Marketing Network

MARKETING NETWORK

	What are the top 5 distribution stores?
	What is the overall trend in shoe sales?
	How has technology (i.e. the internet) changed the trends of the industry?
	Chart1: Where are the athletic shoes sold?
	Chart2: How do the prices vary at each distribution store?
	Chart 3: Who are the largest retailers?
	Chart 4: What types of athletic shoes are selling?

The brand name companies primarily distribute to athletic shoe stores, sporting good stores, pro shops and through the internet. Below is a representation of the breakdown of where both branded and unbranded athletic shoes are sold.

Average pricing for shoes reflects that brand names tend to sell through the above mentioned venues.
Branded sales account for 89.2% of the market (1997 data)

For branded companies, the major distribution outlet is the athletic footwear store. Of those, the top 5 are:

Brands also access consumers through major flagship stores such as Niketown. These stores (included in the Other category) do not account for major sales, but rather serve as advertisements for the company.

In the retail market, the current problem is decreased demand. Since athletic footwear was the hot fashion trend in the early 1990’s, sales in some sectors have not shown large increases and have even decreased. Overall trends indicate a movement away from the cross training and basketball categories towards the alternative sports categories such as hiking.

The basketball category declined in 1998 due to the strike and sales went down 26% for the first half of 1999.
Cross training sales fell 13% in the first half of 1999.
Running sales increased by 6.0%
Hiking sales increased by 19%
Sales as a whole were down 10% for the first half of 1999
Overall size of market: 14 billion dollars
Consumers spent an average of $31.48 on athletic footwear in 1998—down 6.9% from 1997.

Square footage of the top five retailers rose 7.8% in 1999 but sales per square foot declined by 4%
Footaction and Just For Feet will be closing stores in 2000.
Nike was trying to reduce inventory by 14% in 1999
Companies are hoping the 2000 Olympics will boost sales.

The Internet (also included in Other) has become the main focus for the marketing segment of the athletic footwear industry.

Market consultants question whether e-commerce is a profitable venture since footwear is a “look and touch” industry.
Problems also arise from conflict between brand-direct marketing and retail marketing. Companies like Nike have to decide what limits to place on the shoes they will offer on their web site and what they will allow theAthletesfoot.com et al. to offer. If brands opt to take full control over Internet sales, they run the risk of being eliminated from retail space in stores.
The Internet allows consumers access to technology such as Nike ID which lets consumers customize their shoes down to the label on the back.
To compete with brand technology, stores such as Athlete’s Foot have introduced in-store technology such as foot-scanning.