Is the Footwear industry on the edge?
It has been 5 years since the Global Financial Crisis, and economic recovery is well overdue. The IMF cited that the two most likely global risks for economic resilience is, fiscal imbalances and income disparity. The Footwear industry has certainly been impacted by both. You should include adverse weather, which has seen winter collections and summer collections selling so slow, that sales have been the feature of most retailers for far too long.
According to Euromonitor.com () Apparel and footwear has seen an hourglass consumption shape for 2013. This means that consumers are paying for premium and economy products over the mid price products.
The pattern appears to be, that the little growth in 2013, was not in Europe. Look at these figures from Europe:
Italy had unemployment levels of 12% in general, and 35% amongst the young.
Switzerland’s low temperatures resulted in retailers selling summer products cheap.
The men’s footwear section was hardest hit in the Netherlands, men did not spend as much on athletic shoes in favour of pairing up smart/casual look.
Pretty much the same could be said for Spain, France, Greece, Portugal.
The few glimmers of hope came from Austria, Finland and Poland who all saw an increase of 1% in their apparel and footwear sales.
The rest of the world fared better, however still painting a picture of cautious sales.
In August 2013, journalist SUMIT BHATTACHARJEE from the Hindu.com The reporter spoke to CHUKKAPALLI PITCHAIAH, the founder of Popular Shoe Mart, who started the footwear business way back in 1962. Mr PITCHAIAH states the decline in sales is due to the lack of innovation, skilled manpower and inability of South India in staying in tune with fashion.
Here is a link to the editorial:
Perhaps this is why the second largest footwear producer in India, Relaxo, hired SALMAN KHAN for the Hawaii Slippers advert? SALMAN KHAN is a leading actor in Hindi Films and has over 80 films to his credit. He has a life-like model in Madame Tussaud’s and his face is sure to boost the sales of the Relaxo Hawaiian Slippers/flip flip range. Bollywood, are celebrating the 20th year of Hum Apke Hain Koun. A musical family drama that became a blockbuster and starred SALMAN KHAN.
The advert is very Bollywood in style, full of action to convey just the superb grip and strength the Hawaiians can provide. You see Salman ski, walk up the side of a burning building and even walk on water, all in aid of rescuing the damsel in distress.
What is evident in the video, is that SALMAN KHAN is no different to most men. When it comes to what drives their decisions on buying shoes the answer is COMFORT. Very simply, Salman states that if the shoe is comfortable he will “wear it all the time”. It helps that he has an entourage to wear in his shoes for him……watch the video to find out more
Back to statistics around the world. The highest growth areas were Russia with 18% and this was seen with an increase in the use of natural textiles and better quality of products, Vietnam at 8% and Peru and South Africa where good credit facilities existed in the retail units.
The winners in retail sales of apparel and footwear, would appear to be the “Bricks and Clicks” stores, such as Zara, H&M and Nike. They have embraced internet sales which is crucial when footfall in most retail units has dropped over the past five years. The footwear industry is seeing their margins squeezed with customers in search for the cheapest deals. It is easy to see why many independent retailers have closed or at best struggling.
The future however does not so bleak. IMF reports in their World Economic Outlook in April 2014, that the global economy is projected to grow in 2014 & 2015. The growth is stringer in advanced economies at 0.6-0.9% and emerging economies at 0.2% – 0.6%. The chronic fiscal imbalances are still evident but are under control and are projected to see the Percentage of public debt to GDP stabilise and then decrease gently over the next 5 years.
The future for the consumers remains variable, but what is known is men like comfort when choosing their shoes. They are prepared to pay for premium, because that means quality. And with less disposable income, shoes are a cheaper means in improving their looks and wardrobe, than buying a whole new outfit.
To answer the question about if the footwear industry is on the edge? YES IT IS. There will be a lot of changes, because the consumer is demanding that the retailer provide high fashion at a good price. They want it now, and they want to be able to change their minds and still get great service. What does this mean for the shoe industry? It means change, to keep up, it’s time to innovate your sales space, go on-line, use movie stars to sell your shoes. Appeal to new markets, the South African and Indian markets are set to export more to keep ahead of the game. Exporting to countries like China, South Korea with all their new shopping malls, Hong Kong and Russia where the consumer wants better quality.
The views in this article were collated through limited availability of material on the internet. It seems, that if you want research, you have to pay. It would be great to hear your opinions, experiences, concerns about the shape of the footwear industry, in particular the men’s shoe industry.
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