Consumers buying shoes more frequently; footwear brand loyalty undercut by inventory and price failures—AlixPartners study

New York (April 6, 2024) – AlixPartners, in partnership with Footwear Distributors & Retailers of America (FDRA), released its 2024 Spring U.S. Footwear Consumer Survey. The online survey of over 1,000 people, aged 15 and up, assessed purchasing decisions of consumers this Spring into Summer. Of note, it showed purchases are most consistently built around promotional moments when consumers can get their preferred brand at lower prices.

Inflation and economic pressures appear to be taking a toll, the study found. While consumers report buying shoes more frequently, they want them at a lower price-point; 42% of respondents are more likely this year to search for coupons or wait for a sale over last year. 

“We expect flat growth in the footwear segment overall heading into spring and summer 2024,” said Bryan Eshelman, Partner & Managing Director at AlixPartners. “It’s clear from the footwear consumer—specifically in the athletic/athleisure segment—that brands matter more than ever. The challenge for companies in those categories is scaling their direct-to-consumer operations profitably.”

“This report offers a crucial real-time consumer snapshot that shows inflation continues to impact behavior,” said Matt Priest, President and CEO of FDRA. “I speak daily with shoe executives who are working to transform their merchandising strategies to address rapidly changing consumer demand. We are seeing tighter margins across the industry than we have in some time—this is my main concern for our members coming out of this report. Furthermore, the footwear industry has worked to reduce inventory in the market and reduce new stock across categories, but have we reduced it enough? This report will certainly provide some excellent insights to strengthen sales strategies and inventory management.”

Athletic shoes were the bright spot, with respondents expecting to spend 2% more on the segment than last year; fashion and work shoes saw projected declines of 19% and 21% respectively. Brand preference stands out in the athletic segment, with 61% of respondents planning to shop for athletic shoes this spring and summer in branded online stores and 57% in branded brick-and-mortar, against 49% and 40% for nonathletic shoes in the same respective venues.

 

Retailers are missing opportunities to convert demand for brands

 

Brand is the third-most-important driver of purchases, and showed salience especially for purchases of athletic footwear, according to the survey. At the same time, the second-top reason for purchase abandonment is size out of stocks.  

More than a quarter of respondents said they are more likely to buy less expensive brands this year compared to purchasing preferences last year. However, when asked whether seeing a similar model or “dupe” on sale would drive a purchase, only 7% agreed. Customer wallets are constrained, but shoppers still want the real thing.

“Even though cost and availability are barriers to purchases, we aren’t seeing consumers trade down to cheaper options,” said Raj Konanahalli, Partner & Managing Director at AlixPartners. “Rather, we see signs that they would rather find ways to purchase the brand they want—whether through sales or coupons.”

“Although brands still wield significant market power and consumers are reluctant to trade down to cheaper ‘dupes,’ brands too often come up short in converting and solidifying customer loyalty due to across-the-board operational shortcomings,” explained John Breuninger, Director at AlixPartners. “Consumers were generally understanding of this during the pandemic, but no longer.” 

 

Room for AI to optimize inventory

 

Being able to try on the right size and shoe type in-store is a driver for 76% of respondents, according to the study, and 65% go to brick and mortar stores to get the item they want immediately. More than 70% of consumers indicated they intend to buy additional items at the same time as their footwear purchase. Both these trends are undercut by the prevalence of size being out of stock, the second-top reason respondents abandon purchases.

New AI capabilities can help companies optimize inventory levels at individual stores as well as across stores and in the e-commerce portal. Smart use of AI can reduce out-of-stock moments and limit excess inventory across sizes. Investments to improve forecasting, planning, and allocation processes will pay off more than ever through direct demand capture.

“The importance of having the right size, in the right store, in stock is old news, but with customers making store trips less frequently with larger baskets, the impacts of not being in-stock have increased,” Ryan Poole, Partner at AlixPartners, said. “Also, AI advancements in the last year have changed the game for planning and allocation, making it an investment worth scrutinizing.”  

 

Packaging is a wasted cost

 

Over half of consumers don’t think a box, dust jacket, or extra laces are important items to be included in their purchase -- it has little to no impact on purchase decisions. According to the survey, a majority of consumers still don’t look for sustainability when purchasing shoes, but there are a growing number willing to pay more for sustainability; 22% of respondents said they will not consider a brand or retailer that ignores sustainability considerations.

“Reassessing packaging could be coupled with sustainability initiatives to both reduce costs and create goodwill with consumers,” advised Mitchell Collens, Director at AlixPartners.

FDRA represents 95% of the footwear industry, working from footwear design through to retail to help the industry evolve, and advocate for policies that grow the sector. AlixPartners advises footwear manufacturers and retailers on digital-first retail strategies across the value-chain.

 

For more survey findings, please click here.