After last year’s COVID-19 Omicron surge, which derailed many plans to travel and gather, consumers are gearing up for the most festive holiday season in three years. For the footwear and accessories businesses, this optimism translates to a need to refresh wardrobes for social gatherings and invest in items to support travel plans. However, concerns about the economy are looming over this holiday. The 2022 season will prove to be a balancing act as U.S. consumers pair their pent-up holiday energy with their most practical priorities.
Here are the top factors that will influence footwear and accessories sales in the U.S. this holiday season:
This year, consumers are less concerned about product shortages and more focused on inflation, prompting brands and retailers to entice consumers with early deals to help spread out the spending. However, based on the decline in sales reported by NPD for October, that message may have fallen a bit flat. Despite early promotional activities, brand and retailer focus should remain on peak shopping periods, including Thanksgiving week and the last two weeks leading up to Christmas, which traditionally account for the highest percentage of holiday sales for the footwear and accessories markets.
The annual NPD Holiday Purchase Intentions study found that this year, more U.S. consumers plan to host or visit family and friends, have an overnight stay away from home, and are generally less concerned about COVID-19. This behavior will create opportunity for dressier footwear, boots, handbags, luggage, and other categories. Self-purchasing will be particularly important in these areas, so brands and retailers need to entice consumers to treat themselves, especially since fewer consumers plan to self-gift this year. And let’s not forget about the continued cozy craze – while there are occasions to get a bit more dressed up this year, slippers will remain a key item for the holiday season and will continue to exert their fuzzy influence on other items such as mules, clogs, sneakers, loafers, and boots.
Social (Media) Stimulus
Consumers, particularly younger age groups, are increasingly using social media to discover and purchase products. In July, 84% of Gen Z consumers reported that they learn about or discover footwear brands and retailers from social media and 47% have purchased via social media, both up from the beginning of the year, according to the NPD Future of Footwear study. Video posts on sites like TikTok have led to sales for many of the hottest, sold-out footwear and accessories items this year. And, in turn, posts about sold-out items tend to drive up demand. Especially in the footwear market, where a handful of the hot brands and items are key contributors to holiday season sales, brands and retailers need a solid strategy to drive (or leverage) the hype and fulfill the demand, without overshooting.
Across the overall retail landscape, there has been a continued slow and steady decline in the percentage of sales generated online, as physical stores have regained share. For the footwear and accessories businesses specifically, online penetration leveled out in 2021 at about five to 10 points higher than before the pandemic. Both physical stores and digital platforms continue to drive recovery in these industries. For this holiday season, NPD noted a slight dip in the overall percentage of consumers planning to shop online, versus 2021. While we expect to see more of them hitting the stores, for the footwear and accessories businesses this expectation likely won’t lead to a major shift in the metrics we’ve observed this year. Shoppers will be taking advantage of both the in-store and online sales channels, and the less friction that exists between the two, the better.
The ups and downs of the past few years, along with the current and uncertain macroeconomic environment, could stifle footwear and accessories sales growth this holiday season. Brands and retailers that remain focused on their consumers’ current lifestyles and priorities will gain share of mind, and share of wallet, during the holidays.