Tuesday, 10 May 2016
A New Lifestyle Trend to Foster the Athletic Footwear Market
Increasing concerns towards fitness coupled with rising discretionary spending towards functional and trendy athletic wear to boost the market demand
The only thing which will always remain in vogue is staying healthy; and, what is the best and most natural form of exercises other than running and walking? Athletic footwear—designed for different sporting and various outdoor activities - is used by health-conscious across demographics to maintain a stay fit. Not only the footwear help the individuals of all ages and gender to maintain a healthy lifestyle, they are getting more fashionable and trendier. Athletic footwear market consists of different product categories: running shoes, hiking and backpacking shoes, aerobic and gym wear shoes. They come in varied colors and designs, and caters to customers of all classes. A noticeable trend shift from performance sportswear to retro and casual types have already begun catching up across non-athletes; an increasing number of non-athletes are using trendy trainers and comfortable athletic footwear for day-to-day activities. Increasing concerns towards fitness and overall well-being coupled with rising discretionary spending towards health products are factors that boost the demand of athletic footwear. As per a recent report by Allied Market Research titled “World Athletic Footwear Market - Opportunities and Forecasts, 2015-2022”, the world athletic footwear industry would generate revenue of $114.8 billion by 2022, growing at a CAGR of 2.1% from 2016 - 2022. Asia-Pacific is a lucrative market and contributed maximum revenue in 2015, followed by Europe.
The Athletic Footwear Market is driven by attractive promotional strategies by footwear companies, rise in online sales through e-commerce and expansion of athletic retail chains by leading footwear companies. Key players including Nike, Adidas, and Under Armour plan to gain on new marketing opportunities for their brands through brand endorsement and innovative agenda of customization options to customers. Furthermore, the application of 3D printing technology in shoe manufacturing has unlocked new growth opportunities in the market, especially across major regions such as North America and Europe. The rise of “athleisure”—athletic apparel worn in non-athletic settings—not just as a trend but mass customer movement is an fast emerging product category capitalized by leading athletic apparel retailers such as Lululemon and Nike. To allure women, companies offer footwear products that not only enhances wearability but adds a fashionable twist. Functionality mixed with fashion is evolving as a lifestyle trend, fostering the growth of the market across regions. Companies across Europe are keen on developing multichannel athletic retail proposition to drive improved buying, merchandising and retailing disciplines; this has given them a viable platform to exploit the favorable trends that have gained traction across athletic inspired footwear and apparel.
Increasing environmental concerns and volatility in prices of raw materials are some of the key challenges for the industry players to grow in the market. The higher sales of footwear in the product categories of basketball, running, and training last year has also benefitted other leading players of athletic footwear market across emerging nations such as China. Innovative product launches and use of automation technologies have led stalwarts like Under Armour to sell footwear at higher prices. The American company recently launched the UA Architect- its first shoe manufactured using the cutting edge 3D printing technology; the company had publicly announced its interest in producing 3D printed shoes in October last year. Owing to higher discount sales and significant unfavorable foreign currency movements led to loss in gross margin in Q1 this year; however, the adverse outlook is only temporary. The company has been showing significant growth prospects outside North America; it has also been increasing its marketing efforts in overseas markets, especially in Europe and U.K. Making new sponsorships market coupled with expanding distributorship agreements have enabled the company to boost sales; for instance, it has added as many as 250 shop-in-shops in Europe with retail partners and points of distribution in Africa, the Middle East, and Turkey. This has led the company to establish its brand presence in new markets and explore new geographies.
The athletic footwear market is highly competitive. Industry players make considerable investments in exploring new retail channels and offer premiumization and customization options to customers to differentiate themselves and boost their revenue, as well. The industry witnesses tremendous volatility at the category level ; emergence of by retro styles in classics footwear and trends like athleisure becoming more than a passing fad has led brands and retailers to integrate trends into their market plans to stay competitive. Small retailers that are unable to match the massive brick-and-mortar stores by leading players aggressively adopt direct-to-consumer sales and leverage the benefit of robust social network to build credibility and drive sales.