The footwear industry should delight business management academics and stock aficionados alike. Even poor countries have masses of people who need at least one new pair every year. Children are top customers, though parents may overrule brand choices. Linkages between designers, materials of fabrication, and customer segments are tantalizingly complex.
Competition is surprisingly light for a product category that all of us need. There are fewer than 20 significant stocks in which one can trade in North America. Theoretically, there should be no forbidding barriers to industry entry. Most stocks in this industry have June 2008 market capitalization levels below $1 billion. The over-bearing dominance of less than a handful of top brands is most unusual for an open economy. This must also be the reason for the entire industry remaining significantly and consistently ahead of the S&P 500 for the 100-day period ending early June 2008.
Targeting seems to be a driver for success in footwear. Sports gear for the feet represents entire personae. The tendency of super icons to endorse popular brands seems to prevent products with similar tangible features taking market shares even at substantial price discounts. Young people seem to be especially vulnerable, sporting generic clothes and extravagant branded footwear at the same time.
Europeans have honed the art of niche marketing for luxury footwear nearly to perfection. The boutique distribution format works well for the well-heeled, regardless of secular absences from popular retail shelves. Electronic commerce is a step in the right direction for all categories of footwear, though more needs to be done to help customers with comfortable fits.
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