more important than
ever to provide a positive emotional connection that is inherent in cause-related marketing
that empowers consumers during times of distress and upheaval.
According to the second-annual, multi-country, Edelman Goodpurpose study conducted the
fall of 2008, more than half of the 6,000 global consumers surveyed said that even in the
midst of a recession they would be prepared to spend more for a brand if it supported a good
cause. Already, several footwear companies have made sustainable footwear forays, such as
Deckers with the Simple Shoes brand. The company’s goal is to make the Simple brand
100% sustainable with materials including organic cotton, eco-certified leather, bamboo, and
recycled car tires and inner tubes for its rubber soles. Simple Shoes are sold through a variety
of retail channels including independent retailers, outdoor shops and department stores such
as Dillard's and Nordstrom. The company even sells through alternative footwear channels
such as Whole Foods Markets.
Counterfeiting, a Dangerous Business
In 2008, the domestic value of counterfeit and pirated goods seized for intellectual property
rights violations was up 39% to $272.7 million, an increase of almost $76 million from 2007.
U.S. Customs found that for 2007, 40% of all intellectual property rights seizures were
footwear, up from $63.4 million in 2006 to $78 million with the vast majority being in
athletic shoes and the main source being China.
Purchasing cheap, knock-off designer products from the trunk of a car or from a street
hawker is inconsequential to many consumers who do not care about the repercussions to the
industry being scammed that go beyond the bottom line and effect employees across the
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board. Consumers also do not realize the potential dangers of a counterfeit product—knockoffs are likely made from sub-par materials that at best may be ill-fitting but may also cause
injury.
Industry Hopes to See End Depression-Era Tax
Footwear industry members of The Affordable Footwear Initiative have been urging
Congress to pass the Affordable Footwear Act and offer consumers some relief by ending a
Depression-era shoe import tax meant to protect domestic manufacturers from cheaper
imports. Packaged Facts estimates wholesale prices of footwear rose eight percent in 2008
and those price increases were passed on to consumers despite the slowing economy.
In the most recent effort to repeal the tax, Senators Maria Cantwell (D-WA) and John Ensign
(R-NV) formally reintroduced the bipartisan Affordable Footwear Act (S. 730) in April 2009.
The legislation would eliminate the regressive and hidden tax paid on most, lower-cost and
children's shoes, or about 60% of the shoes sold in the United States each year.
Style and Innovation Trends: Personalized Footwear
Through keeping a finely tuned ear to the whims of consumers, the industry is making strides
in personalization and customization by offering an ever-widening variety of shoes that
satisfy not only functional needs but ever important emotional ones, from design options to
celebrity brands that echo and/or magnify an individual’s personality and beliefs.
Several brands in the Adidas stable offer personalized and customized platforms, such as
Adidas’ mi Adidas and mi Original. Mi Adidas, which allows consumers to custom-design
running shoes was launched in Adidas’ performance stores in 2007, followed by the launch in
2008 of Mi Originals to Adidas concept stores.
Emotional benefits can also play a part in customization, where the consumers can fully
express
themselves
artistically!
Enter
Zazzle’s
custom
shoe
offering
(www.zazzle.com/shoes). Zazzle's custom shoe platform is the first fully customizable shoe
with user-generated content, allowing users to design and select colors for the entire shoe.
Consumers are able to create unique custom canvas shoes by uploading their own designs,
patterns, illustrations, images and text, and then preview their shoes instantly. Users can also
embellish their shoe designs with preset colors and patterns. The shoes are embellished and
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Chapter 1: Executive Summary
assembled from scratch within 24 to 48 hours, which enables consumers to receive their
shoes in one to two weeks.
Comfort versus Style: Footwear No longer Easily Categorized
Over the past several years, there has been a step change in seeking solace from the shoes that
hurt us. Footwear fashion trends are ephemeral and reliant on consumer trends, innovation
and artistry, but in the past year, the most widespread buzz has been on casual comfort and
health and wellness rather than on well-heeled stilettos! The marketplace has seen growing
crossover. Shoes are no longer siloed into business wear, casual wear, sporting wear or dress
wear. Casual Friday has evolved into Casual Everyday. Sports and lifestyle continue to
merge. Consumers want to go from faxing, to flexing, to a festive night out seamlessly and in
comfort.
Several brands such as Jones Apparel’s Easy Spirit have made it their core business to
promote this idea while other brands have adopted strategic partnerships that combine
multiple brands into hybrid footwear products. For example, Nine West and New Balance
struck such a deal in 2008 to create a line of footwear combining the style and comfort
technology of each.
Technology Offers Good Shoes and Good Health
In response to continued consumer interest in health and wellness and the multi-tasking
lifestyle, a slew of shoe manufacturers and brands are touting a wealth of health claims.
Ailments from back pain to varicose veins and benefits such as improved posture, posterior
toning, and burning calories, are all being met with high-technology and design innovations
such as rounded soles and heels, extensive cushioning and contoured shapes to mimic
walking barefoot.
The idea of a fitness shoe that offers inherent health and wellness benefits is not new. Earth
shoes, first made popular in the U.S. during the 1970s, were the precursor to the wide variety
of wellness footwear available today. Now known as Earth Footwear, with an average retail
price around $100 a pair, they are designed to create proper alignment of the spine and stretch
the calf muscles.
Newer products have newer price points and more impressive claims! Products such as MBTs
by SwissMasai have sold more than a million pairs at $230 to $270. Chung Shi, a German
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fitness shoe with a rocker bottom, is priced at around $170. Other players in this arena
include the FitFlop, NGR shoes (No Gym Required) and the Z-Coil Freedom.
Aggressive Designs Versus Staid Style
In women’s non-athletic designs, particularly those for fall 2009, the look is about strong
straps, buckles, and chains. Booties, a mixture between a shoe and an ankle boot, have reemerged on runways and on celebrities in a variety of styles, such as peep-toe, lace-up,
oxford and fold-over. Also big are heels with big personality—thick straps, bling, tassels,
buckles and six-inch plus heels in bold colors. But others view the more aggressive styles
including everything from extreme platforms, high sculptural heels and thicker heels, as more
architectural and exciting, rather than simply slutty!
While these more flamboyant and aggressive looks will continue to have traction and
possibly reflect a sense of escapism in difficult economic times, there is another more
conservative trend at work driven more by fear and practicality that emerges in fall
introductions and further penetrates into winter introductions. Many designers are also
introducing more serious and classic shoes that are more practical with an emphasis on blacks
and browns, with muted colors, simple lines and less embellishments (and more conservative
pricing) in anticipation of less-adventurous consumers.
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Marketing Outreach
Recession Time to Engage Loyal Consumers
Given a recession, a footwear marketer’s first instinct may be to cut costs on outreach and
innovation, but such cuts can do more harm than good. Rather, marketers should see it as a
time of opportunity to re-evaluate their brand strategies and re-connect with core consumers.
In a panel moderated by Footwear News Editorial Director Michael Atmore for the Council
of Fashion Designers of America programs designer Vince Camuto commented on the
difficulties posed by the current economy "I expect next year to be our best year. It's a wakeup call to the industry, but it's also a great opportunity to work on your product, reorganize
and reinvent yourself." (Footwear News, December 15, 2008)
Research shows cost-cutting can undermine a marketer’s long-term business strategy. For
example, data from the British study “Profit Impact of Market Strategy” revealed that over
the past 30 years, companies that spent more on innovation during downturns saw returns on
capital employed rise 23.8% during recovery times, while those that limited spending only
saw gains of 0.6%. (Ad Age, February 25, 2008)
Integration Important as Media Preferences Shift
It will be increasingly important to integrate marketing activity with a unified idea that is
expressed through multiple outreach formats—especially to build relationships with younger
consumers who are more likely to play a video game than watch television, and read a blog
than a magazine. Classic advertising methods are less and less effective as the advertising
marketplace has become more fragmented and the consumer audience for each individual
media information source has shrunk and dispersed due to the varied choices.
A mixture of TV, print and out of home, plus emerging media and guerilla tactics, should be
part of any large-scale plan. A study conducted by the National Retail Federation and
BIGResearch found that emerging media forms of communication such as online video-game
ads, blogs and text messages are gaining influence with consumers.
"As new technology
places itself on the market, [it] is diverting attention from the typical newspaper and
magazine advertisements," said Pamela Goodfellow, Senior Analyst at BIGResearch. "It's up
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to retailers to be nimble in knowing what the latest and greatest is to reach their
customers." (AdAge.com, November 20, 2008)
Jimmy Choo Out of The Shoe Box Thinking
Luxury shoemaker, Jimmy Choo isn’t standing idly by waiting for the recession to end.
Instead, the brand has launched an aggressive youth-targeted, buzz-building initiative to fuel
excitement in a difficult economy. In June 2009, Jimmy grabbed attention announcing a
partnership with retailer H&M for a limited-edition collection of shoes (price points for most
shoes at $55 to $138), accessories, and ready-to-wear items due in stores in November 2009.
Jimmy Choo is also prepping to debut Choo 24/7 for spring 2010. Separate from the main
spring collection, it will feature updated versions of favorite styles in a variety of colors,
materials and heel heights.
In support of the launch, the company plans an extensive marketing push for January 2010.
With this endeavor, coupled with the H&M collaboration and its Project PEP charitable
initiative, the company hopes to differentiate itself. “This is an integrated strategy,” said
CEO, Josh Schulman. “It’s very important that we remain close to our customers and
potential customers. Now is the time to take market share.” (Footwear News, June 22, 2009)
Virtual Marketing and Etail Make Most of Recession Dollars
Of course, not every player has the money for the big branding efforts. Virtual marketing and
etailing has emerged as a simple way for smaller and emerging footwear players to make
their products directly available to consumers and in a fiscally problematic time makes the
most out of limited financial resources.
All the Simplicity of Email
With all the capabilities of new technologies, the power of a simple email campaign is oft
forgotten. Online newsletters such as DailyCandy, insider’s guide to what’s hot, new and
undiscovered—from fashion and style to gadgets and travel with a free daily email newsletter
and website predominantly for women or similarly Thrillist for men are an easy and fun way
to blast your market message or new product introduction. The voice of these emails is
quirky, fun and attention-grabbing.
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Make Use of Alternative Advertising Media
While traditional mass-marketing vehicles still hold the most sway, a study conducted by the
National Retail Federation and BIG Research found that alternative marketing outreach
through online video-game ads, blogs and text messages are gaining influence overall with
consumers. Retail ad inserts (traditional circulars and multi-advertiser coupon packages) are
the most influential in clothing purchases, at 33% of consumers citing them, followed by
magazines at 27%, newspapers at 23%, and broadcast TV at 21%. Text messages influence
three percent of clothing purchases, but jumps to six percent among the key target market of
18- to 34-year-olds. Product placement is also particularly effective among the 18- to 34year-old demographic—16% said it impacted a clothing purchase. (Ad Age, November 20,
2008)
The Puma Past Masher
In January 2009, Puma launched "Puma Past Masher", a Web application that lets visitors
upload a personal photo and mash it up with fashion from previous eras to commemorate the
brand's 60th birthday. Mash up options included 225 hairstyles, tops and accessories, which
allow 45 million possible combinations. Notes and comments on each look can be added to
the custom-designed image and those images can then be exported to Facebook and Flickr.
The application, no longer up, generated tremendous popular response in the blogosphere.
Behavioral Targeting in Diverse Consumer Market
While alternative online tactics such as social networking are terrific at building buzz,
utilizing an increasingly popular online advertising strategy—behavioral targeting—may be a
better way to reach consumers and directly drive sales from key consumers.
Experts note that search-related ads sponsored by links, on Google or Yahoo! for example,
are the largest growth sector, but behavioral targeting is a much more pro-active approach.
Behavioral targeting occurs when marketers analyze web users’ online activities to figure out
who is most likely to be interested in its product, which enables them to place ads on
whatever sites those consumers are visiting. For example, behavioral segments important to
the footwear industry, such as “fashion-interested,” “outdoor sports enthusiast” or “soccer
mom,” would be based on where the user has gone and/or what they have done on various
web pages.
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Word-of-Mouth Increasingly Important
Before the emergence of user reviews and comparison sites such as epinions.com, a few
unhappy customers couldn't do much damage. Now their unfiltered rants can be read by
millions of prospects. Of course, consumer opinion can also tilt in a positive direction. For
example, the Princess Poochie blog, shoedaydreams.com, is devoted primarily to shoes,
including discussions on shoes Princess Poochie owns, shoes she wants, shoes she just
bought or favorite online discoveries. Shoe offers alerts to consumers with champagne tastes
on beer budgets. For those longing for white tailored Gucci pumps, Poochie's blog points to a
similar style, available in four colors at Target. She also points out recent introductions
(Christian Louboutin’s Estoteri, $995 at Barney’s!) and to sales (Finnish designer, Minna
Parikka 20% - 50% off!)
Social Networking to Play Big Part in WOM
More and more marketers are using word-of-mouth (WOM) as a key part of their marketing
and brand strategies, which may be particularly meaningful to footwear marketers. It’s easy
and inexpensive, especially with the growth in web communications and communities, for
marketers to offer ample opportunity to interact with real consumers. For example, Facebook
already has in place pages and pages of special Footwear-interested groups, both corporate
and consumer. One of the most popular is Nike, Inc.’s Facebook page with nearly 1.5 million
fans. Toms Shoes, the company that gives a pair of shoes to a child for each pair it sells, had
more than 96,000 fans.
Don’t Forget the Human Touch
Programs, such as Kigo’s Friends of Kigo influencer program, tap the human element to get
the word out. According to Kigo co-founder Rachelle Kuramato, instead of throwing money
at less targeted approaches, they have tapped active, gregarious women in certain markets
(New York City, Chicago, San Francisco and Atlanta), including a PTA President, a lawyer,
and an owner of a Pilates and Yoga studio to wear Kigos and share their positive experiences
with the portable comfort shoe and build buzz for the July 2009 website launch.
Product Placement Opportunities Abound
Non-traditional strategies and tactics will begin playing larger roles in getting product
messages out to consumers, as millions of TiVo/DVR users tune out commercials and ignore
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Chapter 1: Executive Summary
print media. Luckily, many footwear marketers are already skilled in alternative outreach
programs, particularly product placement.
Marketers should explore more placement opportunities within their own cultures for
opportunities—notably fashion and health. The dominance of reality fashion and health
television programming is astounding. No longer relegated to daytime on a couple of cable
networks, the small screen offers options from The Doctors on CBS to Dr. Oz (of Oprah
fame) on Discovery Health, or from The Fashion Show on Bravo to Project Runway on
Lifetime. It is an ever-growing list of television product placement opportunity—including a
soon-to-be seen competition-based shoe design reality television series featuring fledgling
shoe designers, à la Project Runway, Sole Perspective. The program hopes to foster
awareness and appreciation among consumers and benefit the footwear industry through the
use of corporate driven marketing challenges.
Nike Active in Broadcast Placement
Neilsen Product Placement Service found that during the first quarter of 2008, apparel
placements ranked number one on both broadcast and cable with 4,493 and 26,063
placements, respectively. Nike ranked number six in the period with 575 placements on
prime-time broadcast network television with 575 placements (versus Coca-Cola with 2,990
placements), and the only footwear brand in the top ten for number of placements. (The
Center for Media Research Brief, September 26, 2008)
Reliance on Sports Icons Shifting More to Celebrity
Not surprisingly, athletic footwear and sports stars are an easy marketing mix and companies
are continually aligning themselves with top sporting professionals and events from edgier XGame mavens to old standards like football and tennis icons to promote a performance
message. It’s a no brainer.
But with the increasing number of athletic footwear marketers competing for share points, the
focus is on further differentiating brands with lifestyle benefits rather than solely on
functional performance benefits. The main reason for the shift is the influx of non-sport
specific, casual sneakers for everyday use.
While there will always be a place for the professional athlete in promoting a brand (where
would Nike be without it’s young Olympians?!), non-sporting celebrities can better speak to a
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broader emotional universe of benefits and dreams while sports stars live more in the
technological and performance benefits of a shoe. This is leading to relationships and
introductions from hitherto unknown regions. For example, 2008 saw talk show host Kelly
Ripa team with Ryka to co-design a footwear and apparel collection and act as spokesperson
for the brand in its print and online campaign. In 2009, Eddie Van Halen is launching a line
of high and low-top sneakers, similar to the ones he sports onstage with the red, white and
black stripes that mimic the design of his Frankenstein guitar.
Payless and Summer Rayne Oakes Go Green
Licensing, co-branding, and sponsorships with celebrities provide opportunities for
meaningful brand impressions among consumers especially in the face of media and product
clutter proliferation and dwindling advertising effectiveness.
For example, in November 2008, Payless ShoeSource launched the first-ever affordable green
footwear line with the help of Summer Rayne Oakes, Discovery Network's Planet Green
fashion and beauty expert and author of Style, Naturally: The Savvy Shopping Guide to
Sustainable Fashion & Beauty (Chronicle Books, February 2009). The new brand, Zoe and
Zac, at $30 a pair, is a key part of Payless' strategy to bring well-recognized, fresh, and
innovative new brands to every consumer at a good price. Oakes, as Payless’ “ecoconsultant,” will be involved in seasonal line reviews focusing on materials use and aesthetics
for the product, packaging, and in-store materials, as well as participate in other marketing
activities for the brand.
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Footwear Consumer
Men’s Athletic Footwear Penetration Levels Highest at 20%
According to data compiled by Experian Simmons Market Research Bureau, the two major
men’s footwear segments, athletic and non-athletic, both saw decreased levels of penetration
in the past years in terms of footwear bought in the past twelve months. Athletic shoes
dropped two points since 2007 to 20% of the population purchasing in 2009, while nonathletic shoes dropped three points since 2006 to 17% in 2009. 2004 and 2005 saw the
highest levels in usage penetration for the six year period for both segments, at 23% for
athletic and 20% for non-athletic, as consumers recovered from the faltering economy in the
early years of the new millennium. (see Chapter 7: Athletic Footwear Consumer for a specific
look at sneaker, athletic and sports shoes)
Boots and slippers also dropped from the highs of 2004—each dropping a point by 2009 and
settling at six percent and eight percent, respectively. The 2004 levels could not be
maintained as America rolled into another recessionary period—one likely to have greater
staying power. Don’t expect penetration levels to bounce back quickly in the coming years as
consumers may continue to put off new footwear purchases, in lieu of a visit to the local
cobbler.
Table 1–2
Total Consumer Penetration Levels for Men’s Footwear Bought in the Past 12 Months,
2004-2009
(%)
Men’s Footwear Bought
in the Last 12 Months
Fall
2004
Fall
2005
Fall
2006
Fall
2007
Fall
2008
Winter
2009
Athletic Shoes
23%
22%
22%
22%
21%
20%
Non-Athletic Shoes
20
18
19
18
17
17
Slippers
9
8
8
8
8
8
Boots*
7
7
7
7
5
6
* Excluding work boots
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2009. This material is used with permission.
August 2009
© Packaged Facts
27
Chapter 1: Executive Summary
The Global Footwear Market
Women’s Non-Athletic Footwear Penetration Levels
Highest at 23%
Same story, different sex. Women’s footwear purchase penetration levels showed a similar
trend to men’s. Again the two largest categories, athletic and non-athletic, saw decreased
penetration with a steady decline since 2004. For women, the largest segment, non-athletic
shoes, fell from 26% in 2004 to 23% in 2009. Athletic shoes fell from 20% in 2004 to 17% in
2009. Slippers followed the pattern with a three point drop by 2009. It is likely that come the
fall 2009 edition of Simmons data will show a decline.
Women’s boot purchase did not follow the same pattern as men’s. However, the current
uptick to eight percent in winter 2009 from seven percent in fall 2008 for women’s boots is
likely due to heavier purchasing during the snow and sleet months.
Table 1–3
Consumer Penetration Levels for Women’s Footwear Bought in the Past 12 Months,
2004-2009
(%)
Women’s Footwear Bought
in the Last 12 Months
Fall
2004
Fall
2005
Fall
2006
Fall
2007
Fall
2008
Winter
2009
Non-athletic Shoes
26%
25%
25%
25%
24%
23%
Athletic Shoes
20
18
18
18
18
17
Slippers
15
14
14
14
11
12
Boots
9
8
9
9
7
8
* Excluding work boots
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2009. This material is used with permission.
For Footwear, Consumers Shop Wal-Mart Most
According to data from BIGresearch, in the years 2006-2008 BIGresearch, nearly 18% of
adult consumers have no preference for a particular branded outlet, 12% of consumers shop
most often at Wal-Mart and Payless for footwear. Wal-Mart and Payless were the only stores
reaching double-digit preference. However, when broken out by male and female shoppers,
Payless sees a much higher level of loyalty from women at 16% than men at seven percent,
while Wal-Mart sees little differentiation by sex. Since 2006, both Wal-Mart and Payless
have suffered some loyalty erosion.
Both dropped two percentage points from 14% of the adult population in 2006, while
runners-up Kohls and DSW each gained points. In 2008, five percent of consumers shopped
28
© Packaged Facts
August 2009
The Global Footwear Market
Chapter 1: Executive Summary
Kohl’s most often and four percent of consumers shopped DSW, up from four percent and
two percent in 2006, respectively.
Rounding out the top ten retailers for shoe shopping were JC Penney, Foot Locker, Macy’s,
Sears, Kmart, and Target, garnering between two and three percent of adult for 2008. The rest
of the retailers jockeyed for miniscule penetration levels, often at less than half a point with
little in the way of preference changes over the period.
August 2009
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29
Chapter 1: Executive Summary
The Global Footwear Market
Table 1–4
Consumer Penetration Levels for Stores Shopped Most Often for Shoes, by Women,
Men and Total Population, 2006-2008
(%)
2008
Store
2007
2006
Adults
Women
Men
Adults
Women
Men
Adults
Women
Men
WalMart
11.8%
12.5%
11.2%
11.6%
12.6%
10.5%
14.1%
15.5%
12.6%
Payless
11.7
16.0
7.0
11.3
14.8
7.5
14.4
18.9
9.5
Kohls
4.9
4.8
4.9
4.7
4.2
5.2
3.6
3.6
3.5
DSW
3.7
4.5
2.9
2.9
3.4
2.4
2.4
2.9
2.0
JC Penney
2.9
2.9
2.9
3.1
3.5
2.8
2.5
2.8
2.1
Foot Locker
2.4
2.1
2.8
2.9
2.2
3.7
1.8
1.5
2.1
Macy's
2.3
2.6
1.9
2.4
2.8
1.9
1.2
1.1
1.3
Sears
2.0
1.6
2.4
2.0
1.6
2.5
1.8
1.2
2.5
Kmart
1.8
1.9
1.7
1.8
2.3
1.4
2.3
2.7
1.9
Target
1.8
2.3
1.3
1.7
2.2
1.2
1.8
2.1
1.5
Famous Footwear
1.6
2.1
1.0
1.5
1.9
1.1
1.8
1.8
1.8
Shoe Carnival
1.6
1.6
1.6
1.6
1.9
1.4
1.5
1.7
1.3
Nordstrom
1.4
1.3
1.4
1.4
1.6
1.2
1.4
1.4
1.4
Dillards
1.2
1.2
1.1
1.0
1.2
0.8
1.0
1.3
0.7
Finish Line
1.0
0.6
1.4
0.6
0.3
0.8
0.4
0.4
0.5
Online/Internet
0.9
0.7
1.1
0.7
0.7
0.8
0.4
0.4
0.3
Marshalls
0.8
1.1
0.5
0.5
0.6
0.3
0.4
0.5
0.3
Zappos
0.7
0.7
0.7
0.6
0.7
0.5
0.6
0.5
0.6
Dick's Sporting Goods
0.6
0.2
1.2
--
--
--
--
--
--
Ross
0.6
0.9
0.3
0.5
0.8
0.3
0.4
0.6
0.2
Shoes.com
0.6
0.6
0.5
0.5
0.5
0.5
--
--
--
Belk
0.5
0.6
0.5
0.4
0.5
0.2
0.3
0.4
0.2
Nike
0.5
0.3
0.7
0.5
0.4
0.6
0.3
0.2
0.3
Rack Room
0.5
0.6
0.3
0.6
0.7
0.4
0.7
0.9
0.5
SAS Shoes
0.5
0.7
0.4
0.5
0.6
0.3
0.7
0.7
0.7
Academy
0.4
0.2
0.6
0.4
0.1
0.6
0.3
0.3
0.2
Big 5 Sporting Goods
0.4
0.2
0.7
0.4
0.2
0.7
0.7
0.2
1.1
Ebay
0.4
0.5
0.3
0.3
0.4
0.2
0.3
0.3
0.3
Shoe Dept.
0.4
0.6
0.2
0.5
0.6
0.5
0.5
0.8
0.2
Skechers
0.4
0.5
0.4
--
--
--
--
--
--
Bass
0.3
0.2
0.5
--
--
--
--
--
--
Bealls
0.3
0.3
0.2
0.3
0.6
0.1
0.3
0.5
0.0
Easy Spirit
0.3
0.5
0.1
0.2
0.5
0.0
0.2
0.4
0.0
(continued)
30
© Packaged Facts
August 2009
The Global Footwear Market
Chapter 1: Executive Summary
Table 1–4 [cont.]
Consumer Penetration Levels for Stores Shopped Most Often for Shoes, by Women,
Men and Total Population, 2006-2008
(%)
2008
Store
2007
2006
Adults
Women
Men
Adults
Women
Men
Adults
Women
Men
LL Bean
0.3
0.2
0.3
--
--
--
--
--
--
Meijer
0.3
0.3
0.3
0.3
0.2
0.4
0.4
0.4
0.4
Mervyns
0.3
0.4
0.2
0.4
0.3
0.5
0.5
0.8
0.2
New Balance
0.3
0.3
0.3
0.3
0.1
0.5
--
--
--
Outlet Stores
0.3
0.1
0.4
0.3
0.3
0.4
0.3
0.3
0.3
Shoe Show
0.3
0.4
0.2
0.4
0.5
0.2
0.4
0.5
0.2
TJ Maxx
0.3
0.4
0.1
0.3
0.6
0.1
0.2
0.4
0.0
Florsheim
0.2
0.0
0.5
0.2
0.0
0.4
--
--
--
Haband
0.2
0.1
0.3
0.3
0.1
0.5
--
--
--
Journeys
0.2
0.4
0.1
0.4
0.4
0.4
--
--
--
Mason
0.2
0.1
0.3
--
--
--
0.3
0.1
0.4
Redwing
0.2
0.0
0.5
--
--
--
--
--
--
Rockport
0.2
0.1
0.4
0.3
0.1
0.5
--
--
--
Value City
0.2
0.2
0.2
0.4
0.4
0.4
0.5
0.5
0.4
Nine West
--
--
--
0.2
0.4
0.1
0.2
0.4
0.0
No Preference
18.1
13.0
23.5
21.2
15.9
26.9
20.1
14.1
26.6
Other
17.3
16.8
17.9
17.3
16.2
18.5
19.0
16.8
21.4
Note: -- signifies not data available.
Source: BIGresearch, Consumer Intentions and Actions Survey and Simultaneous Media Study, © 2008.
BIGresearch, All Rights Reserved. Compiled by Packaged Facts.
August 2009
© Packaged Facts
31
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The Global Footwear Market
Chapter 2
Chapter 2: The Market
The Market
Scope of Report
This Packaged Facts report analyzes the U.S. footwear market sold through retail channels
and includes a look at the global market for comparison. The report covers the market in
terms of value and unit volume consumption and details U.S. dollar retail sales estimates by
major retail channel, major product type, and consumer segment. Also included is an
overview of the competitive landscape and profiles of selected players within the space. The
report discusses major trends affecting the market including economic factors, design and
marketing, and provides detailed analysis of consumer preferences by major product category
and retail preferences.
Product Categories
Footwear products covered in the scope of this report include essentially every type and
style—from athletic to zories (flip-flops). In presenting the U.S. retail market, Packaged Facts
has categorized footwear by two major types as follows:
•
Athletic Footwear includes athletic, sport, and active lifestyle footwear for men,
women and children. Major athletic brands include Adidas, Asics, Fila, K-Swiss,
New Balance, Nike, Puma, Reebok, and Saucony. Athletic footwear also includes
footwear that is not designed for a specific individual or team sport but may be
performance inspired or intended for other activities. Products include “outdoor”
footwear (hiking boots and sandals) by brands such as Merrell and Teva, and casual
sneakers by brands such as Converse, Skechers, and Vans. Products such as ski and
snowboard boots are included in the market numbers but are not the focus of
discussion.
•
Non-Athletic Footwear covers casual and dress footwear for men, women and
children such as pumps, loafers, or Mary Janes. It also includes house slippers,
various types of work shoes and boots.
Products not in the scope of this report include footwear accessories (i.e. shoe trees, bags,
polishes, laces) gaiters, parts of shoes, socks, and foot care products.
August 2009
© Packaged Facts
33
Chapter 2: Executive Summary
The Global Footwear Market
Methodology
The information presented in this report was obtained from primary and secondary research.
Primary research entailed on-site examination of footwear products in retail stores and
consultations with footwear industry observers and executives. Secondary research involved
canvassing information from financial, marketing, and trade publications, company literature,
and independent research reports, plus reviews of industry group websites, such as the
American Apparel and Footwear Association, and blogs and readers’ comments posted on
these sites.
Market figures in this report are predominantly estimates by Packaged Facts based on data
from the U.S Department of Commerce’s U.S. Census Bureau and major players in the
industry. Data from the U.S. Census Bureau included the Economic Census (1997, 2002, and
2007), primarily for retail sales numbers, Annual Survey of Manufacturers (ASM) for
product shipment statistics, Advanced Monthly Sales for Retail and Foodservice and the
Annual Retail Trade Survey for additional retail figures. Other market data sources include
the U.S. Bureau of Economic Analysis (BEA), the U.S. Bureau of Labor Statistics (BLS), and
the U.S. International Trade Commission (USITC).
The analysis of consumer behavior and demographics is drawn from data produced by the
Simmons Market Research Bureau (New York, NY) Winter 2008/09 Study of Media and
Markets, which is based on the responses of over 20,000 adults age 18 and older and from
BIGresearch Consumer Intentions & Actions Survey (CIA), a monthly online survey of
8,000+ consumers.
34
© Packaged Facts
August 2009
The Global Footwear Market
Chapter 2: The Market
Global Footwear Market
Global Footwear Market Rises 2% Driven by Asia, Latin America
Packaged Facts estimates the global footwear market at retail grew two percent over the 2007
level of $189.3 billion to $192.3 billion in 2008. The 2008 gain was the lowest during the
five-year period spanning 2004 through 2008 and was due largely to gains posted by
emerging economies in Latin America and Asia. Some leading marketers reported gains in
the range of 10% to 15% over 2007 levels for these regions while others showed much more
muted results. In fact, Nike Inc., the largest footwear and athletic apparel marketer, had a
31% gain in its Asia Pacific region for the 12-month period ending November 20082.
European Growth Tempers
In Europe, results were mixed with some marketers reporting mid-single to low-double-digit
gains while others saw declines into the double-digits. Adidas AG, the largest marketer in
Europe saw overall footwear and apparel sales in its home region up 15% in 2008, while its
global footwear sales were up four percent. Alternately, niche marketer Crocs saw its overall
footwear sales decline 15% while sales in Europe decline a whopping 13% in 2008.
U.S. Drags the Global Market Down
In the United States, retailers found themselves with excess inventory, especially towards the
end of the year, and were caught between lower demand and higher product costs leaving
little wiggle room to cut prices and move product. Many U.S. retailers saw sales declines for
the year, at least in terms of volume, but because of sharply higher prices, the market
remained slightly positive.
From the product marketer perspective, the economic and corresponding retail environments
combined with higher average footwear prices due to a lower U.S. dollar meant fewer orders
and lower volume. Still others noted remarkable success such as footwear newcomer Under
Armour, which saw sales rocket up more than 100%. For most smaller mainstream marketers
and marketers of products focusing on fads and recent trends, 2008 was the year of reckoning
with sales down substantially.
2
Nike, Inc. reports its results on a fiscal year period ending May 31 of each year.
August 2009
© Packaged Facts
35
Chapter 2: Executive Summary
The Global Footwear Market
Figure 2–1
Global Footwear Retail Market, 2004–2008
(in billions $)
200.0
189.3
192.3
2007
2008
181.4
175.0
166.2
150.0
153.2
125.0
100.0
75.0
50.0
25.0
0.0
2004
2005
2006
Global Footwear Retail Market
Source: Packaged Facts
Global Five-Year Growth at 6%
Gains in the years leading up to 2008 had been more robust—including nine percent gains in
2005 and 2006 pushing the market to well more than $181 billion. The more modest gain of
four percent in 2007 was due partly to slightly lower average prices, as well as slower volume
growth. For the 2004–2008 period, the global footwear market grew at a compound annual
growth rate of six percent.
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August 2009
The Global Footwear Market
Chapter 2: The Market
Table 2–1
Global Footwear Retail Market and Year-over-Year Percentage Change, 2004–2008
(in millions $)
Year
Total Net Sales
YoY % Change
2004
$153,211.8
--
2005
166,213.5
8.5%
2006
181,428.2
9.2
2007
189,294.7
4.3
2008
192,253.5
1.6
--
5.8%
CAGR
Source: Packaged Facts
Unit Volume Declines Globally
While the global market was higher in U.S. dollar terms, volume sales told a different story.
Packaged Facts estimates total volume declined two percent from the 2007 level 10.5 billion
pairs to 10.3 billion pairs in 2008. The decline was driven largely by the economic downturn
in the United States; however, Packaged Facts estimates that all international markets in the
aggregate still showed a slight decline of one percent. Major competitors such as Nike and
Adidas AG noted unit sales were up in slightly Europe and higher in other regions outside the
United States, but for many other competitors the European market was less kind. For the
2004–2008 period, footwear volume grew at a CAGR of six percent.
August 2009
© Packaged Facts
37
Chapter 2: Executive Summary
The Global Footwear Market
Figure 2–2
Global Footwear Retail Market Unit Volume, 2004–2008
(in millions of pairs)
12,000.0
10,000.0
10,056.3
10,486.5
10,275.4
9,141.5
8,000.0
8,288.7
6,000.0
4,000.0
2,000.0
0.0
2004
2005
2006
2007
2008
Global Footwear Retail Market Unit Volume
Source: Packaged Facts
Table 2–2
Global Footwear Retail Market Unit Volume and Year-over-Year Percentage Change,
2004–2008
(in millions of pairs)
Year
Total Net Sales
YoY % Change
2004
$8,288.7
--
2005
9,141.5
10.3%
2006
10,056.3
10.0
2007
10,486.5
4.3
2008
10,275.4
-2.0
--
5.5%
CAGR
Source: Packaged Facts
38
© Packaged Facts
August 2009
The Global Footwear Market
Chapter 2: The Market
U.S. Footwear Retail Market
U.S. Footwear Market Flat
Packaged Facts estimates the U.S. retail footwear market rose just 0.3% over the 2007 level
of $46.6 billion to reach $46.8 billion in 2008. The U.S. market had seen greater gains in
earlier years—most notably 10% gains in the boom years for the U.S. economy 2005 and
2006, adding $4 billion in market value. For the 2004–2008 period, the U.S. retail footwear
market grew at a CAGR of three percent.
Figure 2–3
U.S. Footwear Retail Market and Percent of Global Footwear Market, 2004–2008
(in billions $)
60.0
27.3%
30%
26.6%
25.7%
50.0
46.6
24.6%
24.3%
46.6
46.8
25%
44.2
40.0
41.8
20%
30.0
15%
20.0
10%
10.0
5%
0.0
0%
2004
2005
2006
U.S. Footwear Retail Market
2007
2008
% of Global Footwear Retail Market
Source: Packaged Facts
August 2009
© Packaged Facts
39
Chapter 2: Executive Summary
The Global Footwear Market
U.S. Market Losing Global Dominance
As a percent of the global market, the United States accounted for essentially 25%, but was
down 0.2% from the level seen in 2007. Once the dominant market around the globe, the
United States is no longer the big kid on the block, as the European Union consolidates more
member states under its banner and emerging economies from Asia to Latin America gain
greater consumer purchasing power. As a result, the U.S. market lost two percentage points in
its global standing since 2004.
Table 2–3
U.S. Footwear Retail Market and Year-over-Year Percentage Change, 2004–2008
(in millions $)
Year
Total Net Sales
YoY % Change
2004
$41,830.0
--
2005
44,200.8
5.7%
2006
46,556.1
5.3
2007
46,588.0
0.1
2008
46,749.3
0.3
--
2.8%
CAGR
Source: Packaged Facts
U.S. Unit Volume Declines
While the U.S. market in terms of value barely squeaked out a gain, in volume terms the
market as measured by apparent consumption3 suffered its first decline since 1998. Packaged
Facts estimates footwear volume declined seven percent from the 2007 level of 2.5 billion
pairs to less than 2.4 billion pairs in 2008. As a percent of global consumption, the United
States accounted for 28% of total footwear volume, but fell to just 23% by 2008. Volume in
earlier years had been rising at a rate between five and six percent, but as a possible harbinger
of things to come growth slowed in 2007 to just one percent. For the 2004–2008 period,
footwear volume grew at a CAGR of one percent.
3
Apparent consumption in volume terms is a measure determined by shipment quantities, plus import quantities, minus export
quantities. It is a measure quantities supplied to the market and is not a direct measure of retail sales.
40
© Packaged Facts
August 2009
The Global Footwear Market
Chapter 2: The Market
Figure 2–4
U.S. Footwear Apparent Consumption by Volume and Percent of Global Footwear
Market, 2004–2008
(in millions of pairs)
3,500.0
30%
27.5%
26.1%
24.8%
24.0%
2,800.0
2,100.0
2,278.5
24%
2,515.4
2,491.8
2,382.6
22.9%
2,352.9
18%
1,400.0
12%
700.0
6%
0.0
0%
2004
2005
2006
U.S. Footwear Market
*2007
*2008
% of Global Footwear Market
* Estimated by Packaged Facts.
Source: U.S. Census Bureau; U.S. International Trade Commission (2004–2006)
Table 2–4
U.S. Footwear Apparent Consumption by Volume and Year-over-Year Percentage
Change, 2004–2008
(in millions of pairs)
Year
Total Net Sales
YoY % Change
2004
2,278.5
--
2005
2,382.6
4.6%
2006
2,491.8
4.6
*2007
2,515.4
0.9
*2008
2,352.9
-6.5
CAGR
--
0.8%
* Estimated by Packaged Facts.
Source: U.S. Census Bureau; U.S. International Trade Commission (2004–2006)
August 2009
© Packaged Facts
41
Chapter 2: Executive Summary
The Global Footwear Market
Imports Dominate U.S. Market
Virtually all footwear sold in the United States is produced overseas by contract
manufacturers. In fact, imports have dominated the U.S. footwear market for some time,
accounting for more than 90% since 1999. In 2006, imports hit their peak at 96% of the U.S.
market with 2.4 billion pairs. Imports leveled off there after growing less than one percent in
2007 and declining six percent in 2008 to less than 2.3 billion pairs. The decline was due in
part to the slowdown in the U.S. economy, but also due to the lower value of the U.S. dollar
which effectively drove import prices higher. For the 2004–2008 period, footwear imports
grew at CAGR of one percent.
Figure 2–5
U.S. Footwear Import Volume and Percent of Apparent Consumption, 2004–2008
(in millions of pairs)
3,500.0
100%
98%
2,800.0
95.4%
96.1%
95.6%
95.7%
96%
94.2%
94%
2,100.0
2,145.7
2,273.0
2,394.3
2,405.4
2,250.7
92%
90%
1,400.0
88%
86%
700.0
84%
82%
0.0
80%
2004
2005
U.S. Footwear Imports
2006
2007
2008
% of U.S. Apparent Consumption
Note: Percent of apparent consumption estimated by Packaged Facts (2007–2008)
Source: U.S. International Trade Commission, U.S. Census Bureau (imports and percent of apparent consumption
(2004–2006)
42
© Packaged Facts
August 2009
The Global Footwear Market
Chapter 2: The Market
Table 2–5
U.S. Footwear Import Volume and Year-over-Year Percentage Change, 2004–2008
(in millions of pairs)
Year
Total Net Sales
YoY % Change
2004
2,145.7
--
2005
2,273.0
5.9%
2006
2,394.3
5.3
*2007
2,405.4
0.5
*2008
2,250.7
-6.4
CAGR
--
1.2%
* Estimated by Packaged Facts.
Source: U.S. Census Bureau; U.S. International Trade Commission (2004–2006)
China Imports Declining
China accounted for 87% of total footwear import volume in 2008, essentially unchanged in
share terms, but in volume terms was down six percent from the 2007 level of 2.1 billion
pairs to less than 2.0 billion pairs. China had grown its share of U.S. imports from the 2004
level of 83%, but topped out by 2007. For the 2004–2008 period China footwear imports
grew at a CAGR of two percent.
Is Vietnam the New China for U.S. Imports?
While import growth from China has topped out, imports from Vietnam have become the
new star, replacing Brazil as the second largest supplier of U.S. footwear in 2006. Vietnam
imports grew at a CAGR of 24% for the 2004–2008 period, growing its share of the U.S.
market from two percent in 2004 to five percent in 2008 supplying 111 million pairs of
footwear.
Vietnam’s import growth was primarily at the expense Brazilian manufacturers. Brazil saw
supply to the United States dwindle at an annual rate of 21% and accounted for just two
percent of all U.S. imports in 2008 at 38 million pairs.
August 2009
© Packaged Facts
43
Chapter 2: Executive Summary
The Global Footwear Market
Table 2–6
U.S. Footwear Import Volume by Top 10 Countries of Origin, 2004–2008
(in millions of pairs)
Country
2004
2005
2006
2007
2008
2004–2008 CAGR
1,791.2
1,941.7
2,062.6
2,099.3
1,955.7
2.2%
Vietnam
47.1
67.4
90.1
97.5
111.5
24.0
Brazil
98.8
79.3
66.7
51.8
38.3
-21.1
Indonesia
46.7
46.3
42.1
34.7
37.3
-5.5
Italy
35.3
27.8
25.5
24.4
20.8
-12.4
Thailand
25.3
24.4
23.6
20.7
18.3
-7.9
Taiwan
13.1
9.1
9.0
12.0
13.6
0.8
India
8.0
9.5
10.4
10.2
10.6
7.3
Mexico
15.7
10.3
11.0
10.9
9.1
-12.6
Hong Kong
19.1
10.1
12.7
8.7
7.4
-21.2
All others
45.2
47.1
40.7
35.1
28.1
-11.2
2,145.7
2,273.0
2,394.3
2,405.4
2,250.7
1.2%
China
Total
Source: U.S. International Trade Commission (2004–2006).
Figure 2–6
U.S. Footwear Import Volume Shares, by Top 10 Countries of Origin, 2008
(%)
Vietnam
5.0%
Brazil
1.7%
China
86.9%
Indonesia
1.7%
Italy
0.9% Thailand
0.8%
Taiwan
0.6%
Mexico
0.4%
All others
1.2%
India
0.5%
Hong Kong
0.3%
Source: U.S. International Trade Commission (2004–2006); calculated by Packaged Facts
44
© Packaged Facts
August 2009
The Global Footwear Market
Chapter 2: The Market
U.S. Footwear Sales by Consumer Group: Women, Men, Kids
Packaged Facts estimates women’s footwear accounted for 50% of total footwear sales
through retail in 2008, up slightly from 49% in 2004, while men’s footwear accounted for
36% in 2008 down from 38% in 2004. Children’s footwear was unchanged at 13% of the
market. All three categories saw modest gains in 2008 of less than one percent, however,
women’s footwear showed the greatest growth over the 2004–2008 period at four percent.
Table 2–7
U.S. Footwear Retail Market by Consumer Group, Women, Men, Kids, 2004–2008
(in millions $)
Product by
Consumer Type
2004
2005
2006
2007
2008
2004–2008
CAGR
Women's footwear
$20,367.95
$21,931.63
$23,451.94
$23,472.61
$23,576.03
3.7%
Men's footwear
15,975.52
16,477.93
16,962.82
16,969.11
17,001.57
1.6
Children's footwear
5,481.34
5,791.23
6,141.33
6,146.24
6,171.74
3.0
Total
$41,824.8
$44,200.8
$46,556.1
$46,588.0
$46,749.3
2.8%
Source: Packaged Facts.
August 2009
© Packaged Facts
45
Chapter 2: Executive Summary
The Global Footwear Market
Figure 2–7
Share of U.S. Footwear Retail Market by Consumer Group, 2008
(%)
Men's footwear
36.4%
Women's
footwear
50.4%
Children's
footwear
13.2%
Source: Packaged Facts.
U.S. Footwear Sales by Major Product Category
Non-athletic footwear remained the dominant product type in 2008 accounting for 55% of the
total U.S. market with athletic footwear capturing the remaining 45%. However, those shares
have shifted since 2004 when non-athletic footwear accounted for 59% of the total market
and athletic footwear made up 41%. Packaged Facts estimates non-athletic footwear grew at a
CAGR of just one percent for the 2004–2008 period to $25.9 billion while athletic footwear
grew at a CAGR of five percent to reach $20.9 billion.
46
© Packaged Facts
August 2009
The Global Footwear Market
Chapter 2: The Market
Table 2–8
U.S. Footwear Retail Market by Major Product Category, 2004–2008
(in millions $)
Consumer
& Category
2004
2005
2006
2007
2008
2004–2008
CAGR
Non-athletic footwear
$24,764.2
$25,310.1
$25,812.7
$25,819.1
$25,851.8
1.1%
Athletic footwear
17,060.6
18,890.7
20,743.4
20,768.9
20,897.5
5.2
Total
$41,824.8
$44,200.8
$46,556.1
$46,588.0
$46,749.3
2.8%
Source: Packaged Facts
Figure 2–8
Share of U.S. Footwear Retail Market by Major Product Category, 2008
(%)
Athletic footwear
44.7%
Non-athletic
footwear
55.3%
Source: Packaged Facts.
August 2009
© Packaged Facts
47
Chapter 2: Executive Summary
The Global Footwear Market
U.S. Footwear Sales by Consumer Group & Major Product
Category
Women’s, Children’s Athletic Footwear Strong
A deeper look by consumer group and major product category shows both women’s and
children’s athletic footwear saw the greatest growth in the 2004–2008 period posting annual
rates of eight percent and seven percent, respectively. Both saw gains of one percent in 2008
to reach $16.5 billion for women’s athletic footwear and $3.6 billion for children’s athletic
footwear. Women’s athletic footwear accounted for 15% of the market while children’s
athletic footwear made up eight percent.
Men’s, Children’s Non-Athletic Decline
Showing negative growth, Packaged Facts estimates men’s non-athletic footwear declined at
an annual rate of less than one percent to settle at $6.8 billion while children’s non-athletic
footwear posted an annual rate of decline at two percent to below the $2.6 billion mark.
Shares for 2008 were 15% and six percent, respectively.
Table 2–9
U.S. Footwear Retail Market by Consumer & Major Product Type, 2004–2008
(in millions $)
Consumer & Product Type
2004
2005
2006
2007
2008
2004–2008
CAGR
Women's footwear, including
dress & casual footwear
$15,074.5
$15,766.2
$16,437.1
$16,445.8
$16,490.8
2.3%
Men's athletic footwear,
including sneakers &
outdoor/hiking boots
9,028.1
9,587.8
10,148.6
10,156.0
10,194.2
3.1
Women's athletic footwear,
including sneakers &
outdoor/hiking boots
5,293.4
6,165.4
7,014.8
7,026.8
7,085.2
7.6
Men's footwear, including
dress & casual footwear
6,947.4
6,890.1
6,814.2
6,813.1
6,807.3
-0.5
Children's athletic footwear,
including sneakers &
outdoor/hiking boots
2,739.2
3,137.5
3,580.0
3,586.1
3,618.0
7.2
Children's footwear, including
boys, girls, infants, & toddlers
2,742.2
2,653.7
2,561.4
2,560.1
2,553.7
-1.8
$41,824.8
$44,200.8
$46,556.1
$46,588.0
$46,749.3
2.8%
Total
Source: Packaged Facts
48
© Packaged Facts
August 2009
The Global Footwear Market
Chapter 2: The Market
Women’s Non-Athletic, Men’s Athletic Growth Stable
Perhaps not surprisingly, women’s non-athletic footwear captured the largest share of the
market at 35% while men’s athletic footwear made up 22%. Growth for both segments was
only slight in 2008, however, for the 2004–2008 period, men’s athletic footwear showed
annual growth at a CAGR of three percent to reach $10.2 billion while women’s non-athletic
footwear grew at a CAGR of two percent to reach $16.5 billion.
Figure 2–9
Share of U.S. Footwear Retail Sales by Consumer Group and Major Product Category,
2008
(%)
Men's athletic
footwear, incl
sneakers &
outdoor/hiking
boots
21.8%
Women's athletic
footwear, incl
sneakers &
outdoor/hiking
boots
15.2%
Men's footwear,
including dress &
casual footwear
14.6%
Children's athletic
footwear,incl
sneakers &
outdoor/hiking
boots
7.7%
Children's
footwear, incl
boys, girls,
infants, &
toddlers
5.5%
Women's
footwear,
including dress &
casual footwear
35.3%
Source: Packaged Facts.
August 2009
© Packaged Facts
49
Chapter 2: Executive Summary
The Global Footwear Market
Global Footwear Market Forecast
Global Footwear Market to Reach $238 Billion by 2013
Packaged Facts expects the global footwear market to grow at a substantially slower clip
between 2008 and 2013 compared to previous years. The global economic environment will
likely put a damper on consumer spending putting pressure on all measures of the footwear
including frequency of purchase, unit consumption and pricing. Regionally, markets will be
affected to varying degrees and at various points in time as the global economic slump works
its way through international markets. For instance, the Asia-Pacific region may take longer
to slow down and may not be as severe as other regions.
Figure 2–10
Global Footwear Retail Market Forecast, 2008–2013
(in billions $)
250.0
238.2
222.9
200.0
207.6
193.8
192.3
181.7
150.0
100.0
50.0
0.0
2008
2009
2010
2011
2012
2013
Global Footwear Retail Market Forecast
Source: Packaged Facts
50
© Packaged Facts
August 2009
The Global Footwear Market
Chapter 2: The Market
Global Growth at Annual Rate of 4%
Packaged Facts forecasts the global market for footwear to grow much slower than in
previous years at a compound annual growth rate (CAGR) of four percent to reach $238
billion by 2013. Sales in 2009 are expected fall six percent from the 2008 level of $192
billion to settle below the $182 billion mark. However, the market should rebound in 2010
with a seven percent gain to $194 billion. Expect gains around the seven percent mark
thereafter through 2013.
Table 2–10
Global Footwear Retail Market and Year-over-Year Percentage Change, 2008–2013
(in millions $)
Year
Total Global Sales
YoY % Change
2008
$192,253.5
--
2009
181,712.4
-5.5%
2010
193,827.0
6.7
2011
207,576.3
7.1
2012
222,936.8
7.4
2013
238,189.8
6.8
--
4.4%
CAGR
Source: Packaged Facts
Global Unit Volume Consumption to Reach 12.1 Billion Pairs
On a unit volume basis, Packaged Facts expects a six percent decline from the 2008 level of
10.3 billion to 9.7 billion in 2009. The drop will be led by slower consumption all around, but
with more acute declines in the United States and Europe. Packaged Facts expects countries
in the Asia-Pacific region will see more modest declines with some showing some modest
gains. Expect a modest rebound of six percent in 2010 to reach 10.2 billion pairs driven by a
bounce in consumption by more developed regions such as the United States and Europe.
Meanwhile it is expected that Latin and South America will show sluggishness as the
economic cycle takes longer to work its way through various countries. Six percent growth is
expected thereafter as the United States and Europe return to more modest growth rates and
emerging economies see consumption rates rise. For the 2008–2013 period unit volume is
expected to grow at a CAGR of three percent.
August 2009
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51
Chapter 2: Executive Summary
The Global Footwear Market
Figure 2–11
Global Footwear Retail Market Unit Volume Forecast, 2008–2013
(in millions of pairs)
14,000.0
12,000.0
12,074.2
11,421.3
10,000.0
10,802.0
10,275.4
10,214.6
9,658.3
8,000.0
6,000.0
4,000.0
2,000.0
0.0
2008
2009
2010
2011
2012
2013
Global Footwear Retail Market Unit Volume Forecast
Source: Packaged Facts
Table 2–11
Global Footwear Retail Market Unit Volume Forecast and Year-over-Year Percentage
Change, 2008–2013
(in millions of pairs)
Year
Total Global Sales
YoY % Change
2008
10,275.4
--
2009
9,658.3
-6.0%
2010
10,214.6
5.8
2011
10,802.0
5.8
2012
11,421.3
5.7
2013
12,074.2
5.7
--
3.3%
CAGR
Source: Packaged Facts
52
© Packaged Facts
August 2009
The Global Footwear Market
Chapter 2: The Market
U.S. Footwear Market
U.S. Footwear Market to Suffer from Thriftier Consumer Habits
In the United States, Packaged Facts estimates more timid overall growth as consumers work
through a paradigm shift in the shopping mindset. The days of conspicuous consumption are
being replaced by a higher level of frugality and conservative spending habits that will force
many marketers to adjust product lineup to offer better values for staple footwear. Consumers
who once spent $200 on a pair of shoes will be looking to drop that to $150 or lower. Others
who bought multiple pairs of shoes per year will cut back by a few pairs. And, more
consumers will likely take better care of older shoes, perhaps with visits to their local repair
shop.
Figure 2–12
U.S. Footwear Retail Market Forecast, 2008–2013
(in billions $)
60.0
25%
24.3%
22.1%
22.4%
22.0%
21.2%
20.3%
48.0
46.8
43.3
45.6
47.2
48.4
40.1
36.0
20%
15%
24.0
10%
12.0
5%
0.0
0%
2008
2009
2010
U.S. Footwear Retail Market Forecast
2011
2012
2013
% of Global Footwear Retail Market Forecast
Source: Packaged Facts
August 2009
© Packaged Facts
53
Chapter 2: Executive Summary
The Global Footwear Market
U.S. Global Market Share to Drop Two Points by 2013
It is expected that the United States will continue its decline as the leading footwear market
as other regions continue to grow at faster rates. For 2009, Packaged Facts expects the United
States to account for just 22% of the global footwear market in U.S. dollar terms. By 2013,
that share is expected to drop to 20%.
Overall Growth Estimated at 1% Annually to Reach $48.4 Billion
Packaged Facts estimates sales of footwear in the United States will drop 14% from the 2008
level of $46.8 billion to just $40.1 billion in 2009. However, the sharp drop in 2009 will be
greeted by a welcomed eight percent gain to $43.3 billion in 2010 as consumers return to
stores. Expect growth rates to wane thereafter to about the three percent mark by 2013
reaching $48.4 billion.
Table 2–12
U.S. Footwear Retail Market Forecast and Year-over-Year Percentage Change,
2004–2008
(in millions $)
Year
Total U.S. Sales
YoY % Change
2008
$46,749.3
--
2009
40,061.7
-14.3%
2010
43,344.1
8.2
2011
45,631.5
5.3
2012
47,169.4
3.4
2013
48,357.9
2.5
--
0.7%
CAGR
Source: Packaged Facts.
Segments to Show Similar Growth
Packaged Facts expects all segments to show rather slow growth overall with men’s nonathletic footwear and children’s footwear leading the pack at slightly better than one percent
annually through 2013. Slower growth is expected in children’s and women’s athletic
footwear.
54
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August 2009
The Global Footwear Market
Chapter 2: The Market
Table 2–13
U.S. Footwear Retail Market Forecast by Consumer Group & Major Product Category,
2008–2013
(in millions $)
2008
2009
2010
2011
2012
2013
2004–2008
CAGR
Women's footwear, including
dress & casual footwear
$16,490.8
$14,229.4
$15,349.9
$16,136.6
$16,685.8
$17,113.3
0.7%
Men's athletic footwear,
including sneakers &
outdoor/hiking boots
10,194.2
8,707.9
9,434.5
9,939.2
10,272.6
10,529.3
0.6
Women's athletic footwear,
including sneakers &
outdoor/hiking boots
7,085.2
5,761.7
6,383.4
6,791.4
7,002.9
7,156.5
0.2
Men's footwear, including
dress & casual footwear
6,807.3
6,091.1
6,468.2
6,748.8
6,990.7
7,185.9
1.1
Children's athletic footwear,
including sneakers &
outdoor/hiking boots
3,618.0
2,946.4
3,257.7
3,467.7
3,576.1
3,654.9
0.2
Children's footwear, including
boys, girls, infants, & toddlers
2,553.7
2,325.2
2,450.4
2,547.8
2,641.4
2,718.0
1.3
$40,061.7
$40,061.7
$43,344.1
$45,631.5
$47,169.4
$48,357.9
4.2%
Consumer & Category
Total
Source: Packaged Facts.
Unit Volume Declines Globally
It is estimated that footwear consumption in unit volume terms will decline 11% from the
2008 level of 2.4 billion pairs to settle at 2.1 billion pairs in 2009— a level not seen since
2003. Packaged Facts sees seven percent growth in 2010 to near the 2.3 billion pair mark.
However, growth thereafter will eventually slow to two percent by 2013 when consumption
will near the 2.5 billion mark.
August 2009
© Packaged Facts
55
Chapter 2: Executive Summary
The Global Footwear Market
Figure 2–13
U.S. Footwear Retail Market Unit Volume Forecast, 2008–2013
(in millions of pairs)
3,500.0
22.9%
25%
21.8%
22.1%
21.9%
21.3%
20.4%
2,800.0
20%
2,352.9
2,100.0
2,262.0
2,365.9
2,468.1
2,430.2
15%
2,105.7
1,400.0
10%
700.0
5%
0.0
0%
2008
2009
2010
2011
2012
2013
U.S. Footwear Retail Market Unit Volume Forecast
% of Global Footwear Retail Market Unit Volume Forecast
Source: Packaged Facts
Table 2–14
U.S. Footwear Retail Market Unit Volume Forecast and Year-over-Year Percentage
Change, 2004–2008
(in millions of pairs)
Year
Total U.S. Sales
YoY % Change
2008
2,352.9
--
2009
2,105.7
-10.5%
2010
2,262.0
7.4
2011
2,365.9
4.6
2012
2,430.2
2.7
2013
2,468.1
1.6
--
1.0%
CAGR
Source: Packaged Facts
56
© Packaged Facts
August 2009
The Global Footwear Market
Chapter 3
Chapter 3: Retail & Distribution
Retail & Distribution
Overview
This chapter presents data and analysis on the retail aspects of the U.S. footwear market,
along with descriptions on the method (wholesale or direct) and class (authorized or massmarket) of distribution and typical retail categories. Following that is an analysis of footwear
sales as a percent of total sales for each major channel as well as U.S. footwear dollar sales
by major retail channel and consumer preferences by retail channel as well as branded
retailers.
Footwear Distribution Method and Class
Method: Wholesale or Direct
Most large marketers distribute their footwear directly to major retail outlets, including
department stores, shoe stores, and athletic stores, along with factory outlets, their own
branded concept stores, and leased departments in independent stores. A marketer may own
or use a network of distribution centers, typically situated in central areas easily accessible by
truck, rail, or other transport. These distribution centers serve as the supply source for retail
outlets in the surrounding geographic area. Some regional and smaller-scale manufacturers
also sell their shoes directly to retailers, usually to independently owned specialty stores or
regional department stores.
However, the majority of small manufacturers use wholesalers or distributors to channel their
shoes to retail outlets. Wholesalers often perform important functions, other than product
transfer, such as helping retailers keep track of stocks, setting up merchandising displays, and
providing information on industry trends. Smaller marketers do not exclusively use
wholesalers and distributors, but often find them the best option for their scale. The larger
marketers may supplement direct distribution through use of the wholesaler system,
especially in international markets, but by and large, the larger marketers rely on their own
distribution, selling direct to retailers. In addition, retailers often have their own distribution
centers that receive shipments from major shoe manufacturers and then disseminate them to
franchised or owned-and-operated stores.
August 2009
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Chapter 3: Retail & Distribution
The Global Footwear Market
Class: Authorized or Mass
Footwear may be distributed on a mass (unlimited) or authorized (limited or franchise) basis.
Mass-distributed footwear is supplied to a variety of retail outlets without limits or restriction;
little or no attempt is made to protect retail accounts from competition or maintain product
exclusivity. Mass-distributed products are generally lower-priced, often a benefit resulting
from higher unit volume and faster turnover. As implied, mass-distributed products have a
much wider range of distribution than authorized-distribution (limited) footwear. Common
retailers consist of national retailers, local and regional discount shoe stores, and warehouse
clubs.
Authorized distribution is restricted in part based on geography to reduce competition at the
retail level for each individual brand. The selected outlets may be the only selling agents of
the manufacturer within a specific territory, and therefore have a protected franchise, but the
degree of restriction on a limited distribution line can vary depending on market. For
example, a particular product line may be distributed through only one outlet in a small town,
whereas in a major metropolitan area, several outlets might carry that same brand.
Outlets for limited distribution can also be selected on the basis of clientele and image. The
prime outlets for limited distribution are usually “class A” department stores, shoe stores, and
sporting goods stores. In some cases, marketers are able to reserve a predetermined amount of
square footage to carve out exclusivity or even create the appearance of a store-within-astore.
Footwear Retail Channels Overview
In the United States, footwear is sold through a variety of retail formats ranging from national
chains to non-clothing and apparel stores (where footwear accounts for less than one percent
of that retail sector’s total sales). Footwear sales through alternative retail formats such as
catalogs and the Internet are playing increasingly important roles in the down economy but to
a lesser degree than other products sold through these channels. Footwear can even be found
for sale by street vendors although the likelihood of counterfeits is high, and if you look hard
enough and have the cash, one will find an artisan cobbler such as E Vogel to craft a custom
pair. But for most Americans, the local Wal-Mart, Payless or Foot Locker is the channel of
choice.
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August 2009
The Global Footwear Market
Chapter 3: Retail & Distribution
There are many ways to categorize retail establishment, but below outlines the general
landscape for footwear retail options.
Shoe Stores
Shoe stores can be grouped into one of two types of outlets. Family shoe stores provide
footwear selections for the entire family in a variety of styles. Specialty shoe stores, often
more up-market, are usually geared towards women or men, and often represent a branded
shoe store concept like Nine West for women or Florsheim for men, which focus on a
particular type of shoe such as dress or casual.
Shoe superstores, much larger than traditional shoe stores, are becoming increasingly
important in the athletic shoe category. Through recently built superstores, retailers are
hoping to steal market shares by offering an extensive selection of athletic and rugged
outdoor footwear, along with a wide variety of products for overall sporting needs.
Discount Shoe Stores
Discount shoe retailers such as Payless, DSW and Famous Footwear offer a variety of
footwear types at reduced prices. These stores often specialize in closeouts, and are generally
characterized by a no-frills, self-service atmosphere. For some footwear marketers, factory
outlets are an important discount retail channel providing them the opportunity to distribute
excess inventory or sub-par merchandise such as irregulars. Marketers often prefer
distributing shoes to factory outlets rather than discount shoe stores or mass discounters,
fearing that association with those channels may cheapen the brand name in the eyes of the
consumer. Outlets are usually located in remote areas so they do not cut into the sales of retail
channels found in indoor malls, shopping strips, and city centers.
Sporting Goods and Athletic Shoe Stores
Athletic stores provide the largest assortment of athletic and rugged footwear. Athletic
specialty stores such as Foot Locker specialize in this type of footwear and provide a sales
staff with extensive knowledge about the product offerings. Sporting goods stores such as
Dick’s or Modell’s not only provide sporting equipment, but an athletic footwear department
as well.
August 2009
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Chapter 3: Retail & Distribution
The Global Footwear Market
General Merchandise: Mass Discounters
Wal-Mart, Kmart, and Target are the primary mass discounter retailers. These retail outlets
provide consumers with an opportunity for one-stop shopping, along with a self-service
selection of inexpensive shoes.
General Merchandise: Department Stores and National Chains
Among the most important outlets for footwear are department stores such as Nordstrom, and
Macy’s, and national chains such as Sears and JC Penney. These stores typically encompass
an average of 20,000 square feet and sell a variety of goods, including fashionable clothing,
accessories, cosmetics, and housewares, in distinct departments spread out over several
floors. They typically offer sales support, higher-quality merchandise, name-brand shoes, and
wide selections.
Apparel: Specialty Apparel Stores
Stores that specialize in apparel may offer a few lines of current shoes along with the
season’s clothing offerings. They account for a small but significant part of the retail pie and
are often the choice for many fashion forward consumers. Examples of apparel specialty
stores include Kenneth Cole and Banana Republic
Apparel: Off-Pricers
Off-pricers include retailers such as Marshalls, Loehman’s and Filene’s Basement through
which brand names are sold at discount prices. Often, these shoes are manufactured as an offprice shoe, or a lower-end line, and are not available at other retail outlets.
Non-Store Retail: Catalog
Catalogs such as L.L. Bean offer higher-end footwear selections; other catalogs fill mid-tier
and bargain niches. These companies specialize in mail order as their predominant outlet for
the sale of products, although they may also have a few company outlet stores. While other
retailers, such as department stores, may have mail-order catalogs (as do various footwear
marketers), their primary business is not mail order, and they are traditionally classified
within their respective channels. The growing role of the Internet, which is a particularly
central issue to mail order marketers, will of course transform the retail/direct-sales
boundaries.
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The Global Footwear Market
Chapter 3: Retail & Distribution
Non-Store Retail: The Internet
Just a few short years ago, all of the top-ranking footwear marketers had websites to promote
their products, but the quality and style of the websites ranged as widely as the marketers
themselves. Most used their websites primarily as consumer and business resources,
providing information on the company, where to find stores, current product lines, and
investment information or employment opportunities. However, few were using them as a
direct-to-consumer retailing tool.
Today, many are now focusing their websites to provide a wide-ranging product selection to
sell directly to consumers. Brand loyalty plays a key role as consumers lose the benefit of
trying on footwear directly before purchase. However, many marketers have lessened the
fitting need by offering incentives such as free shipping and returns. In addition, independent
online retailers such as Zappos.com have taken the Amazon.com model to the footwear
market.
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Footwear Retail Sales by Major Channels
Shoe Stores Remain the Medium of Choice
Packaged Facts estimates shoe stores accounted for 54% of total footwear retail sales in the
United States in 2008, up just one percent from the 2007 level of $24.8 billion to $25.1
billion. Growth was driven in part by an increase in the number shoe stores such as Skechers
that capitalized on more youth-oriented footwear trends. This comes despite certain industry
insider claims that over-capacity in shoe retailing has led to cutthroat competition forcing
some companies to go out of business.
For example, Footstar, Inc., which operated leased footwear departments at K-Mart stores
and also supplied footwear to Rite Aid drug stores, was unable to renew its contracts for 2009
and decided to liquidate. Another factor contributing to the increase in the shoe store channel
has been the push by several marketers to open and operate their own retail locations focused
primarily and sometimes exclusively on their own brands. Companies from Nike, Inc. to
Wolverine Worldwide, Inc. have continued to open stores under their own specific brands.
The shoe store channel grew at an annual rate of five percent during the 2004–2008 period,
increasing its share of the footwear market.
Table 3–1
U.S. Footwear Retail Market by Major Channel, 2004–2008
(in millions $)
2004
2005
2006
2007
2008
2004–2008
CAGR
$20,701.2
$22,876.8
$24,941.6
$24,810.0
$25,056.0
4.9%
General merchandise stores
9,615.2
9,336.5
9,078.1
8,851.9
8,678.9
-2.5
Clothing stores
5,409.2
5,500.2
5,591.5
5,669.5
5,632.6
1.0
Sporting goods stores*
2,770.8
2,868.3
3,022.9
3,170.1
3,220.7
3.8
Non-store retailers
2,068.6
2,227.0
2,391.9
2,555.3
2,620.0
6.1
All other
1,265.0
1,392.0
1,530.0
1,531.2
1,541.2
5.1
$41,830.0
$44,200.8
$46,556.1
$46,588.0
$46,749.3
2.8%
Channel
Shoe stores
Total
* Also includes hobby, book, and music stores.
Note: All major categories are employer firms only. All other includes non-employer firms.
Source: Packaged Facts.
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Chapter 3: Retail & Distribution
General Merchandise Stores Still Second, but Struggling
General merchandise stores, which include superstores such as Wal-Mart (which from a
consumer perspective, sees the highest levels of shopper penetration for footwear),
department stores such as Macy’s, and discounters such as K-Mart, saw their share dwindle
in the 2004–2008 period from 23% of the footwear market to 19%. Packaged Facts estimates
sales declined at a CAGR of three percent to $8.7 billion. Footwear sales of specific retailers
are not known; however, many retailers have had problems. While Wal-Mart continues to do
well, especially in the down economy, other retailers such as Macy’s and K-Mart have
suffered due to elements such as over-capacity and declining traffic.
Apparel Stores Less of a Force
Packaged Facts estimates footwear sales at clothing stores were down slightly in 2008, but
still grew at an annual rate of one percent for the 2004–2008 period. Despite the modest
growth, it is estimated that footwear sales as a percent of the total footwear market declined
from 13% in 2004 to 12% in 2008.
Sporting Goods Stores on the Rise
Accounting for just seven percent of the footwear market, sporting goods stores saw better
results, growing two percent in 2008 to reach $3.2 billion. For the 2004–2008 period sporting
goods stores’ footwear sales grew at a CAGR of four percent.
Catalogs Tried and True, Internet Still on Trial
Non-store retailers, which include catalogs and etailers, saw sales increase at an annual rate
of six percent to reach $2.6 billion to account for six percent of footwear sales. Many
footwear marketers and retailers have used catalogs as a way to proactively entice consumers
for some time. For instance Genesco, which operates the high-end Johnston & Murphy men’s
footwear brand, has sold product via catalog since the 1980s. The catalog has been solid
performer for the company mainly due to the loyal customer base the company has built over
time.
Only in the last few years has the Internet become a force in the footwear market. Because of
the inherent need for consumers to try on footwear, growth has been much slower than many
other products that are sold over the Internet for many other marketers. As an example,
Skechers, which had $1.4 billion in sales in 2008 stated that just one percent of its sales, or
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Chapter 3: Retail & Distribution
The Global Footwear Market
$18 million, came from the Internet despite having sold products via the Internet since 2002.
Still the company did see annual growth of 39% for sales through the Internet during the
2004–2008 period.
Zappos.com Gets in Step
While marketers and brick-and-mortar retailers have seen their Internet sales grow slowly
compared to other products more suited for online retailing, Zappos.com has been a bright
spot finding robust growth. In 2008, sales grew an estimated 19% to reach the $1.0 billion
mark. For the 2004–2008 period sales grew at an annul rate of 53%! However, the company
has not been immune from the economic slump. While quarterly sales were unavailable, the
fact that the company laid off eight percent of its workforce at the end of 2008 points to the
likelihood of slowing, if not declining growth going into 2009.
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The Global Footwear Market
Chapter 3: Retail & Distribution
Figure 3–1
Share of U.S. Footwear Sales by Major Channel, 2008
(%)
General
merchandise
stores
18.6%
Clothing stores
12.0%
Sporting goods
stores
6.9%
Shoe stores
53.6%
Nonstore retailers
5.6%
All other
3.3%
* Also includes hobby, book, and music stores.
Note: Non-store retailers includes catalog sales and ecommerce sales.
Source: Packaged Facts.
Footwear as a Percent of Retailer Sales by Channel
Not surprisingly, shoe stores in the United States captured virtually all their total sales from
the sales of footwear, while other major channels in which footwear is sold saw less than four
percent of their sales come from footwear. Shoe stores saw 93% of their revenues come from
footwear in 2008 versus 87% in 2004. Sporting goods stores clothing stores captured four
percent of their sales from footwear in 2008. General merchandise stores, which include
department store chains, super stores such as Wal-Mart, and discount stores such as K-Mart,
saw two percent of their sales come from footwear while non-store retailers saw just one
percent.
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Chapter 3: Retail & Distribution
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Table 3–2
U.S. Footwear Retail Sales as a Percent of Selected Retail Channel Sales, 2004–2008
(%)
2004
2005
2006
2007
2008
2004–2008
CAGR
87.2%
90.3%
93.2%
93.0%
93.4%
1.7%
Sporting goods
3.5
3.5
3.6
3.6
3.7
1.5
Clothing stores
3.9
3.8
3.6
3.5
3.6
-2.6
General merchandise stores
1.9
1.8
1.6
1.5
1.5
-6.8
Non-store retailers
0.9
0.9
0.9
0.9
0.9
-1.2
All Channels
4.2
4.2
4.1
3.9
3.9
-2.1
Channel
Shoe stores
Note: Does not include all other retail channels and non employer firms. Sporting goods stores also includes book,
music and hobby retailers.
Source: Packaged Facts.
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The Global Footwear Market
Chapter 3: Retail & Distribution
Retail Channels and Stores by Consumer Preference
Footwear Consumers Prefer to Shop at Specialty Apparel Stores
According to data supplied by BIGresearch, when asked what type of retail location they
prefer to shop at for footwear, specialty apparel (i.e. segmented clothing and shoe stores)
ranked number one with consumers at 30%, followed by discount stores with 18% and
department stores with 17%. The Internet and catalogs were far less popular with just three
percent and one percent of respondents, respectively. Membership houses barely registered
and 18% had no preference. For more information on consumer retail preferences, see
Chapter 6: The Footwear Consumer.
Figure 3-2
Consumer Penetration Levels for Type of Retail Shopped Most Often for Shoes,
by Adult Users, 2008
(%)
Discount Store
18.1%
Department Store
16.7%
Internet
3.0%
Catalog
1.2%
Membership
W arehouse
0.2%
No Preference
18.1%
Specialty Apparel
29.9%
Other
12.8%
Source: BIGresearch, Consumer Intentions and Actions Survey and Simultaneous Media Study, © July 2008.
BIGresearch, All Rights Reserved. Compiled by Packaged Facts.
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Chapter 3: Retail & Distribution
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Wal-Mart, Payless Still Top Choice for Consumers
BIGresearch named Wal-Mart the retail leader for footwear purchases followed by Payless
Shoe Source, both with 12% of consumers. However, preferences for these two are down
from 14% in 2006. What’s more, both retailers saw their consumer preference numbers
decline to 11% in BIGreasearch’s February 2009 survey. In spite of the downturn, Wal-Mart
continues to trump competitors in the down economy with its commitment to everyday low
prices and efforts to include higher profile name brands such as L.E.I. and Danskin. Payless
current retail outreach strategy focuses more on celebrity launches such as the launch of the
Christian Siriano for Payless collection created by the “Project Runway” winner, available in
September 2009.
Kohl’s Hopes Celebrity Will Kick Sales Up a Notch
Picking up the slack was third-place Kohl’s, which saw its consumer preference rise from
four percent in July 2006 to five percent in July 2008 to six percent in February 2009. Kohl's
has long utilized a celebrity strategy. In April 2009, the company, in partnership with Iconix
Brand Group's Candie's brand, signed a marketing deal with pop star Britney Spears, who
will appear this year in the Candie's Only at Kohl's print, TV, in-store and online ad
campaigns.
Economy Hard on Off-Pricers Too
After seeing small but steady growth since 2006, off-pricer DSW saw its preference decline
back to three percent in February 2009 from four percent in July 2008 in spite of increasing
its selection of designer footwear.
And from Behind Comes Famous Footwear
In July 2008, Famous Footwear accounted for 1.6% of consumer interest, but after adding
exclusive fashion brands such as Fabulosity and Miss Bisou and launching a high-profile ad
campaign during the 2009 Academy Awards, interest has improved. In February 2009,
BIGresearch has the retailer at 2.3%.
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The Global Footwear Market
Chapter 3: Retail & Distribution
Table 3-3
Consumer Penetration Levels for Stores Shopped Most Often for Shoes,
by Adult Users, 2006-2008
(%)
Store
2008
2007
2006
11.8%
11.6%
14.1%
Payless ShoeSource
11.7
11.3
14.4
Kohl’s
4.9
4.7
3.6
DSW
3.7
2.9
2.4
JC Penney
2.9
3.1
2.5
Foot Locker
2.4
2.9
1.8
Macy's
2.3
2.4
1.2
Sears
2.0
2.0
1.8
Kmart
1.8
1.8
2.3
Target
1.8
1.7
1.8
Famous Footwear
1.6
1.5
1.8
Shoe Carnival
1.6
1.6
1.5
Nordstrom
1.4
1.4
1.4
Dillards
1.2
1.0
1.0
Finish Line
1.0
0.6
0.4
Online/Internet
0.9
0.7
0.4
Marshalls
0.8
0.5
0.4
Zappos
0.7
0.6
0.6
Dick's Sporting Goods
0.6
--
--
Ross
0.6
0.5
0.4
Shoes.com
0.6
0.5
--
Belk
0.5
0.4
0.3
Nike
0.5
0.5
0.3
Rack Room
0.5
0.6
0.7
SAS Shoes
0.5
0.5
0.7
Academy
0.4
0.4
0.3
Big 5 Sporting Goods
0.4
0.4
0.7
ebay
0.4
0.3
0.3
Shoe Dept.
0.4
0.5
0.5
Skechers
0.4
--
--
Bass
0.3
--
--
Bealls
0.3
0.3
0.3
Easy Spirit
0.3
0.2
0.2
LL Bean
0.3
--
--
Wal-Mart
(continued)
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Chapter 3: Retail & Distribution
The Global Footwear Market
Table 3-3 [cont.]
Consumer Penetration Levels for Stores Shopped Most Often for Shoes,
by Adult Users, 2006-2008
(%)
Store
2008
2007
2006
Meijer
0.3
0.3
0.4
Mervyns
0.3
0.4
0.5
New Balance
0.3
0.3
--
Outlet Stores
0.3
0.3
0.3
Shoe Show
0.3
0.4
0.4
TJ Maxx
0.3
0.3
0.2
Florsheim
0.2
0.2
--
Haband
0.2
0.3
--
Journeys
0.2
0.4
--
Mason
0.2
--
0.3
Redwing
0.2
--
--
Rockport
0.2
0.3
--
Value City
0.2
0.4
0.5
Nine West
--
0.2
0.2
No Preference
18.1
21.2
20.1
Other
17.3
17.3
19.0
Note: -- signifies not data available.
Source: BIGresearch, July Consumer Intentions and Actions Survey and Simultaneous Media Study, © July 2008.
BIGresearch, All Rights Reserved. Compiled by Packaged Facts.
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The Global Footwear Market
Chapter 4
Chapter 4: Competitive Landscape
Competitive Landscape
Overview
This chapter presents a look at the competitive landscape for footwear with an examination of
major players and the jockeying for position within the global and U.S. markets. The first
section highlights the major events such as strategic partnerships, acquisitions and
divestitures among selected competitors and puts these events into context of the overall
market. The second section presents selected marketer profiles of both major and minor
competitors to provide a sample of the dominant players juxtaposed to smaller players that
have found niches or are attempting to crack into the major leagues.
Footwear Market Highly Fragmented
The global footwear market is highly competitive and fragmented with a few major players
and a seemingly endless array of smaller players, including designers, marketers,
manufacturers and retailers, all vying for share. Globally, several companies crack the $1.0
billion dollar barrier in footwear sales but only Nike, Inc. and Adidas AG bring in more than
$5.0 billion.
Nike the Global Leader
At the top, Nike had sales of $10.3 billion from its Nike brand at the end of its 2009 fiscal
year. Packaged Facts estimates total company footwear sales, which include Cole Haan,
Converse, Hurley, Nike Golf, and Umbro brands, at $10.9 billion for the 12-month period
ending November 30, 20084.
Adidas at Number 2
Adidas AG vaulted much higher in 2006 when it purchased Reebok, adding more than $2.0
billion in footwear sales globally. In an effort to further focus its holdings on athletic
footwear and apparel, the company later sold its Salomon brand, which makes ski equipment
4
Nike, Inc.’s fiscal year ends May 31 of each year. Figures here have been adjusted to reflect approximate calendar year results
more comparable to other firms.
August 2009
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Chapter 4: Competitive Landscape
The Global Footwear Market
and hiking boots, to Finland-based Amer Sports. Including Reebok for the 2004–2008 period,
total footwear sales for the company grew at an annual rate of six percent.
Other Top Competitors: Puma, Asics, New Balance, C&J Clark
Companies hovering nearer to the $2.0 billion global footwear sales mark include Germanybased Puma AG at $2.1 billion in 2008 and Japan-based Asics Corporation at $1.7 billion.
U.S.-based New Balance Athletic Shoe, Inc.—probably the largest privately held athletic
footwear marketer—had $1.6 billion in total sales in 2008, but the number also includes an
unspecified amount in athletic apparel and accessories. Also unknown is privately held,
United Kingdom-based C&J Clark, which markets mostly casual footwear for men, women,
and children. Total sales are unknown, but are believed to somewhere between $1.5 and $2.0
billion.
Table 4–1
Selected Footwear Marketers with Footwear Sales Greater Than $1.0 Billion, 2004–2008
(in millions $)
Company
2004
2005
2006
2007
2008
04–08 CAGR
Nike, Inc.
$7,580.4
$8,387.1
$9,025.1
$10,472.9
$10,894.2
9.5%
Adidas AG
5,689.2
5,956.9
5,945.7
6,512.4
7,237.5
6.2
Puma AG
1,258.0
1,463.3
1,783.8
1,902.5
2,110.3
13.8
Asics Corporation
824.3
1,023.8
1,162.6
1,419.1
1,728.6
20.3
Geox SpA
423.0
566.6
769.1
1,055.7
1,313.2
32.7
Skechers USA Inc.
738.7
797.8
956.6
1,098.9
1,139.6
11.4
Wolverine Worldwide Inc.
903.6
964.5
1,036.9
1,099.2
1,106.1
5.2
Ecco Sko A/S
523.6
589.6
707.6
911.3
1,012.2
17.9
The Timberland Company
1,153.2
1,200.1
1,126.9
1,004.8
974.3
-4.1
Jones Apparel Group
1,002.4
978.6
941.1
955.8
938.3
-1.6
Source: Compiled by Packaged Facts from annual reports.
Note: Nike footwear sales are for the 12-month period ending November 30, 2008 and include estimates for Cole
Haan, Converse, Hurley, Nike Golf, and Umbro. Adidas AG sales include Reebok sales for the entire period on a pro
forma basis. Some companies’ sales include retail sales in addition to wholesale. Jones Apparel Group figures
include wholesale footwear and accessories, but do not include footwear sold through retail locations. Sales for
Adidas AG, Puma AG, Asics Corporation, Geox SpA, Ecco Sko A/S have been translated to U.S. dollars using the
average annual exchange rate for their respective home currencies.
Athletic Footwear Market More Concentrated at Top
In athletic footwear, competition is much more concentrated at the top with U.S.-based Nike,
and Germany-based Adidas AG, Puma AG, and Asics Corporation with $22 billion combined
global footwear revenue. But beyond that, the competition dwindles below the $1.0 billion
mark to a smattering of players focusing on niche markets.
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Chapter 4: Competitive Landscape
Niche Athletic Sales Lower but Offerings Diverse
New Balance Shoe Inc. is still one of the largest, most recognized brands and known for its
special widths not available by other brands, but its footwear sales globally are likely under
the $1.0 billion mark. Other minor athletic footwear competitors (2008 sales) include Fila
(~$300-400 million), K-Swiss ($340 million), Columbia Sportswear ($217 million), Amer
Sports ($210 million), and Under Armour ($85 million).
Other footwear marketers, such as Skechers, market what may be termed as performanceinspired footwear—casual footwear with athletic shoe construction and styling—along side
more traditionally styled casual footwear. Here the line gets a bit blurry making it difficult to
distinguish athletic footwear from non-athletic footwear. It also becomes a matter of
marketing perspective and consumer perception. Still others, such as Wolverine Worldwide,
VF Corporation, Deckers Outdoor Corporation, and The Timberland Company, produce a
wide range of athletic and outdoor footwear as well as every conceivable hybrid version in
between.
Nike Leads U.S. Footwear Market with Double-Digit Share
Packaged Facts estimates Nike accounted for the largest share of the U.S. market in
wholesale terms with 21% on $4.3 billion in revenue for the 12-month period ending
November 30, 2008, growing from 18% in 2004.
Followed By Adidas, Jones Apparel in Single Digits
Adidas AG accounted for eight percent of the U.S. market in 2008 on footwear sales of $1.6
billion. The company had only three percent of the market in 2005, but after the acquisition
of Reebok, the company’s share jumped to nine percent in 2006.
Jones Apparel Group accounted for five percent of the U.S. market through its Easy Spirit,
Nine West and other brands’ wholesale revenues and is the largest marketer of women’s nonathletic footwear. The company’s share is likely a bit higher considering that footwear sold
through its retail channels is not included in this figure.
Privately Held Companies Share Considerable
Other companies that likely have a considerable stake in the U.S. market include several
companies for which data was not available. They include Berkshire Hathaway-owned Justin
Brands, United Kingdom-based C&J Clark, Kenneth Cole, LA Gear, and Red Wing Shoe.
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Chapter 4: Competitive Landscape
The Global Footwear Market
Table 4–2
Selected Global Footwear Marketers with U.S. Sales, 2004–2008
(in millions $)
Company
2004
2005
2006
2007
2008
04–08 CAGR
Nike, Inc.
$3,225.4
$3,589.4
$3,958.1
$4,332.3
$4,316.5
7.6%
457.8
581.3
1,801.0
1,730.4
1,568.1
36.0
1,002.4
978.6
941.1
955.8
938.3
-1.6
Skechers USA, Inc.
582.2
634.3
772.9
831.2
807.0
8.5
Brown Shoe Company, Inc.
646.3
838.4
893.9
783.1
733.3
3.2
Collective Brands (Stride Rite)
531.2
545.5
627.3
651.8
671.3
6.0
Wolverine World Wide, Inc.
654.7
673.1
655.1
669.8
661.4
0.3
New Balance Shoe, Inc.
614.2
636.1
653.4
625.8
636.3
0.9
Deckers Outdoor Corporation
175.4
229.5
266.1
386.6
581.5
34.9
The Timberland Company
675.8
674.2
607.9
481.0
465.9
-8.9
Asics Corporation
132.0
192.6
258.1
315.1
383.8
30.6
Puma AG
203.5
312.3
371.7
328.1
305.8
10.7
Crocs, Inc.
10.9
94.8
233.8
395.9
294.1
127.9
Genesco, Inc.
226.6
229.2
266.1
285.6
274.6
4.9
Weyco Group, Inc.
223.0
209.5
221.0
232.6
221.4
-0.2
Ecco Sko A/S
133.6
147.9
180.0
199.9
185.9
8.6
K-Swiss, Inc.
397.4
380.5
318.7
202.4
141.8
-22.7
--
99.3
107.8
118.2
128.0
--
112.3
123.7
128.3
128.7
120.0
1.7
--
--
26.9
40.9
84.8
--
Geox SpA
15.1
12.6
23.7
33.0
73.3
48.3
Amer Sports Corporation
37.5
35.5
39.3
48.3
58.9
11.9
Heelys, Inc.
13.8
36.6
161.3
153.0
37.1
28.0
Adidas AG
Jones Apparel Group
LaCrosse Footwear, Inc.
Columbia Sportswear Company
Under Armor, Inc.
Note: Nike footwear sales are for the 12-month period ending November 30, 2008 and include estimates for Cole
Haan, Converse, Hurley, Nike Golf, and Umbro. Adidas AG sales include Reebok sales for the entire period on a pro
forma basis. Some companies’ sales include retail sales in addition to wholesale. Some company sales have are for
the fiscal year ending January 2009. Jones Apparel Group figures include wholesale footwear and accessories, but
do not include footwear sold through retail locations. Sales for Adidas AG, Amer Sports Corporation, Puma AG,
Asics Corporation, Geox SpA, Ecco Sko A/S have been translated to U.S. dollars using the average annual
exchange rate for their respective home currencies.
Source: Compiled by Packaged Facts from annual reports.
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Figure 4–1
Share of U.S. Footwear Wholesale Market by Selected Company, 2008
(%)
Crocs, Inc.
1.4%
Genesco
1.3%
Weyco
1.1%
Puma
1.5%
All others
37.6%
Asics
1.9%
Timberland
2.3%
Deckers Outdoor
2.8%
New Balance
3.1%
Wolverine
3.2%
Stride Rite
3.3%
Brown Shoe
3.6%
Skechers
3.9%
Nike
21.0%
Jones Apparel
4.6%
Adidas AG
7.6%
Note shares may not include all footwear products for some companies; figures may include other products.
Source: Packaged Facts
Consolidation and Strategic Acquisitions All but Stopped
Consolidation continued into 2008 as companies made changes to their portfolios in hopes of
finding strategic benefits and accelerated growth. However, activity slowed dramatically in
2009 as the economic landscape forced marketers to focus on conserving cash versus
spending on big deals. The largest firms focused on strengthening their core businesses
whether they are performance athletic and sports footwear or dress and casual footwear.
Many firms divested businesses up through 2008 that were no longer adding the level of
value needed to continue stronger growth or that were no longer a focus of the overall
company. Nike sold its Bauer Hockey business in 2008, but added Umbro to focus more on
soccer. Adidas AG sold Salomon to Amer Sports in 2005 as it tried to digest Reebok.
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A few smaller, niche companies that reaped rewards from fads through 2008 tried to bolster
their business by adding additional products and brands. Skechers played around with kids’
player, Heelys, and Deckers Outdoor bought TSUBO, a fashionable comfort shoe company,
in 2008. Crocs, Inc. bought several smaller firms in the years following its IPO, but so far has
failed to add a mainstream footwear product—instead focusing on companies and products
that compliment its existing business. Its Jibbitz charms business has so far turned out to be a
smart deal, but its acquisition of Fury Hockey, a hockey gear maker, was a mess.
Nike on the Prowl?
In early 2009, speculation of further Nike acquisitions surfaced when Women’s Wear Daily
reported that Nike was in talks to acquire Quiksilver Inc., maker of surfing and skateboard
lifestyle-oriented apparel. The speculation turned out to be just that as no deal had been
reached by the time of this writing. Though Nike has been sitting on a pile of cash and other
current assets ($9.0 billion as of February 2009) with which it could make strategic
acquisitions, Packaged Facts contends that adding Quiksilver, which has had problems
growing revenue and staying afloat, would add little to Nike’s portfolio brands since its
Hurley business already plays in much the same space as Quiksilver.
What’s more, the company is still digesting Umbro, which it acquired in March 2008. Umbro
is a much more strategic fit adding a strong global soccer business to Nike’s other sports
focuses, but sales growth for the Umbro brand is not as strong as some other businesses.
Skechers Diggin’ in Its Heelys
In August 2008, Skechers announced it had proposed the acquisition of Heelys Inc. Heelys
makes kids sneakers with wheels in the heels that allow kids to alternate between rolling and
walking. Talks had been going on reportedly since December 2007, but Skechers decided to
make its desires known in August 2008 when it announced its offer of $143 million, or $5.25
per share. Skechers dropped pursuit when Heelys rejected the offer, citing Heelys
management was being unrealistic regarding its company’s value. Shortly thereafter the
bottom fell out of the U.S. economy and took Heelys sales with it. Heelys 2008 sales declined
61% from the 2007 level of $184 million to just $71 million. As a result, Heelys share price
was cut from just over $5.00 a share at the end of August 2008 to a low of $1.19 in March
2009. In November 2008, the company hired middle-market investment bank Houlihan
Lokey to advise on strategic options. In a possible acknowledgment that Heelys management
faltered over the proposed merger, CEO Donald Carroll resigned in February 2009.
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LaCrosse Footwear, Inc. Expands with Sustainable Acquisition
In May 2009, LaCrosse Footwear Inc., a marketer of branded work and outdoor footwear and
apparel, announced its intention to acquire Environmentally Neutral Design Outdoor, Inc., or
END, for about $500,000. END designs and markets outdoor and athletic footwear using
sustainable practices such as recycled materials and began shipping product only in 2008.
The company received the “Best Trail Running Shoe Debut” from Runner’s World magazine
in their April 2009 issue and “Best Road Running Shoe Debut” in their June 2009 issue. The
company will debut its Spring 2010 line at upcoming shows including the Outdoor Retailer
Summer Show. The acquisition by LaCrosse closed in June 2009.
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Selected Company Profiles
Nike, Inc.
Company Details
Descriptions
Company Type
Public
Revenues (fiscal year ending May 31 2009)
$19.2 billion
Employees
32,500
President, CEO
Mark Parker
VP GM Global Footwear
Jan Singer
VP Footwear Sportswear
Andrea Correani
VP Global Footwear Converse
John R. Hoke
VP Footwear Sport Performance
Chris Lindgren
VP & Chief Executive Officer, Cole Haan
James Seuss
Address
Nike World Headquarters
One Bowerman Drive
Beaverton, OR 97005
Tel:
503-671-2500
Website:
www.nikebiz.com, www.nike.com
Overview
Based in Beaverton, Oregon, Nike, Inc. is the world’s largest designer and marketer of
athletic footwear and apparel. The company designs, markets and distributes footwear,
apparel, equipment, and athletic and fashion accessories in more than 180 countries
worldwide.
Products are sold through a variety of channels including more than 25,000 retail accounts in
the United States and more than 27,000 retail accounts internationally. Nike also operates
company-owned retail locations such as Nike factory stores and brand specific stores such as
Niketown, Cole Haan, and Converse. The company had 296 company-owned retail locations
in 2008. Other distribution channels include Internet etail, as well as independent distributors
and licensees.
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Virtually all of the company’s footwear and apparel products are manufactured outside the
United States, primarily in Asia by contract suppliers in China, Vietnam, Indonesia, and
Thailand, though other countries such as Argentina, Brazil, India, Italy, and South Africa also
produce products for sale in those countries and surrounding regions. In total, Nike contracts
out to manufacturers in 34 countries.
In October 2007, Nike announced that it had reached agreement to acquire soccer footwear
and apparel brand Umbro for $565 million. The acquisition was complete in March 2008 for
$576 million. The acquisition gives Nike a leading position in the soccer market and greater
exposure to international customers.
In February 2008, Nike announced that it reached an agreement to sell its Bauer Hockey to an
investor group led by Kohlberg & Company and Canadian businessman W. Graeme Roustan
for $200 million. The sale was completed in April of 2008.
Performance
For its fiscal year ending May 31, 2009, Nike reported total net sales increased three percent
over the 2008 level of $18.6 billion to $19.2 billion. However, net sales were down seven
percent in its fourth quarter as the global recession curtailed spending on athletic wear
worldwide.
The company indicated that futures orders for its products for the first half of its 2010 fiscal
year were down 12% (five percent excluding changes in currency exchange rates). Nike’s
futures orders program accounted for 86% of U.S. sales in 2008. For the 2005–2009 period,
Nike’s net sales grew from $13.7 billion at a compound annual growth rate (CAGR) of nine
percent.
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Figure 4–2
Nike, Inc. Total Net Sales, 2005–2009
(in millions $)
25,000.0
20,000.0
18,627.0
19,176.1
16,325.9
15,000.0
14,954.9
13,739.7
10,000.0
5,000.0
0.0
2005
2006
2007
2008
2009
Total Net Sales
Source: Nike, Inc. annual reports and press releases.
Figures are for the fiscal year ending May 31 of stated year.
Table 4–3
Nike, Inc. Total Net Sales and Year-over-Year Percentage Change, 2005–2009
(in millions $)
Year
Total Net Sales
YoY % Change
2005
$13,739.7
--
2006
14,954.9
8.8%
2007
16,325.9
9.2
2008
18,627.0
14.1
2009
19,176.1
2.9
--
8.7%
CAGR
Source: Nike, Inc. annual reports and press releases.
Figures are for the fiscal year ending May 31 of stated year.
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Sales by Product Category
Nike footwear accounted for 54% of the company’s total net sales in its 2009 fiscal year, up
slightly from 52% in 2008, but down over the longer term. In 1999, footwear accounted for
60% of total net sales and was even higher in previous years. However, the company has
worked to build its other businesses in an effort to become more diversified. Apparel
accounted for 27% and equipment made up six percent of total net sales in 2009. Nike’s
“Other” division, which includes the fashion footwear and apparel brand Cole Haan,
Converse, Nike Golf, and newly acquired Umbro, made up the remaining 13%.
Figure 4–3
Share of Nike, Inc. Total Net Sales by Product Category, 2009
(%)
Apparel
27.4%
Equipment
5.8%
Footwear
53.7%
*Other
13.1%
Figures are for the fiscal year ending May 31 of stated year.
* Other includes footwear products sold through Cole Haan, Converse, Hurley, Nike Golf, and Umbro brands.
Source: Nike, Inc. annual reports and press releases.
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Sales by Geographic Region
Nike’s largest share of sales by region was in the United States in 2009 at 34%, but
international markets have become the largest driver of growth for the company. Even
including Nike’s “Other” business, which accounted for 13% in 2009, international is where
it’s at for Nike. In fact, international sales have accounted for more than 50% of Nike’s total
sales since 2002.
It’s not to say that the U.S. business hasn’t seen growth. Sales grew at a CAGR of six percent
between 2005 and 2009. But that pales in comparison to the Asia Pacific and Americas
regions, which showed annualized growth of 15% and 17%, respectively. As a result, the
Asia Pacific region accounted for 17% of total sales in 2009 compared to just 14% in 2005.
The Americas region was just five percent of total net sales in 2005.
Figure 4–4
Share of Nike, Inc. Total Net Sales by Geographic Region, 2009
(%)
Europe, Middle
East and Africa
28.7%
Asia Pacific
17.3%
Americas
6.7%
Other*
13.1%
United States
34.1%
Figures are for the fiscal year ending May 31 of stated year.
* Other includes footwear products sold through Cole Haan, Converse, Hurley, Nike Golf, and Umbro brands.
Source: Nike, Inc. annual reports and press releases.
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Footwear Sales Solid Despite Economy
Despite the slowing economy, Nike’s footwear business still fared well posting a six percent
increase over the fiscal year 2008 level of $9.7 billion to $10.3 billion in 2009. Footwear
sales were up in all regions including four percent in the United States, 15% in the Asia
Pacific region, 13% in the Americas. Europe and the Middle East lagged with an increase of
just one percent. For the 2005–2008 period, Nike footwear sales grew at a CAGR of nine
percent.
Figure 4–5
Nike, Inc. Footwear Net Sales and Percent of Total Net Sales, 2005–2009
(in millions $)
60.0%
12,000
53.1%
53.3%
52.2%
52.2%
10,000
53.7%
10,307
50.0%
9,732
8,514
8,000
40.0%
7,966
7,300
6,000
30.0%
4,000
20.0%
2,000
10.0%
0.0%
0
2005
2006
Footwear
2007
2008
2009
% of total Nike net sales
Figures are for the fiscal year ending May 31 of stated year.
Source: Nike, Inc. annual reports and press releases.
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Table 4–4
Nike, Inc. Total Net Sales and Year-over-Year Percentage Change, 2005–2009
(in millions $)
Year
Total Net Sales
YoY % Change
2005
$7,299.7
--
2006
7,965.9
9.1%
2007
8,514.0
6.9
2008
9,731.6
14.3
2009
10,306.7
5.9
--
9.0%
CAGR
Source: Nike, Inc. annual reports and press releases.
Figures are for the fiscal year ending May 31 of stated year.
Cole Haan, Converse and Other Sales Did Suffer
It was Nike’s collection of other businesses that suffered in 2009, falling three percent from
the 2008 level of $2.6 billion to $2.5 billion. In comparable terms, which excludes Bauer
Hockey and the addition of Umbro, the company stated sales did increase five percent over
all, but were down three percent in the fourth quarter. The company noted that both its Cole
Haan and Nike Golf businesses suffered from the economic environment. For the 2005–2009
period, sales grew at a CAGR of 10%.
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Figure 4–6
Nike, Inc. Net Sales of Cole Haan, Converse & Other Products and Percent of Total Net
Sales, 2005–2009
(in millions $)
3,000
12.6%
15.0%
13.9%
13.8%
13.1%
13.0%
2,500
2,593
2,514
2,260
10.0%
2,000
1,947
1,736
1,500
5.0%
1,000
500
0.0%
0
2005
2006
2007
Cole Haan, Converse and Other
2008
2009
% of total Nike net sales
Figures are for the fiscal year ending May 31 of stated year.
Source: Nike, Inc. annual reports and press releases.
Table 4–5
Nike, Inc. Total Net Sales and Year-over-Year Percentage Change, 2005–2009
(in millions $)
Year
Total Net Sales
YoY % Change
2005
$1,735.7
--
2006
1,947.1
12.2%
2007
2,259.6
16.0
2008
2,592.8
14.7
2009
2,514.3
-3.0
--
9.7%
CAGR
Figures are for the fiscal year ending May 31 of stated year.
Source: Nike, Inc. annual reports and press releases.
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Brand Portfolio
Nike’s pervasive swoosh can be seen on virtually every sport footwear and athletic product
from aquatics to wrestling. The company also markets and operates other brands including
fashion footwear marketer and retailer Cole Haan, athletic and casual footwear and apparel
maker Converse, youth-oriented actions ports marketer Hurley International and United
Kingdom-based soccer footwear and apparel maker Umbro.
Table 4–6
Nike Brand Portfolio
Division/Brand
Description
Nike
Designed primarily for specific athletic use, although products
are worn for casual or leisure purposes. Subbrands include Nike
Air Jordan, and Nike Golf
Cole Haan
Casual footwear, apparel and accessories for men and women
under the brand names Cole Haan and Bragano
Converse
Athletic and casual footwear, apparel and accessories under the
Converse®, Chuck Taylor, All Star, One Star, John Varvatos,
and Jack Purcell trademarks and footwear under the Hurley
Hurley
Action sports apparel for surfing, skateboarding, and
snowboarding, youth lifestyle apparel, and accessories
Umbro
Athletic and casual footwear, apparel and equipment, primarily
for the sport of soccer
Source: Nike, Inc. 2008 annual report.
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Timeline of Significant Events
Table 4–7
Nike Timeline of Significant Events
Year
1957
1962
1972
1974
1979
1980
1985
1988
1992
1995
1997
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Significant Event
Athlete Phil Knight and Bill Bowerman, a track coach who tinkered with shoe designs, meet at the
University of Oregon.
The two men form Blue Ribbon Sports to make quality American running shoes.
The company becomes Nike, after the Greek goddess of victory. The Nike "Swoosh" is designed by
graduate student Carolyn Davidson, who is paid $35. The same year Nike splits with Onitsuka in a
dispute over distribution rights.
At the 1972 Olympic Trials, Knight and Bowerman persuade some marathoners to wear Nike, followed
by advertising that Nike’s were worn by "four of the top seven finishers."
Bowerman tests a new sole by stuffing a piece of rubber into a waffle iron. The result is the waffle sole,
which is added to Nike’s running shoes.
Nike captures 50% of the U.S. running shoe market.
Nike goes public.
Nike expands with shoes for other sports, introducing the Air Jordan basketball shoe named after
basketball superstar Michael Jordan.
Nike's famous "Just Do It" slogan is introduced.
Company buys dress-shoe maker Cole Haan.
Nike opens first NikeTown store.
Nike acquires Canstar Sports, which includes hockey equipment maker Bauer.
Company signs 20-yr-old golf phenomenon Tiger Woods for $40 million endorsement contract.
Nike acquires the license to place its logo on NFL uniforms.
Nike launches a Jordan-branded athletic footwear and apparel division.
Nike opens Jordan store-within-a-store boutiques.
Bowerman dies; Nike releases a line of running shoes in his honor.
The company launches a line of athletic electronics, including MP3 players, heart monitors, and two-way
radios.
Nike opens its first Nikegoddess store in Newport Beach, California.
Nike acquires Hurley International, a distributor of action sports apparel.
Nike acquires Converse and leaves it as a separate operating.
Company becomes the first company to be named "Advertiser of the Year" by the Cannes Advertising
Festival, twice (also 1994).
Nike creates the Exeter Brands Group, a wholly owned subsidiary, to build athletic footwear and apparel
brands for the value retail channel.
Company acquires Official Starter Properties LLC & Official Starter LLC.
Nike launches Air Jordan XX, the 20th edition of the Air Jordan basketball shoe series.
Company introduces the Nike Free shoe, designed to simulate barefoot training.
Nike introduces Air Max 360 featuring a foamless midsole using a new method of creating air soles.
Company teams with Apple Computer on Nike+ combining digital technology with footwear to provide
music, biofeedback, and data collection.
Nike opens flagship retail store in Beijing, China and sponsors 22 of the 28 Chinese teams competing in
the 2008 Summer Olympics
Company sells Starter to Iconix Brand Group
Nike introduces Air Jordan XX3
Company acquires United Kingdom-based Umbro Ltd and sells Nike Bauer Hockey
Nike introduces the lightest athletic shoes to date using Flywire and Lunarlite technology reducing
weight up to 18%
Company introduces new NikeID.com for custom consumer personalization of Nike products
Nike introduces Lunarglide+ featuring Dynamic Support
Company announces restructuring and that it may cut 1,400 jobs
Nike fiscal year end (May 31) revenues reach $19.2 billion
Source: www.nikebiz.com.
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Under Armour, Inc.
Company Details
Descriptions
Company Type
Public
Revenues (2008)
$725 million
Employees
2,200
CEO
Kevin Plank
Senior Vice President of Footwear and Licensing
Raphael Peck
Senior Vice President of Consumer Insights
Kevin Haley
Address
1020 Hull Street
Baltimore, MD 21230-2080
Tel:
(410) 454-6428
Website:
www.uabiz.com, www.underarmour.com
Overview
Founded in 1996 as KP Sports by University of Maryland football player Kevin Plank, Under
Armour is best known for its moisture-wicking undershirts and other apparel. Based in
Baltimore, Maryland, the company's products are used by both youth and professional
athletes and are sold worldwide. Though originally started as a specialty athletic apparel
company, Under Armour has quickly grown to become the company to watch in the athletic
apparel arena.
The company began offering footwear in 2006 with the introduction of football cleats
followed by baseball, lacrosse and softball cleats and slides in 2007. In 2008, Under Armour
introduced training footwear and in 2009 the company entered the running footwear market
with plans to offer soccer cleats later in the year. Similar to the company’s apparel line,
Under Armour uses its HEATGEAR brand of fabrics and offers footwear products at multiple
price points.
Performance
Under Armour’s net sales grew 20% over the 2007 level of $607 million to top the $725
million mark in 2008. Sales growth was driven by all categories and regions, but it was
footwear and international sales that drove growth in percentage terms. While 20% was quite
respectable, especially given the deteriorating economic environment in 2008, the gain was
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Chapter 4: Competitive Landscape
the slowest during the five year period. In fact, sales growth was most robust in percentage
terms in 2006, when net sales rocketed up 53% followed by another 40% gain in 2007. For
the 2004–2008 period, net sales grew at a CAGR of 37%.
Figure 4–7
Under Armour, Inc. Total Net Sales, 2004–2008
(in millions $)
800.0
700.0
725.2
600.0
606.6
500.0
430.7
400.0
300.0
281.1
200.0
205.2
100.0
0.0
2004
2005
2006
2007
2008
Total Net Sales
Source: Under Armour, Inc. annual reports and press releases.
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Table 4–8
Under Armour, Inc. Total Net Sales and Year-over-Year Percentage Change, 2004–2008
(in millions $)
Year
Total Net Sales
YoY % Change
2004
$205.2
--
2005
281.1
37.0%
2006
430.7
53.2
2007
606.6
40.8
2008
725.2
19.6
--
37.1%
CAGR
Source: Under Armour, Inc. annual reports and press releases.
Sales by Product Category
In just a few short years, Under Armour managed to grow its footwear business to account for
12% of sales, surpassing its sales from licensing and accessories at four percent each. Still,
the bulk of Under Armour’s business is apparel, accounting for 80%.
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Figure 4–8
Share of Under Armour, Inc. Total Net Sales by Product Category, 2008
(%)
Apparel
79.8%
Footwear
11.7%
Accessories
4.3%
License revenues
4.1%
Source: Under Armour, Inc. 2008 annual report.
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Sales by Geographic Region
The United States accounted 91% of total net sales in 2008 with Canada accounting for four
percent and all other countries accounting for nearly five percent. Growth in the United States
for the five-year period was at an annual rate of 18%, but at 46% for Canada and 58% for all
other countries combined.
Figure 4–9
Share of Under Armour, Inc. Total Net Sales by Geographic Region, 2008
(%)
United States
91.1%
Canada
4.4%
Other
international
4.5%
Source: Under Armour, Inc. annual reports and press releases.
Footwear Sales See Astounding Incremental Growth
Sales of Under Armour footwear grew from $27 million in 2006 to $41 million in 2007, up
52% eventually capturing seven percent of Under Armour’s total net sales. However, sales in
2008 more than doubled, up 108% to $85 million. But the big gains may be yet to come. In
the first quarter of 2009, Under Armour footwear sales rose a whopping 243% over the same
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period in 2008 to reach $57 million suggesting that the company could very well do sales of
more than $200 million by the end of 2009.
Figure 4–10
Under Armour, Inc. Footwear Net Sales and Percent of Total Net Sales, 2004–2008
(in millions $)
100
14.0%
90
11.7%
80
12.0%
84.8
10.0%
70
60
8.0%
6.7%
50
6.2%
6.0%
40
40.9
30
4.0%
26.9
20
2.0%
10
0.0%
0.0%
0.0%
0
2004
2005
Footwear
2006
2007
2008
% of total Under Armour net sales
Source: Under Armour, Inc. annual reports and press releases.
Table 4–9
Under Armour, Inc. Total Net Sales and Year-over-Year Percentage Change, 2004–2008
(in millions $)
Year
Total Net Sales
YoY % Change
2004
0.0
--
2005
0.0
--
2006
26.9
--
2007
40.9
52.1%
2008
84.8
107.6%
--
--
CAGR
Source: Under Armour, Inc. annual reports and press releases.
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Product Portfolio
Under Armour’s footwear product line began with football cleats—a side of the footwear
business known for thinner margins and slow sales growth. However, the company found
success and quickly introduced other sport cleats. But it was the launch of its training
footwear that gave the industry an inkling of the company’s goals. The introduction of
running footwear confirm suspicions: Under Armour fully intends to be a major player in the
athletic footwear business, going head-to-head with the likes of Nike and Adidas.
Table 4–10
Under Armour Footwear Product Portfolio
Footwear Type
Description
Running
Available in men's and women's sizes; models include Revenant,
Illusion, Apparition, Spectre, Mirage, Chimera
Training
Available in men's, women's, boys', and girls' sizes; models include
Proto Power II, Proto Speed II, Proto Evade II
Football
Available in men's and boys' sizes; models include Proto Combine,
SoFlo Low, Fierce, Nitro, Triple Option, Pursuit, Crusher, Iso II, Combat,
Demolish, Breakaway, Hammer II, Proto Blast
Baseball
Available in men's and boys' sizes; models include Heater, Ignite,
Raptor, Twin Bill, Streak, Leadoff II, Prowler
Soccer
Available in men's sizes; models include Dominate, Create
Lacrosse
Available in men's and women's sizes; models include Iso II, Crank, Iso,
Contener, Proto Speed, Proto Blast, Hammer II, Twin Bill ATV, Combat,
Demolish, Breakaway
Softball
Available in women's sizes; models include laser II Glyde, Radar,
Slides
Available in men's, women's, and boys' sizes; models include Playmaker
Massage , Ignite, Chesapeake II, Compression, Locker, Updrit, Gyra
Source: www.underarmour.com
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Timeline of Significant Events
Table 4–11
Under Armour Timeline of Significant Events
Year
Significant Event
1996
Under Armour is founded by former University of Maryland football player
Kevin Plank.
2000
Under Armour posts more than $5.3 million in sales.
2005
Under Armour goes public selling 9.5 million shares of stock.
Company posts $281.1 million in sales.
2006
Under Armour introduces cleated footwear line in attempt to enter footwear
market.
Company launches Click-Clack ad campaign with the tagline "I Think You
Hear Us Coming".
Company signs top NFL draft picks A.J. Hawk and Vernon Davis as
spokespersons.
Company becomes authorized supplier of footwear to NFL.
Company posts $26.9 million in footwear sales.
2007
Under Armour opens first branded retail store in Annapolis, MD.
Company introduces baseball, lacrosse and softball cleated footwear and
slides.
Footwear sales total $40.9 million.
2008
Under Armour introduces athletic training footwear in first push into
mainstream athletic footwear market.
Company opens second branded retail store in Aurora, IL.
Company becomes exlusive official outfitter of University of Maryland
Athletics.
Footwear sales total $84.8 million.
2009
Under Armour introduces running footwear.
Company launches “Athletes Run” ad campaign.
Footwear sales for the first quarter of 2009 rise 243% over the 2008 level of
$16.6 million to $56.9 million.
Source: Under Armour, Inc. press releases.
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Skechers, USA Inc.
Company Details
Descriptions
Company Type
Public
Revenues (2008)
$1.1 billion
Employees
4,130
CEO
Robert Greenberg
President
Michael Greenberg
Executive Vice President, Product Development
Mark Nason
Address
228 Manhattan Beach Blvd.,
Manhattan Beach, CA
Tel:
(310) 318-3100
Website:
www.skx.com, www.skechers.com
Overview
Based in Manhattan Beach, California, Skechers was founded by Robert Greenberg, founder
of L.A. Gear. Skechers is a more fully integrated footwear company in that it not only designs
footwear for sale through wholesale channels but also receives much of its revenue from its
Skechers footwear retail locations. At the end of 2008, the company operated 84 concept
stores, 83 factory outlet stores and 37 warehouse outlet stores in the United States, and 16
concept stores and three factory outlets internationally. The company also sells Skechers
footwear through various third-party retail channels including department and specialty
stores. The company markets shoes in over 100 countries and territories using distributors
and subsidiaries in Canada, Brazil, Chile, and across Europe, as well as through joint ventures
in Asia.
The company offers a diverse range of footwear for men, women and children under the
Skechers brand, as well as other licensed brands such as Ecko, Bebe Sport and Zoo York. Its
core consumers are 12 to 24 year-old men and women attracted to its “youthful brand image
and fashion forward designs.” Many of its best-selling and core styles are also developed for
children with colors and materials that reflect a playful image.
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Performance
Total net sales for Skechers rose three percent over the 2007 level of $1.4 billion posting a
gain of $47 million. Sales growth in previous years had been more robust, including a 20%
gain in 2006 to $1.2 billion and 16% gain in 2007. For the 2004–2008 period net sales grew
at a CAGR of 12%.
Figure 4–11
Skechers USA, Inc. Total Net Sales, 2004–2008
(in millions $)
1,600.0
1,400.0
1,394.2
1,200.0
1,440.7
1,205.4
1,000.0
1,006.5
920.3
800.0
600.0
400.0
200.0
0.0
2004
2005
2006
2007
2008
Total Net Sales
Source: Skechers USA, Inc. annual reports and press releases.
The company’s domestic wholesale business declined three percent due to both price and
volume declines and as a result of the weakened U.S. retail market. Meanwhile, international
wholesale sales increased 13% due to stronger demand for its products in several European
countries and Brazil. The company’s retail sales increased one percent in the United States
and five percent internationally due to an increase in the number of locations; however, same
store sales were off nine percent in the United States and three percent internationally.
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Table 4–12
Skechers USA, Inc. Total Net Sales and Year-over-Year Percentage Change, 2004–2008
(in millions $)
Year
Total Net Sales
YoY % Change
2004
$920.3
--
2005
1,006.5
9.4%
2006
1,205.4
19.8
2007
1,394.2
15.7
2008
1,440.7
3.3
--
11.9%
CAGR
Source: Skechers USA, Inc. annual reports and press releases.
Sales by Channel
Domestic wholesale sales accounted for 56% of total net sales in 2009 with international
wholesale sales capturing 23%. For the company’s direct-to-consumer business, brick-andmortar retail accounted for 20%, while e-commerce sales made up just one percent.
Figure 4–12
Share of Skechers USA, Inc. Total Net Sales by Channel, 2008
(%)
International
wholesale
23.1%
Domestic
wholesale
56.0%
Retail
19.7%
E-commerce
1.3%
Source: Skechers USA, Inc. 2008 annual report.
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Sales by Geographic Region
The company recorded sales from the United States accounting for 75% of total net sales,
with Canada capturing just three percent. All other countries combined made up the
remaining 22% of Skechers’ net sales
Figure 4–13
Share of Skechers USA, Inc. Total Net Sales by Geographic Region, 2008
(%)
Canada
3.0%
United States
75.2%
Other
international
21.8%
Source: Skechers USA, Inc. annual reports and press releases.
Product Portfolio
The company’s Skechers brand is made up of five sub-brands targeted at specific
demographics. Skechers USA is the company’s main imprint targeted at its core consumers.
The company also offers athletic-styled footwear under its Skechers Active brand, casual
outdoor footwear under the Skechers Cali brand, rugged outdoor footwear under the Skechers
Work brand and children’s shoes under Skechers Kids. Licensors include: Ultd. By Marc
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Ecko, Red by Marc Ecko, Zoo York, 310 Premium Footwear, Mark Nason, Bebe Sport, and
Punkrose.
Table 4–13
Skechers USA Footwear Product Portfolio
Skechers Lines
Skechers USA
Description
Men's and women's footwear generally sold through mid-tier retailers,
department stores and some footwear specialty shops. Line includes:
Casuals, Dress Casuals, Relaxed Fit (for men only), Seriously
Lightweight (for men only), Sandals and Casual Fusion.
Skechers Active
Footwear for men and women with "technical performance-inspired
looks" sold through specialty shoe stores, department stores and
athletic footwear retailers. Line includes: Joggers, Trail Runners,
Sport Hikers, Terrainers, Performance (for men only), Skechers
D’Lites (for women only), and Sport Sandals.
Skechers Cali
Sneakers, skimmers, wedges and sandals for young women designed
with canvas, fabrics and leather with unique prints to typify the
California lifestyle. The sandals range from dress casual looks to
casual to beach thongs. Line is sold through specialty casual shoe
stores and department stores.
Skechers Work
Men’s and women’s casuals, field boots, hikers and athletic shoes.
Typically sold through department stores, athletic footwear retailers
and specialty shoe stores, as well as marketed directly to consumers
through business-to-business channels.
Skechers Kids
Line includes: Skechers Kids, which is a range of infants, toddlers,
boys and girls boots, shoes and sneakers; S-Lights and Hot Lights by
Skechers; Skechers Cali for Girls, which is trend-inspired boots,
shoes, sandals and dress sneakers; Airators by Skechers; Skechers
Super Z-Strap; Skechers Bungees; HyDee HyTop from Skechers; and
Babiez by Skechers
Source: Skechers USA, Inc. 2008 annual report.
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Table 4–14
Skechers USA Licensed Footwear Product Portfolio
Fashion & Street Brands
Description
Unltd. by Marc Ecko &
Red by Marc Ecko
Marc Ecko is a line of men’s street-inspired traditional sneakers,
fusion sneakers and urban-focused casuals. Red by Marc Ecko
is a line of women’s classic and fashion-forward fusion
sneakers, sandals and Mary Janes for young women.
Zoo York
Line of action sports and lifestyle footwear for men, women and
boys. Follows the color palette and trends of Zoo York apparel
and targets skateboarders and those that embrace skate
fashion. Available in skate and specialty shops as well as select
athletic and department stores.
310 Premium Footwear
Footwear collection for men with top-quality leathers, a fashionforward approach to design and comfort, and materials that are
derived from 310 Motoring’s customized cars, including wood
burl and carbon fiber. The line consists of high-design boots,
shoes, and stylized athletics. Available in select department
stores, specialty retailers and urban independents.
Mark Nason &
Siren by Mark Nason
Sophisticated and fashion forward footwear collection, marketed
to style-conscious men, designed to complement designer
denim and dress casual wear. Available in better department
stores and boutiques.
Bebe Sport
Embracing the style and design of the Bebe Sport apparel, the
sneaker and sandal line features such details as rhinestones,
satin laces, and patent leather targeted at women 18 to 34.
Available at department stores and specialty boutiques.
Punkrose &
Public Royalty
Punkrose for women and Public Royalty for men are cuttingedge street ready footwear inspired by music, art, fashion, and
action sports. Line consists of boots, sandals, high-top and lowtop sneakers, skimmers, slip-ons. Available at department
stores, sneaker shops and specialty boutiques.
Source: Skechers USA, Inc. 2008 annual report.
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Timeline of Significant Events
Table 4–15
Skechers USA Timeline of Significant Events
Year
Significant Event
1992
Robert Greenberg, founder of LA Gear, is ousted from LA Gear.
Greenberg and his son, Michael, start Skechers to distribute $40 million of Doc
Martens shoes and boots capitalizing on the grunge fashion trend.
1993
The Greenbergs have a fall out with R. Griggs Group and lose the distributorship
of Doc Martens.
1996
Greenbergs launch women’s sneakers line.
1998
Net sales top $370 million.
1999
Skechers goes public.
2000
Skechers opens stores in London, Paris and Germany.
2001
Skechers is endorsed by Britney Spears in overseas markets to appeal to teenage
girls while in the U.S. the men’s line is endorsed by Rob Lowe and Matt Dillon to
retain the adult market.
2004
New Christina Aguilera Skechers Campaign Launches Internationally; Global
Superstar Looks ``Naughty and Nice'' in Fall 2004 Footwear Ads.
2005
Skechers Creates Kitson-Branded Footwear Line; Leading Lifestyle Footwear
Company.
Partners with L.A.'s Hottest Boutique.
Net sales top $1.0 billon for the first time.
2006
Skechers announces licensing agreement to design, develop and market men's
footwear worldwide for the premier action sport lifestyle brand Zoo York.
Company announces licensing agreement to design, develop and market
footwear in the United States and key international markets for the aviationinspired apparel brand AVIREX
Net sales top $1.2 billion.
2007
SKECHERS Sues Asics for Trade Libel, Unfair Competition and Tortious
Interference with Business Relationships.
Company introduces Shrek by Skechers.
Company posts net sales of nearly $1.4 billion.
2008
Skechers announces licensing agreement with bebe stores, inc. (NASDAQ:BEBE)
to design, develop and market BEBE SPORT women's footwear.
Company Signs Idol Winner David Cook to Global Deal.
Company announced acquisition proposal to acquire Heelys, Inc. for $5.25 per
share in cash, or $142.8 million—Heelys rejects bid outright and Skechers drops
pursuit of deal.
Company establishes joint venture in Hong Kong and Macau, China.
Company opens flagship store in San Francisco.
Net sales rise three percent to over $1.4 billion.
2009
Skechers expands in South America and establishes Skechers Chile Ltda.
First quarter net sales decline 11% from the 2008 level of $385 million to $344
million.
Source: Skechers USA press releases.
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Chapter 4: Competitive Landscape
Jones Apparel Group
Company Details
Descriptions
Company Type
Public
Revenues (2008)
$3.6 billion
Employees
7,925
President & CEO
Wesley R. Card
CEO, Footwear, Accessories and Retail
Andrew Cohen
President, Wholesale Better Footwear Brands
Richard Paterno
Address
1411 Broadway
New York, New York 10018
Tel:
(212) 642-3860
Website:
www.jonesapparel.com
Overview
Based in New York, Jones Apparel Group, Inc. is one of the leading women’s-focused
footwear, apparel and accessory designers and marketers. The company markets such
venerable brands as Gloria Vanderbilt, Givenchy, and Jones New York and footwear brands
Nine West, Bandolino, and Easy Spirit as well as the Dockers Women brand under license
from Levi Strauss & Co. The company’s operations are comprised of five segments:
wholesale better apparel, wholesale jeanswear, wholesale footwear and accessories, retail and
licensing.
At the end of 2008, the company operated 373 specialty retail stores and 644 outlet stores
primarily comprising either footwear and accessories or apparel. Though the company sells
many products in its own stores as well as through third-party retailers, its Nine West, Easy
Spirit, Bandolino and AK Anne Klein retail stores also offer products that are not marketed to
its wholesale customers. The company also opened its first multi-branded specialty store
under the ShoeWoo name in 2008.
In 2008, department stores, accounted for 58% of gross revenues with Macy's, Inc., being its
largest customer accounting for 21% of 2008 gross revenues.
Jones Apparel has the exclusive license to produce and sell women's footwear under the
Dockers Women trademark in the United States and Canada through 2011. In early 2009, the
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company signed a similar agreement with Levi Strauss & Co. to produce and sell boys'
footwear under the Dockers trademark in the United States through 2011. The men’s license
for the Dockers brand is held by footwear marketer and retailer Genesco, Inc.
In July 2008, Jones Apparel announced that it had an exclusive license through the end of
2009 with New Balance Athletic Shoe, Inc. to create and distribute a fashion-lifestyle
footwear collection that brings together New Balance's performance and materials technology
with Nine West's styles.
Performance
Net sales for Jones Apparel declined six percent from the 2007 level of $3.8 billion to $3.6
billion in 2008. The sales declines were led by the jeanswear business; however, the footwear
and accessories business as well as its retail division also suffered. The one bright spot was an
increase in revenues from foreign sales, up a modest four percent to $337 million for its
continuing businesses. The company has fully divested of its Mexico-based operations. For
the 2004–2008 period, net sales for Jones Apparel declined at a CAGR of six percent.
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Figure 4–14
Jones Apparel Group Total Net Sales, 2004–2008
(in millions $)
6,000.0
5,000.0
5,014.6
4,669.9
4,592.6
4,000.0
3,793.3
3,562.6
3,000.0
2,000.0
1,000.0
0.0
2004
2005
2006
2007
2008
Total Net Sales
Source: Jones Apparel Group annual reports and press releases.
Table 4–16
Jones Apparel Group Total Net Sales and Year-over-Year Percentage Change,
2004–2008
(in millions $)
Year
Total Net Sales
YoY % Change
2004
$4,592.6
--
2005
5,014.6
9.2%
2006
4,669.9
-6.9
2007
3,793.3
-18.8
2008
3,562.6
-6.1
--
-6.2%
CAGR
Source: Jones Apparel Group annual reports and press releases.
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Sales by Channel
Jones apparel saw 30% of its net sales come from its wholesale better apparel business
followed by footwear and accessories with 26%. Wholesale jeanswear and retail accounted
for 22% and 20%, respectively. Licensing accounted for less than two percent.
Figure 4–15
Share of Jones Apparel Group Total Net Sales by Channel, 2008
(%)
Wholesale
footwear and
accessories
25.9%
Wholesale
jeanswear
22.0%
Retail
20.2%
Wholesale better
apparel
30.4%
Licensing
1.5%
Source: Jones Apparel Group 2008 annual report.
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Sales by Geographic Region
By region, Jones Apparel saw 91% of its sales come from the United States with foreign sales
accounting for less than 10%.
Figure 4–16
Share of Jones Apparel Group Total Net Sales by Geographic Region, 2008
(%)
United States
90.5%
Other
international
9.5%
Source: Jones Apparel Group annual reports and press releases.
Footwear Sales
Sales of footwear and accessories declined two percent from the 2007 level of $956 million to
settle at $938 million in 2008. The company has struggled to find traction in this arena for
several years and has fluctuated between meager growth and modest declines. In all, the
group saw sales decline at an annual rate of two percent during the 2004–2008 period.
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Figure 4–17
Jones Apparel Group Footwear & Accessories Net Sales and Percent of Total Net
Sales, 2004–2008
(in millions $))
30.0%
1,500
26.3%
25.2%
1,200
27.0%
24.0%
21.8%
20.2%
19.5%
1,002
979
900
21.0%
956
941
18.0%
938
15.0%
12.0%
600
9.0%
6.0%
300
3.0%
0.0%
0
2004
2005
2006
Footwear & accessories
2007
2008
% of total Jones Apparel net sales
Source: Jones Apparel Group annual.
Table 4–17
Jones Apparel Group Total Net Sales and Year-over-Year Percentage Change,
2004–2008
(in millions $)
Year
Total Net Sales
YoY % Change
2004
$1,002.4
--
2005
978.6
-2.4%
2006
941.1
-3.8
2007
955.8
1.6
2008
938.3
-1.8
--
-1.6%
CAGR
Source: Jones Apparel Group annual reports.
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Chapter 4: Competitive Landscape
Brand & Product Portfolio
Jones Apparel’s footwear brand portfolio ranges from higher priced Joan & David to more
budget oriented Dockers Women. However, the company is perhaps best known as a midpriced favorite among women with its Nine West and Anne Klein brands.
Table 4–18
Jones Apparel Group Footwear Product Portfolio
Category
Brand
Bridge
Joan & David
Nine West
Nine West Kids
Enzo Angiolini
Better
AK Anne Klein
Circa Joan & David
Boutique 9
Bandolino
Upper Moderate
Easy Spirit
Nine & Company
Mootsies Tootsies
Moderate
Mootsies Tootsies Kids
Sam & Libby
Sam & Libby Kids
Dockers Women
Source: Jones Apparel Group 2008 Annual Report
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Timeline of Significant Events
Table 4–19
Jones Apparel Group Timeline of Significant Events
Year
Significant Events
1977
Nine West Group founders Jerome Fisher and Vincent Camuto establish a wholesale shoe
business, Fisher Camuto Corporation, taking advantage of business ties with Brazilian
manufacturers and the cheaper labor and abundant raw materials found in that country.
1978
The company makes sales of $9 million.
1988
Fisher Camuto forms Jervin (the name comes from the first three letters of each of their
first names) to sell unbranded women's shoes made in Brazil, to retailers and wholesalers.
The company tries to buy out the footwear division of U.S. Shoe but is spurned.
1991
Company prepares to go public in 1991 and 1992, merging its wholesale and retail
divisions (Fisher Camuto, Fisher Camuto Retail, Espressioni, and Jervin) into the Nine
West Group. The name came from its first address, Nine W. 57th Street, in Manhattan.
1993
Nine West goes public.
1994
U.S. Shoe again rejects a Nine West buyout offer for its shoe business—The proposal
kicks up some dust, however, as U.S. Shoe shareholders make it clear they want a sale.
1995
1996
1997
1998
1999
2000
2004
2005
2006
2007
2008
2009
Nine West Group Acquires U.S. Shoe Corporation, which includes the Easy Spirit brand,
Amalfi, Evan-Picone, and Bandolino for $600 million.
Nine West begins to pare down operations, closing U.S. Shoe's Cincinnati headquarters
and domestic factories, shifting manufacturing to Brazil, and discontinuing or selling
unprofitable brands.
Restructuring continues as the company lays off some 1,000 workers in Ohio.
Facing too much inventory and too little demand, Nine West lays off about 6% of its
workforce, curtails expansion plans, and says it would cut production by about 40%.
Clothing designer and distributor Jones Apparel Group buys out Nine West for $1.4 billion.
Jones buys Nine West's accessories maker Victoria + Co.
Nine West also settles claims of price-fixing that year, paying a $34 million nationwide
settlement.
Jones Apparel acquires Maxwell Shoe Company in July and Barneys New York in
December.
Dilliard's Department Stores eliminates Nine West brands in effort to offer more upscale
footwear.
Rumors circulate that Jones Apparel is looking to sell Nine West.
Jones Apparel sells its Barneys retail stores Dubai-based private equity firm Istithimar
PJSC for $945 million.
Nine West Group and New Balance partner to create fashion-lifestyle footwear collection
that brings together New Balance's innovative performance and materials technology with
Nine West's renowned fashion styling.
Jones Apparel Group and Steven Madden Sign License Agreement to design collection of
junior and girls footwear under the l.e.i. brand and distributed exclusively to Wal-Mart
stores.
Jones Apparel footwear and accessory sales decline 2% with overall sales declining 6%
due to economic downturn.
Nine West Footwear Corporation Signs License and Distribution Agreement With Kurt
Geiger Ltd. for Nine West and Easy Spirit.
Company announces the closing of 225 stores in effort to cut costs.
Source: Jones Apparel Group press releases; www.jonesapparel.com.
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Chapter 4: Competitive Landscape
Deckers Outdoor Corporation
Company Details
Descriptions
Company Type
Public
Revenues (2008)
$689.4 million
Employees
640
President & CEO
Angel R. Martinez
President of the Simple and UGG
Australia Divisions
Constance X. Rishwain
President, Teva Brand
Peter Worley
Address
495-A South Fairview Avenue
Goleta, California 93117
Tel:
(805) 967-7611
Website:
www.deckers.com
Overview
Located in Goleta, California, Deckers Outdoor Corporation was started by University of
California, Santa Barbara student, Doug Otto in 1973. The company’s first products were its
Deckers brand sandals that became popular among the surfing and beach crowd. In 1985 the
company entered into a licensing agreement to produce and distribute Teva sandals. The
company manufactured its original brand of Deckers sandals for over 20 years, but retired the
brand after its purchase of the Simple brand to focus on Teva and Simple products. Since
then, Deckers has grown into an international company with footwear brands—Teva
(acquired in 2002), Simple, Ugg (acquired in 1995), and TSUBO (acquired in 2008). For
2009, the company has resurrected its original Deckers brand selling the products exclusively
online.
Performance
Total sales for Deckers grew 54% over the 2007 level of $449 million to top the $689 million
mark in 2008. Sales were led by wholesale sales of its Ugg boots, which totaled $484 million,
up 66% over the 2007 level of $292 million. Simple brand footwear grew 25% over the 2007
level of $11 million to reach $14 million in 2008, but Teva sales decline one percent to $81
million. The company’s consumer direct business, which includes company-owned stores and
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sales through the Internet rose 68% to $107 million. For the 2004–2008 period, total sales of
Deckers footwear grew at a CAGR of 34%.
Figure 4–18
Deckers Outdoor Total Net Sales, 2004–2008
(in millions $)
800.0
700.0
689.4
600.0
500.0
448.9
400.0
300.0
304.4
264.8
200.0
214.8
100.0
0.0
2004
2005
2006
2007
2008
Total Net Sales
Source: Jones Apparel Group annual reports and press releases.
Table 4–20
Deckers Outdoor Total Net Sales and Year-over-Year Percentage Change, 2004–2008
(in millions $)
Year
Total Net Sales
YoY % Change
2004
$214.8
--
2005
264.8
23.3%
2006
304.4
15.0
2007
448.9
47.5
2008
689.4
53.6
--
33.9%
CAGR
Source: Deckers Outdoor annual reports and press releases.
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Chapter 4: Competitive Landscape
Sales by Channel
Wholesale sales of Ugg accounted for the vast share of Deckers total sales at 70% with Teva
accounting for 12%. Simple and TSUBO wholesale sales accounted for two percent and one
percent, respectively. Direct-to-consumer sales totaled 16% of total sales with ecommerce
sales capturing 10% and sales through retail locations making up six percent.
Figure 4–19
Share of Deckers Outdoor Total Net Sales by Channel, 2008
(%)
Teva wholesale
11.7%
UGG wholesale
70.2%
Simple wholesale
2.0%
TSUBO wholesale
0.5%
eCommerce
10.0%
Retail stores
5.6%
Source: Deckers Outdoor 2008 annual report.
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Sales by Geographic Region
The company took in 84% of sales from customers in the United States with the remaining
16% coming from international customers.
Figure 4–20
Share of Deckers Outdoor Total Net Sales by Geographic Region, 2008
(%)
United States
84.3%
Other international
15.7%
Source: Deckers Outdoor annual reports.
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Chapter 4: Competitive Landscape
Brand Portfolio
Deckers received a substantial boost to its Ugg brand in 2007 when Oprah Winfrey released
her list of favorite things. The result was a spike in sales for Deckers fourth quarter 2007 and
the 66% increase in sales for 2008 mentioned above. In June 2008, the company reintroduced
a limited quantity of the Deckers brand flip flop, but by the following year the company had
sold out of inventory. The company states that it has “exciting things in the pipeline”, but no
indication of when the brand will be available again.
Table 4–21
Deckers Outdoor Footwear Product Portfolio
Brand
Description
Deckers
The original Deckers brand flip flops.
UGG
Luxury comfort brand and the category creator for luxury sheepskin footwear.
Originally adopted as a favored brand by the California surf community, the UGG
brand was acquired by Deckers in 1995 and has since been repositioned as a
luxury comfort collection sold through high-end retailers.
Teva
Outdoor performance and lifestyle brand and pioneer of the sport sandal market.
Originally founded in the 1980s to serve the professional river guides, the
product line has since expanded to include casual open-toe and closed-toe
footwear, including adventure travel shoes, outdoor multi-sport shoes, trail
running shoes, amphibious footwear, light hikers and other rugged outdoor
footwear styles and accessories.
Simple
Began in 1991 as an alternative to all the over-built, over-priced, and over-hyped
products in the marketplace, he brand's legacy was built on its original sneaker
design, the Old School Sneaker, and grew to include successful sandal and
casual products
TSUBO
Acquired in 2008, TSUBO (meaning pressure point in Japanese) was founded
by a British designer in 1998 and marketed as a high-end casual footwear
constructed to provide consumers with contemporary footwear that incorporates
style, function and maximum comfort. TSUBO products are sold throughout the
United States primarily at department stores and independent shoe stores, as
well as several countries worldwide, including Canada, France, Australia, and
Japan.
Source: www.deckers.com
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Timeline of Significant Events
Table 4–22
Deckers Outdoor Timeline of Significant Events
Year
Significant Events
1973
University of California, Santa Barbara student, Doug Otto, begins producing
sandals.
1984
Grand Canyon river guide, Mark Thatcher, begins producing the Teva sandal for
niche market.
1985
Deckers enters into licensing agreement to produce and distribute Teva sandals.
1991
Simple Shoes established by Eric Meyer as a link between athletic and outdoor
shoes.
1993
Deckers acquires Simple Shoes.
Deckers completes initial public offering.
1994
Deckers brand retired to focus on other brands.
1979
Ugg Holdings founded by Brian Smith for the purpose of importing sheepskin
boots from Australia.
1995
Deckers acquires Ugg Holdings.
2002
Deckers acquires Teva.
2004
Net sales in the U.S. climb 78% vaulting over the $100 million mark for the first
time to reach $175 million; total net sales reach $215 million.
2006
Deckers expands Ugg brand to include footwear for spring and summer.
2008
Deckers brand reintroduced with a purely online sales model.
Deckers sales climb 54% over the 2007 level of $449 million to $689 million.
2008
Deckers brand flip flops reintroduced with a purely online sales model.
Deckers sales climb 54% over the 2007 level of $449 million to $689 million.
Company creates joint venture for Ugg in China.
2009
First quarter net sales continue to climb despite economic recession rising 38%
to $134 million.
Source: www.deckers.com
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Chapter 4: Competitive Landscape
Adidas AG
Company Details
Descriptions
Company Type
Public
Revenues (2008)
$15.8 billion
Employees
38,982
CEO & Chairman, Adidas Group
Herbert Hainer
President, Adidas Brand
Erich Stamminger
President and CEO, Reebok
Uli Becker
President of North America, Reebok
Jim Gabel
Chief Marketing Officer, Reebok
Matt O’Toole
President & CEO, Rockport
Michael Rupp
Address
Adidas Americas
5055 N. Greeley Avenue
Portland, OR 97217
Tel:
(971) 234-2300
Website:
www.adidas-group.com, www.adidas.com
Overview
Based in Herzogenaurach, Germany, Adidas AG has more than 150 subsidiaries and is the
second largest global footwear marketer by total dollar sales. In addition to the Adidas brand
of products, the company operates the Reebok business (which includes Rockport and
Reebok-CCM Hockey) and the Taylor-Made golf business. The company also operates
Adidas America Inc. based in Portland, Oregon, where it focuses on its basketball, adventure
and alternative sports product lines. Reebok’s headquarters remain in Canton, Massachusetts
while TaylorMade-Adidas Golf is based in California. The company had nearly 39,000
employees at year-end 2008, up from 31,000 in 2007.
The company has relationships with 300 manufacturing partners and sourced 97% of its
footwear from countries in Asia in 2008, up from 96% in 2007. Unlike many other
companies, sourcing from China represented just 44% of total footwear volume, down from
49% in 2007. Other major countries for sourcing included Vietnam (31%) and Indonesia
(18%).
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Performance
Total sales for Adidas AG rose 13% over the 2007 level of $14.0 billion to top the $15.8
billion mark in 2008. Sales growth was driven primarily by the Adidas business, which grew
18% in 2008 to reach $11.5 billion. TaylorMade-Adidas Golf rose eight percent to reach $1.2
billion. It was Reebok that struggled as sales declined one percent to under $3.2 billion. For
the 2004–2009 period, total sales grew at an annual rate of nine percent.
Figure 4–21
Adidas AG Total Net Sales, 2004–2008
(in millions $)
18,000.0
16,000.0
15,802.2
14,000.0
13,993.9
12,000.0
10,000.0
12,455.4
11,019.6
11,566.2
8,000.0
6,000.0
4,000.0
2,000.0
0.0
2004
2005
2006
2007
2008
Total Net Sales
Note: U.S. dollar sales figures are converted from Euros using the average annual exchange rate for each year.
Source: Adidas AG annual reports.
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Chapter 4: Competitive Landscape
Table 4–23
Adidas AG Total Net Sales and Year-over-Year Percentage Change, 2004–2008
(in millions $)
Year
Total Net Sales
YoY % Change
2004
$11,019.6
--
2005
11,566.2
5.0%
2006
12,455.4
7.7
2007
13,993.9
12.4
2008
15,802.2
12.9
--
9.4%
CAGR
Note: U.S. dollar sales figures are converted from Euros using the average annual exchange rate for each year.
Source: Adidas AG annual reports.
Sales by Product
Sales of footwear accounted for 46% of total net sales in 2008, little changed from 2007 with
apparel making up 44%. Hardware captured the remaining 10% of total sales.
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Figure 4–22
Share of Adidas AG Total Net Sales by Channel, 2008
(%)
Apparel
44.2%
Footwear
45.5%
Hardware
10.2%
Source: Adidas AG 2008 annual report.
Sales by Geographic Region
Europe accounted for 43% of total sales for Adidas AG followed by the Asia region with
25%. Sales in Europe grew seven percent in Euro terms in 2008 and 15% in dollar terms due
to currency fluctuations. Sales in the Asia region were up 18% in Euro terms and 27% in U.S.
dollar terms. North America captured 24% leaving the Latin America region with just eight
percent of sales. North America sales decreased 14% in euro terms, down eight percent in
U.S. dollar terms, while Latin America sales grew a whopping 36% in Euro terms and 46% in
U.S. dollar terms.
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Chapter 4: Competitive Landscape
Figure 4–23
Share of Adidas AG Total Net Sales by Geographic Region, 2008
(%)
North America
23.5%
Asia
24.8%
Europe
43.4%
Latin America
8.3%
Source: Adidas AG annual reports and press releases.
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Sales by Division
The company’s Adidas brand accounted for 73% of total net sales, 80% of which came from
what the company termed “sports performance” products and the remaining 20% from “sport
style.” The Reebok division, which the company acquired in 2006, accounted for 20% of total
net sales, 80% of which was made up of the Reebok brand with 11% accounted for by the
casual footwear brand Rockport and nine percent by Reebok-CCM Hockey products.
TaylorMade-Adidas Golf captured the remaining seven percent of total company net sales.
Figure 4–24
Share of Adidas AG Total Net Sales by Geographic Region, 2008
(%)
Reebok
19.9%
Adidas
72.5%
TaylorMade-adidas
Golf
7.5%
Source: Adidas AG annual reports and press releases.
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Footwear Sales Grew 11% in 2008
Total net sales of footwear for Adidas AG grew 11% over the 2007 level of $6.5 billion to top
the $7.2 billion mark. Growth was due primarily to increased unit sales, which rose 10% from
the 2007 level of 201 million pairs to 221 million pairs. For the 2004–2008 period, total net
sales of footwear for Adidas AG and Reebok footwear grew at a CAGR of six percent.
Figure 4–25
Adidas AG Total Footwear Net Sales and Percent of Total Net Sales, 2004–2008
(in millions $)
8,000
47.7%
46.5%
7,200
6,400
5,600
45.8%
7,238
38.4%
39.8%
5,957
45.0%
40.0%
6,512
5,689
50.0%
5,946
35.0%
4,800
30.0%
4,000
25.0%
3,200
20.0%
2,400
15.0%
1,600
10.0%
800
5.0%
0
0.0%
2004
2005
Footwear
2006
2007
2008
% of total Adidas AG net sales
Figures for 2004 and 2005 are pro forma and reflect total footwear sales for Adidas and Reebok for the entire period.
Source: Adidas AG annual reports.
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Table 4–24
Adidas AG Total Footwear Net Sales and Year-over-Year Percentage Change,
2004–2008
(in millions $)
Year
Total Net Sales
YoY % Change
2004
5,689.2
--
2005
5,956.9
4.7%
2006
5,945.7
-0.2
2007
6,512.4
9.5
2008
7,237.5
11.1
--
6.2%
CAGR
Figures for 2004 and 2005 are pro forma and reflect total footwear sales for Adidas and Reebok for the entire period.
Source: Adidas AG annual reports.
Brand Portfolio
While the Adidas brand has done well in recent years, the company has had some difficulty
integrating Reebok into the company and finding growth for the brand since its 2006
acquisition. Indications are that it may take several more years before the company fully
realizes the synergies and gets Reebok back on a positive growth path.
Table 4–25
Adidas AG Footwear Brand Portfolio
Division/Brand
Description
Adidas Sport
Performance
Performance footwear, apparel and hardware focusing on four key
categories globally: football, running, training and basketball.
Adidas Sport Style
Consisting of Originals (defined as authentic sportswear) and the
Fashion Group, which includes Y-3 and SLVR
Reebok
Traditionally focused on women's fitness footwear, the brand also
offers men's fitness footwear and has been charged with reviving
its style and appeal from years past
CCM Hockey
Ice hockey skates and other gear
Reebok Hockey
Ice hockey skates and in-line roller skates
Rockport
Casual and outdoor footwear for men, women and children
Adidas Golf
Golf footwear and apparel
Source: Adidas AG 2008 annual report.
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Chapter 4: Competitive Landscape
Timeline of Significant Events
Table 4–26
Adidas AG Timeline of Significant Events
Year
1914 – 1918
1926
1928
1936
1946
1950s
1960s
1978
1980s
1984
1993
1997
2000
2001
2002
Significant Events
Adidas grew out of an infamous rift between German brothers Adi and Rudi Dassler.
As WWI winds down, Adi scavenges for tires and rucksacks to create slippers, gymnastics
shoes, and soccer cleats made by his sister.
The shoes' success allows the Dasslers to build a factory.
1928 Amsterdam Olympics, German athletes showcase Dassler shoes to the world.
American Jesse Owens sprints to an Olympic gold in Dassler's double-striped shoes and Nazis
commandeered the Dassler factory to make boots for German soldiers.
Adi makes friends with American soldiers — even creating shoes for a soldier who wears them
at the 1946 Olympics.
Rudi returns from an American prison camp and a dispute between the brothers splits the
business, eventually forming Puma, and Adi's becomes Adidas, beginning one of the most
intense rivalries in Europe.
With innovations such as the replaceable-cleat soccer shoe, Adidas dominates the world athletic
shoe market.
Adidas overtakes the canvas sneakers made by P.F. Flyers and Keds.
Adidas continues to expand globally to maintain its dominant position.
A flood of new competitors following the 1972 Munich Olympics and the death of Adi in 1978
signals the end of an era.
Nike and Reebok capture the North American market.
Adidas’ big mistake - turns down endorsement offer from young Michael Jordan.
Robert Louis-Dreyfus becomes CEO, shifts production to Asia, pumps up advertising budget,
and brings in former Nike marketers to re-establish the company's identity.
Adidas becomes Adidas-Salomon with its $1.4 billion purchase of Salomon, a French maker of
skis and other sporting goods.
The company opens its first high-profile store in Portland, Oregon.
Amid a 10% revenue slide, several executives leave the company.
The company announces that it would consolidate its apparel under the Heritage label to
reinforce its position in the burgeoning casual wear market.
Adidas-Salomon opens Adidas Originals retail stores in Tokyo and Berlin.
Adidas-Salomon opens a store in New York City.
2003
Despite slumping sales in the U.S. amid deep discounting by competitors, Adidas announces
that it would not offer discounts and still intends to capture 20% of the country's shoe market.
2004
Adidas' U.S. headquarters introduces the first computerized footwear: a running shoe with a chip
that allows the shoe to change its support level according to the impact.
The company opens its newest concept store: Performance.
2005
Company selected as official sportswear partner for the Beijing 2008 Summer
Olympics.
Adidas sells its Salomon division to Finland-based Amer Sports Corp. for €485 million.
2006
2007
2008
2009
Adidas’ acquires of Reebok for $3.8 billion.
Adidas-Salomon changes name to Adidas AG.
Adidas consolidates Reebok and Adidas distribution centers
Reebok and Vulcabras form joint venture in Argentina and Brazil.
Company announces world's largest Adidas store to open in Beijing.
Adidas AG sales rise 13% over 2007 level of $14.0 billion to $15.8 billion.
Company accelerates restructuring initiative aimed at reducing management levels and costs by
€100 million.
Source: www.adidas-group.com
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Genesco, Inc.
Company Details
Descriptions
Company Type
Public
Revenues (2008)
$1.6 billion
Employees
14,125
President & CEO
Robert J. Dennis
Senior Vice President; Chief Executive
Officer, Genesco Branded Group, President,
Johnston & Murphy
Jonathan D. Caplan
Address
Genesco Park
1415 Murfreesboro Road
Nashville, Tennessee 37217-2895
Tel:
(615) 367-7000
Website:
www.genesco.com
Overview
Founded in 1924, Nashville, Tennessee-based Genesco Inc. is primarily a retailer of branded
footwear and licensed and branded headwear, with more than 2,200 footwear and headwear
retail stores in the United States, Puerto Rico and Canada. Footwear retail brands include
Journeys, Journeys Kidz, Shi by Journeys, Underground Station, and Johnston & Murphy.
The company also operates headwear retailers such as Hatworld and Lids among others.
Genesco also designs, sources, markets and distributes footwear under its own Johnston &
Murphy brand and the Dockers brand licensed from Levi Straus & Co. to over 950 retail
accounts. (Dockers Women’s and children’s footwear is licensed to Jones Apparel Group).
Most of its Johnston & Murphy and Dockers branded footwear is manufactured by third
parties primarily in Asia.
Retail prices for Johnston & Murphy footwear generally range from $100–$250 while
Dockers footwear ranges from $50–$90. Casual and dress casual footwear accounted for 39%
of total Johnston & Murphy retail sales in Fiscal 2009, with the balance consisting of dress
shoes and accessories.
As of the company’s fiscal year end (January 2009), Johnston & Murphy operated 157 retail
shops and factory stores throughout the United States. Johnston & Murphy retail shops are
located primarily in better malls nationwide and in airports and sell a broad range of men’s
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Chapter 4: Competitive Landscape
dress and casual footwear and accessories. The Company also sells Johnston & Murphy
products directly to consumers through a direct mail catalog and an e-commerce website. The
company added three net new shops and factory stores in Fiscal 2009 and plans to open up to
four net new shops and factory stores in Fiscal 2010.
Performance
Total sales for the company grew three percent over the fiscal-year 2008 level of $1.5 billion
to near the $1.6 billion mark. Sales of Johnston & Murphy retail and wholesale operations
declined eight percent to $178 million with comparable store sales for Johnston & Murphy
retail locations down 10%. By contrast, sales of Dockers brand footwear rose four percent to
$97 million. For the 2004–2008 period (ending January 2009), Genesco’s total net sales grew
at a CAGR of nine percent.
Figure 4–26
Genesco Inc. Total Net Sales, 2004–2008
(in millions $)
1,800.0
1,600.0
1,400.0
1,461.2
1,551.7
1,284.3
1,200.0
1,000.0
1,502.5
1,113.2
800.0
600.0
400.0
200.0
0.0
2004
2005
2006
2007
2008
Total Genesco Net Sales
Note: Figures reflect fiscal year net sales ending January 31 2009
Source: Genesco Inc. annual reports.
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Table 4–27
Adidas AG Total Net Sales and Year-over-Year Percentage Change, 2004–2008
(in millions $)
Year
Total Net Sales
YoY % Change
2004
$1,113.2
--
2005
1,284.3
15.4%
2006
1,461.2
13.8
2007
1,502.5
2.8
2008
1,551.7
3.3
--
8.7%
CAGR
Note: Figures reflect fiscal year net sales ending January 31 2009
Source: Genesco Inc. annual reports.
Sales by Division
The company’s Journeys retail group accounted for 49% of total net sales in 2009 with its
Hat World Group capturing 26%. Station Group accounted for seven percent. Its proprietary
and licensed footwear brands, Johnston & Murphy and Dockers, captured the remaining 12%
and six percent, respectively.
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Chapter 4: Competitive Landscape
Figure 4–27
Share of Genesco Inc. Total Net Sales by Division, 2008
(%)
Station Group
7.2%
Hat World Group
26.1%
Johnston &
Murphy
11.5%
Journeys Group
49.0%
Licensed Brands
6.2%
Source: Genesco Inc. 2009 annual report.
Brand Portfolio
The company’s Journey’s Group and Underground Station Group focus on mainstream
footwear for kids, teens and youthful adults selling both brand names and private label
footwear. Traditionally a men’s footwear brand, Johnston & Murphy introduced a line of
women’s footwear and accessories in select Johnston & Murphy retail shops in the fall of
2008.
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Table 4–28
Genesco Inc. Footwear Brand Portfolio
Division/Brand
Description
Journeys Group
Includes Journeys, Journeys Kidz, and Shi by Journeys retail
footwear chains selling brand name and private label footwear
Underground Station Group
Located primarily in urban markets selling branded and private
label footwear targeted at the 20-35 age group
Johnston & Murphy Group
Includes both J&M retail and wholesale operations focused on
dress and casual dress men's footwear
Licensed Brands
Primarily men's footwear sold under the Dockers brand
licensed from Levi Strauss & Co.
Source: Genesco Inc. 2009 annual report.
Timeline of Significant Events
Table 4–29
Genesco Inc. Timeline of Significant Events
Year
Significant Event
1924
James Jarman starts the Jarman Shoe Company.
1933
Jarman's son Maxey becomes company president, changes company's name to
General Shoe.
1939
General Shoe goes public.
1951
General Shoe buys hundred-year-old shoemaker Johnston & Murphy.
1959
Renames itself Genesco to reflect the change.
1968
Company posts more than $1 billion in sales.
1995
Genesco divests its apparel, soccer, and children's shoe businesses to focus on
men's footwear.
1998
Genesco starts new chain, Underground Station, offering shoes and clothes to
young urban men.
Company also sells its slumping western boot business, including the Laredo
Boot division and 26 Boot Factory stores, to Texas Boot.
2000
Genesco sells Volunteer Leather to Minnesota-based S.B. Foot Tanning.
Company closes its discount General Shoe Warehouse units.
2001
Genesco ends its license to sell Nautica branded footwear.
2002
Company closes Nashville Johnston & Murphy manufacturing plant.
2004
Genesco begins closing about 35 Jarman shoe stores and starts to convert the
rest to Underground Station stores.
2007
Genesco recieves bid to be acquired by Foot Locker. Rival The Finish Line, Inc.
steps in with higher offer and Genesco rejects Foot Locker, Inc. proposal.
The Finish Line, Inc. backls away from acquisition bid and Genesco
subsequently files lawsuit aginst Finish Line Inc. and UBS to complete merger.
2008
Genesco annouces merger with Finish Line, Inc. terminated and settles lawsuit.
2009
Genesco revenues 3% over the 2007 level of $1.5 billion nearing the $1.6 billion
mark.
Source: www.genesco.com
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Chapter 4: Competitive Landscape
Crocs
Company Details
Descriptions
Company Type
Public
Revenues (2008)
$721.6 million
Employees
3,700
President & CEO
John Duerden
Address
6328 Monarch Park Place
Niwot, Colorado 80503
Tel:
(303) 848-7000
Website:
www.crocs.com
Overview
Based in Niwot, Colorado, Crocs, Inc. is a designer, manufacturer and retailer of molded and
casual footwear for men, women and children under the Crocs brand. All Crocs brand shoes
feature a proprietary closed-cell resin called Croslite, which enables the company to produce
soft, comfortable, lightweight, superior-gripping, non-marking and odor-resistant shoes. The
company boasts the footwear as being ideal for casual wear, as well as for professional and
recreational uses such as boating, hiking, hospitality and gardening. Crocs shoes are sold in
129 countries and come in more than 270 styles and colors. The company also sells apparel
and accessories; however, footwear remains its most significant source of sales.
The company has licensing agreements with several sports teams as well as major media
companies including Disney, Nickelodeon, Marvel, DC Comics and Warner Bros. primarily
for its Jibbitz shoe charms business where it offers characters ranging from Mickey Mouse to
Spiderman.
Performance
After booming between 2005 and 2007, sales of the superior gripping Crocs began to slip,
declining 15% from the 2007 level of $874 million to $722 million in 2008. Sales of footwear
were down 13% to $661 million while apparel and accessories fell 28% to $61 million. There
were a couple of bright spots, though, as sales in Mexico were up four percent to $7 million
and sales in the Asia-Pacific region boomed 26% to $205 million. It was the 28% drop in
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North America that caused much of the decline. For the 2004–2008 period, total net sales still
grew at a phenomenal rate of 170%.
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Figure 4–28
Crocs, Inc. Total Net Sales, 2004–2008
(in millions $)
900.0
847.4
800.0
700.0
721.6
600.0
500.0
400.0
354.7
300.0
200.0
100.0
0.0
108.6
13.5
2004
2005
2006
2007
2008
Total Net Sales
Source: Crocs, Inc. annual reports.
Table 4–30
Crocs, Inc. Total Net Sales and Year-over-Year Percentage Change, 2004–2008
(in millions $)
Year
Total Net Sales
YoY % Change
2004
$13.5
--
2005
108.6
703.1%
2006
354.7
226.7
2007
847.4
138.9
2008
721.6
-14.8
170.3%
--
CAGR
Source: Crocs, Inc. annual reports.
Sales by Product
In 2008, Crocs footwear accounted for 92% of company sales with the remaining eight
percent going to apparel and accessories. The company has been trying to diversify and find
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Chapter 4: Competitive Landscape
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new revenues streams for its Croslite material and has had some success with its Jibbitz
footwear charms business, but has faltered as well—most notably with its Fury Hockey
business, which it liquidated in 2008.
Figure 4–29
Share of Crocs, Inc. Total Net Sales by Channel, 2008
(%)
Footwear
91.6%
Apparel &
acessories
8.4%
Source: Crocs, Inc. 2008 annual report.
Sales by Geographic Region
The United States remained the largest sales region accounting for 45% of total Crocs sales
with the Asia-Pacific region in a distant second at 28%. Europe accounted for 21% with
Canada and Mexico at three percent and one percent, respectively. Sales from all other
countries accounted for just one percent.
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Figure 4–30
Share of Crocs, Inc. Total Net Sales by Geographic Region, 2008
(%)
Asia-Pacific
28.4%
Mexico
1.0%
Canada
3.2%
Europe
20.9%
United States
44.5%
All other
2.0%
Source: Crocs, Inc. annual reports and press releases.
Footwear Sales
Total footwear sales grew at a CAGR of 179% for the 2004–2008 period. Sales in 2008 fell
13% from the 2007 level of $763 million to $661 million, but still remained well above the
2006 level of $342 million. At its peak, footwear accounted for 97% of the company’s sales,
but dropped to 92% by 2008.
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Figure 4–31
Crocs, Inc. Total Footwear Net Sales and Percent of Total Net Sales, 2004–2008
(in millions $)
1,000
100.0%
96.5%
94.4%
900
91.6%
90.1%
800
90.0%
763.3
700
95.0%
85.0%
80.7%
660.7
600
80.0%
500
75.0%
400
70.0%
342.4
300
65.0%
60.0%
200
100
10.9
55.0%
102.5
0
50.0%
2004
2005
2006
Footwear
2007
2008
% of total Crocs, Inc. net sales
Source: Crocs, Inc. annual reports.
Table 4–31
Crocs, Inc. Total Footwear Net Sales and Year-over-Year Percentage Change,
2004–2008
(in millions $)
Year
Total Net Sales
YoY % Change
2004
$10.9
--
2005
102.5
839.5%
2006
342.4
234.1
2007
763.3
122.9
2008
660.7
-13.4
--
179.0%
CAGR
Source: Crocs, Inc. annual reports.
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Brand Portfolio
The company’s some odd 270 models include various styles of sandals and clogs, but the
company has also expanded into virtually every type of footwear conceivable. Among the
most notable is the Crox Rx brand designed for customers with special needs such as
problems stemming from complications due to diabetes to hammer toes. The company’s
Ocean Minded brand are not Crocs at all, but was a bolt on acquisition to give the company a
more diversified customer base. Ocean Minded footwear primarily consists of very casual
footwear for ocean lifestyle activities such as boating or beach and include slip-ons and flip
flops.
Table 4–32
Crocs, Inc. Footwear Brand Portfolio
Products
Description
Type/Brand
mammoth, clogs, sandals, flats, heels/wedges, boots, slip-ons, flip flops,
medical, sport, work, prepair, YOU by Crocs, laces, Ocean Minded, Crox Rx
Lifestyle
casual, active, trendy, fun, sports teams, entertainment, high fashion, dressy
Source: www.crocs.com
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Timeline of Significant Events
Table 4–33
Crocs, Inc. Timeline of Significant Events
Year
Significant Event
1999
George Boedecker forms footwear marketing and distribution company.
2002
Boedecker's company begins marketing of Crocs brand footwear produced by Foam
Creations.
2004
Crocs, Inc. acquires Foam Creations.
Sales reach $11 million.
2005
Company reorganizes from a limited liability company and incorporates in Delaware
in anticipation of going public.
Sales reach $265 million.
2006
Company raises $97 million selling nearly 5 million shares to the public.
Sales top $354 million.
Company creates the Jibbitz brand of accessories to its product portfolio and
acquires Fury Hockey Inc to produce hockey, soccer and lacrosse equipment.
Product portfolio includes 25 models of Crocs.
2007
Company acquires Ocean Minded brand of sandals, Bite, LLC producing
performance footwear and sport sandals, and introdiuced women's fashion line YOU
by Crocs.
Product portfolio expands from 25 models to 250 models.
Sales peak at$847 million.
2008
Company adds Tagger International B.V., a manufacturer of messenger bags.
Company liquidates Fury Hockey after it fails to find a buyer. Company expands to
270 product models.
Sales decline 15% $722 million.
2009
Crocs launches its Prepair collection designed to help athletes recover following
fitness activity.
First quarter sales decline 32% from the 2008 level of $198 million to $135 million in
2009.
Source: www.crocs.com
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Marketplace and Consumer Trends
Thriftiness Hot in a Down Economy
The economic crisis, coupled with a different leadership in the White House, is leading to a
genuine value shift in the country. Whereas the beginning of the decade will be remembered
as an era of greed, its end will be marked by a return to a culture of responsibility—in
government, in industry, and at home. More consumers will conclude that conspicuous
consumption is no longer acceptable. Thriftier behaviors, perhaps even bordering on
downright frugality, will achieve more widespread acceptance.
Instead of feeling good about expensive or ostentatious brands as they have in the past, many
consumers will increasingly feel good about getting the best value, making the smartest
choice, or not spending at all in 2009. Thriftiness and value shopping may become
competitive, with consumers boasting about the many and unique ways in which they are able
to avoid spending or get the best value rather than the best brand name—or for those
consumers with the most cunning and expertise, getting the best brand name for the best
value. The surge in frugality has brought back a variety of money-saving behaviors from days
of yore, such as layaway and home-cooked meals. Even cobblers are making a comeback.
The Return of the Cobbler
Many consumers are turning their backs on the throwaway mentality so pervasive in
American culture. People are using glass instead of plastic, the library instead of Amazon,
and repairing rather than replacing their shoes. The latter is a notable change within the
footwear industry. Increasingly, consumers are seeking solace in the resole. A good men's
shoe can be resoled 7 to 10 times and women's shoes between three and five times. While
only 7,200 shoe repair shops remain in the U.S. (down from 100,000 during the 1930s),
repair shops are seeing increases of 20% to 45%, with Chicago and New York shops the
busiest, according to the Shoe Service Institute of America (SSIA). "It's the economy. People
are having their shoes repaired instead of paying $150 and more for everyday shoes," says
John McLoughlin, President of the Shoe Service Institute of America. (Milwaukee Journal
Sentinel, October 25, 2008)
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According to the U.S. Census Bureau’s annual services survey for 2007, total sales for
footwear and leather goods repair establishments grew at an annual rate of five percent to
reach $220 million after growing six percent in 2006. The 2008 survey was not yet available;
however, if the SSIA estimates of 20% to 45% increases are any indication, then total sales
for 2008 could be well above the $250 million mark.
Figure 5–1
Total Sales for Footwear and Leather Goods Repair Establishments, 2003–2007
(in millions $)
250.0
220.0
209.0
200.0
181.0
189.0
197.0
150.0
100.0
50.0
0.0
2003
2004
2005
2006
2007
Footwear and leather goods repair
Source: U.S. Census Bureau
Consumers Cut Back
The renewed interest in shoe repair is just one example of how consumer behavior is evolving
and adapting to the new economic realities in spending and in attitude.
Consumer confidence further highlights shifting attitudes and behaviors. Though still not
great, consumer confidence in June 2009 of 49.3 is an improvement over 26.9 in March 2009.
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(1985=100). (The Conference Board Consumer Confidence Survey press release, April 8,
2009)
The effects clearly indicate the pullback in consumer spending. According to data from the
U.S. Census Bureau, the first quarter of 2009 saw retail sales (seasonally adjusted) decline
nine percent from the first quarter of 2008 and more than one percent from the fourth quarter
of 2008. In fact retail sales fell to a level not seen since 2005.
Figure 5–2
Quarterly Retail & Foodservice Sales, 1992–Q1, 2009
(in billions $)
1200
1000
800
600
400
200
09
08
20
06
07
20
20
05
20
04
20
03
3rd Qtr
20
02
20
01
00
2nd Qtr
20
20
99
1st Qtr
20
98
19
97
19
96
19
95
19
19
94
19
93
19
19
92
0
4th Qtr
Source: U.S. Census Bureau; calculated from monthly data by Packaged Facts.
Final figures from the U.S. Bureau of Economic Analysis showed that first quarter personal
consumption expenditures (PCE) rose a meager 0.4% (current dollar, annualized basis).
However, that was after the fourth quarter’s steep decline—the biggest drop in personal
consumption (-9.0%) since 1980. (In real terms PCE grew at an annualized rate of 1.4%
versus -4.3% in Q4 2008.) Consumers are scrutinizing every purchase, including the daily
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latte at Starbucks, weekly trips to the carwash, Friday dinner date nights, routine visits to the
salon, designer accessories and shoes, yearly fitness club memberships and buying smaller,
fuel-efficient cars to replace gas guzzling SUVs.
Figure 5–3
Quarterly Personal Consumption Expenditures (PCE), 1992–Q1, 2009
(in trillions $)
12
10
8
6
4
2
2nd Qtr
09
20
08
20
06
07
20
05
20
04
3rd Qtr
20
20
03
20
02
20
00
01
20
99
1st Qtr
20
98
19
19
97
19
96
95
19
94
93
19
19
19
19
92
0
4th Qtr
Source: U.S. Bureau of Economic Analysis.
Fashion and Footwear Industries Feeling the Pinch
The fashion industry, in which footwear plays a role, is getting squeezed on many fronts—
including shifting consumer spending behavior and business issues such as retail store
closings and credit squeezes on design houses. While growth had slowed considerably
beginning in 2007 and began to decline in 2008, it was the first quarter of 2009 when the
fashion industry really came apart at the seams. Jones Apparel Group, marketer and retailer
of brands such as Nine West and Easy Spirit reported total net sales for the first quarter of
2009 were down nine percent from the same period in 2008. Even worse, its footwear and
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accessories wholesale business fell 13% while it’s retail segment fell 11%. Even discounters
such as Collective Brands with its Payless Shoe Source and Stride Rite operations saw a
seven percent decline in its first fiscal quarter ending May 31, 2009.
In all, total retail sales (adjusted for seasonality, holidays, etc.) for clothing and clothing
accessories stores, which includes footwear retail, for the fourth quarter of 2008 fell six
percent from the third quarter and eight percent from the same period in 2007 to $51.5
billion. The first quarter of 2009 saw sales pick up three percent over the fourth quarter of
2008, but were still down five percent from the first quarter of 2008 to $52.9 billion.
Figure 5–4
Quarterly Clothing and Clothing Accessory Store Sales, 1992–Q1, 2009
(in billions $)
60
50
40
30
20
10
1st Qtr
08
07
09
20
20
20
06
20
05
20
04
03
3rd Qtr
20
02
20
01
2nd Qtr
20
20
00
20
99
97
96
98
19
19
19
95
19
19
94
19
93
19
19
92
0
4th Qtr
Source: U.S. Census Bureau; calculated from monthly data by Packaged Facts.
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High-End Branded Footwear Toughing it Out
Brands such as Christian Louboutin (ranked by a June 2008 survey from the Luxury Institute
as the most prestigious women's luxury shoe brand among U.S. women), with an average
income of $348,000 and average net worth of $3.6 million (followed by Manolo Blahnik and
Hermes), will be making touch choices as the economy continues to falter. Already plagued
by low-cost imports from the likes of China and soft export markets in the United States and
other countries, high-end footwear makers are reprioritizing, cutting costs, revamping their
operations and courting new business.
For example, luxury footwear designer Giuseppe Zanotti (producer for Proenza Schouler,
Blumarine and Roberto Cavalli), told Footwear News in March 2009 that his company is
analyzing costs to eliminate waste and lowering wholesale prices in a bid to help struggling
high-end department partners, such as Saks Fifth Avenue, Neiman Marcus and Bergdorf
Goodman, protect their margins.
Consumer Footwear Expenditures
According to the U.S. Bureau of Labor Statistics, average annual expenditures on footwear
per consumer unit5 totaled $327 in 2007, up eight percent from the 2006 level of $304.
Generally, average footwear spending has remained in the low $300 range, dipping lower
during times of low economic growth and rising during better economic times. However, a
look at certain demographic measures show some stark differences among consumers.
5
The terms consumer unit, family, and household are often used interchangeably for convenience. However, according to the
U.S. Bureau of Labor Statistics, the proper technical term for purposes of the Consumer Expenditure Survey is consumer unit.
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Figure 5–5
Average Annual Footwear Expenditure Per Consumer Unit: All Consumers Units,
2003–2007
($)
400.0
350.0
343.0
300.0
315.0
303.0
329.0
302.0
313.0
304.0
294.0
281.0
327.0
320.0
250.0
200.0
150.0
100.0
50.0
0.0
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Average annual footwear expenditure
Source: U.S. Census Bureau
Most notable is the amount of spending by household income. Households making more than
$70,000 per year spent at least 66% more than those with a lesser household income. What’s
more, spending among this group grew at an annualized rate of five percent between 2003
and 2007—faster than any other income group. Equally as interesting is that households in
the lowest income brackets—less than $30,000—were one of the lowest spenders on
footwear and spending declined at an annual rate of six- to 15% over the same period.
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Table 5–1
Average Annual Footwear Expenditure Per Consumer Unit by Household Income
Before Tax, 2003–2007
($)
Before Tax Income
2003
2004
2005
2006
2007
03–07 CAGR
$15,000 to $19,999
264
197
163
153
141
-14.5%
$20,000 to $29,999
245
209
228
227
194
-5.7
$30,000 to $39,999
268
323
325
199
277
0.8
$40,000 to $49,999
263
300
269
265
297
3.1
$50,000 to $69,999
396
325
352
343
317
-5.4
$70,000 and over
434
513
450
446
525
4.9
Source: U.S. Bureau of Labor Statistics Consumer Expenditure Surveys; compiled by Packaged Facts
The 55–64 age group saw their average annual spending on footwear increase the fastest
during the 2003–2007 period at an annualized rate of 10%. However, those age 45–54 had the
highest average annual spending near the $400 mark.
Table 5–2
Average Annual Footwear Expenditure Per Consumer Unit by Age of Reference
Person, 2003–2007
($)
Age of Reference Person
2003
2004
2005
2006
2007
03–07 CAGR
under age 25
$206
$258
$297
$251
$237
3.6%
between age 25 and 34
331
398
384
371
383
3.7
between age 35 and 44
413
416
397
404
399
-0.9
between age 45 and 54
334
385
369
343
383
3.5
between age 55 and 64
237
351
298
288
351
10.3
over age 65
167
123
159
133
160
-1.1
Source: U.S. Bureau of Labor Statistics Consumer Expenditure Surveys; compiled by Packaged Facts
Hispanic consumers had the highest average annual spending on footwear ($408), growing at
an annual rate of three percent. By contrast, African America consumers saw spending
decline at an annual rate of three percent, but remained near the high of those that were not
African American or Hispanic. White and all other races and ethnic origins saw the greatest
increase in spending, but remained the lowest at just $319.
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Table 5–3
Average Annual Footwear Expenditure Per Consumer Unit by Race or Ethnic Origin
of Reference Person, 2003–2007
($)
Race/Origin of Reference Person
White, Asian, and All Others
Black or African American
Hispanic or Latino
2003
274
440
368
2004
304
508
424
2005
298
493
442
2006
292
391
427
2007
319
387
408
03–07 CAGR
3.9%
-3.2
2.6
Source: U.S. Bureau of Labor Statistics Consumer Expenditure Surveys; compiled by Packaged Facts
Consumers in the Midwest region of the United States saw spending grow at an annual rate of
eight percent, far out-pacing any other region in terms of spending growth. Consumers in the
South had slow positive growth and remained under the $300 mark. Consumers in the
Northeast and West both spent the same ($350) in 2007.
Table 5–4
Average Annual Footwear Expenditure Per Consumer Unit by Region, 2003–2007
($)
Region
Northeast
Midwest
South
West
2003
357
249
283
305
2004
427
271
312
332
2005
354
280
322
330
2006
358
256
279
349
2007
350
334
297
350
03–07 CAGR
-0.5%
7.6
1.2
3.5
Source: U.S. Bureau of Labor Statistics Consumer Expenditure Surveys; compiled by Packaged Facts
Perhaps in correlation with household income, consumers at the high end of the spectrum in
terms of education level spent the most on footwear in 2007 at a whopping $546, an annual
gain of 15% during the 2003–2007 period. Consumers with a bachelor degree spent less at
$399, but still grew at an annual rate of four percent. Consumers with less than a bachelor
degree spent essentially the same, though those with some college education saw spending
decline at an annual rate of five percent.
Table 5–5
Average Annual Footwear Expenditure Per Consumer Unit by Education Level,
2003–2007
($)
Education
Less than high school graduate
High school graduate
High school graduate with some college
Associate degree
Bachelor's degree
Master's, professional, doctorate
2003
250
250
341
285
336
315
2004
248
301
283
377
419
407
2005
282
268
296
372
357
459
2006
242
266
286
332
382
356
2007
276
269
276
275
399
546
03–07 CAGR
2.5%
1.8
-5.1
-0.9
4.4
14.7
Source: U.S. Bureau of Labor Statistics Consumer Expenditure Surveys; compiled by Packaged Facts
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Kids Footwear Has Built-In Protections
The trends affecting the adult footwear category—higher fuel and material costs, a weak U.S.
dollar, rising labor costs in China, increased retail demand for discount shoes at mass, and a
lessened consumer spending in reaction to the recession—are also pressuring the $6.2 billion
kids’ footwear category, but kids’ footwear has built-in protections. One, the kids
demographic is growing at a greater rate than the generally population. Two, kids footwear
needs constant replacing. Three, kids (and parents) are eternally susceptible to the attentiongrabbing power of licensing.
38 Million Kids by 1212
According to the latest available estimates from the U.S. Census Bureau, there are 36 million
kids in the 3 to 11-year-old age group. Census data also show that these kids make up around
12% of the U.S. population. Distribution by age within the 3–11 population is remarkably
even, with each single year of age accounting for 11% of that age bracket.
Based on the most recent Census Bureau data, Packaged Facts estimates that the population
of 3 to 11-year-olds will increase at an annual rate of about one percent to top the 37 million
mark in 2011 and near the 38 million mark by 2012. That factors out to a lot of replacement
shoes.
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Figure 5–6
Population Forecast of U.S. Kids Age 3–11, 2008–2012
(in millions)
38.0
37.6
37.5
37.1
37.0
36.7
36.5
36.4
36.1
36.0
35.5
35.0
2008
2009
2010
2011
Population of Kids Age 3Š11
2012
Note: Estimates for May of each year.
Source: U.S. Census Bureau, Packaged Facts.
An Influential Force with Buying Power
Kids are also a financial force. Packaged Facts estimates that the buying power of 3 to 11year-olds totaled $20.1 billion in 2008, with 9 to 11-year-olds responsible for the greater
share of kids’ purchasing power. Packaged Facts estimates that the kids’ buying power will
grow at a compound annual growth rate of three percent to $22.8 billion by 2012.
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Figure 5–7
Spending Power Forecast of U.S. Kids Age 3–11, 2008–2012
(in billions $)
$23.5
$23.0
22.8
$22.5
22.1
$22.0
21.4
$21.5
$21.0
$20.5
20.8
20.1
$20.0
$19.5
$19.0
$18.5
2008
2009
2010
2011
Spending Power of Kids Age 3Š11
2012
Source: Packaged Facts.
Cool Licenses Trump All
This powerful persuasive and growing population does not mean that footwear marketers
should feel excessively confident about long-term sales growth; rather, they should step it up
as kids are increasingly marketing savvy and parents are increasingly value-conscious. With
shoe prices rising and clothing budgets getting tighter, parents are going to be looking for
product value as kids continue to push for the coolest shoes.
Out-of-the-box innovations such as the Inchworm shoe, which are able to grow along with
children's feet, will see more favor in the marketplace from parents. The shoes’ iFit
technology allows the shoes to expand up to a full size with the press a button. The company
estimates they last about three to six months longer than conventional shoes.
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Figure 5-8
The Inchworm Shoe
But since kids have such tremendous input on the footwear their parents buy for them and are
well aware of hot licensing properties, for kid-driven purchases, creative licensing will be
more important in the current climate in driving current and future sales. As any good
marketer knows, the way to a long-term customer is to hook them early in life.
Collective Brands, through Payless ShoeSource, added several kid-friendly characters (and
all the free marketing their ubiquitous entertainment outlets include) to enhance it offerings
including Blues Clues, SpongeBob SquarePants, and Hannah Montana—the latter of which
are especially on target for tykes. According to an annual preschool survey conducted in
spring 2009 by strategic marketing firm, Funosophy Inc. the top two characters kids age three
to five are "just getting interested in" are Nickelodeon's SpongeBob SquarePants and Dora
the Explorer, followed by the Disney Princesses, Hannah Montana and Barbie. Also seeing
interest in the tyke sector: Go, Diego, Go!, Spider-Man, Minnie & Mickey Mouse, ScoobyDoo and Transformers. (Playthings, June 1, 2009)
Character licensing allows a child to express herself. It is important for kids, who are just
beginning to explore personal preferences and asserting their individuality, to be able to make
choices among a safe array of footwear options. Parents are keenly aware of the power of
childhood individuality often expressed through pester power—an inexpensive, homegrown
tactic marketers hope for.
"These are the brands they ask their parents to buy, and we know kids influence the footwear
purchasing decision from as young as age 2," said Todd Murray, Director of Children's
Brands and Licenses for Brown Shoe Co., which holds the "Barbie," and "Power Rangers"
among other licenses. (Footwear News, May 12, 2008)
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Kids Express Themselves with Crocs’s Jibbitz Charms
As if licensing characters for kids’ footwear were not enough, Crocs, Inc. has taken the trick
one step further. In 2006, the company acquired Jibbitz LLC, a maker of charms for kids’
footwear that allow kids to personalize their Crocs shoes with a variety of fun options. Jibbitz
have buttons on the back that pop into the holes on the toe of Crocs shoes allowing kids to
swap out charms for a new look. The charms are available in every conceivable object of
kids’ desire from bugs to butterflies to numbers to the space shuttle. With a retail cost of
$2.49 per charm, it is easy for parents to say yes. Much easier than purchasing a new pair of
shoes.
The company’s portfolio of licensed characters is a venerable list of the who’s who among
children’s entertainment. Disney characters play a leading role in the portfolio from perennial
favorite Mickey Mouse to Pixar creation WALL-E. Nickelodeon figures prominently, too,
with Spongebob Squarepants and Dora the Explorer. Other character licenses include
Peanuts, Harry Potter and various super heroes.
Company Ethics and Added Values Important to Consumers
As consumers have gotten smarter, they have also gotten more curious. Not only do they
want to know the specific functional benefits of products, they also want to know about the
core brand and associated company values and beliefs. Some industry experts think this will
take a back seat amid recession concerns, whereas others believe it is more important than
ever to provide a positive emotional connection that is inherent in cause-related marketing
that empowers consumers during times of distress and upheaval.
Global Consumers: Will Spend More on Ethical Brands
According to the second annual multi-country Edelman Goodpurpose study conducted the
fall of 2008, more than half of the 6,000 global consumers surveyed said that even in the
midst of a recession they would be prepared to spend more for a brand if it supported a good
cause. The most popular cause among consumers globally was protecting the environment,
and more than two-thirds of respondents said that they would be willing to pay more for ecofriendly products during a recession. Sustainable and eco-friendly products and corporate
attitudes are no longer part of a niche group of altruistic consumers, but rather an important
“feel good” factor for a wide range of consumers who believe in making purchases that do
more than just contribute to a company’s top line growth. Sustainability and green initiatives
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are clearly front and center when it comes to economic considerations for footwear retailers,
manufacturers and marketers.
Green Particularly Important to Youth to a (Price) Point
According to an April 2009 survey from Generate Insight, reported by MarketingCharts,
Millennials (consumers age 13-29) are extremely educated about green issues, with 76%
believing that it is very important or important for brands to get involved in the green
movement. The majority of older Millennials (18-29) would choose the more expensive
brand that gave back in a green way, but 71% of teens (age 13-17) would choose the less
expensive product over the green.
Sustainable Initiatives are Financially Viable
Increasingly, manufacturers and retailers will recognize that altruistic and sustainability
initiatives can be both financially viable, and help the bottom line. The Edelman survey also
found that 80% of consumers said it is important even during a recession for brands and
companies to allocate funds for social purposes. 68% said they would remain loyal to a brand
in a recession if it supported a good cause. 55% said they would buy brands that support a
good cause even if they aren’t the cheapest. When choosing between two products of similar
quality and price, consumers are more likely to have their purchase decision influenced by a
brand’s social purpose (42%) than innovation (30%) or brand loyalty (27%). (AdAge.com,
November 17, 2008)
Despite the economic downturn, Packaged Facts expects that many American consumers will
continue to prioritize and justify potential extra expenses associated with socially responsible
product purchases on ethical grounds. Footwear players have shown tremendous leadership in
ethical outreach for many years.
Deckers Finds a Simple Way to Sustainability
A pioneer in sustainable footwear manufacturing, Simple Shoes, originally began in 1991 as
an “old school” sneaker, but was bought by Deckers Outdoor Corporation a couple of years
later and expanded to include sandals and casual footwear. The shoes are sold through a
variety of retail channels including independent retailers, outdoor shops and department
stores such as Dillard's and Nordstrom. The company even sells through alternative footwear
channels such as Whole Foods Markets.
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Deckers has taken the Simple brand in an entirely sustainable direction, with the 2005 launch
of Green Toe, an effort to reduce waste and use more sustainable techniques in manufacturing
footwear. Their goal is to make the Simple brand 100% sustainable with materials including
organic cotton, eco-certified leather, bamboo, and recycled car tires and inner tubes for its
rubber soles. In spring 2009, the company introduced silk as a natural upper for its
ecoSNEAKS. The company has also started using water-based glue and employing more
stitching to reduce the use of glue altogether. Another way the company is pushing towards
its goal is through packaging with the company’s shoes packed in 100% post-consumer
recycled boxes.
All these initiatives seem to be paying off. While first quarter 2009 sales are down slightly,
Simple's sales increased 25% in 2008 to reach $14 million.
Naturalizer and Dress for Success
In May 2008, Brown Shoe Company’s Naturalizer division teamed up with international nonprofit organization, Dress for Success, on “Give Shoes, Give Hope.” Founded in New York
City in 1997, Dress for Success is an international not-for-profit organization offering
services designed to help clients find a job and remain employed and promotes the economic
independence of disadvantaged women. Women who brought their gently worn, workappropriate shoes to Dress for Success donation drop-offs at Naturalizer stores received a
20% off coupon toward her next in-store purchase. Naturalizer also contributed 4,300 new
pairs of career shoes to Dress for Success affiliates.
TOMS Shoes One for One
TOMS Shoes founder, Blake Mycoskie, was spurred to action after seeing barefoot children
with bruised and cut feet on a trip to Argentina. Now, TOMS Shoes’ One for One program
donates a pair of shoes to children in need for every pair sold. Since 2006, more than 140,000
shoes have been given to children in Ethiopia, Argentina, South Africa and the United States,
with a goal to donate 300,000 in 2009.
Danner and the Fallen Officers Drive
Danner, Inc., a provider of branded work and outdoor footwear, sponsored the second annual
Drive to Remember for Fallen Officers. "We are honored to support the Drive to Remember
and those who make the ultimate sacrifice for their communities," said Joseph P. Schneider,
President and CEO of LaCrosse Footwear, Inc. "For more than 75 years, Danner has
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developed quality and high performance footwear for these men and women in the field,
whether at work or enjoying the outdoors. We are truly honored to support this wonderful
organization." (Business Wire, May 1, 2008)
The Drive to Remember encompassed a 14-day, 5,000-mile tour from Vancouver, British
Columbia to Washington, DC. Danner hosted a commemorative event at the Danner Factory
Store, including a barbeque lunch to honor the Drive to Remember on their first stop in
Portland, Ore. Proceeds from the sales of Danner socks during the event were donated to the
organization to support the families of fallen officers.
Counterfeiting, a Dangerous Business
According to the World Customs Organization, approximately seven percent of the products
sold around the globe are fakes. The United States is a top destination for counterfeits, with
about $250 billion worth of scammed products crossing the border every year. In 2007, the
U.S. Immigration and Customs Enforcement projected that total American job losses due to
product counterfeiting was 1.4 million. According to U.S. Customs Bureau and other
regulatory agencies, many counterfeit dollars are traced back to greater criminal threats such
as organized crime, child labor, drug trafficking and terrorism.
Staggering Consequences
In 2008, the domestic value of counterfeit and pirated goods seized for intellectual property
rights violations was up 39% to $272.7 million, an increase of almost $76 million from 2007.
U.S. Customs found that for 2007, 40% of all intellectual property rights seizures were
footwear, up from $63.4 million in 2006 to $78 million with the vast majority being in
athletic shoes and the main source being China.
Purchasing cheap, knock-off designer products from the trunk of a car or from a street
hawker is inconsequential to many consumers who do not care about the repercussions to the
industry being scammed that go beyond the bottom line and effect employees across the
board. Consumers also do not realize the potential dangers of a counterfeit product—knockoffs are likely made from sub-par materials that at best may be ill-fitting but may also cause
injury.
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Counterfeit Counter-Intelligence
In an interview with Footwear News, David Brener, the chief intellectual property rights
operations branch officer in Washington, D.C., explained what is being done to combat the
problem. “We are trying to use a layered approach. We can't inspect our way out of the
problem. We are using targeted techniques, risk-management techniques. We're going out on
a post-transaction basis after the product arrives to go to companies and work with them to
find weaknesses and correct them. When they have seminars and annual meetings, we have
trade specialists there.”
He also noted that two of the most popular counterfeiting method is transshipping—
channeled through different locations to hide the final destination—or purposely mislabeling
such as shoes with a counterfeit logo that is covered and peeled off later. (Footwear News,
October 20, 2008)
Although most experts believe that nothing will stop counterfeiting, this type of proactive
activity on behalf of law enforcement and industry players, coupled with high-tech innovation
in anti-counterfeiting tracking tactics, such as RFID, holograms, permanent labels and
invisible inks, helps stave the flood of fakes, particularly at the distribution level. However,
once fakes make it to the consumer level, copies easily fool consumers’ less-discerning eyes.
Industry Hopes to See End Depression-Era Tax
Footwear industry members of The Affordable Footwear Initiative have been urging
Congress to pass the Affordable Footwear Act and offer consumers some relief by ending a
Depression-era shoe import tax meant to protect domestic manufacturers from cheaper
imports. Packaged Facts estimates wholesale prices of footwear rose eight percent in 2008
and those price increases were passed on to consumers despite the slowing economy.
Despite the best efforts of the footwear industry lobby over the past several years, the tax still
remains, even though 96% of all shoes sold in the United States are imported and wholesale
prices are rising. The tariff runs as high as 67.5% on some items and averages 10%.
Repealing the shoe tax could help pass as much as $2 billion in savings to U.S. consumers.
Proponents also assert that the Affordable Footwear Act would stave off further industry
downsizing and protect domestic footwear manufacturing jobs.
In the most recent effort to repeal the tax, Senators Maria Cantwell (D-WA) and John Ensign
(R-NV) formally reintroduced the bipartisan Affordable Footwear Act (S. 730) in April 2009.
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The legislation would eliminate the regressive and hidden tax paid on most lower-cost and
children's shoes, or about 60% of the shoes sold in the United States each year.
Coalition members include the American Apparel & Footwear Association (AAFA),
Footwear Distributors and Retailers of America (FDRA), Retail Industry Leaders Association
(RILA), Outdoor Industry Association (OIA), National Retail Federation (NRF) and many of
the individual member companies represented by these associations. Visit the AAFAsponsored coalition website, www.EndTheShoeTax.org for more information.
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Style and Innovation Trends
Free to Re-Invent Me
Footwear is a huge and increasingly diversified business, driven by a host of demographic,
lifestyle and fashion trends. As a result, the category is being segmented ever more finely to
meet the manifold functional and emotional needs and desires of shoe shoppers. This is seen
in the diversity of mainstream footwear trends—from casual comfort to sexy stilletto, and the
fact that, in recent years, a far greater range of styles has become acceptable in the U.S.
workplace. There is no urge to conform in terms of style. In fact, the urge now is to
constantly evolve and change, as Americans continue to define, and re-define, themselves as
individuals.
The diverse nature of personal styles and the belief that one can re-invent oneself with, for
example, a fashion makeover, driven by the wealth of makeover media, means there is a
place in the average consumer’s closet for a wide variety of shoe styles to reflect one’s mood.
Make Me Unique: Personalized Footwear
In an ego-centric American culture where the individual is lauded—exemplified by the
popularity of reality-based TV programming, consumer-generated content and a plethora of
products that are “made just for me”—footwear innovations that engage and express the
power of personal ego through design and functional options will begin to see more consumer
interest. Although growth in this arena may be slow to build as word-of-mouth from loyal
and satisfied customers is often the main source of advertising.
Through keeping a finely tuned ear to the whims of consumers, the industry is making strides
in personalization and customization by offering an ever-widening variety of shoes that
satisfy not only functional needs but ever important emotional ones, from design options to
celebrity brands that echo and/or magnify an individual’s personality and beliefs.
Several brands in the Adidas stable offer personalized and customized platforms, such as
Adidas’ mi Adidas and mi Original. Mi Adidas, which allows consumers to custom-design
running shoes, was launched in Adidas’ performance stores in 2007, followed by the launch
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in 2008 of Mi Originals to Adidas concept stores. See below the image of this author’s
customized at Mi Originals online with company name, city and born on date.
Figure 5-9
Adidas’ Customizable Mi Originals
Work Shoes Get the Custom Treatment
Taking customization and function even further, LaCrosse Footwear, Inc.’s Danner created
the "myDanner" custom footwear program for building a one-of-a-kind, personalized Danner
work boots.
The process starts online with customers choosing materials (Vibram, GORE-TEX,
Thinsulate, etc.), as well as leathers, fabrics, laces, and hardware. The program currently
launches with three top Danner styles, the Super Rain Forest, Fort Lewis and the Santiam,
with more styles to come. Production of the custom myDanner boots will take approximately
two weeks. Danner even offers a more personalized premium package that includes a twonight stay in Portland, a private factory tour, and a private custom boot fit. In 2008, LaCrosse
Footwear, saw its sales rise eight percent to reach $128 billion.
Emotional Pulls the Shoes Strings Too
Emotional benefits can also play a part in customization, where the consumers can fully
express
themselves
artistically!
Enter
Zazzle’s
custom
shoe
offering
(www.zazzle.com/shoes). Zazzle's custom shoe platform is the first fully customizable shoe
with user-generated content, allowing users to design and select colors for the entire shoe.
Consumers are able to create unique custom canvas shoes by uploading their own designs,
patterns, illustrations, images and text, and then preview their shoes instantly. Users can also
embellish their shoe designs with preset colors and patterns. The shoes are embellished and
assembled from scratch within 24 to 48 hours, which enables consumers to receive their
shoes in one to two weeks.
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High End Activity
While there are a few mass players, such as At Nikeid.com and SteveMadden.com, making
customization more affordable for the masses, the excitement is in high-end customization
with boutiques popping up across the country. For example, at Morgan Miller, a boutique in
southern Florida since 2006, shoe addicts can design their own custom-fit sandals, then cruise
the mall or sip champagne as cobblers build their creation. About an hour later, the shoes are
served on a silver platter. An array of soles, straps and embellishments are available and the
cost ranges between $100 and $400. The store also hosts shoe parties.
Many of the smaller shops have been around for decades, such as E Vogel in New York City
specializing in custom shoes for men and riding boots for men, women and children since
1879. E Vogel's upscale clientele veer toward classic looks. The store is also popular with
customers who can't buy shoes off the shelf, either because of orthotics or conditions such as
bunions or hammertoes. Customers here pay $1,300 to start, with subsequent pairs costing
$850 each. Although this shop employs 18 shoemakers, the average wait time for the first
pair of shoes is about four months.
Interchangeable Shoes
Several start-up shoe companies touting interchangeable sandals and shoes have appeared on
the scene, including Lexees, One Sole by Quick Change Artist, Bandals and Zip Shoes, for
consumers who want unique personalized footwear options at lower price points. Lexees,
One Sole and Bandals, are simple sandals with an interchangeable upper or band.
Figure 5-10
Sandals with Interchangeable Upper or Band
Soon to launch in the United States, the ZIPZ Shoes system’s shoe tops and bottoms
("covers" and "souls" in ZIPZ language) are interchangeable to create different combinations
with a variety of patterns, styles and colors in toddler, youth and adult sizes. ZIPZ, currently
sold abroad, will appear in multiple U.S. retail locations in the fall of 2009.
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Finding Comfort in a Pair of Shoes
There is a stereotype that women seek solace in shoes, and stereotypes are often based in fact.
An October 2007 poll from Consumer Reports National Research Center found that the
average American woman has 19 pairs of shoes, however only four pairs are worn regularly
and 43% have been at least moderately injured by their shoes. So it is unclear how much
comfort women are actually getting out of their shoes.
Comfort versus Style: Footwear No Longer Easily Categorized
Over the past several years, there has been a steep change in seeking solace from the shoes
that hurt us. Footwear fashion trends are ephemeral and reliant on consumer trends,
innovation and artistry, but in the past year, the most widespread buzz has been on casual
comfort and health and wellness rather than on well-heeled stilletos! The marketplace has
seen growing crossover. Shoes are no longer siloed into business wear, casual wear, sporting
wear or dress wear. Casual Friday has evolved into Casual Everyday. Sports and lifestyle
continue to merge. Consumers want to go from faxing, to flexing, to a festive night out
seamlessly and in comfort.
Shoe Comfort Gets More Accessible
Comfort shoes, once wore the stigma of hippie shoes, grandma shoes or nurse shoes, while
high-fashion footwear fell within the parameters of “suffer for beauty.” Now women (and
men to a lesser degree) have wide range of choices and price points that are both comfortable
and fashionable—less because high-fashion shoes are getting more comfortable and more
because comfort shoes are getting more fashionable. Several brands such as Jones Apparel’s
Easy Spirit have made it their core business to promote this idea while other brands have
adopted strategic partnerships that combine multiple brands into hybrid footwear products.
For example, Nine West and New Balance struck such a deal in 2008 to create a line of
footwear combining the style and comfort technology of each.
Comfort Shoe Brands Break the Mold
Several classic comfort shoe brands have introduced updated designs to meet consumer needs
for a more attractive shoe. C&J Clark has introduced the Indigo, Privo and Unstructured lines
under its Clarks brand.
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Figure 5-11
Privo’s Acacia Slip-on with Flex-Fit
Figure 5-12
Indigo’s Sweetie Pump with ABS Heel
Figure 5-13
Unstructured’s Un.radke Ankle Boot
Innovative shoe maker Geox has put its waterproof, breathable technology into great-looking,
dressier loafers, boots and pumps. Naot, a comfort sandals maker, has branched into boots
and shoes.
In January 2009, Kigo footwear launched a line of portable, recycled, eco-friendly, comfort
footwear. The shoes made of compressible materials feature a fold-close design, so they can
stow as easily as a glove. Quality materials carefully selected to meet varying conditions and
environments mean that Kigo shoes are as comfortable as a slipper yet as sturdy as an athletic
shoe.
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Figure 5-14
Kigo Footwear
Fashion Finds Comfort
Fashion brands like Cole Haan, Kenneth Cole and Anne Klein, better known for fashion
footwear, have also stepped into the world of comfort. For example, Cole Haan, owned by
Nike, introduced a line of pumps with Nike Air technology in the soles and Anne Klein
introduced a line of pumps and loafers with iflex-sole that are bendable like slippers.
In August 2008, RSVP, a women’s designer shoe brand, and Foot Petals, Inc., a maker of
shoe inserts that relieve foot pain, launched RSVP Cushioned by Foot Petals, sold only on
retail shoe site Zappos.com. The Foot Petals Tip Toe and Haute Heel inserts are sewn into
each of the shoes' sock liners to add a feel-good element to each shoe.
Figure 5-15
RSVP Lyndsey Cushioned by Foot Petals
Similarly, Paris Hilton Footwear improved the comfort on the brands’ line of platform
stilettos, with a "comfort heart", a cushion inside the inner sole of every shoe.
The Science of Footwear
While some footwear is inspired by science fiction, such as the 160 individually numbered
Star Trek-inspired Enterprise Edition Airwalk sneakers, designed by street style designer Jeff
Ng for CBS Consumer Products to celebrate the latest Star Trek voyage into theaters, or the
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Nike Air Trainer "Transformers" inspired by the Autobots' leader, Optimus Prime, there is
even more spectacular innovation based in real science, particularly in the athletic shoe arena.
Figure 5-16
Optimus Prime inspired Nike Air Trainer "Transformers"
Under Armour Gets Sophisticated
The sports apparel maker, Under Armour, has jumped into athletic footwear with the help of
technology, such as rapid prototyping, where a special machine can "print" a polymer version
of the shoe's sole. Under Armour can make sure the treads are in the right place, even give the
sole a workout, without investing $20,000 and up for a costly steel mold. Under Armour is
also utilizing 3-D software to build virtual versions of its shoes to save time on the
development side by six months. Using software from sports-training company Dartfish,
Under Armour tests that the "cartilage" of the shoe will properly absorb shocks and provide
independent suspension when the foot hits the ground.
Of course, challenging the major athletic footwear players such as Nike and New Balance
will still be a major undertaking as these competitors have the same kinds of protocols and
technologies. But if their sales in 2008 and the first quarter of 2009 are any indication, Under
Armour is well on its way to becoming the next major designer and marketer.
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Technology Offers Good Shoes and Good Health
In response to continued consumer interest in health and wellness and the multi-tasking
lifestyle, a slew of shoe manufacturers and brands are touting a wealth of health claims.
Ailments from back pain to varicose veins and benefits such as improved posture, posterior
toning, and burning calories, are all being met with high-technology and design innovations
such as rounded soles and heels, extensive cushioning and contoured shapes to mimic
walking barefoot.
Better Health Through Earthly Footwear at Sky-High prices
The idea of a fitness shoe that offers inherent health and wellness benefits is not new. Earth
shoes, first made popular in the U.S. during the 1970s, were the precursor to the wide variety
of wellness footwear available today. Now known as Earth Footwear, with an average retail
price around $100 a pair, they are designed to create proper alignment of the spine and stretch
the calf muscles.
Newer products have newer price points and more impressive claims! Products such as MBTs
by SwissMasai have sold more than a million pairs at $230 to $270 for the "anti shoe" with a
rocker bottom and a soft wedge heel your foot sinks—playing on consumer vanity and health
needs. Chung Shi, a German fitness shoe with a rocker bottom, is priced at around $170.
Spas, Fitness Experts Saw Opportunity
Bliss spa owner Marcia Kilgore, developed the FitFlop, which promises to help you walk
faster and keep the hamstring and calf muscles active longer during steps, reduce joint strain
and tone thighs. Taryn Rose shoes are made by artisans in Italy, but are built on an
asymmetrical form, which gives full arch support, helps to reduce fatigue and improves
comfort. The Z-Coil line, with its funky heel design, bills itself as pain-relief footwear.
In 2009, fitness expert, Jennifer Cohen’s introduced NGR shoes (No Gym Required) which
offer similar promises, along with her first fitness, motivation and health guidebook, No Gym
Required: Unleash Your Inner Rockstar.
Cohen noted in an interview with MacLean’s magazine in October 2008, "Though everyone's
lifestyle is so different, it all comes down to the same thing. That is, how to maximize what
you do in a minimum amount of time."
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Figure 5-17
Masai Barefoot Technology Kaya
Figure 5-18
Fit Flops Sandal
Figure 5-19
Z-Coil Freedom
Experts Conflicted on Fitness Shoe Promises
Those in the health field are generally skeptical about wellness and fitness shoes. "It's a lot of
hype and often not a lot of supported substance," according to Bruce Williams, President of
the American Academy of Podiatric Sports Medicine. "While there may be some truth to the
claims ... most people can do a lot better with a decent pair of running shoes or getting more
active." (Cox News Service, July 22, 2008)
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But Katy Santiago, a California bio-mechanist conducted a study for Earth footwear to
determine the shoes' impact on physical health and found positive results. After four weeks,
the 31 women studied who walked 10,000 steps a day in Earth shoes lost body fat, increased
their walking speed and saw an increase in lean body mass.
One of the few measures of how healthy a particular shoe may be comes from the American
Podiatric Medical Association. The organization issues seals of acceptance to shoes that meet
the standards of a committee of experts. While FitFlops are recognized, the likes of Z-Coil,
MBT or Earth shoes are not. This does not necessarily mean there is a serious problem with
the unlisted shoes though.
Fall Footwear Stylings: 1980s Revisited, Strong Embellishments
and Colors, Aggressive Heels and Boots,
The 80s aesthetic has been re-infiltrating fashion for the past few years. In footwear, sneakers
reminiscent of styles worn in a Kajagoogoo or The Cure video are being re-introduced by
old-school makers such as LA Gear, which re-introduced a limited-edition Stardust line in
five colors (light grey, white/blue, white/grey/green, white/lilac/green, and light pink), or reinvigorated by newer players such as designer John Varvatos’ take on the classic Converse.
Women’s Footwear Goes Retro, Aggressive
In women’s non-athletic designs, particularly those for fall 2009, the look back is much more
stylized. Footwear designer Lawrence “XL” Gay’s new footwear line, Xllent Shoes, to
launched in the fall of 2009, is inspired by 1980s rock 'n' roll and hip-hop track suits, The line
highlights two other top 80s-inspired trends for fall: strong embellishments and booties.
There is nothing dainty about the strong straps, buckles, and chains appearing in footwear
designs. Booties, a mixture between a shoe and an ankle boot, have re-emerged on runways
and on celebrities in a variety of styles, such as peep-toe, lace-up, oxford and fold-over.
Also big are heels with big personality. Some may refer to them as “hooker pumps” complete
with thick straps, bling, tassles, buckles and six-inch plus heels in bold colors. But others
view the more aggressive styles including everything from extreme platforms, high sculptural
heels and thicker heels, as more architectural and exciting, rather than simply slutty!
Jeffrey Kalinsky, Founder of high-end retail shop Jeffrey in New York & Atlanta; and current
Director of Designer Merchandising at Nordstrom told Footwear News in February 2009 that
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the fall footwear showcase in New York featured "Very aggressive footwear. There was a
combat feeling, a motorcycle feeling, even bondage. A tough-chic approach to footwear." He
went on to note that "Proenza Schouler's footwear gets better season after season, Alexander
Wang is really getting into it. I am sure he will have a successful shoe business." (Footwear
News, February 23, 2009)
Retro Designs Not New
A look farther back in history shows that this outré footwear trend relates to far greater
economic trends. In the recessionary 1930s, shoes became very experimental, according to
Elizabeth Semmelhack, Curator of the Bata Shoe Museum and the author of Heights of
Fashion: A History of the Elevated Shoe.
"The 1930s was the era of Andre Perugia, whom I consider to be the first great modern shoe
designer. Fashion was linked to Surrealism and to intellectual concepts. Perugia and
Ferragamo made shoes so far removed from the stereotyped sexualized shoe." She sees
something similar happening today. "High heels today are incredibly architectural. Heels are
higher—designers are pushing the envelope of engineering, of what can be built, and the
materials it can be built out of. Yet the shoes are still sexy. It's as though today's designers are
making shoes that can be sexy and significant." (National Post, May 16, 2009)
A No-Frills Backlash in the Offing?
While these more flamboyant and aggressive looks will continue to have traction and
possibly reflect a sense of escapism in difficult economic times, there is another more
conservative trend at work driven more by fear and practicality that emerges in fall
introductions and further penetrates into winter introductions. Many designers are also
introducing more serious and classic shoes that are more practical with an emphasis on blacks
and browns, with muted colors, simple lines and less embellishments (and more conservative
pricing) in anticipation of less-adventurous consumers.
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Marketing Outreach
Recession Time to Engage Loyal Consumers
Given a recession, a footwear marketer’s first instinct may be to cut costs on outreach and
innovation, but such cuts can do more harm than good. Rather, marketers should see it as a
time of opportunity to re-evaluate their brand strategies and re-connect with core consumers.
In a panel moderated by Footwear News Editorial Director Michael Atmore for the Council
of Fashion Designers of America programs designer Vince Camuto commented on the
difficulties posed by the current economy "I expect next year to be our best year. It's a wakeup call to the industry, but it's also a great opportunity to work on your product, reorganize
and reinvent yourself." (Footwear News, December 15, 2008)
Research shows cost-cutting can undermine a marketer’s long-term business strategy. For
example, data from the British study “Profit Impact of Market Strategy” revealed that over
the past 30 years, companies that spent more on innovation during downturns saw returns on
capital employed rise 23.8% during recovery times, while those that limited spending only
saw gains of 0.6%. (Ad Age, February 25, 2008)
By not communicating with consumers (and employees and investors, for that matter), brands
and products risk alienating losing them. It is key to remain visible. Speed is also of the
essence and the faster marketers can roll out new marketing during a recession, the better. In
order to do this, marketers need to be organized, focused and driven.
Integration Important as Media Preferences Shift
It will be increasingly important to integrate marketing activity with a unified idea that is
expressed through multiple outreach formats—especially to build relationships with younger
consumers who are more likely to play a video game than watch television, and read a blog
rather than a magazine. Classic advertising methods are less and less effective as the
advertising marketplace has become more fragmented and the consumer audience for each
individual media information source has shrunk and dispersed due to the varied choices.
A mixture of TV, print and out of home, plus emerging media and guerilla tactics, should be
part of any large-scale plan. A study conducted by the National Retail Federation and
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BIGResearch found that emerging media forms of communication such as online video-game
ads, blogs and text messages are gaining influence with consumers.
"As new technology
places itself on the market, [it] is diverting attention from the typical newspaper and
magazine advertisements," said Pamela Goodfellow, Senior Analyst at BIGResearch. "It's up
to retailers to be nimble in knowing what the latest and greatest is to reach their
customers." (AdAge.com, November 20, 2008)
Jimmy Choo Takes It Down a Notch
Luxury shoemaker Jimmy Choo isn’t standing idly by waiting for the recession to end.
Instead, the brand has launched an aggressive youth-targeted, buzz-building initiative to fuel
excitement in a difficult economy. In June 2009, Jimmy grabbed attention announcing a
partnership with retailer H&M for a limited-edition collection of shoes (price points for most
shoes at $55 to $138), accessories, and ready-to-wear items due in stores in November 2009.
Although it is a one-time event separate from main Jimmy Choo line, the experimentation
with new categories for H&M is an interesting tactic in youth outreach, building long-term
brand association. Jimmy Choo is also prepping to debut Choo 24/7 for spring 2010. Separate
from the main spring collection, it will feature updated versions of favorite styles in a variety
of colors, materials and heel heights.
“Our strategy has always been about balancing icons
and innovation,” CEO, Josh Schulman said. “We see Choo 24/7 as a great way to hero the
iconic products along cutting-edge fashion.” In support of the launch, the company plans an
extensive marketing push for January 2010. With this endeavor, coupled with the H&M
collaboration and its Project PEP charitable initiative, the company hopes to differentiate
itself. “This is an integrated strategy,” said Schulman. “It’s very important that we remain
close to our customers and potential customers. Now is the time to take market share.”
(Footwear News, June 22 2009)
More Strategies to Reach Price Conscious Consumers
According to the 17th semi-annual Piper Jaffray "Taking Stock With Teens" survey, teen
(median age of 16.7 years) spending on clothes was down 19%. However, they were
spending more on shoes with a nine percent increase!
"Footwear posted the strongest year-over-year and sequential results at a four percent and 21
percent gain respectively," the Minneapolis-based brokerage firm said in the report. "An
indication that the strong footwear cycle, particularly relative to the weakness in apparel,
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continues for the youth demographic." The company added, "Teens and their parents are still
buying new clothes, footwear and accessories, but are more selective and increasingly priceconscious. This will force retailers to discount prices and offer unique promotions to keep a
steady flow of spending until the economy improves."
Virtual Marketing and Etail Make Most of Recession Dollars
Of course, not every player has the money for the big branding efforts. Virtual marketing and
etailing have emerged as a simple way for smaller and emerging footwear players to make
their products directly available to consumers and in a fiscally problematic time makes the
most out of limited financial resources.
More People Cocooning and Online in Recession
Online outreach is also an interesting option in a recession as it may be the most opportune
way to reach out to cocooning consumers. The instinct to cocoon during difficult times makes
it more difficult for marketers to drive consumers to brick and mortar retail. To drive traffic,
footwear players are rolling out more Internet-only exclusives.
A survey released in 2008 by Prospectiv, a provider of online customer acquisition solutions,
suggests that the Internet is the place to be, or to shop rather, and do all things pertaining to
shopping during the economic downturn. According to the survey, 84% of respondents said
they had changed their shopping habits due to concerns about the recession, and for the
majority (64%), this change meant logging on to conduct more research to compare products
and brands online.
In a panel moderated by Footwear News Editorial Director Michael Atmore, part two in a
series of Council of Fashion Designers of America programs to benefit the organization's
Business Service Network, designer Tory Burch was optimistic about the potential of ecommerce for her brand. "Many people don't want to be seen shopping, and the Web is an
alternative to that," she said. (Footwear News, December 15, 2008)
All the Simplicity of Email
With all the capabilities of new technologies, the power of a simple email campaign is oft
forgotten. Online newsletters such as DailyCandy, an insider’s guide to what’s hot, new and
undiscovered—from fashion and style to gadgets and travel, with a sister website, both
predominantly for women, or similarly Thrillist for men, are an easy and fun way to blast
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your market message or new product introduction. The voice of these emails are quirky and
fun attention-grabbers.
An email blast from Thrillist in June 2009 for Del Toro shoes read:
“Too often, enjoying leisure activities means enduring terribly unleisurely acts, like taking three flights to chill on a European beach,
or hacking off your toe with pill cutters just to get the finest pain
pills to cut with them. For shoes from guys whose respect for their
leisure facilitates yours, Del Toro.
DTs are the brainchild of two Palm Beach prep school buddies who
dreamt of celebrating graduation by kickin' back, smoking cigars,
and wearing velvet shoes with their school emblem on them, until
realizing they take nine months to make, and they'd actually have to
get jobs to pay for them, and said screw that, let's do it ourselves;
they now make velvet Prince Albert slippers normally worn with
tuxes, interpret them as more casual loafers, and trick 'em out with
emblems and custom monograms/images.
All shoes are made in Spain with leather soles and heels, and come
in either black, navy, or forest green velvet with black trim; you can
go clean or choose from an array of emblems like skull &
crossbones, palm trees, soccer players, an old-timey bike with a huge
front wheel, or the U of M "U" logo or its pissed-off Ibis -- though
it’s unclear whether he's upset because the 'Canes stink, or your feet
do. To go full custom, either input a monogram (after choosing
velvet color, thread color, and font you desire), or upload any image
(i.e., family crest, martini olive, your frat's initials); once digitized,
DT will email you a shot of what the embroidered version will look
like to make sure everything's good, then proceed with production,
and in 1/3 the time of other custom loafer-makers, you'll be the only
kid on the block with John Larroquette-face shoes.
As DT just launched the custom site, it'll soon be adding further
customization options like trim color in addition to new velvet
colors, more schools, (e.g., Ivies and ACC heavyweights), and the
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option to have shoes made in whatever fabric you want -- pick one
that can stand up to the Aegean Sea as you lay heavily sedated in the
surf.
Customize your velvet loafers at BuyDelToro.com”
Make Use of Alternative Advertising Media
While traditional mass-marketing vehicles still hold the most sway, a study conducted by the
National Retail Federation and BIG Research found that alternative marketing outreach
through online video-game ads, blogs and text messages are gaining influence overall with
consumers. Retail ad inserts (traditional circulars and multi-advertiser coupon packages) are
the most influential in clothing purchases, at 33% of consumers citing them, followed by
magazines at 27%, newspapers at 23%, and broadcast TV at 21%. Text messages influence
three percent of clothing purchases, but jumps to six percent among the key target market of
18- to 34-year-olds. Product placement is also particularly effective among the 18- to 34year-old demographic—16% said it impacted a clothing purchase. (Ad Age, November 20,
2008)
A May 2009 survey by the Association of National Advertisers found that two-thirds of
marketers surveyed plan to hike media budgets when the recession ends, with hikes in social
media and experimental budgets a priority.
Alternative Media Increasingly Important, Especially Among the Young
For many footwear marketers, old-school television, print, or radio advertising may not be
viable or even necessary, as consumers receive information in a totally different manner than
they did 20 or even 10 years ago. And there are many exciting, alternative options in an age
of evolving media consumption where new consumer tools are being constantly developed.
Alternative media interaction is increasingly the best way to target people, particularly young
people, directly. The outreach programs that have long-term impact will recognize and adapt
to the changing information, entertainment and media consumption habits of young
consumers.
For example, marketers can spread the brand love by allowing consumers to embed brands on
their profiles with widgets, and they can also build their own social networks. Social
interaction websites and blogs, in particular, seem to provide tailor-made forums for
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conversations, particularly around fashion, which can involve personal connections, and
word-of-mouth brand building.
The Puma Past Masher
In January 2009, Puma launched "Puma Past Masher", a Web application that lets visitors
upload a personal photo and mash it up with fashion from previous eras to commemorate the
brand's 60th birthday. Mash up options included 225 hairstyles, tops and accessories, which
allow 45 million possible combinations. Notes and comments on each look can be added to
the custom-designed image and those images can then be exported to Facebook and Flickr.
The application, no longer up, generated tremendous popular response in the blogosphere.
Behavioral Targeting in Diverse Consumer Market
While alternative online tactics such as social networking are terrific at building buzz,
utilizing an increasingly popular online advertising strategy—behavioral targeting—may be a
better way to reach consumers and directly drive sales from key consumers.
Experts note that search-related ads sponsored by links, on Google or Yahoo! for example,
are the largest growth sector, but behavioral targeting is a much more pro-active approach.
Behavioral targeting occurs when marketers analyze web users’ online activities to figure out
who is most likely to be interested in its product, which enables them to place ads on
whatever sites those consumers are visiting. For example, behavioral segments important to
the footwear industry, such as “fashion-interested,” “outdoor sports enthusiast” or “soccer
mom,” would be based on where the user has gone and/or what they have done on various
web pages.
Of course, there is a privacy issue with behavioral targeting, but young consumers—or more
specifically Gen Y—who have been raised in an information culture, are exceedingly
comfortable with everyone knowing their business! These consumers are expected will likely
have no problem with this type of consumer profiling. In fact, they will expect marketers to
know their preferences and market accordingly by creating evocative high-end brand widgets
to customize social networking pages, sending appropriate coupons to their cell phones when
they pass a Payless or a Skechers, and basically inserting their brands into daily life and
communication.
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Word-of-Mouth: Added-Value for Marketers and Consumers
Before the emergence of user reviews and comparison sites such as epinions.com, a few
unhappy customers couldn't do much damage. Now their unfiltered rants can be read by
millions of prospects. And they could have a bigger effect on consumers who may already be
tilting risk-averse. Those consumers might say, "Why take a chance on an expensive pair of
shoes when those two people had a bad experience?"
Of course consumer opinion can also tilt in a positive direction. For example, the Princess
Poochie blog, shoedaydreams.com, is devoted primarily to shoes, including discussions on
shoes Princess Poochie owns, shoes she wants, shoes she just bought or favorite online
discoveries. Shoe offers alerts to consumers with champagne tastes on beer budgets. For
those longing for white tailored Gucci pumps, Poochie's blog points to a similar style,
available in four colors at Target. She also points out recent introductions (Christian
Louboutin’s Estoteri, $995 at Barney’s!) and to sales (Finnish designer, Minna Parikka 20% 50% off!)
Footwear Clubs Breed WOM
Footwear communities abound—online and offline. ShoeTube.tv, an online shoe community
for shoe lovers, offers video features such as "The Daily Shoe" and "Shop Til You Drop,"
along with features on shoe fashions with user-generated videos is already attracting
advertisers or the The Hello Stiletto Shoe Club, a group with 16 chapters nationwide and a
website at www.shoeclub.us, offers online social networking and outings every two months
such as an exclusive shopping trips to the likes of DSW or to high-end stores like Neiman
Marcus. The club also sponsors "Best in Shoe" competitions, where women strut their best
shoes along a pink carpet at local events.
Social Networking to Play Big Part in WOM
More and more marketers are using word-of-mouth (WOM) as a key part of their marketing
and brand strategies, which may be particularly meaningful to footwear marketers. It’s easy
and inexpensive, especially with the growth in web communications and communities, for
marketers to offer ample opportunity to interact with real consumers. For example, Facebook
already has in place pages and pages of special Footwear-interested groups, both corporate
and consumer. One of the most popular is Nike, Inc.’s Facebook page with nearly 1.5 million
fans. Toms Shoes, the company that gives a pair of shoes to a child for each pair it sells, had
more than 96,000 fans.
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Proof That WOM Works
More importantly, WOM is accepted and trusted by consumers. A 2007 survey by ACNielsen
found that 78% of respondents viewed recommendations from other consumers as
trustworthy. That compares with 63% for newspaper ads, the second most-trusted medium,
and just 18% for text ads on mobile phones. (Seattle Post-Intelligencer, December 24, 2007)
Another study showed that family and friend recommendations may supercede other types of
consumer marketing when it comes to influencing purchases, according to data released in
April 2008 from ZenithOptimedia's Touchpoints ROI Tracker, a comprehensive project
comprising over 300,000 interviews across 34 countries and covering more than 4,000 brands
in 126 product and service categories. Consumer outreach tools, such as magazine ads,
Internet banner ads and WOM, were each given a "contact clout factor," a number on a scale
of 1 to 100 that indicates the relative influence of the tool on purchasing. WOM
recommendations from family and friends led the pack with an average score of 84. TV ads
and Internet search were next, with an average score of 69 and 67, followed by magazine ads
at 60, newspaper ads at 55, outdoor ads at 45, radio ads at 42, and Internet banner ads at 41.
In terms of branding, however, TV is still the leading medium with the average brand
advertising on TV recalled by 22% of category consumers. (Ad Age, April 9, 2008)
Don’t Forget the Human Touch
It is important to note that actual human contact may be a crucial part in making the most of
WOM initiatives. A spring 2008 study by The Keller Fay Group, a market research
consultancy specializing in word of mouth, and media agency OMD found that WOM
expressed face-to-face and by phone is viewed as highly "credible" more often than online
talk (59% vs. 49%), and face-to-face WOM is more likely than online to lead to strong
purchase intent (50% vs. 43%). This may be particularly relevant to a product that is
especially personal and needs fitting.
Programs, such as Kigo’s Friends of Kigo influencer program, tap the human element to get
the word out. According to Kigo co-founder Rachelle Kuramato, instead of throwing money
at less targeted approaches, they have tapped active, gregarious women in certain markets
(New York City, Chicago, San Francisco and Atlanta), including a PTA President, a lawyer,
and an owner of a Pilates and Yoga studio, to wear Kigos and share their positive experiences
with the portable comfort shoe and build buzz for the July 2009 website launch.
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Product Placement Opportunities Abound
Non-traditional strategies and tactics will begin playing larger roles in getting product
messages out to consumers, as millions of TiVo/DVR users tune out commercials and ignore
print media. Luckily, many footwear marketers are already skilled in alternative outreach
programs, particularly product placement.
Marketers should explore more placement opportunities within their own cultures for
opportunities—notably fashion and health. The dominance of reality fashion and health
television programming is astounding. No longer relegated to daytime on a couple of cable
networks, the small screen offers options from The Doctors on CBS to Dr. Oz (of Oprah
fame) on Discovery Health, or from The Fashion Show on Bravo to Project Runway on
Lifetime. It is an ever-growing list of television product placement opportunity—including a
soon-to-be seen competition-based shoe design reality television series featuring fledgling
shoe designers, à la Project Runway, Sole Perspective. The program hopes to foster
awareness and appreciation among consumers and benefit the footwear industry through the
use of corporate driven marketing challenges.
Nike Active in Broadcast Placement
Neilsen Product Placement Service found that during the first quarter of 2008, apparel
placements ranked number one on both broadcast and cable with 4,493 and 26,063
placements, respectively. Nike ranked number six in the period with 575 placements on
prime-time broadcast network television with 575 placements (versus Coca-Cola with 2,990
placements), and the only footwear brand in the top ten for number of placements. (The
Center for Media Research Brief, September 26, 2008)
Reliance on Sports Icons Shifting More to Celebrity
Not surprisingly, athletic footwear and sports stars are an easy marketing mix and companies
are continually aligning themselves with top sporting professionals and events from edgier XGame mavens to old standards like football and tennis icons to promote a performance
message. It’s a no brainer.
But with the increasing number of athletic footwear marketers competing for share points, the
focus is on further differentiating brands with lifestyle benefits rather than solely on
functional performance benefits. The main reason for the shift is the influx of non-sport
specific, casual sneakers for everyday use. With the shift toward trendy everyday athletic
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footwear, marketers are now more likely to sign endorsement or licensing contract with a
high-profile music or television star or a health and wellness guru.
What Do Kelly Ripa and Eddie Van Halen Have in Common?
While there will always be a place for the professional athlete in promoting a brand (where
would Nike be without it’s young Olympians?!), non-sporting celebrities can better speak to a
broader emotional universe of benefits and dreams while sports stars live more in the
technological and performance benefits of a shoe. This is leading to relationships and
introductions from hitherto unknown regions. For example, 2008 saw talk show host Kelly
Ripa team with Ryka to co-design a footwear and apparel collection and act as spokesperson
for the brand in its print and online campaign.
In 2009, Eddie Van Halen is launching a line of high and low-top sneakers, similar to the
ones he sports onstage with the red, white and black stripes that mimic the design of his
Frankenstein guitar. The shoes, priced at $54 and $59, will be sold at EVHgear.com and
select department and specialty stores. In a side note, ELVH Inc., Van Halen’s company, has
filed a cause of action for copyright infringement in Los Angeles Federal District Court
against Nike. ELVH alleges that a certain Nike Dunk Low design style infringes the
copyright held since 2001 on the red-white-and-black pattern popularized on his guitar.
Of course, if the sports star can also offer more than just performance, all the better. Nike
tapped sports star and environmentalist Steve Nash of the Phoenix Suns to launch the new
Nike Zoom MVP Trash Talk in on Earth Day 2009. The classic hoop shoe is still designed
for athletic performance but is made using scrap materials generated in the footwear
manufacturing process and packaged in a recycled fiber shoebox.
Appropriate and Authentic Celebrity Relationships
Non-athletic footwear brands are no stranger to the power of celebrity. Who can forget the
boost Oprah gave Uggs in 2007 when she included the boots on her list of favorite things?
Celebrity endorsement can go a long way in building buzz. Even a side comment, from a TV
or movie star on a red carpet interview can generate intense interest in a shoe.
Developing long-term marketing relationships with celebrities is a fun and functional way of
reaching consumers through a variety of media, whether through a licensing deal,
programming sponsorship, product placement or a major advertising push comprised of a
multi-layered plan. These cannot be a simple paid endorsement to be successful as savvy
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consumers can easily sniff out falsity in marketing. To be successful, the celebrities, whether
they are high-end designers, fitness experts, musicians, or actors, must share qualities with
the footwear product itself.
The benefits of authentic arrangements include: growth potential, brand recognition, research
and innovation opportunities, and new or emerging market opportunities. Luckily, many
celebrities have immediate synergies as part of the greater fashion and trend juggernaut and
are already perceived as authentic.
Payless and Summer Rayne Oakes Go Green
Licensing, co-branding, and sponsorships with celebrities provide opportunities for
meaningful brand impressions among consumers especially in the face of media and product
clutter proliferation and dwindling advertising effectiveness.
For example, in November 2008, Payless ShoeSource launched the first-ever affordable green
footwear line with the help of Summer Rayne Oakes, Discovery Network's Planet Green
fashion and beauty expert and author of Style, Naturally: The Savvy Shopping Guide to
Sustainable Fashion & Beauty (Chronicle Books, February 2009). The new brand, Zoe and
Zac, at $30 a pair, is a key part of Payless' strategy to bring well-recognized, fresh, and
innovative new brands to every consumer at a good price. Oakes, as Payless’ “ecoconsultant,” will be involved in seasonal line reviews focusing on materials use and aesthetics
for the product, packaging, and in-store materials, as well as participate in other marketing
activities for the brand.
Candie’s Taps Britney to Connect with Young Consumers
In an effort to connect with young consumers, in May 2009, Kohl's and Candie's announced
an exclusive marketing partnership with pop tart Britney Spears. They made a splash, running
a one-off full-size poster in the April 15 edition of Us Weekly to launch the campaign. The
hard-to-ignore poster features Spears in a pink bathing suit and black patent leather heels,
against a wall of pink cotton candy.
Collage-style print ads followed, featuring footwear to accessories tout "Britney Spears for
Candie's Only at Kohl's" spelled out in diamonds. TV spot with Spears are scheduled for
summer 2009, promoting the back-to-school line.
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If the License Fits, Wear It
The benefits of well-crafted licensed or co-branded footwear line are tremendous, including
growth potential, brand recognition, research and innovation opportunities, and new or
emerging market opportunities. A well-crafted licensing arrangement can turn a mundane
product into a much more meaningful consumer lifestyle statement.
Footwear manufacturers are well-entrenched in the licensing business. Companies such as
Brown Shoes and Nike (both named among the top global licensees in the footwear category
for 2008 by License! Global magazine) work with several licensed brands. Nike licenses
include CLC, MLB, NCAA, USA Basketball, Bowl Championship Series, Haddad Brands,
Manchester United, LRG, U.S.A. Olympics and Brown’s licenses include Via Spiga, Franco
Sarto, Barbie, Winnie the Pooh, Naturalizer, Fergie, Reba McEntire, and Carlos by Carlos
Santana. (See Table 6-1 for other footwear companies lauded by License! Global for 2008)
Both the licensor and licensee must consider multi-layered marketing questions when
evaluating a potential relationship. The most important question to ask first is whether the
product or license fits with and benefits business goals, image and attributes. Other key
questions include:
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•
Can the product or property expand my business?
•
Who is the target audience?
•
What is the shelf life of this partnership?
•
Will the partner be able to uphold the agreement?
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Table 6-1
License! Global Selected Top Global Licensees in the Footwear Category, 2008
Company
License Examples
Primary Business
ACI International
Dreamworks, Perry Ellis, Hang Ten,
Margaritaville, Mattel, Nickelodeon, Ocean
Pacific, Original Penguins, Shaq, Warner Bros.
Men's, women's
and children's
footwear
Adidas
David Beckham, L.A.Galaxy, National
Basketball Association, Mexico Football
Federation, Y-3 Yojo Yamamoto, Stella
MacCartney and Diesel Denim
Athletic footwear,
apparel and
accessories
B Brands
Full Circle, Morgan
Footwear design
& sourcing
Brown Shoe
Company
Via Spiga, Franco Sarto, Barbie, Winnie the
Pooh, Fergie, Reba McEntire
Footwear
Leomil Group
Spider-Man, Strawberry Shortcake, Dora the
Explorer, SpongeBob SquarePants, The
Smurfs, Pucca, The Dog, The Cat, Hannah
Montana, Camp Rock, Disney Princesses, Cars,
Roary the Racing Car, Bob the Builder, Thomas
& Friends, Handy Manny, Go, Diego, Go!,
Pokemon, Sheepworld, Sugar & Babe, Disney
Cuties, Le Petit Prince, Jaja, Marvel Extreme,
Smiley, The Simpsons, Miffy, Iron Man, all
Marvel properties
Footwear and
apparel
Nike USA
CLC, MLB, NCAA, USA Basketball, Bowl
Championship Series, Haddad Brands,
Manchester United, LRG, U.S.A. Olympics
Footwear, apparel,
sports equipment
Pentland Brands
Lacoste, worldwide license for footwear; Ted
Baker, worldwide license for footwear; Kickers,
U.K. license for footwear and clothing
Footwear and
clothing in the
sports, outdoor and
fashion sectors
SGCompanies
(SG Footwear,
SG Messer and
SGI Apparel)
Dockers, Gold Toe, Izod, Panama Jack, Sealy
Posturepedic, The Beatles, Ben 10, Gecko,
Madagascar, Mongoose, Monster Jam, Planet
Earth, Sesame Street, The Simpsons, Wow!
Wow! Wubbzy!
Footwear and
apparel
Source: License! Global November 2008. Compiled by Packaged Facts.
Do-Good Marketing
Research suggests that most successful product strategies will offer consumers not just a
single functional benefit, but also higher-level emotional benefits which can be delivered
effectively through cause marketing. According to the 2008 Cone Cause Evolution Survey,
26% of consumers expect companies to give more support to causes and nonprofits in an
economic downturn, while 52% expect companies to maintain existing programs. The survey
also found that 79% of U.S. consumers would switch from one brand to another if the other
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brand were associated with a good cause. Although this is down from 87% in 2007—
probably due to economic concerns—it is still a significantly high percentage. "Consumers
are absolutely looking for value, meaning that it's a quality product and fairly priced," said
Carol Cone, Founder and Chairman. "If they can also have an easy and inexpensive way to
help with a cause that's relevant to them, it adds value to the shopping experience." (Ad Age,
October 13, 2008)
Do-Good Marketing Part of a Whole Brand’s Image
According to Deidre Sullivan, President of SnapDragon Consultants, a brand insights firm
based in New York City, a holistic marketing approach has even more profound significance
and opportunity for marketers. She said in an interview, “The brand relationship in the future
will become more and more dimensional and not just center on the act of buying. Consumers
want to know who they are dealing with and what their values are. Is this a responsible
brand? Is this a brand I can trust? They will look to their brand for education and leadership
on environmental issues. They don’t expect brands to be perfect. But they do expect brands to
try hard and make some sacrifices themselves.”
Timberland Taps Double Benefit
Companies and brands that support good causes are able to tap a double benefit (functional
and emotional) which may be more motivating to consumers—especially if the cause ties in
well and is meaningful to the core consumer market; for example, in the spring of 2009,
Timberland called for gently used shoe donations in exchange for a 10% discount off its
products. The promotion, in partnership with footwear charity Soles4Souls, starts on Earth
Day, and shoppers can bring old shoes into 68 Timberland stores throughout the U.S.
Timberland will promote the program with online banners, in-store merchandising and public
relations efforts.
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Chapter 7
Chapter 7: The Footwear Consumer
The Footwear Consumer
Note on Experian Simmons Market Research Bureau Consumer
Data
The following discussion of consumer demographics relies largely on data compiled by
Experian Simmons Market Research Bureau, based in New York City. Each year, Experian
Simmons surveys a large sample of consumers about their buying habits. The following
discussion derives from the winter 2008/09 consumer survey, which is based on more than
20,000 households. By surveying a large sample of households, selected to represent a
statistically accurate cross-section of the U.S. population, Experian Simmons is able to
construct detailed demographic profiles across markets and categories.
In addition, Experian Simmons has developed an index system to calibrate the usage of a
product by a given segment of the population, compared with usage by the population as a
whole. If 10% of all survey respondents report use of a product, for example, the baseline
index of 100 is set to that 10% rate. If 20% of respondents age 18–24 report use, this group
would have an index of 200, being twice as likely to use the product. Generally speaking,
Packaged Facts considers an index of 110 or higher to be significant, or an “indicator,” while
classifying demographic segments with an index of 80 or lower as “resisters.” This discussion
treats as “not significant” any indices falling between these two levels, or any findings that
Simmons has classified as statistically unreliable.
Using Experian Simmons’ database, Packaged Facts also conducted its own online poll of
2,600 adults in February 2009 to address selected consumer attitudinal statements.
Note on BIGresearch Data
This Packaged Facts discussion also utilizes data from BIGresearch. BIGresearch conducts
monthly online surveys of 8,000+ consumers and publishes its findings in the Consumer
Intentions & Actions Survey (CIA). These are online (opt-in email) surveys; however,
BIGresearch does weight samples so they are representative of the overall population by
gender, age (adults age 18+), income, and geography. Despite the limitations of online
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surveys, BIGresearch’s large sample of 8,000+ puts these data in a different class than quick
online surveys of 500 or 1,000 respondents.
The CIA survey focuses on what consumers are currently buying and where they are buying
it, and also on their shopping/retail intentions for the short-term future—the next 4 weeks, the
next 3 months. Thus, according to BIG, “Unlike indicators based on past performance, this
data brings intelligence on where the retail consumer is going, their intentions and actions.”
However, by stringing together 12 or 36 or 60 months’ worth of BIG data, Packaged Facts
can provide a very nuanced picture of consumer trends and shifts—including consumer
responses to sudden or short-term dynamics.
Men’s Athletic Footwear Penetration Levels Highest at 20%
According to Experian Simmons, the two major men’s footwear segments, athletic and nonathletic, both saw decreased levels of penetration in the past years in terms of footwear
bought in the past twelve months. Athletic shoes dropped two points since 2007 to 20% of the
population purchasing in 2009, while non-athletic shoes dropped three points since 2006 to
17% in 2009. 2004 and 2005 saw the highest levels in usage penetration for the six year
period for both segments, at 23% for athletic and 20% for non-athletic, as consumers
recovered from the faltering economy in the early years of the new millennium.
Boots and slippers also dropped from the highs of 2004—each dropping a point by 2009 and
settling at six percent and eight percent, respectively. The 2004 levels could not be
maintained as America rolled into another recessionary period—one likely to have greater
staying power. Don’t expect penetration levels to bounce back quickly in the coming years as
consumers may continue to put off new footwear purchases, in lieu of a visit to the local
cobbler.
Table 7-1
Total Consumer Penetration Levels for Men’s Footwear Bought in the Past 12 Months,
2004-2009
(%)
Men’s Footwear Bought
in the Last 12 Months
Fall
2004
Fall
2005
Fall
2006
Fall
2007
Fall
2008
Winter
2009
Athletic Shoes
23%
22%
22%
22%
21%
20%
Non-Athletic Shoes
20
18
19
18
17
17
Slippers
9
8
8
8
8
8
Boots (Excluding Work Boots)
7
7
7
7
5
6
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2008/09. This material is used with permission.
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Figure 7–1
Total Consumer Penetration Levels for Men’s Footwear Bought in the Past 12 Months,
2004-2009
(%)
25%
20%
15%
10%
5%
0%
Athletic Shoes
Non-Athletic Shoes
2004
2005
2006
2007
Slippers
2008
Boots (Excluding
Work Boots)
2009
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2008/09. This material is used with permission.
Women’s Non-Athletic Footwear Penetration Levels Highest at
23%
Same story, different sex. Women’s footwear purchase penetration levels showed a similar
trend to men’s. Again the two largest categories, athletic and non-athletic, saw decreased
penetration with a steady decline since 2004. For women, the largest segment, non-athletic
shoes, fell from 26% in 2004 to 23% in 2009. Athletic shoes fell from 20% in 2004 to 17% in
2009. Slippers followed the pattern with a three point drop by 2009. It is likely that come the
fall 2009 edition of Simmons data will show a decline.
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Women’s boot purchases did not follow the same pattern as men’s. However, the current
uptick to eight percent in winter 2009 from seven percent in fall 2008 for women’s boots is
likely due to heavier purchasing during the snow and sleet months.
Table 7-2
Consumer Penetration Levels for Women’s Footwear Bought in the Past 12 Months,
2004-2009
(%)
Women’s Footwear Bought
in the Last 12 Months
Fall
2004
Fall
2005
Fall
2006
Fall
2007
Fall
2008
Winter
2009
Non-athletic Shoes
26%
25%
25%
25%
24%
23%
Athletic Shoes
20
18
18
18
18
17
Slippers
15
14
14
14
11
12
Boots (Excluding Work Boots)
9
8
9
9
7
8
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2008/09. This material is used with permission.
Figure 7–2
Total Consumer Penetration Levels for Women’s Footwear Bought in the Past
12 Months, 2004-2009
(%)
30%
25%
20%
15%
10%
5%
0%
Non-athletic Shoes
Athletic Shoes
2004
2005
2006
Slippers
2007
2008
Boots (Excluding Work
Boots)
2009
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2008/09. This material is used with permission.
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Chapter 7: The Footwear Consumer
Penetration When Purchasing for the Opposite Sex Typical
When purchasing footwear for the opposite sex, women showed a greater propensity to shop
for men, while men showed single-digit inclination to shop for women. For example, 14% of
women have shopped for men’s athletic shoes and 11% have shopped for men’s non-athletic
shoes, while only three percent on men have shopped for women’s athletic shoes and four
percent for women’s non-athletic shoes.
Table 7-3
Consumer Penetration Levels for Men’s and Women’s Footwear Bought in the
Past 12 Months by Member of the Opposite Sex, 2004-2009
(%)
Men’s Footwear
Women’s Footwear
Athletic
Shoes
Non-Athletic
Boots
Slippers
Athletic
Shoes
Non-Athletic
Boots
Slippers
Men’s
Purchase
28%
23%
8%
8%
3%
4%
1%
2%
Women’s
Purchase
14
11
4
8
32
42
14
22
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2008/09. This material is used with permission.
Top Footwear Segment Consumer Demographics by Sex
Male and Female Athletic Shoe Purchasers Characteristics Upwardly Mobile
According to Experian Simmons data, men and women who purchased athletic footwear in
the past twelve months were more likely than average to pop for demographics characteristic
of the upwardly mobile and the family-oriented. Men and women age 25-44 showed above
average interest and both popped for higher education, full-time employment, a variety of
white-collar jobs (particularly professional/technical at M139 and W134), incomes upward of
$75,000, and two-income households. These purchasers were more likely than average to
have children and to live in mid-value homes.
Certain characteristics popped for men that indicated another consumer profile—youth, such
as those age 18-24 (116) and those living rent-free (129). Another indicator toward youth is
in a comparison with women, who pop for marriage (111), while men do not show an above
average likelihood. Women, while popping largely among white-collar work, also popped for
labor (111).
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Table 7-4
Demographic Characteristics of Male Athletic Shoe Purchasers, 2009
(index)
Male Characteristics
Index
Age 18-24
116
Age 25-34
127
Age 35-44
122
Undergraduate College Degree
121
Graduate Degree
116
Employed Full-Time (30+ Hours)
111
Occupation: Management/Financial Operations
113
Occupation: Professional/Technical
139
Occupation: Sales
129
Occupation: Office & Administrative Support
127
Employed Adults in HH: Two
117
Employed Adults in HH: Three or More
110
Household Income: $75K-$99K
113
Household Income: $100K-$149K
130
Household Income: $150K+
129
# of People in HH: Three-Four
114
# of Children in HH: One or More
111
# of Children in HH: Two
115
Age of Children in HH: 6-11
114
Age of Children in HH: 12-17
118
Kind of Residence: Owned Condo or Co-Op
122
Kind of Residence: Live Rent Free
129
Value of Residence: $200K-$299K
112
Value of Residence: $300K-$499K
120
Value of Residence: $500K-$750K
118
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study,
Winter 2008/09. This material is used with permission.
January 2008
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The Global Footwear Market
Chapter 7: The Footwear Consumer
Table 7-5
Demographic Characteristics of Female Athletic Shoe Purchasers, 2009
(index)
Female Characteristics
Index
Age 25-34
117
Age 35-44
126
Some College
114
Undergraduate College Degree (Only)
122
Graduate Degree
132
Employed Full-Time (30+ Hours)
120
Occupation: Management/Financial Operations
126
Occupation: Professional/Technical
134
Occupation: Labor
111
Employed Adults in HH: Two
121
Household Income: $75K-$99K
122
Household Income: $100K-$149K
135
Household Income: $150K+
135
Presently Married
111
# of People in HH: Three-Four
113
# of Children in HH: One
116
# of Children in HH: Two
119
Age of Children in HH: 6-11
113
Age of Children in HH: 12-17
127
Kind of Residence: Rented House
112
Value of Residence: $200K-$299K
115
Value of Residence: $300K-$499K
123
Value of Residence: $750K-$999K
112
(Alternate) Value of Residence: $750K+
116
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study,
Winter 2008/09. This material is used with permission.
Male and Female Non-Athletic Shoe Purchasers Characteristics Also Upwardly
Mobile
Non-athletic shoe purchasers were similar in spirit to athletic shoe purchasers: educated,
white-collar, two-income households, households with children, and home ownership. But
with the non-athletic shoe purchasers, home values and income levels skewed higher,
upwards of $500,000 and $100,000, respectively. There was also less indication of age as an
above average indicator.
August 2009
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Chapter 7: The Footwear Consumer
The Global Footwear Market
Table 7-6
Demographic Characteristics of Male Non-Athletic Shoe Purchasers, 2009
(index)
Male Characteristics
Index
Age 25-34
117
Undergraduate College Degree
132
Graduate Degree
117
Employed Full-Time (30+ Hours)
113
Employed Part-Time (<30 Hours)
112
Occupation: Management/Financial Operations
126
Occupation: Professional/Technical
145
Occupation: Sales
132
Occupation: Office & Administrative Support
133
Employed Adults in HH: Two
115
Household Income: $100K-$149K
111
Household Income: $150K+
126
# of Children in HH: Two
112
Age of Children in HH: 6-11
110
Kind of Residence: Owned Condo or Co-Op
119
Value of Residence: $500K-$750K
123
Value of Residence: $750K+
131
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study,
Winter 2008/09. This material is used with permission.
Table 7-7
Demographic Characteristics of Female Non-Athletic Shoe Purchasers, 2009
(index)
Female Characteristics
Index
Undergraduate College Degree
121
Graduate Degree
128
Employed Full-Time (30+ Hours)
115
Occupation: Management/Financial Operations
126
Occupation: Professional/Technical
125
Employed Adults in HH: Two
114
Household Income: $75K-$99K
113
Household Income: $100K-$149K
119
Household Income: $150K+
127
Kind of Residence: Owned Condo or Co-Op
127
Value of Residence: $200K-$299K
115
Value of Residence: $300K-$499K
114
Value of Residence: $500K-$750K
126
Value of Residence: $750K+
113
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study,
Winter 2008/09. This material is used with permission.
January 2008
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The Global Footwear Market
Chapter 7: The Footwear Consumer
Male and Female Boot Purchasers Showed Dramatically Different
Characteristics
For men, data suggested the profile of a young, blue-collar worker. Men who purchased boots
in the past year were more likely than average to be young, age between 18-44, with 18-24
popping the highest at 126. Hispanics, those living in the central United States, those without
a high school diploma, laborers, those sharing a household with other working adults, larger
households, household with children, low-income earners, singles, and those living in rentals
or low-value homes all popped as above average indicators. Purchasers of boots more useful
in a blue-collar work environment clearly edge out any other male boot purchaser.
Women skew to the other end of the spectrum—those more likely than average to purchase a
fashion boot more suitable for a white-collar work environment and perhaps a snow boot
(women living in the Northeast popped at 139!). Similar to earlier profiles, women were more
likely than average to pop for demographics characteristic of the upwardly mobile and the
family-oriented. Women age 18-44 showed above average interest. Women also popped for
higher education, full-time employment, a variety of white-collar jobs, personal incomes
upward of $40,000 (with $100,000 earners popping at 177), and two-income households.
These purchasers were more likely than average to have children and to live in mid- and
upper-value homes.
August 2009
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Chapter 7: The Footwear Consumer
The Global Footwear Market
Table 7-8
Demographic Characteristics of Male Boot Purchasers, 2009
(index)
Male Characteristics
Index
Age 18-24
126
Age 25-34
116
Age 35-44
113
Hispanic
123
Central
110
Non High School Grad
118
Employed Full-Time (30+ Hours)
110
Occupation: Labor
133
Employed Adults in HH: Three or More
130
Individual Employment Income: Under $20K
116
Individual Employment Income: $20K-$39K
127
Not Married
117
# of People in HH: Three-Four
110
# of People in HH: Five Or More
131
# of Adults in HH: Three or More
126
# of Children in HH: Three or More
155
Age of Children in HH: 6-11
127
Age of Children in HH: 12-17
135
Kind of Residence: Rented Apartment
115
Value of Residence: $100K-$199K
122
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study,
Winter 2008/09. This material is used with permission.
January 2008
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The Global Footwear Market
Chapter 7: The Footwear Consumer
Table 7-9
Demographic Characteristics of Female Boot Purchasers, 2009
(index)
Female Characteristics
Index
Age 18-24
145
Age 25-34
110
Age 35-44
136
Black (Non-Hispanic)
143
Northeast
139
Some College
121
Undergraduate College Degree
125
Graduate Degree
136
Employed Full-Time (30+ Hours)
125
Occupation: Management/Financial Operations
155
Occupation: Professional/Technical
121
Occupation: Sales
120
Occupation: Office & Administrative Support
128
Employed Adults in HH: Two
113
Employed Adults in HH: Three or More
117
Individual Employment Income: $40K-$59K
137
Individual Employment Income: $60K-$74K
114
Individual Employment Income: $75K-$99K
169
Individual Employment Income: $100K+
177
# of People in HH: Three-Four
119
# of Adults in HH: Three or More
118
# of Children in HH: One
113
# of Children in HH: Two
118
Age of Children in HH: 6-11
124
Age of Children in HH: 12-17
119
Kind of Residence: Owned Condo or Co-Op
124
Value of Residence: $300K-$499K
132
Value of Residence: $500K-$750K
142
Value of Residence: $750K+
139
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study,
Winter 2009. This material is used with permission.
Male and Female Boot Purchasers Showed Dramatically Different
Characteristics
Slippers may be just the thing for those men working in boots all day, at least according to
Experian Simmons data. There were striking similarities in men who purchase slippers to
August 2009
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Chapter 7: The Footwear Consumer
The Global Footwear Market
men who purchase boots, including above average indexes for Hispanics, those without a
high school diploma, laborers, those sharing a household with other working adults, larger
households, household with children, low-income earners, and those living in rentals. Age
was less of a directive, although men age 25-34 popped at 120. Blacks also popped for above
average use, as did men living in the Pacific and the Northeast. Apparently, slippers are
hipper on the coasts!
Although slippers were also more popular than average for women on the coasts and for
Black women and among laborers, the women’s profile did diverge from men. For example,
age, race and household income showed the shifts, with women age 65-74 popping at 111,
Asian women at 114 and households earning $100,000 to $149,000 at 110.
Table 7-10
Demographic Characteristics of Male Slipper Purchasers, 2009
(index)
Male Characteristics
Index
Age 25-34
120
Hispanic
156
Black (Non-Hispanic)
153
Northeast
138
Pacific
118
Non High School Grad
125
Employed Part-Time (<30 Hours)
115
Occupation: Labor
118
Employed Adults in HH: Three or More
113
Household Income: Under $25K
117
Household Income: $25K-$49K
119
# of People in HH: Five Or More
125
# of Children in HH: Three or More
118
Age of Children in HH: 6-11
114
Age of Children in HH: 12-17
128
Kind of Residence: Rented House
123
Kind of Residence: Rented Apartment
149
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study,
Winter 2009. This material is used with permission.
January 2008
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194
The Global Footwear Market
Chapter 7: The Footwear Consumer
Table 7-11
Demographic Characteristics of Female Slipper Purchasers, 2009
(index)
Female Characteristics
Index
Age 65-74
111
Black (Non-Hispanic)
138
Asian (Non-Hispanic)
114
Northeast
118
Pacific
112
Occupation: Labor
116
Household Income: $100K-$149K
110
# of People in HH: Five Or More
114
# of Children in HH: Three or More
113
Age of Children in HH: 12-17
115
Kind of Residence: Owned Condo or Co-Op
113
Kind of Residence: Rented Apartment
112
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study,
Winter 2009. This material is used with permission.
Consumer Agreement with Select Attitudinal Statements
Packaged Facts conducted its own online research of 2,600 adults in February 2009 asking
consumers what level of agreement they felt with five attitudinal statements related to
footwear.
Surprise! Shoe Shopping a Favorite Pastime for Women
Consumers who “agreed a lot” with the statement “Shopping for shoes is a favorite pastime,”
may not be surprising. Notable demographic groups more likely than average to agree with
the statement included women from age 18-24, college students, those with incomes of
$250,000 or more and those living on the Pacific coast.
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Chapter 7: The Footwear Consumer
The Global Footwear Market
Table 7-12
Top Demographic Characteristics of Consumers who ‘Agree a Lot’ with the Statement:
Shopping For Shoes is Favorite Pastime, 2009
(index)
Characteristics
Index
Female
171
18 To 24
174
25 To 29
111
Not Married/Partnered
112
Current College Student
139
Undergraduate College Degree
111
Area In Which You Live: Urban
111
HH Income: $100,000 To $149,999
113
HHI: $150+
132
HH Income: $250,000 Or More
187
Pacific Coast
124
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2008/09. This material is used with permission.
Brand/Designer Important to Urbanites
Consumers who “agreed a lot” with the statement “Shoe Brand or Designer is Important,”
were somewhat more directional. Again the data skewed to women age 18-24 (212), but also
to women age 65 or older to a lesser degree (122). Other interesting dichotomies: current
college students popped, but so did those with a doctoral degree; low household incomes
popped, but so did high household incomes. This may reflect two-pronged interest: the
young, broke and fabulous alongside the mature, rich and fabulous! Agreement with this
statement also popped among renters, urbanites and those on the Pacific coast, all indicators
of a more citified consumer.
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Chapter 7: The Footwear Consumer
Table 7-13
Top Demographic Characteristics of Consumers who Agree a Lot with the Statement:
Shoe Brand or Designer is Important, 2009
(index)
Characteristics
Index
18 To 24
212
65+
122
Not Married/Partnered
119
Employed Part-Time
113
Current College Student
144
Doctoral Degree
160
Residence: Rent The Residence
116
Area In Which You Live: Urban
133
HHI: $150+
139
HH Income: $250,000 Or More
190
HHI: Under $20K
140
Pacific Coast
127
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2009. This material is used with permission.
Fewer Purchases and Less Expensive Purchases Among the More
Disenfranchised
Consumers who “agreed a lot” with the statements “I am Buying Fewer Shoes Because of the
Economy,” and “I am Buying Less Expensive Shoes Because of the Economy,” see above
average agreement among women, particularly among those age 30-34, and those who may
not bring in large incomes such as students, homemakers, retirees, and the unemployed.
These consumers popped for less education and lower incomes, and for living in rural areas
and in the South.
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Chapter 7: The Footwear Consumer
The Global Footwear Market
Table 7-14
Top Demographic Characteristics of Consumers who Agree a Lot with the Statement:
I am Buying Fewer Shoes Because of the Economy, 2009
(index)
Characteristics
Index
Female
119
18 To 24
111
30 To 34
121
35 To 39
113
Student/Homemaker/Retired/Not Employed
119
High School Diploma
125
Some College (Did Not Graduate)
118
Residence: Rent The Residence
110
Area In Which You Live: Rural
133
HHI: Under $20K
151
South
121
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2008/09. This material is used with permission.
Table 7-15
Top Demographic Characteristics of Consumers who Agree a Lot with the Statement:
I am Buying Less Expensive Shoes Because of the Economy, 2009
(index)
Characteristics
Index
Female
115
30 To 34
121
40 To 44
111
Children Under 18 In HH
119
Employed Part-Time
127
Student/Homemaker/Retired/Not Employed
113
High School Diploma
126
Some College (Did Not Graduate)
121
Residence: Rent The Residence
111
Area In Which You Live: Rural
142
HHI: Under $20K
167
HHI: $20K-$39k
119
South
124
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2008/09. This material is used with permission.
January 2008
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The Global Footwear Market
Chapter 7: The Footwear Consumer
Function over Form Skewed Older
Consumers who “agreed a lot” with the statement “In Buying Shoes, I Prioritize Function
over Style,” created a much different profile. This was the only statement that showed above
average agreement for older consumers, notably those age 60-64 indexing at 149 and for
home ownership.
Table 7-16
Top Demographic Characteristics of Consumers who Agree a Lot with the Statement:
In Buying Shoes, I Prioritize Function Over Style, 2009
(index)
Characteristics
Index
45 To 49
121
50 To 54
130
55 To 59
140
60 To 64
149
65+
138
Student/Homemaker/Retired/Not Employed
110
Some College (Did Not Graduate)
113
Doctoral Degree
110
Residence: Own The Residence
110
Area In Which You Live: Rural
111
HHI: Under $20K
118
Central
120
South
114
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2009. This material is used with permission.
August 2009
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Chapter 7: The Footwear Consumer
The Global Footwear Market
Footwear Consumer at Retail
For Footwear, Consumers Shop Wal-Mart Most
According to data from BIGresearch, in the years 2006-2008, adult consumers at 30% in
2008, particularly women at 35% in 2008, shopped most often at specialty apparel
establishments, which can include a wide range of shops from local mom and pop to high end
boutiques. Discount stores and department stores follow with 18% and 17% in 2008. Since
2006 specialty apparel and department stores saw a slight increase in preference while
discount stores saw a slight decrease.
While footwear still struggles to make inroads in etail, as most consumers want to sample the
wares first, there has been an uptick in preference since 2006, from one percent to three
percent in 2008. Catalog penetration remained fairly stagnant however. Membership
warehouse barely moved the needle.
Table 7-17
Consumer Penetration Levels for Type of Retail Shopped Most Often for Shoes,
by Adult Users, Men and Women, 2006-2008
(%)
Type of Retail
2008
2007
2006
Adults
Women
Men
Adults
Women
Men
Adults
Women
Men
29.9%
35.3%
24.2%
27.8%
31.7%
23.7%
28.5%
34.1%
22.5%
Discount Store
18.1
20.2
15.9
17.6
20.1
15.1
20.1
22.6
17.5
Department Store
16.7
17.4
16.0
16.7
17.7
15.7
14.7
15.5
13.7
Internet
3.0
3.0
3.1
2.6
2.7
2.5
0.7
0.8
0.6
Catalog
1.2
0.9
1.5
1.1
1.0
1.2
1.0
0.8
1.2
Membership Warehouse
0.2
0.0
0.3
0.1
0.0
0.2
0.1
0.0
0.2
No Preference
18.1
13.0
23.5
21.2
15.9
26.9
20.1
14.1
26.6
Other
12.8
10.2
15.5
12.7
11.0
14.6
14.8
12.1
17.7
Specialty Apparel
Source: BIGresearch, Consumer Intentions and Actions Survey and Simultaneous Media Study, © 2008.
BIGresearch, All Rights Reserved. Compiled by Packaged Facts.
Specialty for Young, Department Store for Old
In terms of age, specialty apparel again held the highest levels of preference, peaking among
consumers younger than 30 at 40% in 2008. Interest in specialty apparel retail dwindled as
age increased. The opposite was true for department stores and catalogs, where interest
January 2008
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The Global Footwear Market
Chapter 7: The Footwear Consumer
increased as age increased, topping off at 24% and three percent, respectively, for those age
65 or more. Internet preference held fairly steady across all age groups at three to four
percent. Discount stores core consumer was those age 45-64 with 22%.
Preference by HHI Plays Out Along Socio-Economic Lines
The preference trend by household income was easily traced: those with more money prefer
pricier, more elite retail. Those household incomes upwards of $75,000, showed a stronger
preference for specialty apparel, department stores and the Internet, at 32%, 22% and four
percent, respectively. The difference was especially marked for department stores with a tenpoint difference from those with household incomes less than $35,000 (at 12%). For Discount
stores the converse was true—the lower the income, the greater the preference.
Blacks and Hispanics Prefer to Shop at Specialty Apparel
In terms of race, Blacks and Hispanics, at 40%, preferred specialty apparel approximately ten
points more than Whites or Asians. Whites showed a slight preference for department stores
versus Hispanics and Asians, while Whites and Hispanics showed a preference for discount
store versus Blacks and Asians.
Table 7-18
Consumer Penetration Levels for Type of Retail Shopped Most Often for Shoes,
by Age, Household Income and Race, 2008
(%)
Age
Type of
Retail
2008
Adults
Specialty
Apparel
Household Income
Race
Under
30
30-44
45-64
65+
<$35K
$35K$74K
$75K+
Whites
Blacks
Hispanics
Asians
29.9%
39.1%
33.6%
26.9%
21.1%
29.4%
30.6%
32.0%
27.9%
40.3%
40.2%
30.6%
Discount
Store
18.1
14.5
17.0
21.7
17.0
26.8
17.4
10.1
19.3
11.0
18.3
8.0
Department
Store
16.7
10.4
16.2
17.7
24.0
11.7
18.3
22.3
17.8
14.9
11.9
10.6
Internet
3.0
3.5
3.2
3.0
2.9
2.1
3.4
4.1
3.2
3.2
2.0
4.9
Catalog
1.2
0.5
0.5
1.2
3.3
1.4
1.2
1.3
1.4
1.4
0.7
0.8
Membership
Warehouse
0.2
0.4
0.1
0.1
0.1
0.2
0.3
0.0
0.2
0.0
0.0
0.0
No
Preference
18.1
19.4
18.7
17.1
14.2
16.2
16.2
16.7
17.6
16.9
14.9
31.1
12.8
12.2
10.7
12.4
17.4
12.1
12.6
13.5
12.6
12.4
12.0
14.1
Other
Source: BIGresearch, Consumer Intentions and Actions Survey and Simultaneous Media Study, © 2008.
BIGresearch, All Rights Reserved. Compiled by Packaged Facts
August 2009
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Chapter 7: The Footwear Consumer
The Global Footwear Market
For Footwear, Consumers Shop Wal-Mart Most
BIGresearch also shows that while nearly 18% of adult consumers have no preference for a
particular branded outlet, 12% of consumers shop most often at Wal-Mart and Payless for
footwear. Wal-Mart and Payless were the only stores reaching double-digit preference.
However, when broken out by male and female shoppers, Payless sees a much higher level of
loyalty from women at 16% than men at seven percent, while Wal-Mart sees little
differentiation by sex. Since 2006, both Wal-Mart and Payless have suffered some loyalty
erosion.
Both dropped two percentage points from 14% of the adult population in 2006, while
runners-up Kohls and DSW each gained points. In 2008, five percent of consumers shopped
Kohl’s most often and four percent of consumers shopped DSW, up from four percent and
two percent in 2006, respectively.
Rounding out the top ten retailers for shoe shopping were JC Penney, Foot Locker, Macy’s,
Sears, Kmart, and Target, garnering between two and three percent of adult for 2008. The rest
of the retailers jockeyed for miniscule penetration levels, often at less than half a point with
little in the way of preference changes over the period.
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The Global Footwear Market
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Table 7-19
Consumer Penetration Levels for Stores Shopped Most Often for Shoes, by Women,
Men and Total Population, 2006-2008
(%)
2008
Store
2007
2006
Adults
Women
Men
Adults
Women
Men
Adults
Women
Men
WalMart
11.8%
12.5%
11.2%
11.6%
12.6%
10.5%
14.1%
15.5%
12.6%
Payless
11.7
16.0
7.0
11.3
14.8
7.5
14.4
18.9
9.5
Kohls
4.9
4.8
4.9
4.7
4.2
5.2
3.6
3.6
3.5
DSW
3.7
4.5
2.9
2.9
3.4
2.4
2.4
2.9
2.0
JC Penney
2.9
2.9
2.9
3.1
3.5
2.8
2.5
2.8
2.1
Foot Locker
2.4
2.1
2.8
2.9
2.2
3.7
1.8
1.5
2.1
Macy's
2.3
2.6
1.9
2.4
2.8
1.9
1.2
1.1
1.3
Sears
2.0
1.6
2.4
2.0
1.6
2.5
1.8
1.2
2.5
Kmart
1.8
1.9
1.7
1.8
2.3
1.4
2.3
2.7
1.9
Target
1.8
2.3
1.3
1.7
2.2
1.2
1.8
2.1
1.5
Famous Footwear
1.6
2.1
1.0
1.5
1.9
1.1
1.8
1.8
1.8
Shoe Carnival
1.6
1.6
1.6
1.6
1.9
1.4
1.5
1.7
1.3
Nordstrom
1.4
1.3
1.4
1.4
1.6
1.2
1.4
1.4
1.4
Dillards
1.2
1.2
1.1
1.0
1.2
0.8
1.0
1.3
0.7
Finish Line
1.0
0.6
1.4
0.6
0.3
0.8
0.4
0.4
0.5
Online/Internet
0.9
0.7
1.1
0.7
0.7
0.8
0.4
0.4
0.3
Marshalls
0.8
1.1
0.5
0.5
0.6
0.3
0.4
0.5
0.3
Zappos
0.7
0.7
0.7
0.6
0.7
0.5
0.6
0.5
0.6
Dick's Sporting Goods
0.6
0.2
1.2
--
--
--
--
--
--
Ross
0.6
0.9
0.3
0.5
0.8
0.3
0.4
0.6
0.2
Shoes.com
0.6
0.6
0.5
0.5
0.5
0.5
--
--
--
Belk
0.5
0.6
0.5
0.4
0.5
0.2
0.3
0.4
0.2
Nike
0.5
0.3
0.7
0.5
0.4
0.6
0.3
0.2
0.3
Rack Room
0.5
0.6
0.3
0.6
0.7
0.4
0.7
0.9
0.5
SAS Shoes
0.5
0.7
0.4
0.5
0.6
0.3
0.7
0.7
0.7
Academy
0.4
0.2
0.6
0.4
0.1
0.6
0.3
0.3
0.2
Big 5 Sporting Goods
0.4
0.2
0.7
0.4
0.2
0.7
0.7
0.2
1.1
Ebay
0.4
0.5
0.3
0.3
0.4
0.2
0.3
0.3
0.3
Shoe Dept.
0.4
0.6
0.2
0.5
0.6
0.5
0.5
0.8
0.2
Skechers
0.4
0.5
0.4
--
--
--
--
--
--
Bass
0.3
0.2
0.5
--
--
--
--
--
--
Bealls
0.3
0.3
0.2
0.3
0.6
0.1
0.3
0.5
0.0
Easy Spirit
0.3
0.5
0.1
0.2
0.5
0.0
0.2
0.4
0.0
(continued)
August 2009
© Packaged Facts
203
Chapter 7: The Footwear Consumer
The Global Footwear Market
Table 7-19 [cont.]
Consumer Penetration Levels for Stores Shopped Most Often for Shoes, by Women,
Men and Total Population, 2006-2008
(%)
Store
2008
2007
2006
Adults
Women
Men
Adults
Women
Men
Adults
Women
Men
LL Bean
0.3
0.2
0.3
--
--
--
--
--
--
Meijer
0.3
0.3
0.3
0.3
0.2
0.4
0.4
0.4
0.4
Mervyns
0.3
0.4
0.2
0.4
0.3
0.5
0.5
0.8
0.2
New Balance
0.3
0.3
0.3
0.3
0.1
0.5
--
--
--
Outlet Stores
0.3
0.1
0.4
0.3
0.3
0.4
0.3
0.3
0.3
Shoe Show
0.3
0.4
0.2
0.4
0.5
0.2
0.4
0.5
0.2
TJ Maxx
0.3
0.4
0.1
0.3
0.6
0.1
0.2
0.4
0.0
Florsheim
0.2
0.0
0.5
0.2
0.0
0.4
--
--
--
Haband
0.2
0.1
0.3
0.3
0.1
0.5
--
--
--
Journeys
0.2
0.4
0.1
0.4
0.4
0.4
--
--
--
Mason
0.2
0.1
0.3
--
--
--
0.3
0.1
0.4
Redwing
0.2
0.0
0.5
--
--
--
--
--
--
Rockport
0.2
0.1
0.4
0.3
0.1
0.5
--
--
--
Value City
0.2
0.2
0.2
0.4
0.4
0.4
0.5
0.5
0.4
Nine West
--
--
--
0.2
0.4
0.1
0.2
0.4
0.0
No Preference
18.1
13.0
23.5
21.2
15.9
26.9
20.1
14.1
26.6
Other
17.3
16.8
17.9
17.3
16.2
18.5
19.0
16.8
21.4
Note: -- signifies data not available.
Source: BIGresearch, Consumer Intentions and Actions Survey and Simultaneous Media Study, © 2008.
BIGresearch, All Rights Reserved. Compiled by Packaged Facts.
Age, HHI and Race Affect Retail Preference
Department Stores Should Address Aging Consumer
While Wal-Mart generally garnered the highest levels of preference, those levels peaked
among consumers age 45-64 at 15% in 2008 versus only ten percent for those under age
thirty. Alternately, Payless appeared to have a steady hold on consumers up through age 64,
garnering between 12% and 13%, but dropped significantly among those age 65 or older.
Kohl’s, DSW and JC Penney all peaked among consumers age 30-44 with six percent, five
percent, and three percent respectively. Foot Locker saw the third highest levels after WalMart and Payless for the under thirty crowd at seven percent.
January 2008
© Packaged Facts
204
The Global Footwear Market
Chapter 7: The Footwear Consumer
Although the percentages are much smaller and therefore less directional, it appeared that
larger and older department stores, whether high-end or value, such as Macy’s, Kmart, Sears,
Nordstrom, and Dillards, barely have a toe-hold on the younger consumers that keep a brand
going, who have given their loyalty to shoe-focused shops such as Finish Line, Shoe
Carnival, and Famous Footwear.
High Income Households Shop Value, but Branding Important
In 2008, Wal-Mart and Payless, both value retailers, topped out among consumers with
household incomes less than $35,000 at 19% and 14% respectively. Conversely, among high
earning households ($75,000 or more) levels dropped to five percent and nine percent.
Kohls and DSW, both also value retailers, showed a different pattern. For both levels of
preference increased as household income increased. For example, only two percent of
$35,000 households preferred DSW, while seven percent of $75,000 or more households
preferred it. High earning households also showed a preference for higher end retailers such
as Macy’s and Nordstrom, but not for value department stores such as Sears and Kmart.
These specific value-shopping preferences suggest that high-income households will shoe
shop at certain value retailers, but the retailers’ brand image may be a key deciding factor.
Racial Preference Decidedly Different
Among racial lines, Wal-Mart led only among Whites at 13%, with Blacks at six percent,
Hispanics at ten percent and Asians at six percent. Kohl’s, Sears and Kmart saw a similar
trend, albeit at lower penetration levels all around.
DSW saw a steady preference that cut across race between three and four percent. Payless led
among Hispanics at a whopping 18%, but with solid numbers for Whites, Blacks and Asians
also, at 11%, 14% and 15%, respectively. Foot Locker saw a high among Blacks at ten
percent and a low for Whites at two percent.
August 2009
© Packaged Facts
205
Chapter 7: The Footwear Consumer
The Global Footwear Market
Table 7-20
Consumer Penetration Levels for Top 15 Stores Shopped Most Often for Shoes,
by Age, Household Income and Race, 2008
(%)
Age
Store
Household Income
Race
Adults
Under
30
30-44
45-64
65+
<$35K
$35K$74K
$75K+
Whites
Blacks
Hispanics
Asians
Wal-Mart
11.8%
9.7%
10.9%
14.5%
10.8%
18.5%
11.5%
5.1%
12.9%
6.4%
9.9%
5.7%
Payless
11.7
12.0
13.2
12.5
7.8
14.2
12.9
8.6
10.7
13.5
18.0
14.5
Kohls
4.9
3.9
6.4
4.6
4.1
3.1
5.5
6.8
5.8
0.7
1.5
1.8
DSW
3.7
3.4
5.2
3.4
2.3
1.8
3.5
7.2
3.7
4.3
2.9
3.7
JC Penney
2.9
1.5
2.6
3.5
3.9
2.9
3.7
2.7
3.0
5.1
1.8
1.8
Foot Locker
2.4
6.8
2.9
1.0
0.2
3.1
1.9
1.6
1.5
9.4
5.6
2.9
Macy's
2.3
2.1
2.2
2.2
3.0
1.3
2.0
3.9
2.1
4.0
2.6
2.5
Sears
2.0
0.9
1.7
2.3
3.1
1.8
2.5
1.5
2.1
1.2
1.0
1.9
Kmart
1.8
0.5
0.9
2.7
2.8
3.2
1.5
1.0
2.1
0.2
0.7
0.0
Target
1.8
2.2
2.6
1.5
0.9
1.7
2.0
1.6
1.9
0.5
2.2
0.4
Famous
Footwear
1.6
2.1
1.1
1.7
1.1
1.3
1.8
2.3
1.7
0.6
0.7
1.2
Shoe
Carnival
1.6
2.3
2.0
1.5
0.3
1.9
1.5
1.5
1.6
1.8
0.6
2.2
Nordstrom
1.4
0.9
1.4
1.4
1.8
0.5
1.2
2.9
1.4
1.6
1.6
0.5
Dillards
1.2
0.3
0.9
1.4
2.2
0.6
1.2
1.7
1.1
1.2
1.3
0.5
1.0
2.9
1.2
0.3
0.0
0.8
0.8
1.2
0.8
2.6
1.3
0.8
Finish Line
Source: BIGresearch, Consumer Intentions and Actions Survey and Simultaneous Media Study, © 2008.
BIGresearch, All Rights Reserved. Compiled by Packaged Facts.
Price, Selection, Quality and Location Top Shoe Retail Drivers
For both men and women, price at 68% for men and 72% for women, followed by selection,
quality, and location were the top cited reasons for shopping a particular retail establishment
for shoes. More women than men placed emphasis on price, selection and location—
approximately seven percent more across the board—but the sexes leveled out on quality
both at 40%.
More interesting is where the sexes diverge. Men are slightly keener on service while women
are intensely more interested in inspiration. Fourteen percent of men cited service versus 12%
of women. Women indicated that new styles and ideas are important with 18% and ten
percent respectively—men didn’t even hit double digits for these.
January 2008
© Packaged Facts
206
The Global Footwear Market
Chapter 7: The Footwear Consumer
Table 7-21
Top Consumer Shoe Retail Drivers for Men and Women, 2008
(%)
Reason
Men Overall
Women Overall
68.3%
75.0%
Selection
52.2
59.4
Quality
40.5
40.1
Location
31.4
38.2
Service
14.0
12.2
In-Store Experience
10.9
11.6
Newest Styles
9.3
18.1
Knowledgeable sales people
7.1
7.8
Store Appearance
6.5
7.3
Store Layout
6.0
6.4
Fashion Ideas
5.8
10.4
Advertising
4.0
4.9
Newest Fabrics
2.5
3.0
Price
Source: BIGresearch, Consumer Intentions and Actions Survey and Simultaneous Media Study, © 2008.
BIGresearch, All Rights Reserved. Compiled by Packaged Facts.
Average Monthly Spend on Shoes in 2008: $25
The majority of consumers do not have a monthly stipend to spend on footwear—especially
in this economy. However, spend levels fluctuated little over the 2006-2008 period. For the
largest spend cohort, $11-$25, the drop from 20% in 2006 to 18% 2008 was only two
percentage points. Some spending cohorts even increased a bit—those spending $76-$100
were at four percent of adults in 2006 and at five percent in 2008.
The average monthly spend for adults on shoes for 2008 stood at $25 for adults up from $23
in 2006, but down from $26 in 2007. Women’s average spend dropped a fair amount since
2007 from $29 to $26 while men’s increased to $25 from $24.
August 2009
© Packaged Facts
207
Chapter 7: The Footwear Consumer
The Global Footwear Market
Table 7-22
Average Monthly Spend on Shoes, by Adults, Men and Women, 2006-2008
(%)
Amount
2008
2007
2006
Adults
Women
Men
Adults
Women
Men
Adults
Women
Men
35.7%
31.9%
39.7%
31.6%
24.9%
38.7%
35.0%
27.4%
43.1%
$1 - $10
15.6
15.5
15.8
15.7
16.0
15.4
17.1
17.4
16.7
$11 -$25
17.7
20.3
15.0
19.4
22.9
15.7
19.5
24.3
14.3
$26 - $50
15.8
17.4
14.1
17.5
19.7
15.3
15.7
18.4
12.7
$51 - $75
6.6
6.7
6.4
7.1
7.6
6.7
6.1
6.5
5.7
$76 - $100
5.3
5.1
5.6
5.4
5.4
5.5
3.9
3.4
4.5
$101 - $200
2.1
2.0
2.2
2.2
2.5
1.9
1.7
1.6
1.7
$201 - $300
0.8
0.8
0.7
0.7
0.7
0.6
0.7
0.5
0.9
$301+
0.4
0.2
0.6
0.3
0.3
0.3
0.4
0.4
0.5
$25.39
$25.62
$25.14
$26.32
$28.52
$23.99
$23.41
$24.43
$22.31
$0
Average
Source: BIGresearch, Consumer Intentions and Actions Survey and Simultaneous Media Study, © 2008.
BIGresearch, All Rights Reserved. Compiled by Packaged Facts.
The Younger You are the More You Spend
Those under age 30 showed a greater inclination to spend across amount cohorts—the highest
level in the $11-$25 range at 17% for 2008. After age 30, levels dropped as age increased but
not significantly. Those under age 30 also have the highest average monthly spend among age
groups at $36 versus $16 for those age 65 or more.
Wealthier More Likely to Spend on More Expensive Footwear
It’s logical. Those with household incomes below $35,000 showed a greater inclination to
spend at the lowest level versus those earning more than $75,000—17% versus 14%
respectively. Alternately, those with more money showed higher percentages for spend
categories upward of $25 versus those with less money. The average monthly spend shows
the disparity: lowest household income average spend stood at $20 while highest income
stood at $31.
Whites Show Lowest Average Spend Levels
Compared to Blacks, Hispanics and Asians, Whites showed high percentage for spending
little to no money on a monthly basis, reaching 40% for $0 spend versus fellow shoppers at
19%. Black shoppers on average spend the most monthly at $52 followed by Hispanics at
$44, Asians at $43 and bringing up the rear, Whites at $20.
January 2008
© Packaged Facts
208
The Global Footwear Market
Chapter 7: The Footwear Consumer
Table 7-23
Average Monthly Spend on Shoes, by Age, HHI and Race, 2008
(%)
Age
Amount
Adults
$0
Household Income
Race
Under 30
30-44
45-64
65+
<$35K
$35K$74K
$75K+
Whites
Blacks
Hispanics
Asians
35.7%
27.0%
31.6%
37.9%
46.7%
40.8%
35.0%
32.2%
39.8%
18.6%
18.8%
19.8%
$1 - $10
15.6
15.5
15.9
16.0
15.3
17.2
16.1
13.9
16.8
5.8
10.3
24.2
$11 -$25
17.7
17.3
18.7
18.1
15.9
16.9
18.3
17.5
17.9
13.0
18.3
8.1
$26 - $50
15.8
16.9
17.3
15.6
13.0
14.3
15.5
17.6
14.3
25.9
24.9
18.9
$51 - $75
6.6
8.5
7.3
5.1
5.7
5.5
6.8
7.0
5.4
13.5
10.1
13.2
$76 - $100
5.3
8.5
5.7
4.6
2.3
3.1
5.4
7.0
3.9
13.5
8.5
6.6
$101 - $200
2.1
3.6
2.6
1.7
0.6
1.6
1.6
3.0
1.2
6.4
6.5
6.1
$201 - $300
0.8
1.9
0.6
0.6
0.2
0.3
0.9
1.0
0.5
2.4
1.8
1.6
$301+
0.4
0.8
0.3
0.4
0.2
0.3
0.2
0.8
0.3
1.0
0.7
1.5
$25.39
$36.19
$26.85
$22.58
$16.29
$19.81
$24.56
$31.15
$20.47
$52.01
$44.09
$42.55
Average
Source: BIGresearch, Consumer Intentions and Actions Survey and Simultaneous Media Study, © 2008.
BIGresearch, All Rights Reserved. Compiled by Packaged Facts.
Consumers Likely to Spend Less
In the summer of 2008, BIGresearch asked consumers what the near future of their footwear
spending habits looked like. While 50% said their footwear spending habits would not
change, a large segment, 43% said they would spend less—a trend seen at every demographic
level. [Tables 6-25 and 6-26]
As the economy has shown no marked improvement at the time of this report, it is likely that
more consumers are further restricted their shoe shopping budgets across demographic lines.
Table 7- 24
Consumer Response to the Question, “Over the next 90 days (July, August and
September), do you plan on spending more, the same or less on footwear than you
would normally spend at this time of the year?” by Adults, Women and Men, 2006-2008
(%)
Response
2008
2007
2006
Adult
Women
Men
Adult
Women
Men
Adult
Women
Men
More
7.1%
7.4%
6.8%
12.0%
13.3%
10.6%
10.2%
11.7%
8.6%
Same
50.4
45.2
55.8
58.9
55.4
62.5
56.9
51.2
63.1
Less
42.6
47.4
37.5
29.2
31.3
26.9
32.9
37.1
28.3
Source: BIGresearch, Consumer Intentions and Actions Survey and Simultaneous Media Study, © 2008.
BIGresearch, All Rights Reserved. Compiled by Packaged Facts.
August 2009
© Packaged Facts
209
Chapter 7: The Footwear Consumer
The Global Footwear Market
Table 7- 25
Consumer Response to the Question, “Over the next 90 days (July, August and
September), do you plan on spending more, the same or less on footwear than you
would normally spend at this time of the year?” by Age, HHI and Race, 2008
(%)
Age
Response
Household Income
Adult
Race
Under 30
30-44
45-64
65+
<$35K
$35K$74K
$75K+
Whites
Blacks
Hispanics
Asians
More
7.1%
10.6%
10.5%
4.6%
2.7%
7.3%
6.2%
7.8%
5.7%
16.3%
13.6%
9.7%
Same
50.4
53.0
54.6
48.0
44.7
44.6
49.8
57.2
51.4
44.2
44.6
44.2
42.6
36.4
34.9
47.4
52.5
48.1
44.0
35.0
42.9
39.5
41.9
46.1
Less
Source: BIGresearch, Consumer Intentions and Actions Survey and Simultaneous Media Study, © 2008.
BIGresearch, All Rights Reserved. Compiled by Packaged Facts.
January 2008
© Packaged Facts
210
The Global Footwear Market
Chapter 8
Chapter 8: The Athletic Footwear Consumer
The Athletic Footwear Consumer
Note on Simmons Market Research Bureau Consumer Data
As noted in Chapter 7: The Footwear Consumer, consumer demographics discussions rely on
data compiled by Experian Simmons Market Research Bureau, based in New York City.
Each year, Experian Simmons surveys a large sample of consumers about their buying habits.
The following discussion derives from the winter 2008/09 consumer survey, which is based
on more than 20,000 households. By surveying a large sample of households, selected to
represent a statistically accurate cross-section of the U.S. population, Experian Simmons is
able to construct detailed demographic profiles across markets and categories.
In addition, Experian Simmons has developed an index system to calibrate the usage of a
product by a given segment of the population, compared with usage by the population as a
whole. If 10% of all survey respondents report use of a product, for example, the baseline
index of 100 is set to that 10% rate. If 20% of respondents age 18–24 report use, this group
would have an index of 200, being twice as likely to use the product. Generally speaking,
Packaged Facts considers an index of 110 or higher to be significant, or an “indicator,” while
classifying demographic segments with an index of 80 or lower as “resisters.” This discussion
treats as “not significant” any indices falling between these two levels, or any findings that
Experian Simmons has classified as statistically unreliable.
Sneaker, Athletic and Sport Shoes Penetration Higher for
Women at 63%
According to Experian Simmons data, women’s sneaker, athletic and sports shoes penetration
was 63% in the winter of 2009—three percentage points higher than men’s, at 60%. Although
in terms of athletic shoe data only, men had a greater penetration than women, at 20% versus
17%. [See Chapter 7: The Footwear Consumer for data on broader categories of consumer
footwear penetration]
August 2009
© Packaged Facts
211
Chapter 8: The Athletic Footwear Consumer
The Global Footwear Market
Table 8-1
Total Consumer Penetration Levels for Sneakers, Athletic Shoes, or Sports
Shoes Bought in the Past 12 Months, by Sex and Total Population, 2009
(%)
Population
% Purchase Penetration
Men
60%
Women
63
Total Sample
61%
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study,
Winter 2008/09. This material is used with permission.
Casual Sneakers Top Among Both Men and Women
There are many different varieties of sneakers, from casual wear to cross training to hiking.
Three stand out though: casual, exercise walking and jogging/running sneakers. Casual
sneakers had the greatest penetration with women at 25% and men at 22%. Exercise walking
sneakers were much preferred by women at 21% with men only reaching 12%.
Jogging/running and tennis sneakers were both on an equal footing, preferred by both men
and women at 12% and five percent, respectively.
Preferences diverged between the sexes with men showing higher penetration for basketball
(for example, men at eight percent and women at only four percent), cross training, and
hiking sneakers, while women showed higher levels for aerobic sneakers (women at four
percent and men at only two percent).
Table 8-2
Total Consumer Penetration Levels for Sneakers, Athletic Shoes, or Sports Shoes
Product Segments Bought in the Past 12 Months, by Sex and Total Population, 2009
(%)
Segment
Men
Women
Total Sample
Casual Sneakers
22%
25%
23%
Exercise Walking
12
21
17
Jogging Or Running
12
12
12
Cross Training
9
7
8
Basketball
8
4
6
Tennis
5
5
5
Aerobic
2
4
3
Hiking
4
2
3
Other
11
11
11
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2008/09. This material is used with permission.
January 2008
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Chapter 8: The Athletic Footwear Consumer
Top Demographic Characteristics by Sneakers, Athletic Shoes,
or Sports Shoes Type
Casual Sneaker Purchasers More Likely Than Average to Be Young Living on
East or West Coast
For casual sneaker-wearing men, the data suggested a profile of a young, possibly blue-collar
worker. These men were more likely than average to be young, age between18-34. Hispanic
or Black, living on the east or west coasts, to have low levels of education, to work in labor,
to share a household with other working adults, to live in larger households, to live in
households with children, to be single, and to live in rentals. Purchasers of boots more useful
in a blue-collar work environment clearly edge out any other male boot purchaser.
Women shared many similar characteristics, but also popped for Asians and for six-figure
household income.
August 2009
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Chapter 8: The Athletic Footwear Consumer
The Global Footwear Market
Table 8-3
Demographic Characteristics of Casual Sneaker Purchasers, by Sex, 2009
(index)
Men
Index
Women
Index
Age 18-24
129
Age 25-34
134
Age 25-34
132
Age 35-44
131
Hispanic
140
Hispanic
127
Black (Non-Hispanic)
128
Black (Non-Hispanic)
112
--
--
Asian (Non-Hispanic)
123
Northeast
117
Northeast
112
Pacific
114
--
--
Non High School Grad
113
--
--
High School Grad Only
114
--
--
Occupation: Sales
111
Occupation: Sales
110
Occupation: Office & Administrative
130
Occupation: Labor
110
Occupation: Labor
123
--
--
Employed Adults in HH: Three +
123
Employed Adults in HH: Two
111
Not Married
115
--
--
--
--
Household Income: $100K-$149K
110
# of People in HH: Five Or More
134
# of People in HH: Three-Four
118
--
--
# of People in HH: Five Or More
137
# of Children in HH: One
121
# of Children in HH: One
115
# of Children in HH: Two
113
# of Children in HH: Two
150
# of Children in HH: Three +
138
# of Children in HH: Three +
145
Age of Children in HH: Under 6
125
Age of Children in HH: Under 6
146
Age of Children in HH: 6-11
136
Age of Children in HH: 6-11
155
Age of Children in HH: 12-17
128
Age of Children in HH: 12-17
132
Kind of Residence: Rented House
124
Kind of Residence: Rented House
113
Kind of Residence: Rented Apartment
122
Kind of Residence: Rented Apartment
113
--
--
Kind of Residence: Live Rent Free
121
--
--
--
--
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2008/09. This material is used with permission.
Exercise and Walking Purchasers Skew Much Older, Retired
A very different profile emerged for exercise and walking sneaker wearers. These both men
and women showed above average likelihood to be older, retired, with incomes in the six
digits, living in two-person households, living in condos, and owning a residence.
January 2008
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Chapter 8: The Athletic Footwear Consumer
Men also spike for Hispanic, part-time employment, self-employment, while women spiked
for mobile home residence and lower income at $25,000-$49,000.
Table 8-4
Demographic Characteristics of Exercise and Walking Shoe Purchasers, by Sex, 2009
(index)
Men
Index
Women
Index
Age 55-64
130
Age 45-54
117
Age 65+
151
Age 55-64
128
Hispanic
110
--
--
Employed Part-Time (<30 Hours)
131
--
--
Self-Employed
130
--
--
Retired
144
Retired
114
Occupation: Sales
127
--
--
Employed Adults in HH: None
123
--
--
Employed Adults in HH: One
111
--
--
Household Income: $75K-$99K
110
Household Income: $25K-$49K
110
Household Income: $100K-$149K
112
Household Income: $100K-$149K
113
Presently Married
110
--
--
# of People in HH: Two
122
# of People in HH: Two
117
# of Children in HH: None
111
--
--
Kind of Residence: Owned House
110
Kind of Residence: Owned Condo/Co-Op
110
Kind of Residence: Owned Cond/Co-Op
111
Kind of Residence: Mobile Home
118
Value of Residence: $200K-$299K
110
Value of Residence: $100K-$199K
112
Value of Residence: $300K-$499K
123
Value of Residence: $200K-$299K
111
Value of Residence: $500K-$750K
115
Value of Residence: $500K-$750K
114
Value of Residence: $750K+
120
--
--
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2008/09. This material is used with permission.
Jogging or Running Purchasers More Likely Than Average to be Educated,
White-Collar, Family-oriented
According to Simmons data, men and women who purchased jogging and running footwear
in the past twelve months were more likely than average to pop for demographics
characteristic of the upwardly mobile and the family-oriented. Men and women age 18-44
showed above average interest and both popped for higher education, full-time employment,
a variety of white-collar jobs (particularly professional/technical at M158 and W156),
incomes upward of $100,000, and two-income households. These purchasers were more
likely than average to have children and to live in mid-value homes.
August 2009
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Chapter 8: The Athletic Footwear Consumer
The Global Footwear Market
Men popped for Hispanic and Pacific, while women popped for Asian and Southwest. Men
also showed a greater likelihood to rent an apartment while women showed a likelihood to
live in a household with three or more working adults—both suggest a younger consumer
limiting or possibly sharing expenses.
Table 8-5
Demographic Characteristics of Jogging and Running Shoe Purchasers, by Sex, 2009
(index)
Men
Index
Women
Index
Age 18-24
134
Age 18-24
138
Age 25-34
177
Age 25-34
162
Age 35-44
130
Age 35-44
147
Hispanic
112
Asian (Non-Hispanic)
156
Pacific
128
Southwest
117
Undergraduate College Degree
129
Undergraduate College Degree
158
Graduate Degree
156
Graduate Degree
145
Employed Full-Time (30+ Hours)
116
Employed Full-Time (30+ Hours)
124
Occupation: Management/Financial
122
Occupation: Management/Financial
126
Occupation: Professional/Technical
158
Occupation: Professional/Technical
156
--
--
Occupation: Office/Administrative Support
121
Employed Adults in HH: Two
117
Employed Adults in HH: Two
134
--
--
Employed Adults in HH: Three +
131
Household Income: $100K-$149K
141
Household Income: $100K-$149K
148
Household Income: $150K+
146
Household Income: $150K+
170
# of People in HH: Three-Four
115
# of People in HH: Three-Four
126
# of People in HH: Five Or More
120
# of People in HH: Five Or More
127
# of Children in HH: Two
129
# of Children in HH: Two
127
# of Children in HH: Three +
131
# of Children in HH: Three +
142
Age of Children in HH: Under 6
134
Age of Children in HH: Under 6
127
Age of Children in HH: 6-11
129
Age of Children in HH: 6-11
142
Age of Children in HH: 12-17
115
Age of Children in HH: 12-17
141
Kind of Residence: Rented Apartment
116
--
--
Value of Residence: $300K-$499K
124
Value of Residence: $200K-$299K
132
Value of Residence: $500K-$750K
126
Value of Residence: $300K-$499K
126
Value of Residence: $750K+
110
Value of Residence: $500K-$750K
118
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2009. This material is used with permission.
January 2008
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The Global Footwear Market
Chapter 8: The Athletic Footwear Consumer
Cross Trainers Similar to Joggers
Men and women who purchased cross-trainers in the past twelve months skewed slightly
older (age 25-54) than those who purchased jogging and running sneakers but otherwise
shared many characteristics. Again, both men and women were more likely than average to
pop for higher education, full-time employment, a variety of white-collar jobs, incomes
upward of $75,000 (with $150,000 popping at M154 and W183), and two-income
households. These purchasers were more likely than average to have children and own
homes.
Men popped for White consumers, while women popped for consumers living in the
Northeast, for women working in labor, for marriage and for renting a house.
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Chapter 8: The Athletic Footwear Consumer
The Global Footwear Market
Table 8-6
Demographic Characteristics of Cross Training Shoe Purchasers, by Sex, 2009
(index)
Men
Age 25-34
Age 35-44
Age 45-54
White Non-Hispanic
-Some College
Undergraduate College Degree
Graduate Degree
Employed Full-Time (30+ Hours)
Occupation: Management/Financial
Occupation: Professional/Technical
-Employed Adults in HH: Two
Employed Adults in HH: Three +
Household Income: $75K-$99K
Household Income: $100K-$149K
Household Income: $150K+
--# of People in HH: Three-Four
-# of Children in HH: Two
Age of Children in HH: 6-11
Age of Children in HH: 12-17
Kind of Residence: Owned House
Value of Residence: $200K-$299K
Value of Residence: $300K-$499K
Value of Residence: $500K-$750K
--
Index
111
156
105
113
-115
158
140
122
119
171
-123
117
132
135
154
--134
-133
126
124
111
126
138
118
--
Women
Age 25-34
Age 35-44
Age 45-54
-Northeast
Some College
Undergraduate College Degree
Graduate Degree
Employed Full-Time (30+ Hours)
Occupation: Management/Financial
Occupation: Professional/Technical
Occupation: Labor
Employed Adults in HH: One
Employed Adults in HH: Two
Household Income: $75K-$99K
Household Income: $100K-$149K
Household Income: $150K+
Presently Married
# of People in HH: Three-Four
# of Adults in HH: Two
# of Children in HH: Two
Age of Children in HH: 6-11
Age of Children in HH: 12-17
Kind of Residence: Rented House
Value of Residence: $100K-$199K
Value of Residence: $300K-$499K
Value of Residence: $500K-$750K
Value of Residence: $750K+
--
Index
123
151
122
-118
116
162
144
139
183
176
114
116
133
124
116
183
115
118
117
140
129
129
120
111
131
127
127
--
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2009. This material is used with permission.
Female Basketball Shoe Purchasers High Earners versus Male
Male and female basketball sneaker purchasers shared many demographic traits, such as age
(25-44), race (Hispanic and Black), occupation (labor), household makeup (large and/or with
children), and rental dwellings. However, when it comes to education, employment, and
household income, there is a disruption. Men showed above average likelihood to have little
education (no high school diploma at 131) while women showed some likelihood for higher
January 2008
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The Global Footwear Market
Chapter 8: The Athletic Footwear Consumer
education (some college at 115). Men were more likely to work part-time while women
popped for both part-time and full-time. Lastly, men showed above average likelihood for
incomes between $25,000 to $99,000, while women only popped for high household incomes
of $150,000 or more (123). One explanation for the disparity is in the other age categories
that popped. Men also popped for a much younger age cohort with less work and life
experience, 18-24, while women popped for an older one, 45-54.
Table 8-7
Demographic Characteristics of Basketball Shoe Purchasers, by Sex, 2009
(index)
Men
Age 18-24
Age 25-34
Age 35-44
Hispanic
Black (Non-Hispanic)
Pacific
Non High School Grad
High School Grad Only
Employed Part-Time (<30 Hours)
-Occupation: Labor
-Employed Adults in HH: Two
Employed Adults in HH: Three +
Household Income: Under $25K
Household Income: $25K-$49K
Household Income: $75K-$99K
Not Married
# of People in HH: Three-Four
# of People in HH: Five Or More
# of Adults in HH: Three +
# of Children in HH: One
# of Children in HH: Two
# of Children in HH: Three +
Age of Children in HH: Under 6
Age of Children in HH: 6-11
Age of Children in HH: 12-17
Kind of Residence: Rented House
Kind of Residence: Rented Apartment
Index
215
157
114
135
348
122
131
118
140
-130
-115
138
117
117
111
138
120
185
158
136
142
177
145
162
169
157
174
Women
Age 25-34
Age 35-44
Age 45-54
Hispanic
Black (Non-Hispanic)
-Some College
-Employed Full-Time (30+ Hours)
Employed Part-Time (<30 Hours)
Occupation: Professional/Technical
Occupation: Labor
Employed Adults in HH: Two
-Household Income: $150K+
---# of People in HH: Three-Four
# of People in HH: Five Or More
# of Adults in HH: Three +
# of Children in HH: One
# of Children in HH: Two
# of Children in HH: Three +
Age of Children in HH: Under 6
Age of Children in HH: 6-11
Age of Children in HH: 12-17
Kind of Residence: Rented House
--
Index
183
155
110
119
273
-115
-114
134
128
148
126
-123
---143
210
121
143
167
270
164
253
232
219
--
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2009. This material is used with permission.
August 2009
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Chapter 8: The Athletic Footwear Consumer
The Global Footwear Market
Tennis Shoe Purchasers Not Necessarily the Country Club Stereotype
Interestingly, most of the demographic characteristics that pop for tennis sneakers usage don’t
track with popular cultures image of the tennis player. Aside from men working in
management/finance at 129 and women with household incomes of $100,000-149,000 at 114,
the data also drifted toward a working-class image with labor popping for men and women
and the lowest household income popping for women.
Table 8-8
Demographic Characteristics of Tennis Shoe Purchasers, by Sex, 2009
(index)
Men
Index
Women
Index
Age 35-44
164
Age 25-34
124
--
--
Age 35-44
124
--
--
Black (Non-Hispanic)
175
Southeast
126
Southeast
128
Pacific
117
Central
112
Undergraduate College Degree
131
--
--
--
--
Employed Full-Time (30+ Hours)
114
--
--
Employed Part-Time (<30 Hours)
128
Occupation: Management/Financial
129
Occupation: Labor
154
Occupation: Labor
119
--
--
Employed Adults in HH: One
122
Employed Adults in HH: Two
123
Not Married
112
Household Income: Under $25K
121
# of People in HH: Five Or More
143
Household Income: $100K-$149K
114
# of Adults in HH: Three +
127
# of People in HH: Three-Four
133
# of Children in HH: Two
114
# of People in HH: Five Or More
111
Age of Children in HH: 12-17
125
# of Adults in HH: Three +
110
--
--
# of Children in HH: One
133
--
--
# of Children in HH: Two
149
--
--
# of Children in HH: Three +
113
--
--
Age of Children in HH: Under 6
114
--
--
Age of Children in HH: 6-11
148
--
--
Age of Children in HH: 12-17
140
--
--
Kind of Residence: Rented House
167
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2008/09. This material is used with permission.
January 2008
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The Global Footwear Market
Chapter 8: The Athletic Footwear Consumer
Aerobic Sneaker Purchasers More Likely Than Average to be High-income
Women
Male and female aerobic sneaker purchasers shared few demographic traits except for age 3544, Hispanic, labor industry, large households and households with children. These male
characteristics along with non-high school graduate (144), not married (137) and three or
more adults in household (175) went on to suggest a lower socio-economic status.
However for women, a higher socio-economic status was indicated with higher education
(graduate degree at 123), professional/technical employment (139), and six-digit household
incomes ($100,000-$149,000 at 158) popping as above average characteristics.
Table 8-9
Demographic Characteristics of Aerobic Shoe Purchasers, by Sex, 2009
(index)
Men
Age 35-44
--Hispanic
-Northeast
Pacific
Non High School Grad
Some College
-Occupation: Labor
-Not Married
# of People in HH: Three-Four
# of People in HH: Five Or More
# of Adults in HH: Three +
# of Children in HH: One or More
---------
Aerobic
142
--210
-127
118
144
121
-144
-137
138
195
175
161
---------
Women
Age 25-34
Age 35-44
Age 45-54
Hispanic
Black (Non-Hispanic)
Pacific
-Graduate Degree
-Employed Full-Time (30+ Hours)
Occupation: Professional/Technical
Occupation: Labor
Employed Adults in HH: One
Employed Adults in HH: Two
Household Income: $100K-$149K
Household Income: $150K+
# of People in HH: Five Or More
# of Adults in HH: Three +
# of Children in HH: One or More
# of Children in HH: Two
# of Children in HH: Three +
Age of Children in HH: Under 6
Age of Children in HH: 12-17
Kind of Residence: Rented House
Value of Residence: $200K-$299K
Aerobic
138
128
119
145
138
130
-123
-127
139
128
113
110
158
144
160
122
123
127
137
127
143
154
110
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2008/09. This material is used with permission.
August 2009
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Chapter 8: The Athletic Footwear Consumer
The Global Footwear Market
Hiking Purchasers More Likely Than Average to be Educated, West Coast
Men and women who purchased hiking shoes shared two common characteristics. Both were
more likely than average to be from the west coast and to be college graduates. Otherwise
men popped for management/financial employment and six-digit household incomes, while
women popped for age 35-54, full-time employment, two-income households, marriage, large
household, and households with one or more children.
Table 8-10
Demographic Characteristics of Hiking Shoe Purchasers, by Sex, 2009
(index)
Men
Index
Women
Index
--
--
Age 35-44
142
--
--
Age 45-54
137
Northeast
110
Pacific
156
Pacific
147
--
--
Undergraduate College Degree
153
Undergraduate College Degree
156
Occupation: Management/Financial
111
Employed Full-Time (30+ Hours)
119
Household Income: $150K+
118
Employed Adults in HH: Two
121
# of People in HH: Three-Four
113
Presently Married
115
--
--
# of People in HH: Five Or More
123
--
--
# of Children in HH: One Or More
110
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2008/09. This material is used with permission.
Nike and New Balance Only Brands with Double Digit
Penetration Levels
Nike and New Balance saw the greatest levels of brand penetration among consumers, with
Nike at 19% for men and 20% for women, followed by New Balance at 13% for men and
14% for women. While no other tracked brands reached double-digit levels, Adidas and
Reebok each garnered eight percent of the total sample and Skechers captured seven percent.
There was not much gender disparity in brand preferences for sneakers. Men showed a slight
one-point preference for Adidas, Airwalk and Rockport brands. Only Skechers showed more
than a one-point difference with nine percent for women versus four percent for men.
Reebok, Asics, Converse, Vans, Keds, Avia, and K-Swiss only saw a one-percentage point
disparity. Women also bought more other, probably lesser-known, brands suggesting that
women were more open to new or unknown brands and were perhaps less brand loyal than
men when it came to sneakers.
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The Global Footwear Market
Chapter 8: The Athletic Footwear Consumer
Table 8-11
Total Consumer Penetration Levels for Sneakers, Athletic Shoes, or Sports Shoes
Brands Bought in the Past 12 Months, by Sex and Total Population, 2009
(%)
Brands
Men
Women
Total Sample
Nike
19%
20%
19%
New Balance
13
14
14
Adidas
9
8
8
Reebok
8
9
8
Skechers
4
9
7
Asics
2
3
3
Converse
3
4
3
K-Swiss
2
3
3
Puma
3
3
3
Vans
2
3
3
Avia
1
2
2
Airwalk
2
1
1
Brooks
1
1
1
Fila
1
1
1
Keds
--
2
1
L.A. Gear
1
1
1
Rockport
2
1
1
Saucony
1
1
1
Other Brands
17
19
18
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study,
Winter 2008/09. This material is used with permission.
Top Demographic and Psychographic Characteristics by
Selected Sneakers, Athletic Shoes, or Sports Shoes Brand
Nike Purchasers Demographics and Psychographics
Top indexes for male and female Nike purchasers included those age between18-44. Hispanic
or Black consumers, those employed full-time, those working in professional and technical
industries, those earning six-digit incomes, those living in households with children and those
living in rented houses. Because of the significant penetration of the Nike brand, these shared
characteristics were not particularly edifying.
Women popped for a few extra characteristics such as Asian consumers, those living in the
Southwest, those with college degrees, and those employed in labor industries.
August 2009
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Chapter 8: The Athletic Footwear Consumer
The Global Footwear Market
Table 8-12
Demographic Characteristics of Nike Shoe Purchasers, by Sex, 2009
(index)
Men
Index
Women
Index
Age 18-24
145
Age 18-24
123
Age 25-34
157
Age 25-34
163
Age 35-44
129
Age 35-44
153
Hispanic
141
Hispanic
140
Black (Non-Hispanic)
187
Black (Non-Hispanic)
148
--
--
Asian (Non-Hispanic)
112
Northeast
110
Southwest
121
Non High School Grad
121
Undergraduate College Degree
120
Employed Full-Time (30+ Hours)
113
Employed Full-Time (30+ Hours)
118
--
--
Employed Part-Time (<30 Hours)
125
Occupation: Professional/Technical
133
Occupation: Professional/Technical
132
Occupation: Sales
117
Occupation: Labor
137
Employed Adults in HH: Two
110
Employed Adults in HH: Two
126
Employed Adults in HH: Three +
127
--
--
Household Income: $100K-$149K
117
Household Income: $75K-$99K
119
--
--
Household Income: $100K-$149K
135
--
--
Household Income: $150K+
111
Not Married
115
--
--
# of People in HH: Three-Four
122
# of People in HH: Three-Four
133
# of People in HH: Five Or More
146
# of People in HH: Five Or More
151
# of Adults in HH: Three +
127
# of Adults in HH: Three +
117
# of Children in HH: One
122
# of Children in HH: One
131
# of Children in HH: Two
140
# of Children in HH: Two
160
# of Children in HH: Three +
154
# of Children in HH: Three +
178
Age of Children in HH: Under 6
143
Age of Children in HH: Under 6
149
Age of Children in HH: 6-11
143
Age of Children in HH: 6-11
176
Age of Children in HH: 12-17
149
Age of Children in HH: 12-17
173
Kind of Residence: Rented House
118
Kind of Residence: Rented House
131
Kind of Residence: Rented Apartment
126
Kind of Residence: Live Rent Free
111
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2008/09. This material is used with permission.
January 2008
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Chapter 8: The Athletic Footwear Consumer
Nike shoe purchasers proved to be an optimistic bunch, popping 61% higher than average in
thinking their financial situation would get significantly better in the next 12 months. Only
Converse and Puma showed higher indexes above the 200 mark. Nike purchasers showed a
higher propensity to want to succeed or please other people with certain characteristics such
as approval seeking (138), child influenced (135), and centered on work (133) all popping.
Table 8-13
Psychographic Characteristics of Nike Shoe Purchasers, 2009
(index)
Psychographic Characteristics
Index
Approval Seeking: Far Above Average
138
Smart Greens: Far Below Average
110
Early Adopter: Above Average
124
Health and Image Leader: Far Above Average
126
Active Health Management: Far Below Average
117
Child Influenced Shopper: Far Above Average
135
Work Centered: Far Above Average
133
Advertising Receptivity: Far Above Average
123
Internet Activity: Far Above Average
123
Economic Outlook: Next 12 Months Finances Better/Worse?: Significantly Better Off
161
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2008/09. This material is used with permission.
New Balance Purchasers Demographics and Psychographics
New Balance purchasers were more likely than average to be White, white-collar
professionals, aged 55-64, and living in the Northeast. Among men, ages skewed higher with
those 45-55 at 117, while women popped for those age 25-34 at 112. New Balance purchasers
were also more likely to be married and own their own home or condo.
August 2009
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Chapter 8: The Athletic Footwear Consumer
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Table 8-14
Demographic Characteristics of New Balance Shoe Purchasers, by Sex, 2009
(index)
Men
Index
Women
Index
Age 45-54
117
Age 25-34
112
Age 55-64
120
Age 55-64
120
White Non-Hispanic
114
White Non-Hispanic
114
Northeast
119
Northeast
114
Undergraduate College Degree
117
Southeast
116
Employed Full-Time (30+ Hours)
112
Undergraduate College Degree
117
Occupation: Management/Financial Operations
115
Graduate Degree
131
Occupation: Professional/Technical
122
Employed Full-Time (30+ Hours)
113
Occupation: Sales
147
Occupation: Management/Financial
114
Employed Adults in HH: Two
117
Occupation: Professional/Technical
139
Household Income: $75K-$99K
143
Employed Adults in HH: Two
116
Household Income: $100K-$149K
131
Household Income: $75K-$99K
118
Presently Married
114
Household Income: $100K-$149K
122
# of People in HH: Three-Four
110
Household Income: $150K+
127
# of Adults in HH: Two
113
Presently Married
115
Age of Children in HH: 6-11
111
# of People in HH: Three-Four
112
Age of Children in HH: 12-17
113
# of Children in HH: Two
111
Kind of Residence: Owned House
116
Kind of Residence: Owned House
111
Kind of Residence: Owned Condo or Co-Op
121
Value of Residence: $100K-$199K
112
Value of Residence: $100K-$199K
112
Value of Residence: $200K-$299K
113
Value of Residence: $200K-$299K
130
Value of Residence: $300K-$499K
116
Value of Residence: $300K-$499K
131
Value of Residence: $500K-$750K
124
Value of Residence: $500K-$750K
116
--
--
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2008/09. This material is used with permission.
Psychographic characteristics for New Balance purchasers showed a higher likelihood to do
above average research and information gathering (122) and had above average Internet
activity (125). They were also more likely to engage in above average active health
management (126). They showed higher than average propensity to see their next 12 months
finances as somewhat worse off (116), but expected to spend a little more on household
essentials.
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Table 8-15
Psychographic Characteristics of New Balance Shoe Purchasers, 2009
(index)
Psychographic Characteristics
Index
Impulse Shopper: Far Above Average
110
Brand Loyals: Far Above Average
113
Approval Seeking: Below Average
114
Informed Consumer: Far Above Average
118
Active Health Management: Above Average
126
Family Centered: Above Average
114
Child Influenced Shopper: Below Average
112
Research/Info Gathering: Above Average
122
Internet Activity: Above Average
125
Economic Outlook: Next 12 Months Finances Better/Worse?: Somewhat Worse Off
116
Economic Outlook: Household Essentials Expect to Spend: A Little More
118
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study,
Winter 2008/09. This material is used with permission.
Adidas Purchasers Demographics and Psychographics
Adidas purchasers skewed slightly young, aged 18-44 and were more popular among
Hispanics and Blacks. The Northeast and Pacific regions also popped for above average
Adidas preference as did renters rather than home-owners. They showed above average
tendencies for households with children.
Men were more likely than average to unmarried (122); for women that characteristic did not
pop. Overall the profile suggests lower household incomes derived from labor for men (122)
and clerical for women (111), but a closer look shows some above average tendencies for
higher incomes with women popping significantly higher for $100K-$149K (127) and $150+
(124).
August 2009
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Chapter 8: The Athletic Footwear Consumer
The Global Footwear Market
Table 8-16
Demographic Characteristics of Adidas Shoe Purchasers, by Sex, 2009
(index)
Men
Index
Women
Index
Age 18-24
162
Age 18-24
147
Age 25-34
143
Age 25-34
155
Age 35-44
123
Age 35-44
125
Hispanic
177
Hispanic
171
Black (Non-Hispanic)
160
Black (Non-Hispanic)
174
Northeast
121
Northeast
115
Pacific
129
Pacific
134
Non High School Grad
114
Some College
119
Employed Full-Time (30+ Hours)
113
Employed Part-Time (<30 Hours)
149
Employed Part-Time (<30 Hours)
125
Occupation: Professional/Technical
144
Occupation: Management/Financial
113
Occupation: Office & Administrative Support
111
Occupation: Professional/Technical
122
Occupation: Labor
138
Occupation: Labor
122
Employed Adults in HH: Two
111
Employed Adults in HH: Two
112
Employed Adults in HH: Three +
146
Employed Adults in HH: Three +
140
Household Income: $100K-$149K
127
Household Income: $75K-$99K
119
Household Income: $150K+
124
Household Income: $100K-$149K
110
# of People in HH: Three-Four
114
Household Income: $150K+
118
# of People in HH: Five Or More
174
Not Married
122
# of Adults in HH: Three +
135
# of People in HH: Three-Four
113
# of Children in HH: One or More
137
# of People in HH: Five Or More
168
# of Children in HH: One
119
# of Adults in HH: Three +
139
# of Children in HH: Two
135
# of Children in HH: One
123
# of Children in HH: Three +
163
# of Children in HH: Two
140
Age of Children in HH: Under 6
138
# of Children in HH: Three +
169
Age of Children in HH: 6-11
149
Age of Children in HH: Under 6
140
Age of Children in HH: 12-17
149
Age of Children in HH: 6-11
149
Kind of Residence: Rented House
153
Age of Children in HH: 12-17
157
Value of Residence: $500K-$750K
136
Kind of Residence: Rented House
145
--
--
Kind of Residence: Rented Apartment
139
--
--
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2008/09. This material is used with permission.
January 2008
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The Global Footwear Market
Chapter 8: The Athletic Footwear Consumer
Adidas purchasers were 41% more likely than the average to believe their finances will be
improved in the next 12 months. They were far more likely to engage in Internet activity
(156). They were also more likely to rate far above average as impulse shoppers (111) and
early adopters (141). Other psychographic characteristics that popped include approval
seeking (143), health and image leader (148), and work centered (143).
Table 8-17
Psychographic Characteristics of Adidas Shoe Purchasers, 2009
(index)
Psychographic Characteristics
Index
Impulse Shopper: 1 Far Below Average
111
Approval Seeking: Far Above Average
143
Smart Greens: Far Above Average
118
Early Adopter: Far Above Average
141
Health and Image Leader: Far Above Average
148
Child Influenced Shopper: Far Above Average
149
Work Centered: Far Above Average
143
Advertising Receptivity: Far Above Average
126
Internet Activity: Far Above Average
156
Internet Involvement: Far Above Average
142
Economic Outlook: Next 12 Months Finances Better/Worse?: Significantly Better Off
141
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2008/09. This material is used with permission.
Reebok Purchasers Demographics and Psychographics
Far fewer demographic characteristics popped for Reebok than for other major athletic
footwear brands, suggesting that the brand’s demographic profile skews much more toward
the average consumer than Nike, New Balance, or Adidas. The above average profile that did
emerge, though, suggests characteristics including Hispanic (117) and Black (173) women
living in the Southeast (118) on lower incomes derived from labor (128) and office &
administrative (113) work. Single men, those living in the Northeast and those in
management/financial (138) positions also showed a slightly higher than average tendency.
August 2009
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Chapter 8: The Athletic Footwear Consumer
The Global Footwear Market
Table 8-18
Demographic Characteristics of Reebok Shoe Purchasers, by Sex, 2009
(index)
Men
Index
Women
Index
Age 35-44
118
Age 35-44
112
Age 45-54
128
Age 45-54
111
Northeast
134
Age 55-64
115
Employed Part-Time (<30 Hours)
111
Hispanic
117
Occupation: Management/Financial
138
Black (Non-Hispanic)
173
Household Income: $25K-$49K
116
Southeast
118
Not Married
111
Non High School Grad
127
# of People in HH: Three-Four
112
Occupation: Office & Administrative Support
113
# of Children in HH: One
113
Occupation: Labor
128
# of Children in HH: Two
116
Household Income: Under $25K
114
# of Children in HH: Three +
125
Household Income: $25K-$49K
112
Age of Children in HH: 6-11
127
# of People in HH: Five Or More
116
Age of Children in HH: 12-17
111
# of Children in HH: One
132
Kind of Residence: Rented House
120
# of Children in HH: Three +
123
Kind of Residence: Rented Apartment
112
Age of Children in HH: 6-11
123
--
--
Age of Children in HH: 12-17
133
--
--
Kind of Residence: Rented House
135
--
--
Value of Residence: Under $100K
120
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2008/09. This material is used with permission.
Reebok purchasers showed tendencies that indicate a busy, go-getting type of personality. For
example, they were more likely than average to be intensely work-centered (124), approvalseeking (118), informed (114) and into health management (110).
January 2008
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The Global Footwear Market
Chapter 8: The Athletic Footwear Consumer
Table 8-19
Psychographic Characteristics of Reebok Shoe Purchasers, 2009
(index)
Psychographic Characteristics
Index
Impulse Shopper: Far Below Average
110
Brand Loyals: Above Average
114
Approval Seeking: Far Above Average
118
Informed Consumer: Far Above Average
114
Early Adopter: Above Average
110
Active Health Management: Above Average
110
Work Centered: Far Above Average
124
Internet Activity: Far Below Average
112
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study,
Winter 2008/09. This material is used with permission.
Skechers Purchasers Demographics and Psychographics
Skechers purchasers popped for those age 25-44, Hispanics, dual incomes, marriage, family
households, households with children, above average household incomes, and for those living
in the Pacific region. Women, a core consumer for the brand, popped for higher education,
and part-time employment—in total it evokes an image of a soccer mom.
August 2009
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Chapter 8: The Athletic Footwear Consumer
The Global Footwear Market
Table 8-20
Demographic Characteristics of Skechers Shoe Purchasers, by Sex, 2009
(index)
Men
Index
Women
Index
Age 25-34
122
Age 25-34
150
Age 35-44
148
Age 35-44
135
Hispanic
168
Hispanic
115
Pacific
163
Pacific
115
High School Grad Only
119
Some College
113
Employed Full-Time (30+ Hours)
123
Undergraduate College Degree
112
Occupation: Labor
141
Employed Part-Time (<30 Hours)
118
Employed Adults in HH: Two
133
Homemaker
110
Household Income: $25K-$49K
115
Occupation: Office & Administrative Support
117
Household Income: $75K-$99K
124
Employed Adults in HH: Two
129
Household Income: $100K-$149K
125
Household Income $50K-$74K
110
Presently Married
112
Household Income: $75K-$99K
111
# of People in HH: Three-Four
110
Household Income: $100K-$149K
114
# of People in HH: Five Or More
133
Presently Married
114
# of Adults in HH: Two
121
# of People in HH: Three-Four
118
# of Children in HH: One
123
# of People in HH: Five Or More
124
# of Children in HH: Two
147
# of Adults in HH: Two
110
# of Children in HH: Three +
145
# of Children in HH: One
122
Age of Children in HH: Under 6
152
# of Children in HH: Two
144
Age of Children in HH: 6-11
165
# of Children in HH: Three +
145
Age of Children in HH: 12-17
111
Age of Children in HH: Under 6
154
Value of Residence: $200K-$299K
144
Age of Children in HH: 6-11
180
--
--
Value of Residence: $300K-$499K
112
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2008/09. This material is used with permission.
Psychographically, Skechers purchasers were 39% more likely to be serious researchers and
info gatherers and 41% more likely to be serious about Internet activity. They were also more
likely than average to be a super-informed consumer and child-influenced shopper. Also of
note and in comparison with other brands, they were more likely (111) to not be brand loyal.
January 2008
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Chapter 8: The Athletic Footwear Consumer
Table 8-21
Psychographic Characteristics of Skechers Shoe Purchasers, 2009
(index)
Psychographic Characteristics
Index
Brand Loyals: 1 Far Below Average
111
Approval Seeking: Far Above Average
111
Informed Consumer: Far Above Average
129
Early Adopter: 3 Average
116
Health and Image Leader: Above Average
125
Active Health Management: Above Average
116
Family Centered: Far Above Average
119
Child Influenced Shopper: Far Above Average
131
Work Centered: 1 Far Below Average
112
Advertising Receptivity: Far Above Average
129
Research/Info Gathering: Far Above Average
139
Internet Activity: Far Above Average
141
Economic Outlook-Next 12 Months Finances Better/Worse?: Significantly Better Off
127
Economic Outlook-Household Essentials Expect to Spend: A Little More
115
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2008/09. This material is used with permission.
Asics Purchasers Demographics and Psychographics
Asics may be dubbed the affluent sneaker. The brand skewed significantly higher in key
demographic indices suggesting highly educated, high net worth, and dual high-income
families. Men were 105% more likely to have household incomes above $150,000 and 95%
more likely to have homes valued between $300k and $500k. Women showed above average
likelihood for household incomes above $150,000 at a whooping 149% and for homes valued
between $500k and $750k at 103%!
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Chapter 8: The Athletic Footwear Consumer
The Global Footwear Market
Table 8-22
Demographic Characteristics of Asics Shoe Purchasers, by Sex, 2009
(index)
Men
Index
Women
Index
Age 35-44
160
Age 35-44
127
White Non-Hispanic
110
Age 45-54
153
Northeast
128
White Non-Hispanic
117
Some College
131
Northeast
113
Undergraduate College Degree
147
Pacific
111
Graduate Degree
158
Undergraduate College Degree
176
Employed Full-Time (30+ Hours)
128
Graduate Degree
179
Employed Adults in HH: Two
145
Employed Full-Time (30+ Hours)
125
Household Income: $100K-$149K
123
Employed Part-Time (<30 Hours)
121
Household Income: $150K+
205
Occupation: Professional/Technical
201
Presently Married
110
Employed Adults in HH: Two
131
# of People in HH: Five Or More
144
Employed Adults in HH: Three +
147
# of Adults in HH: Two
115
Household Income: $100K-$149K
186
Age of Children in HH: 6-11
123
Household Income: $150K+
249
Age of Children in HH: 12-17
158
Presently Married
120
Kind of Residence: Owned House
103
# of People in HH: Three-Four
116
Value of Residence: $300K-$499K
195
# of People in HH: Five Or More
117
--
--
# of Adults in HH: Two
111
--
--
# of Adults in HH: Three +
120
--
--
# of Children in HH: One or More
114
--
--
# of Children in HH: Two
146
--
--
Age of Children in HH: Under 6
118
--
--
Age of Children in HH: 12-17
172
--
--
Kind of Residence: Owned House
127
--
--
Value of Residence: $100K-$199K
134
--
--
Value of Residence: $200K-$299K
130
--
--
Value of Residence: $300K-$499K
134
--
--
Value of Residence: $500K-$750K
203
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2008/09. This material is used with permission.
January 2008
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The Global Footwear Market
Chapter 8: The Athletic Footwear Consumer
Asics purchasers spiked for avid Internet use and for research showing an index of 190 and
195, respectively. Their propensity for Internet use and research jibes with there less than
likelihood to impulse shop and there greater likelihood to be brand loyal. Asics purchasers are
also heavily invested in health and image (146) and active health management (137).
Table 8-23
Psychographic Characteristics of Asics Shoe Purchasers, 2009
(index)
Psychographic Characteristics
Index
Impulse Shopper: Below Average
120
Brand Loyals: Above Average
112
Smart Greens: Far Below Average
119
Informed Consumer: Far Above Average
121
Early Adopter: Above Average
118
Health and Image Leader: Above Average
146
Active Health Management: Far Above Average
137
Research/Info Gathering: Far Above Average
195
Internet Activity: Far Above Average
190
Economic Outlook-Next 12 Months Finances Better/Worse?: Somewhat Better Off
113
Economic Outlook-Household Essentials Expect to Spend: A Little Less
122
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2008/09. This material is used with permission.
Converse Purchasers Demographics and Psychographics
Converse purchasers popped for youth, Hispanics, residents in the Northeast or Pacific
regions, larger households and renters. The Converse brand seems to have a firmer grip on
women as they age. Men only popped for 18-24, but women popped for 18-44.
Household incomes showed a great disparity between men and women. Men popped for
household income between $25,000 and $49,000 at 127, while women popped for $100,000
and $149,000 at 155.
August 2009
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Chapter 8: The Athletic Footwear Consumer
The Global Footwear Market
Table 8-24
Demographic Characteristics of Converse Shoe Purchasers, by Sex, 2009
(index)
Men
Index
Women
Index
Age 18-24
191
Age 18-24
188
Hispanic
196
Age 25-34
169
Northeast
121
Age 35-44
120
Pacific
166
Hispanic
201
Non High School Grad
140
Northeast
111
High School Grad Only
114
Southwest
156
Employed Part-Time (<30 Hours)
144
Pacific
138
Employed Adults in HH: Three +
154
Non High School Grad
126
Household Income: $25K-$49K
127
Some College
132
Not Married
143
Employed Part-Time (<30 Hours)
110
# of People in HH: Five Or More
168
Homemaker
148
# of Adults in HH: Three +
147
Occupation: Labor
127
# of Children in HH: Three +
177
Employed Adults in HH: Two
116
Age of Children in HH: Under 6
119
Employed Adults in HH: Three +
120
Age of Children in HH: 6-11
123
Household Income: $100K-$149K
155
Age of Children in HH: 12-17
127
# of People in HH: Three-Four
146
Kind of Residence: Rented House
135
# of People in HH: Five Or More
188
Kind of Residence: Rented Apartment
173
# of Adults in HH: Three +
158
Value of Residence: $300K-$499K
137
# of Children in HH: One
193
--
--
# of Children in HH: Two
189
--
--
# of Children in HH: Three +
158
--
--
Age of Children in HH: Under 6
187
--
--
Age of Children in HH: 6-11
188
--
--
Age of Children in HH: 12-17
212
--
--
Kind of Residence: Rented House
217
--
--
Kind of Residence: Rented Apartment
122
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2008/09. This material is used with permission.
Converse purchasers showed above average tendencies early adopters (149), but below
average impulse shoppers (133). Equally interesting is that they were 21% more likely to be
far below average on being family centered, but showed an index of 174 for being far above
average as a child influence shopper.
January 2008
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The Global Footwear Market
Chapter 8: The Athletic Footwear Consumer
Table 8-25
Psychographic Characteristics of Converse Shoe Purchasers , 2009
(index)
Psychographic Characteristics
Index
Impulse Shopper: Far Below Average
133
Brand Loyals: Above Average
128
Approval Seeking: Far Above Average
136
Smart Greens: Far Above Average
128
Early Adopter: Above Average
149
Health and Image Leader: Above Average
136
Active Health Management: Far Below Average
116
Family Centered: Far Below Average
121
Child Influenced Shopper: Far Above Average
174
Work Centered: Far Above Average
124
Advertising Receptivity: Far Above Average
128
Research/Info Gathering: Average
114
Internet Activity: Far Above Average
125
Economic Outlook-Next 12 Months Finances Better/Worse?: Significantly Better Off
205
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2008/09. This material is used with permission.
Puma Purchasers Demographics and Psychographics
The Puma profile pointed to those who were younger, Hispanic, without high school
diplomas, and living in large households. Also showing significant pops in preferences were
men with rental apartments (231) and households with children under six (166), and women
from households with children 6-11 (185) and three or more children (227).
August 2009
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Chapter 8: The Athletic Footwear Consumer
The Global Footwear Market
Table 8-26
Demographic Characteristics of Puma Shoe Purchasers, by Sex, 2009
(index)
Men
Index
Women
Index
Age 18-24
199
Age 18-24
239
Age 25-34
160
Age 25-34
131
Hispanic
263
Age 35-44
185
Northeast
144
Hispanic
288
Pacific
135
Northeast
155
Non High School Grad
221
Southwest
118
Employed Full-Time (30+ Hours)
110
Non High School Grad
164
Occupation: Labor
120
Employed Part-Time (<30 Hours)
140
Employed Adults in HH: Two
126
Homemaker
134
Employed Adults in HH: Three +
137
Occupation: Labor
163
Household Income: $25K-$49K
123
Employed Adults in HH: Three +
142
Not Married
143
Household Income $50K-$74K
117
# of People in HH: Five Or More
185
Household Income: $100K-$149K
137
# of Adults in HH: Three +
152
Household Income: $150K+
135
# of Children in HH: Two
115
Not Married
119
# of Children in HH: Three +
225
# of People in HH: Three-Four
147
Age of Children in HH: Under 6
166
# of People in HH: Five Or More
203
Age of Children in HH: 6-11
145
# of Adults in HH: Three +
170
Age of Children in HH: 12-17
148
# of Children in HH: One
154
Kind of Residence: Rented House
120
# of Children in HH: Two
172
Kind of Residence: Rented Apartment
231
# of Children in HH: Three +
227
--
--
Age of Children in HH: Under 6
147
--
--
Age of Children in HH: 6-11
185
--
--
Age of Children in HH: 12-17
155
--
--
Kind of Residence: Rented House
155
--
--
Kind of Residence: Rented Apartment
132
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2008/09. This material is used with permission.
January 2008
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The Global Footwear Market
Chapter 8: The Athletic Footwear Consumer
Puma purchasers were more likely approval seekers (176), early adopters (177), and health
and image leaders (195). They also scored high for Internet activity (182) and work
centeredness (163).
Table 8-27
Psychographic Characteristics of Puma Shoe Purchasers, 2009
(index)
Psychographic Characteristics
Index
Impulse Shopper: 3 Average
111
Brand Loyals: Far Above Average
129
Approval Seeking: Far Above Average
176
Smart Greens: Far Above Average
133
Informed Consumer: 2 Below Average
114
Early Adopter: Far Above Average
177
Health and Image Leader: Far Above Average
195
Active Health Management: 2 Below Average
123
Family Centered: 1 Far Below Average
145
Child Influenced Shopper: Far Above Average
159
Work Centered: Far Above Average
163
Internet Activity: Far Above Average
182
Economic Outlook-Next 12 Months Finances Better/Worse?: Significantly Better Off
207
Economic Outlook-Household Essentials Expect to Spend: A Lot Less
163
Source: Compiled by Packaged Facts based on data from Experian Simmons National Consumer Study, Winter
2008/09. This material is used with permission.
August 2009
© Packaged Facts
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