Footwear Market Research & Business Solutions

The NPD Group is the industry authority for the footwear market. Leading brands, specialty retailers, Wall Street analysts, and the media rely on our data of record and unique perspective.

Our comprehensive information and analysis about consumer spending and shopping behavior, analytics and modeling capabilities, Checkout Tracking℠ receipt-harvesting, and other solutions drive better business decisions.

From opportunity identification to program evaluation, uncovering competitive threats to boosting market share, The NPD Group knows the “steps” you need to take to succeed.

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Footwear
Products


Retail Tracking

The NPD Group has the largest POS footprint in the industry. We collect weekly and monthly sales data from over 30,000 doors globally, spanning all industry channels of distribution, including independent specialty stores, sport specialty stores, sporting goods, department stores, mass merchants, and e-commerce. This allows you to continuously monitor sales of men’s, women’s, and children’s sports apparel, footwear, equipment, and accessories.

The Retail Tracking Service delivers the most detailed point-of-sale information available to guide your critical business decisions. Standard measures available at the category, brand, and item levels include unit sales/share, dollar sales/share, and average selling price. Advanced measures available for specialty channels include inventory, margins, and GMROI.


Consumer Tracking

Stay on top of shifting preferences and trends with insights from consumer panelists who have agreed to provide information about their purchasing habits, usage, and attitudes.  You can use this information to analyze consumer behavior, preferences, and purchase drivers as input for product development, brand management, and marketing strategies.


Athletic and Outdoor Segmentation

Identify and reach specific consumer groups so you can efficiently target and capture your most valuable consumers. Use our athletic and Outdoor Segmentation to drive more sales using targeted messaging. It also can help you refine your merchandising mix and assortment once you understand the differences among key consumer segments. Seven athletic segments and four outdoor segments are included.


Geo Level Information

Assess regional strengths and opportunities, monitor competitive performance by region, and plan and evaluate effectiveness of targeted activities. Call on our insight into retail sales in specific regions or store groupings using Geo Level information from our Retail Tracking Service.



Footwear
Solutions


You have opportunities. You face threats. What you need are smart, quantifiable methods of distinguishing one from the other and maximizing your chances of success. NPD’s Analytic Solutions Group includes a team of senior leaders with extensive experience developing and delivering analytic solutions that address strategic marketing, sales, and planning issues.

We combine NPD POS and consumer information, industry expertise, and custom survey research – then add state-of-the-discipline research techniques and methodologies to explain the "why behind the buy.” Through advanced modeling and analytic services, we offer insight into what will happen in the future, not just what has happened in the past, answering your most pressing business questions:

See how clients have used our analytic solutions to solve their business challenges in our Analytic Solutions Case Study Library.


Footwear
Reports


Footwear
Press Releases


April 17, 2017

Shift in Footwear and Accessories Spending Sends Warning Signal for Retail Fashion, Reports NPD

The three key components of the $334 billion retail fashion segment, apparel, footwear, and fashion accessories, are each in different positions when it comes to the business, according to leading global information company The NPD Group. The apparel industry, which represents 65 percent of total U.S. retail fashion dollar sales and spans everything from basics to jeans, continues to enjoy the consistent growth experienced over the past few years. Conversely, the more trend-driven footwear and fashion accessories industries are now experiencing sales declines, keeping overall retail fashion sales in the 12 months ending February 2017 even with results from the prior year.


February 8, 2016

U.S. Athletic Footwear Industry Grows 8 Percent to $17.2 Billion in 2015, NPD Group Reports

The U.S. athletic footwear industry grew by 8 percent in 2015*, generating $17.2 billion and marking one of the best performances the industry has had in a number of years, according to global information company The NPD Group. Unit sales grew by 3 percent and average selling price by 5 percent, to $61.15.

Footwear
Insights


October 18, 2016

Three Trends Driving Independent Footwear Sales in 2016

Identifying top-selling and fast-growing styles is key to your success in today's competitive U.S. independent footwear market. Go to the source for ongoing insight that details exactly what's happening in the independent shoe channel and how it relates to your market. Identifying top-selling and fast-growing styles is key to your success in today's competitive U.S. independent footwear market. Go to the source for ongoing insight that details exactly what's happening in the independent shoe channel and how it relates to your market.


October 10, 2016

How We Predicted Sales for the Under Armour Curry 2 Low Basketball Shoe

Want to make killer products people love? If so, you need to distinguish the winning ideas from the losers, move fast to keep ahead of trends, and prepare yourself for the possibility of a hot category’s decline.


August 31, 2016

Learn What's Behind Your Brand's Share Gains or Loss

See how data and insights helped one footwear brand understand a sales decline and refine its marketing strategy to win back customers.


August 31, 2016

How Can You Convince A Retailer To Carry Your Brand?

The footwear market is changing fast. In-store foot traffic is down, and retailers are fighting for share. How will you expand your brand's value at your current retailers and make a case for new retailers?


August 30, 2016

How a Leading Footwear Manufacturer Increased Sales and Market Share

Just last year, a leading footwear manufacturer client sought help understanding the reasons for a cornerstone shoe’s year-over-year sales decline. The dip came as a big surprise, because the company had invested heavily in a new marketing campaign. The first natural assumption—the message did not resonate—wasn’t necessarily true. It turns out our client, through its media planner, had also changed the mix of media placements. It was entirely possible the new mix was not as effective as previous placements had been.


August 15, 2016

Case Study: Making the Case For Assortment Expansion

A major footwear brand increased their SKU listings over 50 percent at one large, national footwear specialty retailer. See how they did it


November 10, 2015

Segment And Sell To Gen Y: 10 Ways Younger and Older Millennials Shop Differently

The retail world is obsessed with Millennials.


August 10, 2015

What Feels Longer Than a School Day to a 10-Year Old?

Ahh the Back-to-School shopping season! That make or break time of year for many of the manufacturers and retailers who toil in the world of academic supplies and related paraphernalia. It can be a stressful time. And although the stress levels this year are likely no worse than usual, the stressful time is extending. The back-to-school season is now much longer than it used to be.


July 29, 2015

Gender-Neutral Retail

Our futures are no longer dictated by the sex organs we’re born with. Girls can be anything they want to be, whether a professional rugby player, engineer, CEO of a startup, or President of the United States. Boys can be artists, dancers, full-time fathers, and nurses. A macho male Olympian can transition into a beautiful woman. A graceful female model can develop facial hair and big muscles. The boys-don’t-cry era is behind us, and gender and sexuality are no longer the black and white concepts they were years ago.


June 15, 2015

Talking Shop

E-commerce is growing in the fashion and beauty world. Last year, 23 percent of footwear sales, 20 percent of accessory sales, 16 percent of apparel sales, and 11 percent of U.S. beauty sales took place online. And these rates have continued on an upward trajectory.


Footwear
Insights and Opinions from our Analysts and Experts


May 18, 2017

Sneakernomics: The U.S. Team Sports Equipment Marketplace

This week, NPD reached another important milestone with the launch of its team sports equipment tracking service: we now provide the most comprehensive reporting available on the entire universe of team sports equipment sales in the U.S. With this dataset, retailers and brands will be able to track and monitor overall trends; identify areas that  are over-performing or underperforming in the market; measure lift from promotions; and use historical and current volumes to enable informed decision-making.

At a high level, the $6.5 billion U.S. team sports equipment market grew by 1 percent in 2016*. This soft overall growth comes as no surprise given the negative trend we’ve seen in terms of sports participation in the U.S. More specifically, there were healthy gains in equipment categories including basketball, lacrosse, sport bags, and protective gear, which were offset by losses in golf, baseball/softball, soccer, and hockey.

Team sports equipment is a very brand diverse market, with many small brands making only a handful of items. The top ten brands make up only about half of the market. Of the top ten equipment brands, the growth drivers in 2016 were Wilson, Callaway, and Spalding. Driven by golf liquidation, Nike also fared well.

Given the cool, wet weather and delayed tax refunds, dollar sales were down in the first quarter of 2017. I expect sales to improve in the months ahead, as warm weather unfolds and parents equip their sports-playing children with their gear heading into the back-to-school season.

*Source: The NPD Group, Inc. / Retail Tracking Service

 

Data is representative of retailers that participate in The NPD Group's Retail Tracking Service. NPD’s current estimate is that the Retail Tracking Service represents approximately 70 percent of the U.S. retail market for team sports equipment.



May 8, 2017

Sneakernomics: Here Comes Gen Z, Part 2

In a recent blog I highlighted some of the major differences between Millennials and Generation Z. I get a lot of questions on how to understand the profile and values of Gen Z, and for brands and retailers it’s certainly necessary to understand this important next generation.

When asked to describe themselves, the most used word by Gen Z is “unique.” Gen Z wants to buy unique products, from unique brands, that are sold at unique retailers. They have also expressed that they’re willing to pay more for such unique products. Taking it a step further, they also want products that are tailored “just for me.”

Gen Z also seeks meaning in their work, relationships, products, and brands. They value relationships above all else. This makes them both tolerant and respectful. Gen Z also appears to have more “old school” work ethics, and I expect they will be hardworking, determined, dependable, and independent.

Gen Z believes that the community, if it comes together, can solve all problems. “Life hacks” (meaning a trick, skill, or shortcut that increases efficiency and productivity or solves problems) are revered. This makes Gen Z intensely collaborative.

As a generation that is out to change the world, Gen Z also wants brands to take visible stands on social issues. Human rights are the primary cause for Gen Z, and equality is non-negotiable. We can also expect more social change as this cohort gains the right to vote. With that, brands can no longer claim to be apolitical. If Gen Z does not agree with a brand’s values, they will take their business elsewhere.

For Gen Z, education is on-demand. They will learn things when they need to know them. We must learn new ways to teach them. In the Gen Z world, everything is “smart,” and all objects have behaviors.

Gen Z has moved from self to selfies. They have given up virtually all concerns for privacy, and they share everything. This makes them ripe for contextual marketing.

Brands and retailers must adapt to this new generation. In order to successfully serve Gen Z, brands and retailers must again adjust the way they market.

Because Gen Z wants a relationship with brands, they will seek out brands that share their values. Brands must earn their influence with Gen Z, and earn it every day.


May 3, 2017

Sneakernomics: Why Q1 Did Not Bode Well for U.S. Athletic Footwear Sales

Contrary to the positive overall results we saw in the first quarter of 2015 and 2016, Q1 was a mixed bag that left the total U.S. athletic footwear market down 3 percent for the first three months of 2017. Unit sales were down 2 percent and average selling price was down 1 percent for the quarter.

A warmer-than-last-year January started things off on a positive note, but the delayed EITC tax refunds crushed February as I predicted, as well as colder weather for the month versus 2016. Weak NBA All-Star Game sales also hurt the month. As a result, February sales were down in the mid-teens – the worst monthly performance in memory. March started off well, as the refund checks began to flow, but Easter’s shift to April hurt the end of the month.

For the quarter, men’s athletic footwear sales declined by 3 percent, kids’ sales we down 6 percent, and the women’s market remained flat.

The casual athletic category was a big bright spot for the industry in Q1, with sales up 36 percent versus the prior year, and over 20 percentage points greater than Q1 2016. Classics experienced an 11 percent increase, but this growth was well off the previous trend. The running category struggled in Q1, with sales down 5 percent. Weather shoulders part of the blame. Spring sports were off to a poor start – baseball and soccer footwear sales were each down by more than 20 percent.

In terms of channel performance, shoe chains fared the best of any channel, with sales up in the low single-digits, but this was well off the previous trend. Athletic specialty/sporting goods was again the channel to perform the weakest, with sales down in the mid-single digits. Department stores and national chains both declined in the low single-digits.

Nike, Inc. sales declined in the high single-digits for the quarter. The brand is still facing challenges in basketball, running, and cross training. Adidas sales grew nearly 85 percent, as the brand continues to double-down in the running and casual categories. The growth rate in classics slowed on the anniversary of the big Adidas push into the market last year. Under Armour (UA) athletic footwear sales declined double-digits in Q1, though the brand’s expansion into national chains helped offset significant losses in the athletic specialty/sporting goods channel.

The top-selling styles for Q1 based on dollar sales were the Jordan VI, Nike Air Huarache, Adidas Superstar, Jordan XIII, and Jordan IV.

I expect that the second quarter will be better than the first, with the late tax refund impact over and the late Easter/spring break taken into account. The market still has some Sports Authority liquidation hurdles to overcome, which will temper results somewhat.



May 1, 2017

Sneakernomics: Here Comes Gen Z, Part 1

I’ve written a lot about Millennials, but there is another cohort, Generation Z, that’s just as large in both scope and influence. While there are similarities between the two, they are distinct enough that brands and retailers must approach them differently. 

Gen Z is defined as having been born in 1997 or after, which means the oldest of this generation are in their late teens. This cohort is the most diverse ever—even more diverse than the Millennials—and they are also the most educated generation, being self-taught on the internet. Several major events have already taken place in the small window of time since they’ve been born, including 9/11, the first African American U.S. president, several instances of mass violence, and climate change.

I have described Millennials as tech savvy. Gen Z has taken this to a whole new level, which requires them to be tethered to their smartphones. They have only known a user-generated, wireless, and hyper-connected world. To them technology is invisible, but omnipresent.

This generation has never known a world without a smartphone or smart device. According to a recent NPD survey, 43 percent of parents have purchased a tablet for their children in the household*. This makes Gen Z both hyper local and hyper global; they are keenly aware of what is happening nearby and around the globe. This generation has been described as “prematurely mature;” because of the internet they know too much, too soon. This “loss of innocence” has made them pragmatic and resilient.

Like the Millennials, Gen Z is supremely confident and raised to “do anything you want,” but all the choices have made Gen Z risk-averse.

Gen Z is even more visual than the Millennials and their preference is for online information over print. They would rather watch a video instead of reading instructions. Rather than use Facebook, Gen Z views that as an “older crowd” platform and instead prefers apps like Pinterest and Instagram, as they favor pictures over text. Successful marketing will speak through images rather than words.

As with Millennials, marketers must listen rather than talk. Brands must be completely transparent, which earns trust.

Just as the Millennials changed the way brands and retailers approach the business, so will Gen Z. The business advantage goes to the retailers and brands capable of successfully marketing and catering to both groups. 

*Source: NPD Connected Intelligence, Mobile Connectivity Survey, January 2017


March 15, 2017

Sneakernomics: Marketing with Millennials, Part 2

How can brands and retailers better resonate with Millennials, who hold tremendous influence now and in the future? It starts not with knowing, but understanding them.

Millennials are focused on societal needs. They feel a great sense of community with their generation, including those around the world. Millennials tend to support progressive causes including a higher minimum wage, and are willing to pay higher prices to pay for these causes. Their beliefs are integrated into their choices as consumers.

Tying into that, Millennials feel compelled to make the world a better place. They have been described as “conscious capitalists,” and expect corporations to be “good citizens.” They believe brands should participate in causes and be a force for good.

Millennials’ shopping behavior is not passive, but it’s a social experience to be shared with friends. Millennials want to interact with brands, to co-create products and to participate in the brand experience. They want to discover new and dynamic products from a proven name, approved by their peer group. Millennials today are looking for relevance and authenticity. They want to develop relationships with brands that deliver a personalized, customized experience. Brands that don’t understand and respond to these needs will fail.

Millennials seek brands that feel unique to them, and make them feel unique. These brands have been vetted and approved by their peer set. Taught to be curious their entire lives, they are incredibly smart, savvy, and know how to research a brand. Millennials don’t see a boundary between consumers and brands.

Consequently, Millennials are more engaged with products. They want to interact with brands and want to share feedback. They want to collaborate with brands. Brands must create a feedback loop that allows Millennials to share their thoughts.

Because Millennials are internet trained, there is an expectation for instant gratification. Email is too slow and cumbersome, while text messaging is more immediate and can be used when a phone call is inconvenient. Twitter, Instagram, and Pinterest share thoughts in real time.

Seeing as Millennials are so digitally engaged, and have shared so much knowledge with their peers, they are early adopters of new ideas, concepts, and products. This will drive the speed of change even faster than we’ve known. Leveraging early adopters will build brand equity.

The concept of branding has changed in that Millennials are so much more aware of a product’s attributes and issues, and therefore consumers are much less brand loyal. If a competitor’s product is perceived to be better or to perform more in line with their needs, they will change in a heartbeat. Consequently, brands must keep their consumers well-informed and up-to-date, not just on what’s in the market now, but what’s coming next.

Millennials have been hit hard by the Great Recession. Good paying jobs have been hard to find. Many are saddled with massive college debt. This has created a frugal generation, and Millennials are always looking for value; however, don’t read frugal as cheap. Millennials may be cautious with their purchases, and research them extensively, but if they decide a more expensive option is the best solution, that’s the decision they will make. Millennials want value for their hard-earned money.

In the words of Simon Sinek, “People don’t buy what you do; they buy why you do it.” This line captures the essence of the Millennial generation’s core values. Though diverse and complex, Millennials as a whole are connected, digitally engaged, and value conscious. Brands and retailers must market their products today in a way like never before.


March 7, 2017

Sneakernomics: Marketing with Millennials, Part 1

Brands used to market to Boomers; successful brands today market with Millennials.

Millennials, or the generation born between 1981 and 1996, are now a larger group than the Boomers, who were born between 1946 and 1964. They account for one-third of all retail spending, and soon they will represent 50 percent of the workforce. In the sports industry, 90 percent of athletic footwear gains in 2016 were driven by Millennials or the proceeding generation, Gen Z. These two cohorts accounted for 70 percent of sneaker sales in 2016. 

The Millennial generation is much more diverse than previous cohorts, being 38 percent non-white compared to the Boomers, who are 22 percent non-white. In addition, with more than one-third of Millennials having a college degree, this generation is also the most educated in history.

Millennials are constantly interviewing brands, meaning that a brand has to prove itself, every day. For Boomers, there were fewer shopping choices, shopping outlets, and sources of product information. For Millennials, those elements are infinite. On top of that, these elements are always in their pockets, on their mobile devices.

Many Millennials have never known a world without the internet. Because of that, Millennials are more connected to each other than any previous generation. This means they share everything. When they want to know something or get an opinion, they consult their peer group. As a result, Millennials’ groups are much, much larger than those of the boomers. 

Boomer generation marketing was reactive. Brands ran an ad campaign and measured how many consumers responded. Millennials don’t react, but interact. They are part of the branding process, from sharing a great YouTube ad, to advising friends on purchase experiences, to giving positive and negative feedback directly to a brand. Remember, just because it’s easy to hit the “Like” or “Favorite” button, does not mean those recommendations are given out lightly (and a “Like” is just as easily reversed).

Contrary to the shopping experience Boomers are most familiar with, physical stores are no longer the place where consumers learn about products; they are the places to try out products, not research. Millennials go to physical stores to see if products fit or if the color is right. Physical stores must adapt to this fundamental shift.

Malls are no longer where young people hang out; now they hang out on their phones. Next time you are in a mall (and I’ll bet it will be a while), go to the food court. Most of the people there are retirees, nursing a cup of coffee. The top-end malls will survive, but the rest are doomed.

“Omni” or “all” channel is old-school thinking. Millennials don’t care about your businesses logistics or Chinese walls. They want what they want, whenever, wherever, and however they want it. If your brand can’t offer it to them that way, they will move on. Your brand experience must be completely transparent and seamless, with no hidden quirks. There is only one channel: all of it.

The lesson here is, engage rather than market; listen well and respond; and provide value. Find out where your customers are living—digitally—and involve them there. Seek interaction, not reaction. Market with Millennials.


February 23, 2017

Sneakernomics: How Golf Lost the Millennials

2016 was not kind to the golf industry. Nike announced it was exiting the equipment business, Golfsmith went bankrupt and shuttered, hundreds of golf courses closed, and Ben Hogan filed for bankruptcy (again). The largest brand, Taylor Made, with the greatest share and best roster of players, is for sale and seemingly cannot find a buyer. What’s going on?

Golf rounds fell sharply at the beginning of the Great Recession, but as the economy has improved and the recession officially ended, rounds have not bounced back. Some elders lost too much of their retirement savings in the recession to spend on golf, but the real issue is much deeper than that.

In order to offset the decline in rounds, golf manufacturers released too many new and competing technologies. New releases were coming out so frequently that the consuming public could not keep up. This created a glut of deeply discounted products that were not moving off the shelves.

Big-box golf retailers showed nice growth in the early days of the recession, but that growth largely came from industry consolidation. As courses closed, so did the pro shops. The failing golf business forced mom-and-pop golf shops to shutter. Market share flowed to big-box, masking the underlying trend.

What happened to create this reversal of fortune? The golf Industry failed to attract Millennials to the game. The National Golf Foundation reported that there were 400,000 fewer golfers in 2013, with 200,000 of the decline coming from Millennials.  Since Millennials represent 25 percent of the nation’s population, this decline is devastating to the sport.

So, why don’t Millennials play golf?

Millennials value ease, speed, and efficiency in their endeavors. Raised on the internet, “instant gratification” is the expectation. Over four hours of essentially doing the same thing over and over is against the idea of speed and efficiency.

They are also the most inclusive generation. Millennials want to share their experiences with as many friends as possible. Golf says, “all of you can play, as long as it no more than four. Boomers, on the other hand, value exclusiveness. The idea of paying to have the privilege of exclusive membership to play golf is counter to Millennial values.

Millennials are the most diverse generation ever, and they have embraced diversity like no other generation. The lack of diversity at Augusta National, the crown jewel of the sport, is just one example of how golf does not qualify as diverse. Mark King, former President of Taylor Made/Adidas Golf cited the lack of “minorities playing, women coming into the game” as reasons for golf’s decline.

Millennials’ most important crusade is the environment. Golf is not green. Many courses smell like a chemical factory. Courses require tremendous amounts of water to stay in shape.

Millennials were hit hard by the recession. This caused them to seek value in every purchase. They are willing to spend on things they think are important, but always look at purchases with a value lens. Spending big money on rounds and equipment apparently does not connote value to Millennials.

Golf rules are Byzantine. Compare the USGA regulations to the “Spirit of the Game” in a favorite sport among Millennials, Ultimate Frisbee: “Spirit of the Game. Ultimate relies upon a spirit of sportsmanship that places the responsibility for fair play on the player.” This is essentially the only rule in Ultimate.

At least for the time being, the values of golf do not match up with the values of Millennials.  Golf has lost the Millennials.



February 14, 2017

Sneakernomics: Tax Refund Delays Can Hurt the Sports Business

In 2015 Congress passed the Protecting Americans from Tax Hikes (PATH) Act. One of the main provisions of PATH was to slow down taxpayer refunds for the Earned Income Tax Credit (EITC) and/or the Additional Child Tax Credit. The slowdown was intended to give the IRS more time to investigate for fraudulent claims. It is estimated that about 28 million taxpayers filed for EITC in recent years.

The effect of this slowdown in payments means that the IRS will not be issuing EITC refunds until February 15, 2017. Taking weekends, processing time, and the Presidents’ Day holiday into account, estimates are that refunds will not begin to be received until February 27, and many may extend into March.

EITC benefits low to middle income households with children. It allows parents to claim up to $3,300 for one child and more than $6,250 for three children. The magnitude of the credits is in the tens of billions of dollars.

Since most low to middle income families are living paycheck to paycheck, this tax credit is a financial windfall. Many low to middle income families spend their tax refunds as soon as they receive it.

The timing of the refund has a profound impact on sports retail, particularly sneaker sales. In years past, processing glitches have delayed refunds and the industry suffered until the refunds hit.

We can expect a soft February for sales of athletic footwear and apparel due to this new law. While the industry will make up these sales in March, it will make trending difficult and retailers and brands anxious. Coupled with a late Easter this year, Q1 will be a challenging one for the sports industry.



February 7, 2017

Sneakernomics: Sports is Catching the Disease that’s Killing Retail

My colleague Marshal Cohen recently wrote a blog, “An Urgent Message for Retail,” and in it he states that during the holiday season, “…consumers appeared to have grown numb to the early and constant promotions” and “[w]e have witnessed the demise of promotion’s reign as king of shopping influencers.”

The sports industry has been relatively immune to the cancer of relentless promotions – at least until Holiday 2016.

Sure, there has been discounting in the sports categories that are in systemic decline. Golf and fitness equipment like treadmills are two that come to mind. For the most part, though, the sports industry has been able to avoid counting on deep discounts to drive sales. Until now.

Holiday 2016 will go down as one of the most aggressively promoted years in sports retail. Here are some examples as to why, and what it means for this year.

While the massive sweatshirt category has been in decline for more than a year, brands and retailers seemed to think that it would magically bounce back. Instead, it took “40% off” pricing to produce a meager sales result and clear distressed inventory. With such deep discounting this leads me to think, what will it take to grow the business in 2017? Also, mid-market footwear retailers began boot promotions with “Buy One, Get One Free” starting on Black Friday. No one makes money with deals like that. Some brands also began to weaken or ignore their own “Minimum Advertised Price” policies in an effort to spark sales and clear stocks. This led to a free-for-all discount environment, which will continue into 2017.

On another note, NPD has found on several occasions that consumers are not purchasing products, including clothing and accessories, adorned with giant logos the way they used to do. Yet, sports brands and retailers trotted more of the same, in the hopes of achieving a different result. This caused markdowns to ensue.

In addition, an athleisure “bubble” was created as more fashion brands and retailers tried to grab a piece of the still strong category. Hundreds of new brands tried to jump in on the performance apparel boom. As they fail in 2017, the market will be flooded with deep discounts on poor imitations of activewear.

Of course, the ongoing retail rationalization has yet to improve this toxic situation. We won’t see any relief for this in 2017 either. More sports stores will likely close in 2017.

The sports industry is headed down the path of the teen retailers, where steeper discounts are no longer effective in clearing stockrooms, let alone driving sales and profits.

So how does the sports industry avoid this slide? We must get back to the core principles that built this business.

The sports industry is an inspirational and aspirational business. We inspire others to get fit and to improve their sports. Participants aspire to make themselves better. A race to bottom on price does neither.

Unrequited demand is another fundamental strategy in the sports business. If demand is not met, there is no need to promote.

Innovation has always been a cornerstone of the sports industry. Even in the distressed sweatshirt category, innovative and more technical products sold well this holiday and posted big increases. We must find ways to keep innovation strong. This will help fend off the athleisure bubble as well.

The sports industry has always been about premium and exclusive products. We must emphasize the premium nature of our business and avoid trying to grow by the lowest prices.

Segmentation has also been a core principle in sports. We must double down on having clear and distinct lines for different categories of retailers. Brands must also intentionally rationalize the number of retailers in the space, buy elevating the winners and letting the others improve or fall by the wayside.

Finally, the sports industry must stop chasing artificial targets set by Wall Street. Driving to an arbitrary growth target is a recipe for disaster. Brands and retailers must do what is right for the long term health of their businesses, rather than a short term and inconsequential goal set by the stock market.

If the sports industry can return to its core values, it has a much greater chance of being healthy once again.


January 26, 2017

Sneakernomics: Are Sneakerheads Important?

About every month or so, someone in the mainstream media will “discover” that sneakerheads exist. They often seek me out to ask what drives this phenomenon and what their value is to the market.

A formal definition of a sneakerhead is a person who collects, trades, and/or admires sneakers as a form of hobby. Sneakerheads, like most collectors, are passionate and dedicated to their subject. Many are very knowledgeable about the origins and history of sneakers. Many spend a great deal of time and money studying the category and its past, while building their collections.

I have a deep respect for the passion, commitment, and knowledge that sneakerheads possess.

Sneakerheads have been around since brands began to associate athletes with particular shoe styles. In the 1970’s, the best New York City street ballers had the coolest and rarest shoes, which were supplied by the brands. When Nike reintroduced the Air Force 1 at the behest of East Coast urban retailers, the fervor ratcheted up a notch. Serious collecting started with the first Jordan shoe, banned by the NBA. Other brands entered the act by signing players and creating special shoes just for them. Later, when Nike began re-issuing “retro” Jordan’s, new and old collectors sought to start or fill in collections. Then sneaker collecting was off to the races.

With the advent of the internet, we reached a whole new dimension in the world of sneakerheads. Isolated collectors could now connect with each other. Rumors about releases and special products bounced all over the web. Opinions about favorite shoes could be shouted (and shouted down) across time zones and continents. All of this helped heat up the sneakerhead world even further.

And then came ways to buy and sell your favorite sneakers through peer-to-peer websites like eBay. This changed the game dramatically. Soon, rare styles were selling for multiple-times their original retail value. Prices escalated, which brought on opportunists.

Finally, brands began to do collaborations with artists, musicians, and celebrities, creating specially designed, extremely limited edition styles. The brands intended for such shoes to give them further hype and credibility within the sneakerhead community. Because collaborations were very limited in quantity, they became highly desirable. Collaborations created yet another market for collectors.

Very quickly the sneakerhead world went from collecting for fun to profiteering. As resale prices escalated on limited edition shoes, a new type of “sneakerhead” came into being: the speculator. Looking merely to make a quick buck (or hundreds of quick bucks), many more buyers got into the game with the sole intent of flipping limited edition shoes, sometimes on the same day they bought them.

Sneakerheads have always sold and traded their shoes, but never to this degree and intensity. The introduction of a large number of resellers has raised the resale prices of shoes and kept traditional collectors from acquiring the shoes they coveted.

Sneakerhead sales information has always been a little tough to pin down, but one angle is to look at the sales of the kinds of shoes that sneakerheads are interested in and make an estimate. These shoes are generally Brand Jordan retro or marquee basketball shoes (endorsed by big-name players), or shoes tied to collaborations (though these are very limited in terms of the number of pairs available and don’t amount to much in sales). Of course, we cannot assume that every one of these shoes went to a sneakerhead; however, even if we take all of these shoes into account, the portion is still less than 3 percent of the total U.S. athletic footwear business, which is hardly a substantial number.  

Since sneakerheads have a rather minor impact on overall retail sales, how else can we assess their impact on the business?

The sneakerhead “press” has little influence outside the sneakerhead community. The sneakerhead media is comprised of everything from very large and sophisticated publishing organizations, to guys doing YouTube videos in their mom’s basement. All live in fear of offending the brands that they depend on to keep them fed with pictures and information about upcoming releases. In the sneakerhead press, there is very little original content and frequent cut-and-pasting of content from other sources. Because the sneakerhead media is unwilling or unable to speak the truth to power, their influence is very limited, except inside the echo chamber that is sneaker culture.

Individually and for the most part, sneakerheads lack a voice outside the echo chamber. Nevertheless, astute brands and retailers are listening to their collective voice. If the overall sentiment is very good or very bad about a particular product, color, or material, brands and retailers should adjust their plans accordingly. As I have often said, the most important thing to remember in using social media is not to talk, but to listen.

Sneakerheads are a deeply committed community of collectors and aficionados. They do not represent a major portion of sneaker sales, and while they do create a lot of hype and buzz that can be good for brand equity, this brand equity is difficult to measure. Within the echo chamber, the voices of sneakerheads are loud, but those voices do not carry.


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