3 Data Points on the Sneaker Market
By 2025, the sneaker industry is expected to nearly double its $55 billion dollar valuation from 2016 to $95.14 billion. Consider the exponential growth a product of rising global population, active participation in fitness and global sports events, as well as resale efforts from small players and platforms like GOAT, StockX, and Grailed.
The formula for a thriving sneaker market is comprised of more than anticipated “drops” and exclusive releases hyped by Millenials and Gen-Zers. So what are the winning components? Here are three sneaker market data points to consider.
ATHLETIC FOOTWEAR: THE DOMINATING SECRET
With functional athletic designs crossing over into streetwear lifestyle trends like Adidas’ NMD Boosts, Ultraboosts, and Nike Air Max 270, the athletic/sports footwear category grew by 46% during 2017 in comparison the 13% growth of the entire footwear market. This includes performance, outdoor, and sports inspired footwear.
An initial thought of athletic performance footwear can easily exclude more fashionable styles like Nike’s Air Jordan series, but it’s these “performance” sneakers indoctrinated into streetwear’s demand and popularity that have contributed to the rapid growth in athletic footwear segment. Although Nike continues to create innovative advancements in performance technology for its sports and running categories, a simple strategy has remained consistent since the 80’s when it comes to generating buzz around its basketball performance sneakers. Collaborations and new designs like the Travis Scott Cactus Jacks and Air Jordan 1 continue to preserve the Air Jordan performance legacy while capitalizing on the hypebeast market.
Nevertheless, the case of Nike’s Air Jordan is only one scenario. Across the sector, running shoes are anticipated to register the highest shipments by 2025 at around 392 million units. This applies to all running categories from Nike, Adidas, Under Armour, and Puma, all key players. For more lifestyle-focused brands like Lululemon, our data showed a 6% increase in running and trainer shoe styles in 2018.
ATHLESUIRE CONTINUES AS A LIFESTYLE, NOW WITH A NEW TARGET CUSTOMER
Men’s footwear commanded more than half of the market in terms of revenue in 2017, and the segment will continue to dominate the athletic footwear market until 2025. Noted in our Opportunities in Menswear excerpt, men are now in search for high performing assortments to incorporate into an active lifestyle. Combining highly technical fabrications into everyday wear, retailers can capitalize on footwear’s place in the athleisure trend, and it’s newest buyer: men.
Leading the performance-wear wave is Lululemon, who noted last year that 30% of its new customers added during the first quarter of 2018 were men attracted to casual wear and Lululemon's men’s office commute line. Meanwhile, Nike has continued to introduce footwear like its Nike PG1, a basketball shoes with responsive cushioning, a forefoot strap for stability, and Flywiretechonogly.
To find a middle ground between athleisure lifestyle and groundbreaking performance footwear, athletic retailers can take note of Mizuno, the Japanese brand dedicated to linking scientific research to athletic performance through footwear. Sportstyle is Mizuno’s latest hybrid collection of street style and performance technology, and while the retailers is a global player in performance footwear, it’s the lifestyle branding similar to Lululemon and Outdoor Voices that the brand hopes looks to build.
SUSTAINABILITY IS STILL UNCHARTED TERRITORY
Sixty-six percent of global consumers are willing to pay more for sustainable goods, and seventy-three percent of these consumers are Millennials, (defined by Nielsen as those born from 1977 to 1995). By 2021, these sustainably minded shoppers are expected to spend up to $150 billion on sustainable FMCG goods an increase of $14 billion - $22 billion.
Where the sneaker market falls into the sustainable category still remains murky and uncharted, which can pose as an opportunity for athletic retailers. As part of its recent pledge to only use recycled plastics by 2024, Adidas revealed a new running shoe made from 100 percent recyclable materials this year. The Futurecraft Loop was designed using only thermoplastic polyurethane (TPU), a plastic material that dons the entire sneaker. Similarly, Nike’s 30-year commitment to holistic sustainability, the brand transforms plastic bottles and used products into new materials which comprises 75% of every shoe and apparel products.
While emerging lifestyle players like All Birds and Everlane create sustainable footwear for everyday use, footwear’s most profitable sector (athletic), has an open opportunity for profitable sustainable initiatives in both the performance and lifestyle categories.
The path to a $95.14 billion dollar sneaker industry is clear cut. By 2025 will you have taken advantage of the athletic, lifestyle, and sustainability merges taking over the sneaker industry?