New business models for brands and retailers: what strategies are available for footwear?

Four decades ago, production of footwear totaled approximately 8.8 billion pairs and was distributed around the world near the markets where shoes were later sold. Since then, as the earth’s population grew by 63% (4.8 to 7.8 billion people), footwear production went up by 150%. Nowadays footwear travels many miles and frequently goes from one continent (production) to another (consumption). A huge market was created comprising several manufacturers, brands, and retailers. 

Sports brands, such as Nike or adidas, dominate the landscape and are familiar to many consumers. Smaller shoemakers, in many instances more focused on formal and classic shoes, are not as well-known and are constantly struggling for a piece of the pie.

In this environment, striving for the attention of customers becomes key, so brands who succeed in knowing their target audience and learn about their needs, preferences, and expectations, will have an advantage against their competitors. If they manage to do that while staying on top of new industry trends, they can adapt their strategies in time and see improvements in sales and profits.

One of the biggest trends of the moment is sustainability, and some of the business models considered in this paper have strong arguments in this field. Second-hand, Rentals, Repairs, and On-demand production models share the ambition of contributing to a minor impact of the fashion industry on our planet. They share common questions, but the differences are important to bear in mind.

Regardless of the format of a business, it will always be key for them to be aligned with the customers' expectations and work to offer them a pleasant buying experience. If brands succeed in having ambassadors amongst their customers, they will enjoy the benefits with their return to the stores (offline or online). Bespoken modes and limited series should be particularly focused on this, and on ensuring the exclusivity that they offer is always offered through a hassle-free process.

Warranties, Styling services, Factory-direct shipping, Omnichannel, Metaverse, and Subscriptions are other models addressed in this paper. 

An analysis of the different models' advantages and a reflection on the most important elements of the different strategies is also found in the latest World Footwear Innovation Paper.

Summary
Second-hand
Rentals
Subscription
Tailored footwear
Warranties and repairs
Limited series
Styling service
Metaverse
On-deman production
Fatory-direct shipping
Omnichannel
Main Insights