One of the cool things about working for NPD is having the ability to share insights across industries. My colleagues and I recently explored the penetration of e-commerce within the industries we track and discovered that footwear has one of the most developed businesses online. In 2018, 29 percent of all footwear was purchased online in the U.S. and online sales of footwear grew faster than those in physical stores.* I believe this figure can rise to 50 percent in the foreseeable future, and penetration can grow significantly across the broader sports market.
While e-commerce giants pose big competition, brands and retailers are successfully building their own niche, online platforms and there remains plenty of room to grow in this space.
The greatest driver will be brands’ direct-to-consumer (DTC) businesses. Over the last few years, DTC has accounted for nearly all the growth we have seen in athletic footwear, and most of that growth has stemmed from online. Virtually every brand is committed to aggressively growing their DTC sales, even at the expense of their wholesale partners. We will not see this emphasis abate.
Retailers are also committed to growing through e-commerce. Every major retailer has their own dedicated website. Smaller retailers who cannot afford an online business will get left behind.
The space limitations that exist in physical retail are not an issue online. No store can carry every color nor can they stay in business carrying every size. The internet does have every color and is in much better shape on sizes.
In the spirit of striking the right balance, the most successful retailers will be those who “blend” the digital and physical. Consumers want a seamless shopping experience, as they buy whenever, wherever, and however they want. Retailers must integrate these two elements, using the physical store as part of their fulfillment strategy.
Finally, we can expect continued retail rationalization. As we saw with The Sports Authority bankruptcy, a significant portion of that business went to the web. Every store closure opens the door for online business to grow.
There will always be a need for physical stores in the sports industry; however, with far too many stores selling the same stuff, we can expect this restructuring to continue. In the near term, e-commerce will capture a growing share of the total.
*Source: The NPD Group/ Consumer Tracking Service
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The Future of Style
Date: May 18 – 20, 2021
Description: Welcome to the Future of Style, an in-depth exploration of the global fashion industries encompassing beauty, accessories, apparel, footwear, and sports..