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Sneaker Retail Obsession is More Real Than Ever


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Recently, consumers have become more and more interested in the sneaker industry, leveraging sales and demanding for more. Sales for the sports footwear market grew by almost 50% in 2017, through brands like Nike NKE , Adidas ADDYY , and more recently Vans, owned by VF Corp. VFC . It seems as though this sneaker trend and obsession stems from the younger generation. According to Forbes, millennials spent $21 billion on footwear in 2014, a 6% increase from the prior year.

What Brands Are Trending?

We all know of the major sneaker brands - Nike and Adidas. In the past year, Adidas has seemingly been doing better than Nike, with all the World Cup sponsorships, new lifestyle sneaker releases, and brand endorsements. However, in a survey by investment firm Piper Jaffray, 41% of consumers identified Nike as their favorite footwear brand. Trailing behind Nike was streetwear brand Vans at 19%, making it the only other brand that has come that close to Nike.

In its recent quarterly report, VF Corp. posted a 26% increase in Vans brand revenue, with an overall total of almost $4 billion in revenue. According to Quartz , Vans pushed out Nike as the number one brand among upper income females. Women have been ditching their high heels and turning towards sneakers, because it's all about comfort now. Sales of heels have declined 11%, whereas sales for women's sneakers have increased 37% over the past year.

It's no surprise that sneaker retail has increased over all demographics. These brands have created strong brand loyalty amongst their consumers and continue to see an increase in revenue because of that. Consumers are looking for the same thing they did with athleisure clothing - comfort, but presentable. Not only do sneakers work for athleisure, but people have started wearing sneakers with business clothing and more so have made it an everyday clothing item. According to Retail Dive , VP and senior industry analyst of NPD group, Matt Powell, stated that sneakers outpace both dress and casual shoes combined, and that it's more about a look and lifestyle for consumers now.

What's Next?

Sneaker brands are constantly innovating and creating new products for all of the "sneaker heads" out there. One thing for sure is that consumers all over the world, know what shoe is coming out next and where to buy it. Not only does that make a difference to the overall success of this industry, but also the fact that this success gives the brands a lot of choices when it comes to distribution channels. For example, Nike is distributed from its brick-and-mortar store, online and through third party stores such as Footlocker FL , Finish Line FINL and Dicks Sporting Goods DKS . When these brands do well, more distributors will be willing to keep their products in stock, which is a win-win situation for both.

With the recent success of brands like Vans, it is clear that the sneaker industry is only continuing upwards. With new releases and unique products, these footwear brands are only looking to find ways to increase consumers and sales. It can be said that this sneaker obsession that consumers seem to have is really driving sales upwards for its respective industry.

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Foot Locker, Inc. (FL): Free Stock Analysis Report

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NIKE, Inc. (NKE): Free Stock Analysis Report

Adidas AG (ADDYY): Free Stock Analysis Report

V.F. Corporation (VFC): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.





This article appears in: Investing , Stocks
Referenced Symbols: FL , DKS , NKE , ADDYY , VFC



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