The NPD Group Inc.

01/13/2022 | News release | Distributed by Public on 01/13/2022 14:42

Two Steps Forward, One Step Back: 2022 Outlook for the Fashion Footwear and Accessories Markets

Beth Goldstein

Executive Director, Industry Analyst, Fashion Accessories, Footwear

Despite recovery progress made in 2021, it feels as though we are in a similar place to one year ago, trying to predict how the U.S. consumer will behave under a new veil of uncertainty.

We've settled into lifestyles that are more centered around the home than ever before; the nature of the workplace has changed; and participation in travel and events has not yet fully recovered. These factors will drive the evolution of the fashion footwear and accessories markets in 2022.

Work reimagined

According to the NPD Omnibus survey fielded in October, one-third of U.S. consumers who expected to return to a physical workplace anticipated doing so for one to three days a week, while 40% didn't plan to return to the office or didn't know. This hybrid dynamic, along with the record number of people who have left the workforce (notably women), points to a permanent shift in fashion priorities for U.S. workers.

In addition, the dress code for in-person workplaces has continued to become more casual, as workers prioritize comfort. Our recent Future of Footwear study revealed that over 50% of consumers wear casual sneakers to work outside of the home, compared to just under 20% who wear dress footwear. The concepts of "comfort" and "casual" will continue to drive sales, even as dressier styles slowly improve from their 2020 lows.

Experiential importance

In 2020, as many office workers remained home and social events and travel were halted, sales within certain fashion footwear and accessories categories abruptly dropped off, while slippers and outdoor products picked up. Although sales of fashion footwear, handbags, and luggage improved in 2021 as consumers resumed some activities, they remain below pre-pandemic 2019 levels. Simply put, these industries need consumers to participate in experiences, if they are to continue recovering.

While there may be some bumps along the road (as evidenced by a likely omicron-driven dip in experiential spending in December), I believe the return to experiences will be the spark for these industries in 2022. However, just as it is for in-person work, the caveat is that the categories benefitting will likely differ from those that benefitted in the past. In addition, "active experiential" categories, such as walking and hiking are expected to remain strong in 2022, according to the latest NPD Future of Footwear findings.

Virtual + In Real Life (IRL)

A new level of online sales penetration has been set, as consumers have become more comfortable buying products online - however, "digital versus physical" and "website versus brick-and-mortar" are not mutually exclusive.

In 2022, we'll continue to see the development of livestreaming and other forms of social selling, as well as avatars, augmented and virtual reality, and artificial intelligence. Most of the progress in the virtual world will be grounded in the physical, offering more exciting and convenient shopping experiences and setting up the next level of omnichannel retail.

Merchandise mix(-up)

In 2022, we'll see more depth than breadth, as assortments are tightened and resources are focused on securing inventory for the most productive items. Brands and retailers will need to balance the buy-now-wear-now mindset of the consumer with uncertain delivery times that might disrupt the flow of products. Pricing and promotion decisions be more fluid than they have been in the past. And, while Nike might be the most high-profile brand to rethink its distribution strategy, it won't be the only one to do so. For all these reasons, agility will be key.

Doing our part

The year is just over two weeks old and already major fashion brands, such as Timberland and Steve Madden, have announced new sustainability initiatives. And it's no longer just about using sustainable materials - it's about developing sustainable models for lasting contributions to the environment and to our communities. We will continue to see progress across all these areas in 2022, with resale likely being a particular area of growth.

While in some ways it may seem as though the fashion footwear and accessories markets are experiencing déjà vu, they are at a different place than one year ago. Overall, these markets have recovered from their low points in 2020 and continued growth is expected in 2022. But as we've learned, there will likely be some headwinds during the trip, causing brands and retailers to take the occasional step back. And, as we know, not all categories will or have been on the same recovery trajectory, so it's important to stay connected with consumers' current lifestyles and priorities every step of the way.

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