Five Things Every New Designer Should Know About The Shoe Business
According to the Footwear Distributors & Retailers of America (FDRA), your dream job is part of a $62 billion industry that imports upwards of 2 billion pairs of shoes annually (2.3 billion in 2014). The footwear industry, experts say, is filled with tons of opportunity and possibilities for new and emerging designers. The bad news? The costs and risk of failure can be markedly higher than the cost of failure in other industries — particularly since shoes tend to be a lot more expensive to produce than apparel.
But don’t panic yet. We’ve reached out to experts in the shoe business to get the scoop on the good, the bad and the ugly in the world of footwear. Here, we outline five things you need to know.
Vision Versus Practicality
According to FDRA President Matt Priest, 99 percent of shoes sold in the U.S. are imported. And tariffs, Priest said, are among the highest on any consumer good — averaging 10 percent but reaching as high as 67 percent for certain types of footwear.
Have those costs been factored into your plans for your dream gig?
“This is something we run into often,” Priest said. “There can be a direct conflict between a designer’s vision and the reality of sourcing for and producing that footwear.”
With 150 classifications of footwear used by U.S. Customs to tax imports, Priest said, designers often find themselves making amendments to their original vision for practicality.
“Sometimes, what starts out as crystal clear in the designer’s mind can easily turn into a real challenge,” said Priest.
This is particularly true for designers looking to mass-produce their footwear, Priest said.
Competition is part of every industry, but experts say the increasingly competitive nature of the footwear biz has intensified because of a number of trends.
“With the advent of social media and blogging as promotional channels, there are so many ways to get your designs out there, and while that’s not a bad thing, it’s making the industry even more competitive,” explained Priest.
CL King & Associates analyst Steven Marotta noted that while competition in the footwear market is definitely stiff, there are unique upsides to the business.
“The shoe industry is highly fragmented,” said Marotta. “It’s not dominated by one or two players, so even with the competition, there’s room to carve out your own space.”
As for social media, Marotta said emerging designers should use the Web to their advantage.
“Be incredibly aware of social media — it can be an inexpensive way of projecting your brand to a larger audience,” Marotta noted.
Building Your Brand
Another effective way of competing, insiders say, is through product differentiation and branding. You have to decide how your brand will stand out and what you will use to create an identity that will drive consumer loyalty.
“Having a hook of your own — whether you’re creating athletic styles, a chunky heel, a dress shoe or something casual — is important,” Marotta said.
And it’s not just about creating one signature product, Marotta noted.
“Be known for a particular look — not one specific SKU — so you could have five different shoes, but consumers still recognize that each of those shoes is your brand.”
Understanding What Sells
According to Wunderlich Securities Inc. analyst Danielle McCoy, the latest footwear market trends reveal that consumers care as much about finding unique and striking shoe styles as they do about finding styles that are comfortable.
“You have to be different, but you also have to have some form of comfort feature,” said McCoy. “When you combine both, those seem to be the winners in the footwear space.”
Insiders caution that while a passion for footwear design should be an important driver for entering the industry, a continually updated awareness of trends will take new or emerging designer far.
“Make sure it’s not just about the art but that it’s also about making money — that’s how you ensure that you’re around next season to do it all over again,” said Marotta.
The Changing Consumer Landscape
There has been a power shift in the shoe industry, and the ball is officially in the court of the consumer.
“It’s not the designers, brands or retailers driving consumer demand and trends, as it has historically been,” Priest said. “Instead, power has shifted to the consumer.”
The need to cater to the more “in-demand” consumer who knows and has no qualms stating what he/she wants is evident in the uptick in the footwear-customization business, Priest said.
Understanding how to connect with this new consumer is critical to the success of emerging designers and their brands, experts say.