Footwear Retailing - UK - July 2015

OVERVIEW
Definitions
EXECUTIVE SUMMARY
Footwear sales grow 6.5% in 2015
Figure 1: UK footwear sales best- and worst-case forecast, 2010-20
Footwear specialists take 44% share
Figure 2: Distribution of spending on footwear, by type of retailer, 2015 (est)
Young fashion footwear specialists lead
Figure 3: Leading footwear specialists: Compound annual growth rates in net revenues 2010-13*
Clarks seen as reliable
Figure 4: Attitudes towards and usage of selected brands, May 2015
Footwear sector is fragmented
Figure 5: Footwear retailers bought from in last 12 months, online and in-store May 2015
One in ten women dissatisfied with shoe size options
Figure 6: How satisfied consumers are when shopping for footwear, May 2015
Women continue to opt for flats, while men choose trainers
Figure 7: Percentage of women who have bought shoes from each shoe category, May 2015
Using latest designs to drive footwear sales
Figure 8: Most important factors when buying shoes for yourself, May 2015
Helping female customers with fit
Figure 9: What would improve the shopping experience when buying footwear in-store or online, May 2015
What we think
ISSUES AND INSIGHTS
Which retailers are emerging as the winners of 2015?
The facts
The implications
What are the main opportunities for growth in the footwear market?
The facts
The implications
How can retailers use technology to improve the shopping experience?
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Robust growth
Footwear spend grows ahead of clothing
Deflation in the consumer prices of footwear
Aging population presents an opportunity
Feet are getting bigger and wider
MARKET SIZE AND FORECAST
Figure 10: UK footwear sales at current prices, 2010-20
Footwear to grow 30% by 2020
Figure 11: UK footwear sales. best- and worst-case forecast, 2010-20
Market segmentation
Figure 12: UK footwear sales segmented by market value and percentage share, 2015 (est)
Opportunities for children’s footwear market
Figure 13: UK footwear sales segmented by women, men and children, % share, 2015 (est)
MARKET DRIVERS
Economic environment
Women purchase more clothing and footwear than men
Figure 14: Spending habits for clothing, footwear and accessories, by gender, March 2015
Footwear spend grows ahead of clothing
Figure 15: Consumer spending on clothing and footwear (including VAT), 2010-14
Consumer prices
Figure 16: Consumer prices index annual % change for footwear, clothing and all items, Sep 2014-May 2015
Aging population presents an opportunity
Figure 17: Trends in the age structure of the UK population, 2009-19
Obesity levels have plateaued
Figure 18: Proportion of overweight and obese population, 2005-13
Feet are getting bigger and wider
Women suffer more foot problems than men
KEY PLAYERS – WHAT YOU NEED TO KNOW
Footwear specialists account for 44% of the market
17.1% of sales to be made online
Impressive growth from Hotter Shoes
Clarks suffers a challenging year
Sports Direct leads the non-specialists
3D printing being used to create tailored footwear
INNOVATIONS
3D printing creates custom-made shoes
Reducing online returns using 3D scanning
Wi-Fi and tablets link digital and physical
Children’s shoes get fashionable
Schuh’s future-proofed store concept
Mobile app to drive engagement
Drone delivery pop-up launch
Independent retailer taps into the trend for sporty shoes
Catering for the aging population
Shoes that feel as good as they look
LEADING SPECIALIST RETAILERS
Figure 19: Leading footwear specialists: Compound annual growth rates in net revenues 2010-13*
Sales
Figure 20: Leading footwear specialists: Revenues, 2010-14
Stores
Figure 21: Leading footwear specialists: Outlet numbers, 2010-14
Sales per outlet
Figure 22: Leading footwear specialists: Sales per outlet, 2010-14
Operating profits and margins
Figure 23: Leading footwear specialists: Operating profits, 2010-14
Figure 24: Leading footwear specialists: Operating margins, 2010-14
LEADING NON-SPECIALIST RETAILERS
Leading non-specialists: Financial data
Figure 25: Leading non-specialist retailers: estimated footwear sales (excluding VAT), 2013 and 2014
The consumer: Shopping at non-specialists
Figure 26: Retailers that consumers have purchased footwear from in the last 12 months, May 2015
Leading non-specialists: Retail offering
Figure 27: Leading non-specialist retailers: Positioning, offer and brands stocked, July 2015
CHANNELS OF DISTRIBUTION
Footwear specialists take 44% share
Figure 28: Distribution of spending on footwear, by type of retailer, 2015 (est)
Figure 29: Estimated distribution of spending on footwear, by type of retailer, 2014 and 2015
Specialists lose market share
Figure 30: Estimated share of footwear spending taken by footwear specialists, 2010-15
MARKET SHARES
Non-specialists lead
Figure 31: Top ten retailers of footwear: market shares, 2014
Figure 32: Top 20 retailers of footwear: market shares, 2012-14
ONLINE
Online to account for 17.1% of footwear sales
Figure 33: Online sales of footwear (including VAT), 2013-16
Distribution: Pureplays versus multichannel
Figure 34: Estimated distribution of online sales (including VAT), 2014 and 2015 (est)
Online market leaders
Figure 35: Leading online retailers: estimated net online revenues and online market shares, (excluding VAT), 2014
The consumer: Where they shop online
Figure 36: Retailers that consumers have purchased footwear from online in the last 12 months, May 2015
SPACE ALLOCATION SUMMARY
Summary allocation overview
Figure 37: Footwear retailers space allocation estimates, May 2015
Detailed space allocation estimates
Figure 38: Footwear retailers space allocation estimates, May 2015
Figure 39: Footwear retailers space allocation estimates, May 2015
BRAND COMMUNICATION AND PROMOTION
Low growth in advertising spend
Figure 40: Recorded above-the-line, online display and direct mail total advertising expenditure on footwear, 2011-14
Top advertisers
Figure 41: Recorded above-the-line, online display and direct mail total advertising expenditure on footwear, by advertiser, 2011-14
Media type
Figure 42: Recorded above-the-line, online display and direct mail total advertising expenditure on footwear, by media type, 2011-14
Figure 43: Recorded above-the-line, online display and direct mail total advertising expenditure on footwear, by media type, 2011-14
A note on adspend
BRAND RESEARCH
What you need to know
Brand map
Figure 44: Attitudes towards and usage of selected brands, May 2015
Key brand metrics
Figure 45: Key metrics for selected brands, May 2015
Brand attitudes: Shoe Zone is defined by its low price
Figure 46: Attitudes, by brand, May 2015
Brand personality: Schuh and Office promote an upbeat brand image
Figure 47: Brand personality – Macro image, May 2015
Clarks represents a reliable option
Figure 48: Brand personality – Micro image, May 2015
Brand analysis
Clarks generates usage through trust and reliability
Figure 49: User profile of Clarks, May 2015
Schuh has an upbeat and trendy brand image
Figure 50: User profile of Schuh, May 2015
Office shares similar traits as Schuh, but with a stronger 16-24 bias
Figure 51: User profile of Office, May 2015
Dune has lower awareness and a weaker brand image than others
Figure 52: User profile of Dune, May 2015
Russell & Bromley’s image of exclusivity and expense likely to limit usage
Figure 53: User profile of Russell & Bromley, May 2015
Shoe Zone’s value encourages usage despite certain negative traits
Figure 54: User profile of Shoe Zone, May 2015
THE CONSUMER – WHAT YOU NEED TO KNOW
Fragmented footwear sector
Low average age of shoe buyer
One in ten women dissatisfied with shoe size options
Women continue to opt for flats
Using latest designs to drive footwear sales
Helping female customers with fit
Importance of click-and-collect
WHO SHOPS WHERE
Figure 55: Footwear retailers bought from in last 12 months, online and in-store, May 2015
Figure 56: Leading footwear retailers: Profile of in-store and online shoppers, May 2015
Figure 57: Leading footwear retailers, Number of retailers used, In-store and online, May 2015
Figure 58: Profile of who buys from how many outlets, in-store and online, May 2015
LEVELS OF SATISFACTION WHEN SHOPPING FOR FOOTWEAR
One in ten women dissatisfied with shoe size options
Figure 59: How satisfied consumers are when shopping for footwear, May 2015
Retailers need to monitor customer assistance
Figure 60: Key drivers of overall satisfaction with footwear retailers, May 2015
Fashion more of a priority when shopping online
Figure 61: Overall satisfaction with footwear retailers – Key driver output, May 2015
Overall satisfaction high but falls among men
Figure 62: Overall satisfaction with footwear retailers shopped at most often, May 2015
TYPES OF FOOTWEAR PURCHASED
Women continue to opt for flats
Figure 63: Percentage of women who have bought shoes from each shoe category, May 2015
25-34s most adventurous shoe shoppers
Figure 64: Repertoire of types of shoes bought by women, by age group, May 2015
Trainers become most popular male footwear
Figure 65: Percentage of men who have bought shoes from each shoe category, May 2015
MOST IMPORTANT FACTORS WHEN BUYING SHOES
Using latest designs to drive footwear sales
Figure 66: Most important factors when buying shoes for yourself, May 2015
Men under 44 focus on footwear brands
Figure 67: Most important factors when buying shoes for yourself, by gender, May 2015
Opportunities provided by older consumers
Figure 68: Most important factors when buying shoes for yourself, by age group, May 2015
WHAT WOULD IMPROVE THE SHOPPING EXPERIENCE
Helping female customers with fit
Figure 69: What would improve the shopping experience when buying footwear in-store or online, May 2015
Young women keen on knowledgeable staff and style advice
Importance of click-and-collect
Figure 70: What would improve the shopping experience when buying footwear in-store or online, by gender, May 2015
Using new store design and innovation to stand out
C&J CLARK GROUP
What we think
Innovative in-store technology enhancing the customer experience
Brand-building store concept
More fashion-focused footwear
Targeting overseas consumers with an eye for stylish British footwear
Company background
Company performance
Figure 71: C&J Clark Group: Group financial performance, 2010/11-2014/15
Figure 72: C&J Clark Group: Outlet data, 2010/11-2014/15
Retail offering
DUNE LONDON
What we think
New stores delivering double-digit sales growth
E-commerce sales benefiting from multichannel strategy
Lifestyle brand evolution
Appealing to American shoppers’ appetite for affordable upmarket European footwear brands
Catering to local demand
Company background
Company performance
Figure 73: Dune Group: Group financial performance, 2010/11-2014/15
Ramping up overseas expansion
Figure 74: Dune Group: Estimated outlet data, 2010/11-2014/15
Retail offering
KURT GEIGER
What we think
Possible sale of the business
Kid’s footwear
Celebrity brand boost
Fashion accessories booming
Online sales success
Company background
Company performance
Figure 75: Kurt Geiger Ltd: Group financial performance, 2010-14
Figure 76: Kurt Geiger Ltd: Outlet data, 2010-14
Retail offering
MACINTOSH RETAIL GROUP (BRANTANO AND A. JONES)
What we think
UK businesses to be sold off
Brantano rolling out concessions
Company background
Company performance
Brantano
Figure 77: Brantano (UK): Financial performance, 2010-14
Figure 78: Brantano (UK) Outlet data, 2010-14
Jones Bootmaker
Figure 79: A Jones & Sons PLC: Financial performance, 2010-14
Figure 80: A Jones & Sons PLC: Financial performance, 2010-14
Retail offering
Brantano
Jones Bootmaker
OFFICE HOLDINGS
What we think
Owner considering potential £300m float of Office
Four distinct go-to specialist destinations
Click-and-collect
Multichannel offering to support German expansion
Tapping into augmented reality to drive brand engagement
Company background
Company performance
Figure 81: Office Holdings Ltd: Group financial performance, 2010/11-2014/15
Figure 82: Office Holdings Ltd: Outlet data, 2010/11-2014/15
Retail offering
SCHUH
What we think
Giving the customer control
International expansion
Company background
Company performance
Figure 83: Schuh Ltd: Group financial performance, 2010/11-2014/15
Figure 84: Schuh Ltd: Outlet data, 2010/11-2014/15
Retail offering
SHOE ZONE GROUP
What we think
Product range development focused
Online growing well
Store portfolio management
International plans
Company background
Company performance
Figure 85: Shoe Zone Group Ltd: Group financial performance, 2009/10-2013/14
Figure 86: Shoe Zone Group Ltd: Outlet data, 2009/10-2013/14
Retail offering
DATA SOURCES AND ABBREVIATIONS
Data sources
Fan chart forecast
Abbreviations