Talks on transit, trade and supply chain strategy kicked off the FDRA’s Footwear Trade Distribution & Customs conference today in Long Beach, Calif., a fitting destination as one of Southern California’s busiest maritime shipping ports.
At the crux of the hot topics was the power of packaging — a space where big and small players can reduce costs, embrace sustainability and add value to the customer experience. Allbirds, for instance, incorporates an attractive design inside its packaging with notes on the specific style, sustainability and information on how to return the product.
Matt Priest, president and CEO of FDRA, told FN that to remain competitive, brands should similarly be more “thoughtful” about creating an experience.
“It’s part of the fun, like opening up a present for yourself,” Priest said. “I think it is a trend, but it’s going to be even more prevalent because if you look at our overall sales; our internal numbers show e-commerce is off the charts with double-digit growth year after year. Brick and mortar is having an okay time, but remaining toward flat lining. As more and more customers are being serviced by the brand (via e-commerce), it’s something they’re going to have to tune in to.”
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However, to counter theft of products left on porches and on doorsteps, discreet packaging and secure drop-offs are key.
“Amazon has the ability to empower an Amazon delivery person to go inside your home — whether it’s remote unlock or some kind of code,” said Priest. “It’s a feature Amazon provides now and I think you’ll see more of that — providing access to trusted delivery people to bring merchandise into your home.”
Increasingly, consumers are demanding sustainable products, but different brands have their own narrative of what that means, Priest said. Vivobarefoot, Rothy’s and Adidas are among the brands that have collections made of recycled water bottles. Last year, Bed Stu announced that it aims to transition its organic collection entirely throughout the brand.
“For us, as an organization, it’s about how we get to the factory level — how do we drive zero waste in factories in China? How do we make the economic case to the factories and get to the ownership groups on how to cut materials effectively and sell byproduct down the line?” Priest explained. “Taking products out of the landfill is what we’re focused on.”
Of course, trade policy and legislative instability can impede planning on all fronts of business.
“We pay $3 billion in duties in the footwear industry every year in a normal year, if at the end of the year we only paid $3 billion, then that’s a good year because we avoided increased tariffs,” Priest said of the economy.
“The best-case scenario is that we stay off subsequent lists the Trump administration has been rolling out as it relates to Chinese products. Worst-case scenario is that we have a 25 percent duty rate on top of what we already pay on footwear from China. That’s a big concern of ours. The up and down nature of this administration takes away one of the things that any business organization is empowered to do — try to create certainty. How do you make sourcing decisions behind this uncertainty?”
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