Vertical Focus: Footwear

Vertical Focus: Footwear

China SC Woes Have Footwear Industry Tied In Knots

The impact on the supply chain from lockdowns in China was a major themefor footwear retailers in the first half of 2022. Largely reporting lower-than-expected earnings, many major footwear brands pointed a finger at the lockdowns to explain their disappointing performance levels.

Strict and extended COVID-19 lockdowns in Shanghai, Shenzhen, and Qingdao set off a ripple effect across the industry’s supply chain, causing many footwear distribution centers, retail stores, and production facilities to close. In addition, the shutdown created transportation and supply chain bottlenecks at local ports, resulting in product scarcity and delays.

As a result, footwear brands are feeling a one-two punch from longer lead times for freight coming from the region as well as lost revenue due to store closures in the area.

Here’s a look at how some of footwear’s biggest players fared amidst these supply chain woes to date:

  • Crocs,Under Armour,Allbirds, andAdidasall reported headwinds to their businesses in China and offered weak guidance for the rest of the fiscal year.
  • Wolverine Worldwide (owner of Saucony, Merrell, Sperry, and Sweaty Betty, among others) is retaining a confident outlook for 2022, predicting a growth rate of 15% to 18%. However, the company predicted longer-term impacts to the supply chain that could last through 2023.
  • Tapestry, the parent company of Kate Spade, Coach, and Stuart Weitzman, cut its outlook for the fiscal year based on challenges from COVID-related pressures in China.

Does Footwear Retail Need a Hand(held)?

Handheld mobile devices may be what footwear retail stores need to get a leg up on the competition, according to a new report from technology news platform IMC Grupo.

Challenged by constraints including lack of store employees, time-consuming payment methods, inefficient inventory management, outdated enterprise resource planning systems, and cumbersome exchange and return practices, many footwear retailers have turned to handheld mobile computer solutions to boost efficiency, the report notes.

According to the report, footwear retailers embracing handheld systems can gain the following benefits:

Boost digital transformation and information management. Handheld personal computers handle data and information seamlessly, making it easier to manage retail functions in real time. This ability, in turn, means footwear retailers can more easily transform sales, order replenishment, and distribution processes.

Provide timely and accurate market information. In the apparel and footwear industry, it’s incredibly important for a store to keep revising and refining its marketing and product strategies. Handheld mobile computers deliver quick and accurate data that can efficiently inform and shape marketing decisions.

Improve customer service quality. Using handhelds, store employees can quickly and accurately check inventory and help customers find the footwear they are looking for, leading to improved customer service. In the case of a stockout, store clerks can use the handheld devices to help customers place an order for the desired item(s).

Facilitate efficient restocks. Inventory updates are crucial to ensure that footwear stores do not run out of stock. Handheld mobile computers provide swift information regarding goods, facilitating timely restocks without wasting time.

Sprinting Toward Zero Carbon Footprint

Footwear and apparel company Allbirds may just win the sustainability race. The company, known for its commitment to eco-friendly practices, has unveiled a new Tree Flyer performance running shoe that has a carbon footprint of 9.92 kg CO2e, all of which is offset to zero. How? According to the company, it’s a combination of innovative technology, renewable natural materials, and instantaneous material circularity:

  • Midsoles: While usually made from petroleum and 100% synthetic, the Tree Flyer’s SwiftFoam midsole material leverages natural castor beans, a renewable natural resource that has a 20% lower carbon footprint than a petroleum-based alternative.
  • Waste: Nearly 100% of the excess waste created while making the midsole is instantaneously recycled to craft the external heel counter.
  • Structure: The shoe also features a knit structure, made from Allbirds’ signature eucalyptus-based tree fiber.

The company notes that it has not sacrificed performance in the name of sustainability. Allbirds claims the Tree Flyer offers more bounce, more propulsion, and a 70% rebound rate that helps give runners more energy with every step.

Sneakers That Come Apart—On Purpose

While most footwear companies focus their manufacturing prowess on making sure shoes don’t fall apart, Nike is going in the opposite direction with two of its current products, deciding that indestructible shoes may not be the right goal to embrace. Some 300 million pairs of shoes per year are tossed in the trash in America, and take an average of 30 to 40 years to decompose, according to a2021 Wichita State study.

Instead, in an effort to help boost sustainability in the footwear industry, Nike developed its Nike Link and Link Axis shoes, which incorporate the concept of shoe “disassembly” into their design.

Using its innovative ISPA approach (Improvise, Scavenge, Protect, and Adapt), Nike’s designers created the Link models to emphasize flexibility and durability while avoiding the kinds of bonds and adhesives that typically make shoes difficult to disassemble and recycle. The Link can instead be pulled apart into three distinct pieces, eliminating the need for energy-intensive shredding or manual breakdown processes.

Nike also says that removing traditional adhesives also takes some energy out of the sneaker construction process in the way of heating and cooling the bonds, meaning they’re more sustainably constructed as well.

Consumers can return the disassembled Nike Link and Link Axis shoes to Nike stores for recycling.

Sizing Up the Global Footwear Market

There must be a lot of Carrie Bradshaws out there, as a new report from estimates the global footwear market will reach $440 billion by 2026. Here are some key takeaways:

  • Casual footwear, one of the most popular segments of the market, is projected to reach $213.3 billion by 2026.
  • The athletic footwear segment, which currently accounts for a 37.6% share of the global footwear market, is predicted to grow by 1.9% CAGR.
  • China, India, Brazil, Italy, Vietnam, Indonesia, Mexico, Thailand, Turkey and Spain are the leading producers of footwear.
  • Top footwear consumers and importers are the United States, Japan, Germany, UK, France and Italy.