Marshal Cohen is chief industry analyst of the NPD Group and a nationally recognized expert on consumer behavior. This is an excerpt from the May issue of WSAToday magazine.

Marshal Cohen

Almost every industry sees a time when all the rules change and all the tried-and- true things it has come to count on to plan, forecast, buy and sell are turned upside down. Well, that time has come to the athletic footwear market. This industry has grown enormously, and the shoes have evolved from very simple products to ones that use so much technology one wonders if they might be used to send us to the moon…or beyond. As for the more earthly pursuit of shopping, here, too, we are seeing a paradigm shift.

Consumers Seek Comfort First

NPD Group data from January to December 2006 indicate a noticeable swing in what consumers are purchasing. In the almost $19.4 billion athletic footwear market, the shift is toward the low-performance footwear category, which has become the second-largest-selling athletic shoe category behind running shoes (earning $4.8 billion and $4.9 billion, respectively). This means consumers are moving from casual athletic shoes to fashion designs for casual wear. In a recent NPD survey, consumers reported that comfort is the primary influence on their athletic footwear purchases; price and “a fashionable look” placed second and third.

96 Hours by Puma boots, new for fall '07

We see another example of this fashion and comfort trend in the skate-shoe category. Although skate-inspired footwear still represents a small portion ($800 million) of the total athletic footwear market, we can’t ignore its growth. Brands as well as retailers are reorienting their focus on this market. Puma is one of the best examples of this phenomenon. Once known for being worn by world-class athletes, today Pumas have become sought-after fashion shoes.

Metallic sneakers from the Puma by Rudolph Dassler fall '07 collection

For more evidence that brands are responding to these changes, take a look at the introduction of the Tailwind line by Nike and Payless ShoeSource. With this move, Nike can use the heritage of its brand by developing a lower-priced line that won't directly compete with its core. Another way to differentiate within the same brand would be to spell it out. For example, perhaps K-Swiss should consider the monikers K-Swiss Tennis and K-Swiss Fashion to clearly mark the split but still capitalize on its brand name.

How Retailers Can Sell Athletic

K-Swiss men's sneaker for fall '07

Perhaps the biggest challenge is on the retailer side of the equation. Department stores have traditionally been strong channels for athletic footwear sales but are now displaying signs of vulnerability. NPD numbers show that athletic footwear sales dropped in department stores by 5.3 percent for 12 months ending January 2007. Interestingly, we see significant growth in the self-serve footwear store models. Stores such as Famous Footwear, DSW and Payless are running ahead of 2005 by 6.3 percent—just more evidence of the changing rules.

Large sporting goods stores such as Dick’s Sporting Goods and Sports Authority have departments for camping, cycling, baseball, tennis…you get the idea. Within each you can find all the specialized items you need to pursue that sport or activity—except the footwear made for that sport.

Consumers Want What’s Authentic

The Etnies Sheckler, new for fall '07

The consumer expects to be serviced by knowledgeable people within a reasonable amount of time and with a certain focus. If you are a retailer still operating under the old rules, like selling your product by displaying 100 styles of shoes on a wall, or having limited coverage on the sales floor, think again. If you are a brand thinking that the retailer understands how to sell your brand or product, think again. If you are a brand wondering where your consumers went, take a look around. Maybe they went looking for a more authentic experience or maybe they went to buy the latest “fun” style.

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