For most of 2020, consumers have prioritized spending in industries such as home, technology, toys, and sports equipment to support their work- and play-from-home lifestyles. You can probably relate to this on a personal level. As a result, footwear and accessories have been among the most challenged industries this year, down -22% and -27%, respectively, since March.* With few places to go, new fashion just hasn’t been a priority. This behavior is not expected to change during the holiday period, but as we are seeing in complementary industries including apparel and beauty, footwear and accessories categories that align with consumers’ current lifestyles will emerge as winners.

Tidings of Comfort and…Cozy

I’ve talked a lot about comfort, convenience, and curation as drivers of successful product in both the footwear and accessories industries. These factors remain important, but for this season, we can also add casual and cozy to the mix. While these aren’t new trends, they have been taken to the extreme during the pandemic (my inbox is currently stuffed with “cozy” subject lines). This bodes well for footwear this season, because the brands and items that tap into these trends are typically big holiday items anyway. As a result, I’m optimistic that footwear can make up some lost ground this holiday. In fact, according to NPD’s Future of Footwear report, footwear sales are projected to decline in the mid-single digits during Q4 – a significant improvement from year-to-date trends.

Slippers have grown +50% in year-to-date sales** and I believe there is still opportunity in this category, given the infusion of fashion and innovation it has received. Holiday is already the biggest time of the year for slippers, and this year it will be even bigger. Similar products will follow suit: Crocs, lined/fuzzy sandals, and a newer crop of hybrid casual styles that combine slippers, shoes, and sneakers. Fashion shoes and boots will likely be soft, but the cold weather casual business has already picked up – driven by that coziness factor, as well as the potential anticipation of spending time outdoors this winter.  And we simply can’t ignore the strength of the UGG brand right now, a key driver of this category.

The Miracle of Marketing

In accessories, there is opportunity for cold weather products as well (including warmer face masks), but overall the industry is suffering from lower demand because far fewer people are going to the office, social events, and/or traveling. That’s not to say there won’t be bright spots, but it’s all in the marketing; what do consumers need for outdoor outings; quick, close-to-home errands; or working from home? Backpacks, card cases, and cosmetic bags may continue to stand out, as well as jewelry as a great “Zoom” accessory. The luxury space, such as designer bags and fine jewelry, presents an investment opportunity for consumers less impacted economically by the pandemic and with some savings due to reduced spending on travel, dining out, gym memberships, etc.

Digital Will be in the (Sleigh) Driver’s Seat

The growth of e-commerce has been the big story all year. We are heading into the holiday season with an online penetration over 10 points higher than it was last year for footwear, and 15 points higher for accessories***.  And while the percentage of sales generated online generally increases for holiday compared to the prior months, in-store has historically remained the primary driver of sales. This year, holiday will be digitally driven – we’ll approach, if not exceed, half of sales generated from e-commerce, and more of the dollars generated in-store will have originated with online research as consumers look to make their store trips more efficient and transactional.  According to an NPD/CivicScience poll conducted in late August, 35% of consumers noted that they had shopped in-store for clothing, footwear, or accessories in the past 30 days, and almost all of them had made a purchase.

The Gift of the Last Minute Lift

No matter how hard retailers push to encourage early holiday shopping, there will always be a contingent of last minute shoppers. Last holiday, for both footwear and accessories, Super Saturday week was the peak, and Christmas week saw the fastest growth. Despite the increased digital focus, stores will also play an important role this year, particularly since shipping options will become limited as the holiday approaches. Options like buy online pick-up-in-store and curbside pickup will be key.

Tie it With a Bow

Bringing all of this together is the fact that many consumers may be thinking ahead to early 2021 and their planned in- and out-of-home activities to determine what to buy for themselves and others this holiday. Therefore, it will be more important than ever for footwear and accessories brands and retailers to relate their messaging and merchandising to consumers’ lifestyles. My family and I plan to continue our social and active pursuits outside this winter, so that will have a big impact on what I purchase this holiday – and I imagine for many others, too.

*Source: The NPD Group/ Consumer Tracking Service, 6 months ending August 2020 vs. 2019
**Source: The NPD Group/ Retail Tracking Service, 6 months ending August 2020 vs. 2019
***Source: The NPD Group/ Consumer Tracking Service, 3 months ending August 2020 vs. 2019

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