Retailers once fretted over unpredictable weather patterns and the ever-shifting tastes of shoppers. Now they have new worries to battle: the consolidation coming from powerhouses like Amazon and Walmart, the rise of new direct-to-consumer websites and end users’ need for rich shopping experiences.
For the footwear industry, such pressures have chipped away at the business, causing “us to go from slow growth a year ago to no growth today,” Beth Goldstein, an industry analyst for fashion, footwear and accessories at The NPD Group Inc., said during a presentation today at FN Platform in Las Vegas.
Shoe sales started to drop in February after peaking at $66 billion in August 2016, Goldstein said. Comparatively, footwear sales today are down 4 percent to $63 billion.
The analyst said a number of trends triggered the slump.
For starters, tax refunds hit later this year, thanks to IRS efforts to crack down on fraud, she said. Once refunds were sent out, consumers didn’t use them to shop.
Additionally, Goldstein said other categories are capturing consumers’ interests.
In particular, she said, consumers are focused on items related to healthy living, so they are cooking at home and purchasing products that help them relax – think candles and pillows.
“Staying in is the new going out,” Goldstein said.
What’s more, consumers are investing in products that help them create smart homes, where their appliances and TVs are all connected.
To highlight her point, Goldstein said 33 percent of consumers surveyed said they would buy things related to a healthy lifestyle, trailed by 20 percent saying they would spend on home improvements, 16 percent for travel and just 5 percent for fashion goods.
But there are bright spots.
She highlighted a new category, coined “festival season,” that gives brands and retailers an opportunity to market water sandals, rainboots and sport slides around events such as Coachella.
Goldstein also noted that the recent wave of acquisitions would lead to growth. She said the best examples could be seen at Steve Madden, Aldo Group, Coach and Michael Kors.