Changing Footwear Industry: Impact of Online Shopping

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Introduction

The footwear industry consists of companies that are engaged in the marketing of footwear such as dress shoes, sneakers, boots, sandals, as well as athletic and trade-related products. The inception of the industry dates back to 1648, when Boston shoemakers along with their colleagues in tub and barrel making formed a first labor organization. In 1774, Johann Adam Birkenstock registered as a shoemaker in a small village in Germany while in 1897, Johann’s grandson designed the first contoured insole that would be instrumental in manufacturing footwear from that point on.

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It should be noted that Birkenstock is a brand that has remained popular to this day, and its accomplishments in orthopedics are still highly valued. The history of the footwear industry is characterized by small by significant accomplishments of different inventors and brands that have shaped the availability of products in the market. Due to the changing customer demands, footwear companies have learned to use their developments to cater to the latest trends.

As the first shoe stores began appearing, the footwear industry relied on the power of physical shops to be able to display the available range to potential customers and entice them into making a purchase. Today, however, the future of brick-and-mortar footwear stores remains uncertain as both local and global retailers offer an online shopping option. Now, it is imperative for retailers to adapt to changing consumer habits and needs to provide an experience that would be valued. This paper aims to explore the macro-level changes that footwear retailers had undergone in the last two decades as a result of the disruptive processes brought by online shopping.

Prior Research

The effects of online shopping on the success of brick-and-mortar have been extensively studied in the research literature. As mentioned by Pozzi, the increased availability of online shopping has influenced physical retail in two crucial ways (569). First, as customer’s travel costs reduced since they do not have to visit physical stores, they have broadened their perspectives in terms of trying new brands. Second, revenues in the footwear industry have increased in areas with greater competition, suggesting that online channels allow diverting customers’ attention from rivals businesses.

Singh and Meshram pointed to the increased online consumption of clothing and accessories among younger generations (150). Approximately 40% of online consumers fall within the 25-30 age group, with 73% of the study’s respondents indicating that they shopped for clothing and accessories online (Singh and Meshram 151). While the findings do not suggest that customers never shop in physical stores, the trend points to the shift in the prevalence of online shopping, especially in the younger customer group.

Since footwear stores are widely available in shopping malls, it is essential to mention the impact of online shopping on malls. According to Yan, the reduction in shopping mall visits cannot be explicitly attributed to the growth of online shopping (40). For online retailers, the total sales have been increasing, with the major companies such as Amazon realizing the revenue of over US $140 billion each year (Yan 40).

However, it is not only online retail that contributes to the closing of stores in shopping malls but also other factors like the bankruptcies of major retailers such as J.C. Penney contributed to the decreased success of physical shopping malls.

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Since online retail is highly concentrated with increased competition, companies that offer products to customers online tend to compete based on price differentiation. As a result of that, online shops have lower prices to attract clients (Dahiya 1499).

Offline shops suffer from such competition because they have to lower prices as well and cannot receive profit, not maintain large stock. Online shops, on the other hand, have the capacity to offer a more excellent selection of items since there are no costs associated with paying rent to malls. To stay competitive, physical stores should use the popularity of online shopping to their advantage. As suggested by Moes and Vliet, shops that are greatly present online and show off their physical stores to customers tend to experience higher purchasing intentions and the greater likelihood of being visited by potential clients (1). Both novelty and enjoyment have found to explain such a positive effect of online on the brick-and-mortar.

In 2020, the global footwear market size is valued at $365.5 billion, and by 2027, it is estimated to reach $530.3 billion (O’Connell). Since footwear is made up of different materials and serves various purposes, the opportunities for widening the market continue being relevant. Major footwear brands, such as Nike, have adapted to the latest trends and have started manufacturing footwear from recycled materials. The increase in customers’ health awareness has been crucial for reshaping the industry, with the greater emphasis placed on products intended for fitness and exercises.

Brand Cases

Speaking of brands using the advanced technologies to their advantage, it is important to mention such footwear giants as Nike, Adidas, and Vans. Established in 1964 (initially named Blue Ribbon Sports), the company opened its first retail spot in 1966 and launched as Nike in 1972. At the beginning of the 21st century, Nike had retailers and distributors in more than 170 countries. The brand has always taken the opportunity to advertise its products with the help of such celebrities as Roger Federer, Tiger Woods, Michael Jordan, and others. With the increased popularity of online shopping, Nike did not close its stores but instead chose to use the new technologies to advance the brand’s position in the market and gain new audiences.

Throughout the years, Nike has been moving in the direction of having a person-centered method of engaging with its audience online. Today, Nike has around 200 different social media accounts globally, all of which are created to provide the same positive experience to customers. To help potential clients find the right product for them, Nike teaches its staff to participate in personal and relevant communication with customers on social media. The brand looks for actionable requests from customers to help several of them at a time. Such a strategy allowed Nike to build a community around the brand, without relying on physical stores (Balan 2).

As the sphere of retail has changed due to the increased availability of online shopping, it was important for Nike to use Facebook, Instagram, Twitter, and other social media platforms for visual communication with the target market (Balan 2). The storyline that the company has established is that the community of Nike is not based on buying from the brand but rather on sharing their experiences and asking support-related questions. While Nike still has physical stores, most communication and customer experience occurs online.

Adidas has taken a similar approach to Nike in terms of its use of online methods to attract customers. Established in 1924 as Gebrüder Dassler Schuhfabrik and renamed Adidas in 1949, the brand has positioned itself as a leading provider of the best equipment to athletes. The company is the second-largest sportswear manufacturer after Nike and, therefore, competes with its principal rival in all aspects.

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The company places significant importance on purchases through its website. However, the main goal of the online strategy was to become closer to customers around the world and represent their first choice of athletic footwear and clothing. While keeping physical stores, Adidas used e-marketing and e-commerce to expand its audience and the number of customers, offer various services through the online store that is always available, enable clients to express their preferences for product development, collect data and statistics on product choices, as well as promote the brand name.

For Adidas, digitalization has offered a new tool to make its footwear and other products more popular (Graesser 188). Social media advertising encourages active participation from Adidas’s customers, who, often indirectly, contribute to the development of the company. In addition, there is a certain degree of segmentation between the customers who purchase Adidas footwear online and those who go to physical stores. Online, the brand engages with younger audiences who use social media regularly while offline, shops usually deal with customers of an older age range. Therefore, the differences in the way Adidas targets different demographics is rooted in shifting consumer behaviors.

The social media strategy implemented by Vans is the one that fits the younger demographic of online customers the most. The first physical store of the company was opened in 1966 to sell footwear directly to the public. In the ’70s, the brand became hugely popular among the generation of skateboarders, with Vans continuing its focus on the younger audiences. For instance, in 1998, the company offered the first of its kind indoor and outdoor skatepark in Orange County to attract skateboarders (“A Brief History of Vans: Off the Wall”).

The transfer to digital marketing began in 2004 when Vans launched its Customs department on its website to provide customizable footwear. The brand engaged celebrities known by younger people in its advertisement campaigns and began engaging with its target audience online. Social media has become the core point of the company’s strategy because of the focus on younger audiences. Vans uses Instagram, Facebook, Twitter, and other platforms to share interesting facts about the brand, promote the latest footwear models. There is a sense of community that goes along with the strategy of Vans, which is a critical aspect shared by all three brands explored in

Hypothesis

The increase in demand for footwear has also been attributed to the rise of social media and Internet penetration into the daily lives of potential customers. Taking the rise of social media and digital communication has encouraged the leading players in the footwear market to promote both of their products and services with the help of the Internet. However, it can be hypothesized that physical footwear retailers can benefit from using online solutions to their advantage.

While online shopping for shoes prevails, and the market continues to grow, offline retailers will not disappear completely if they understand how to use digital methods for attracting customers. Thus, online shopping should be considered an opportunity for footwear retailers, as seen in the examples of such giants as Nike or Adidas, that have successfully combined online and offline retail to form a unique marketing strategy.

Methodology

The research intends to be qualitative, a systematic review of literature on the topic of online shopping’s impact on the physical footwear retail industry. A well-done systematic review can be essential for combining relevant research evidence to inform the current study and understand the key trends and theories regarding the issue at hand (Seers 36). In addition to evidence of trends, the chosen method that focuses on the review of literature would allow making recommendations on how offline footwear retailers can overcome the challenges imposed by online shopping. A rigorous qualitative review of studies can also uncover new trends, often helping to illuminate why specific trends are emerging and how they can be addressed.

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Data Collection and Analysis

To collect data for the systematic review, the researcher will search the relevant databases, such as Elsevier, EbscoHost, and GoogleScholar. Related articles must have been published in English and be no older than seven years old. The identified papers will be later assessed for meeting the criteria of eligibility. An independent reviewer will screen through the titles and the abstracts of the works and then review full texts of the selected research articles. Standard forms of data extractions will be utilized in the analysis, and the quality of the included studies will be assessed with the help of the standardized qualitative research appraisal tool.

For example, the reviewer will answer questions pertaining to the clarity of research aims, the appropriateness of the methodology and the design, the relevance of the recruitment strategy and data collection, the consideration of ethical issues, as well as rigor of the data analysis. Depending on the quality of evidence and the information presented in research, research will be either included or excluded from the analysis.

Discussion and Implications

The impact of online shopping on brick-and-mortar business is an area of study that has multiple components and includes different variables. For footwear brands that have physical stores, the best strategy is to use online shopping and social media advertising to their advantage (Powell). As shown in the cases of Nike, Adidas, and Vans, footwear companies need to establish a sense of community around their brands and engage potential customers into a conversation about their expectations about footwear and other athletics-related products.

Successful footwear brands learned how to use social media advertisements and spread awareness of their products and services. Those that have not adjusted to the new market trends and consumer demands are more likely to experience the adverse effects of digitalization and deal with the declining numbers of customers visiting physical stores.

Areas for Future Research

Studying best practices implemented by successful footwear brands is a potential area for research. While some shoe companies struggle with gaining customers at physical stores, others listen to market demands and implement essential changes that can allow them to stay relevant either locally or globally. An example of a future study topic is implementing a shift toward digital marketing at an organization that has previously relied on brick-and-mortar retail, measuring the impact of the change on profitability and customer engagement.

Works Cited

A Brief History of Vans: Off the Wall Since ’66.” Vans. Web.

Balan, Carmen. “Nike on Instagram: Themes of Branded Content and Their Engagement Power.” CBU International Conference on Innovations in Science and Education, 2017, pp. 1-6.

Dahiya, Menal. “Study on E-Commerce and its Impacts on Market and Retailers in India.” Advances in Computational Sciences and Technology, vol. 10, no. 5, 2017, pp. 1495-1500.

Graesser, Andreas. Run IT: Dominating Information Technology. Springer, 2019.

Meshram, Jyoti. “Study of Impact of Online Shopping on Conventional Shopping Methods by Today’s Youth with Respect to Clothing and Accessories.” Journal of Advances in Business Management, vol. 2, no. 3, 2016, pp. 149-153.

Moes, Anne, and Harry van Vliet. “The Online Appeal of the Physical Shop: How a Physical Store Can Benefit from a Virtual Representation.” Heliyon, vol. 3, no. 6, 2017, e00336.

O’Connell, Liam. “Size of the Global Women’s Footwear Market from 2018 until 2027.” Statista. 2019. Web.

Powell, Matt. “Sneakernomics: The Internet Changed the Sneaker Business Forever; Get Ready for More! Forbes, 2014. Web.

Pozzi, Andrea. “The Effects of Internet Distribution on Brick-and-Mortar Sales.” The RAND Journal of Economics, vol. 44, no. 3, 2013, pp. 569-583.

Seers, Kate. “Qualitative Systematic Reviews: Their Importance for Our Understanding of Research Relevant to Pain.” British Journal of Pain, vol. 9, no. 1, 2015, pp. 36-40.

Yan, Xaioxing. “Impact of Online Shopping on Shopping Malls.” Digital Commons at Buffalo State, Applied Economics Theses, no. 29, 2018, pp. 1-42.

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BusinessEssay. (2022, January 10). Changing Footwear Industry: Impact of Online Shopping. Retrieved from https://business-essay.com/changing-footwear-industry-impact-of-online-shopping/

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BusinessEssay. 2022. "Changing Footwear Industry: Impact of Online Shopping." January 10, 2022. https://business-essay.com/changing-footwear-industry-impact-of-online-shopping/.

1. BusinessEssay. "Changing Footwear Industry: Impact of Online Shopping." January 10, 2022. https://business-essay.com/changing-footwear-industry-impact-of-online-shopping/.


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BusinessEssay. "Changing Footwear Industry: Impact of Online Shopping." January 10, 2022. https://business-essay.com/changing-footwear-industry-impact-of-online-shopping/.