KEY TAKEAWAYS:
- The footwear industry is growing post-pandemic, both online and in-store, it is a $550+ billion market in the U.S alone.
- Authenticity is key in the omnichannel shopping experience, 93% of customers find UGC helpful when making a purchase decision.
- We are seeing a shift in eCommerce shopping trends towards Social Media and virtual try-on, in particular in younger shoppers, who are 2X to 3X more likely to have shopped using these channels.
In Google’s recently published Consumer Insights report, we see yet more confirmation of an idea that’s feeling increasingly unavoidable: the next evolution in commerce will be about how close brands can get to customers and the places where they spend their time.
And for the global footwear industry – a titan of online and offline sales that’s now enjoying a second year of post-pandemic growth – those words ring particularly true: the brands that will stand the best chance of riding that growth wave will be the ones that can best meet their customers needs no matter where – physically, or in the sales cycle – those customers are.
Challenges and opportunities for footwear brands abound. Increasing competition from “born digital” D2C brands, the need to understand and implement an omnichannel customer experience, and a requirement to balance innovation (AI, AR) with traditional customer service are foremost among them. In this article, we’ll look at how footwear brands can use customer insight – elevating and celebrating their customers to drive “digital word of mouth” – to gain a competitive advantage over their peers.
TRENDING UP
During the pandemic, while people were stuck at home walking around in their slippers, footwear was among the major retail casualties.
In the U.S. – a $550+ billion market – the footwear industry saw a heavy downward trajectory, with Q2 revenues in 2020 down 31% versus the previous year.
However, as we enter into our second year of the ‘new normal’ we are seeing the footwear industry step-change again. In particular, the trainer segment in the UK is expected to grow by 7.5% (2022-2027) to approximately £4.2bn market volume in 2027.
These growth predictions come after the pandemic where customers had to accept a more digital world but are now also returning to in-store shopping. This has created a truly omnichannel shopping landscape where customers now seamlessly switch between digital, physical, virtual and social platforms for any single buying journey.
COMPETITION
As the footwear shopping landscape evolves, the market dominance of previous “big players” is continually under threat. This is particularly true in the trainer and sneaker segment, where the rise and rise of disruptive social-first D2C brands shows no sign of slowing – in the UK alone, as of June 2022, there were over 185 footwear manufacturers.
Not only do consumers have more choices than ever before, they’re also making purchase decisions based on an increasing number of factors. Recently – think: Yeezy and Adidas – we’ve seen how the power of consumer opinion can both elevate and tear down a brand almost overnight; driving home the idea that, in a socially connected world, the power that lies in the hands of the customer means even the credibility of the “big players” (i.e. those with the biggest marketing budgets) isn’t beyond disruption.
In an increasingly competitive footwear landscape – and one underpinned by the often fractious movement of social currency – social proof content (e.g. User-generated Content, ratings and reviews, customer testimonials) provides both an immediate outlet for brands to showcase the benefits of their product – and an opportunity to more authentically convey their brand persona.
By utilising the wealth of content already being created and shared by a community of fans on social media – i.e. finding a home for that content on their website and across product display pages – brands have the power to educate while telling a story, enhancing a customer’s shopping experience by helping them to shop in the “real world”.
Leading with authentic, customer-generated content is a factor that’s particularly important for eCommerce footwear retailers, who are accustomed to seeing three times more returns than any other eCommerce category. This is largely due to the huge variations in style and fit seen across the category – points of individual preference that may be well served by the availability of UGC at the point of purchase.
OMNICHANNEL EXPERIENCES
Footwear sales through eCommerce platforms have a lower profit margin than other apparel or more general eCommerce, a factor partly owing to unavoidable logistical factors: shoe boxes require larger storage areas, and attract higher postage costs. This, combined with the higher rate of returns for shoes versus general eCommerce, means footwear brands have a dual incentive to work even harder to decrease their return rates.
The process of choosing and purchasing a given pair of shoes is no longer completely dominated by in-store environments; it’s a truly omnichannel experience. 75% of consumers use social media to discover new products and trends, and 62% use social media to research and compare products before making a purchase.
For a preview of what the future of footwear shopping might look like, brands might be best served by looking outside their own category and toward an industry that’s already making the transition to true omnichannel: the beauty and cosmetics industry.
Once a predominantly in-store shopping experience like footwear – beauty customers typically like to be able to test products, try shades, combine formulations etc. – with the implementation of ‘virtual try on’ customers can do just that when shopping online.
Considering the importance of UGC for footwear eCommerce now, could the future of shopping footwear online evolve further to allow customers to virtually try-on shoes? In 2023 we are already seeing a shift in eCommerce shopping trends this way, with younger shoppers currently being the highest adopters: they are 2X to 3X as likely to have shopped using social media and virtual try-on.
CONCLUSION
Consumers now have a wealth of information at their fingertips: social, digital, physical and virtual platforms combine to present an ever-increasing number of avenues through which to engage with and discover new products and services. The footwear industry, back to growth after a difficult pandemic, is seeing a change in the way people shop. And as we’ve seen, being a ‘big player’ is no longer a safe bet, with customers favouring other more ‘genuine’ (read: authentic) brands.
In this omnichannel landscape, footwear brands have to be authentic to cut through the clutter and stand out; it is no longer good enough to just showcase a series of professional (likely over-edited) images.
Footwear brands, like their peers across all D2C industries, need to ‘social proof’ themselves. They need to show customers that they are the right fit for them – at both a shoe and brand level. And they need to do it in a way that foregrounds the customer experience, elevating and celebrating their community in a way that encourages digital word of mouth across social platforms and beyond.
Take a note from Cinderella, in the end, the prince loved her regardless of her sparkly dress and shiny shoes.
