The pandemic has caused consumers to drastically change their behavior and consumption pattern in the last one year. The footwear industry was no exception, and it was adversely affected, which led to the halting of its growth. However, the silver lining in this whole episode was the boom in online shopping. This new age purchasing pattern emerged more as a necessity than a hobby as people were forced to live under restrictions and long lockdowns. The mounting crisis of the coronavirus pandemic challenged the footwear industry to bear the burden of higher return rates and constant cancellations. People were unable to purchase anything online because they faced problems related to fitting and comfort.
Consequently, footwear brands came up with virtual solutions that allowed their buyers to try out the product and see how it fits them from the comfort of their homes. Likewise, our custom shoe designs, a customization solution, has a built-in digital feature enabling your customers to design and experiment with their looks and styles. They can preview the designed product through 3d technology and check whether it fits them perfectly or not while sipping coffee in their couches.
Custom Design Shoes Provide Robust Solutions to Brands for Leveraging Virtual Retail
The wholesale athletic footwear market sales in the US grew steadily from 2008-19, registering growth every year for a total 40 per cent rise over that timeframe. Imported pairs of shoes per capita increased 6 per cent from 2012 to 2019. However, the situation transformed with the pandemic’s outbreak and suddenly changed the trajectory in the past year. The second quarter in 2020 was impacted majorly. According to some researchers who surveyed the top 13 public footwear companies in the US, their revenue was down by 31 per cent, while gross margins fell by 710 points. However, there was a material recovery at the back end of last year—full-year 2020 revenue declines were 4.5 per cent, gross profit fell 9.5 per cent, and gross margin declined 220 basis points. The outsized impact of reduced brick-and-mortar sales was one of the major reasons behind the decline, as buyers were unable to feel and touch the product they wanted to purchase.
Additionally, buyers were who were into purchasing products shifted their majority of shopping through online marketplaces. It has been reported that online shoe sales grew 10 per cent in 2020, with online penetration of sales of fashion shoes rising by12 per cent. Retailers with established omnichannel infrastructure hurriedly moved operations and inventory online at the outset of the pandemic, committing to new costs that in many cases also included expensive partnerships with delivery and returns providers.
Witnessing many hurdles in the way, footwear brands and retailers thought of implementing a range of solutions that allow them to boost their sales under any circumstances. The embracement of virtual solutions in physical stores was hailed as a panacea by many people. This phenomenon worked especially well in China compared to the West, where brands combined their endorsements with eCommerce conveniences. However, in this new phase of the Covid-19 pandemic, brands are still waiting for prospective viewers to have the same enthusiasm, and momentum has slowed.
According to experts in Mckinsey. live streaming commerce was a big deal a year ago, but in terms of the number of interactions, they’ve declined. According to the company, not many buyers regularly sign up for live stream shopping events. It is believed that viewership hasn’t accelerated as quickly as predicted, and many experts conclude that live stream will be, at most, 2 per cent of digital commerce globally this year, including China. As the pandemic subsides and consumers return to live events and in-store shopping, it’s reasonable to assume that the hype will taper off. However, it would be unfair to rebuke the use of live streaming as it is one of those long-term trends that was greatly accelerated during the pandemic. And this is no new trend for fashion-tech companies as this is the common trajectory for them, people are excited early, but after some time, they are disappointed by the same technology. But brands must not get disheartened by the trend as it takes a long time to reach the masses. Many analysts and investors believe that footwear companies should have an overall positive outlook for the long term, and they should compare their solutions with the long-winded adoption of technologies, such as Facebook advertising or QR codes.
Amid the pandemic, retailers including Moda Operandi, Neiman Marcus, Nordstrom, and Farfetch partnered with video commerce platforms that enabled one-to-many broadcasts. They are considered to be the year’s biggest eCommerce investments as they move to video shopping. Last month, Whatnot raised $150 million at a $1.5 billion valuation; and Ntwrk received $50 million from Kering and Goldman Sachs. Klarna bought Hero for an estimated $160 million in July, while Popshop Live raised $20 million. Meanwhile, big tech players, including Instagram, Tik Tok, Snapchat, Facebook, Pinterest, YouTube, and Amazon, are investing in video commerce. While working with Ntrwk, Kering will be able to inform how the format is executed for luxury brands. Though many stakeholders believe that a successful luxury approach exists in the West, they must work towards it. The young consumers can already find product inspiration on platforms like YouTube and Tik Tok, and the relatively high penetration of e-commerce for luxury in the US and Europe, compared to China, means that it could catch up. Though video shopping is in its infancy stage, it has the potential to engage and create emotion around fashion and luxury brands, and if it is done in the right way, it could be meaningful.
From the cases mentioned above, it is evident that digital solutions are here to stay for a long time, and it is advisable for brands who have been reluctant to incorporate these changes. It is high time that they stream through these changes and transform their bottom line. We have brought together various factors that will inspire brands who have refrained from adopting novel business solutions in the current post.
Here are numerous elements that accelerate the use of digital solutions in the business model for footwear brands and retailers:
Omnichannel Intensifies Competition in the Footwear Market
Omnichannel has been the buzzword for quite some time now; it means that consumers are going to combine store visits and online interactions during the shopping journey. Now to capitalize on this trend, brands are leaving no stone unturned as they mark their presence across various platforms online and offline to gain more traction and more revenue. While multi-channel is growing its significance, a study has revealed that83 per cent of shopping journeys still happen within a single channel — overwhelmingly in traditional stores, which account for almost 80 per cent of fashion purchases today. As a result, certain brands, such as Balenciaga to JW Anderson, are quickening the pace at which they remove and add content from their social media feeds.
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