As the coronavirus pandemic rages on and national vaccinations efforts are plagued with challenges, shoe industry leaders have a bevy of issues to contend with as they chart the path forward for their businesses.
Still, most of the 100 industry executives surveyed by the Footwear Distributors & Retailers of America for its first-ever quarterly shoe business outlook report, indicated they’re feeling optimistic about the future.
According to the FDRA, the bulk of the industry is “sanguine” on the outlook for both the United States economy and shoe shoppers’ buying power, with 74% of survey respondents indicating they see a stronger six-month outlook for both the economy and footwear consumers’ buying power.
Nevertheless, asked to select their company’s biggest issue for the next six months, 35% indicated they’re concerned about production and supply chain costs. Perhaps it’s unsurprising as steep tariffs initiated by former U.S. president Donald Trump remain in place and West Coast port issues reach a fever pitch due to COVID-19 induced disruptions and heavy container volumes.
Meanwhile, about 32% of shoe executives indicated they see “new consumer behavior shifts” as the top concern. Many firms have had to dramatically shift resources to digital since the global health crisis took hold in the U.S. last March. They’ve also had to invest in convenience services such as buy online pickup in store, curbside pickup as well as contactless and flexible payment options. At the same, quarantine-inspired product trends boosted categories like athletic (see: running and hiking shoes) and comfort (and athleisure) at the expense of dress shoe and sandals. Now, with numerous studies indicating that many COVID-caused behaviors are likely to stick, execs are understandably fortifying their strategies in hopes of making sound predictions and investments on the areas of consumer behavior that have been permanently shifted by COVID as well as those elements that will remain in flux.
Nearly 18% of leaders surveyed by the FDRA indicated COVID itself was a top concern; 9% said labor such as costs, quality and shortages was top of mind; 3% chose government issues such as taxes and regulations; and another 3% selected inventory and/or retail prices.
Forecasting their plans for the next months, execs were evenly divided on how their operating costs have trended compared to six months ago, but nearly two-thirds expect operating costs to rise over the next six months.