Footwear market: Consumers desire comfort over appearance

Consumers' desire for comfort is putting brands such as Crocs (CROX), Deckers (DECK), and Skechers (SKX) in the spotlight. In 2023, the global comfort footwear market reached $26.35 billion and is expected to near $50 billion by 2028.

Brooke DiPalma highlights the brands that stand to benefit from the rising appeal of comfortable footwear and highlights shifting trends in the workplace and among younger generations pushing comfy footwear higher.

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Editor's note: This article was written by Gabriel Roy.

Video transcript

[AUDIO LOGO]

JOSH LIPTON: When was the last time you wore a pair of UGGs or Crocs? Well, if you have, you're not alone as consumers are now preferring comfort over appearance. Brooke DiPalma is here with the details. Brooke.

BROOKE DIPALMA: Good afternoon, Josh. Good afternoon, Julie. I mean consumers desire to be comfy all day is putting once stale brands into the spotlight. So think UGGs to work, think Crocs to parties, and maybe even Birkenstocks likely have made an appearance during the colder months with their hit shoe. You could see right here the Boston clog.

Now, last year in 2023, the global comfort footwear market reached $26 billion. And the desire to be comfy is slowly expected to grow. You could see here by 2028, the data platform, Research and Markets, expects it to surpass $47 billion.

And now get this, Americans only buy about seven pairs of shoes a year, according to Stifel analyst Jim Duffy. So top footwear brands like Adidas and Nike, well, they may want to watch their tails here as these smaller companies could get a lot bigger. In the comfy shoe market, those that are gaining traction include Decker Brands with growth from the brand UGG and those HOKA sneakers. Now, Crocs is also in focus with innovation and personalization with those Jibbitz Charms and Birkenstock, the OG comfy shoe, as well as Skechers. Now, UBS analyst Jay Sole said that all four of these brands are, quote, "really well positioned to continue to deliver nice growth," adding that their stocks could face ongoing pressure if consumers strength changes.

Now this trend has been growing for quite some time. And if you take a look at this Crocs revenue growth, we were seeing we were seeing growth pre pandemic. But it more than tripled with 2023 revenue coming in at $3.96 billion. Now, why is that? Well, consumers who tried Crocs during the pandemic around here actually decided that they're going to now wear them in public as dress codes for kids and the office are way more relaxed than what they used to be.

Now, two brands that might have missed out on this trend, VF Corporation brand Vans, as well as Allbird. Now, Wedbush analyst Tom Nikic said that they failed to introduce new products. That's as far as VF Corp brand Vans go. And Allbirds, well, they struggled to gain customers because of a limited physical retail presence.

Now, guys, all eyes are on the next generation, think Gen Alpha and Gen Z. And in Piper Sandler's latest consumer survey with teens, Crocs actually fell from number seven to number six here and that's mainly due to the popularity of, get this, UGG. And Crocs were also ranked the third brand that could be, quote, "on the way out with male teens."

So losing popularity there. And Josh, Julie, what I've learned most while doing this story, and while writing about what some may consider to be ugly shoes, is that there are a lot, a lot, guys, of hot takes in this newsroom. So many opinions while I was looking to write this story.

JULIE HYMAN: Well, I mean, you are a Birkenstocks--

JOSH LIPTON: Yes.

JULIE HYMAN: --guy, which I think are considered--

JOSH LIPTON: All year around.

JULIE HYMAN: --to be in this category. I have a big HOKA consumer at home.

JOSH LIPTON: Yeah.

JULIE HYMAN: So like I don't know.

JOSH LIPTON: See, I think breaking down comfort and appearance--

BROOKE DIPALMA: But are you wearing them more? Is this more of, like, a daily occurrence versus--

JOSH LIPTON: I'm daily.

BROOKE DIPALMA: --what it used to be?

JOSH LIPTON: I'm daily.

BROOKE DIPALMA: Daily. Every day.

JOSH LIPTON: See, the problem, comfort versus appearance, I mean, I happen to think the Birkenstock Boston is a comfortable, handsome--

JULIE HYMAN: And good looking shoe.

JOSH LIPTON: --shoe.

JULIE HYMAN: I guess beauty is in the eye of the beholder, I guess--

JOSH LIPTON: Yeah, there we go. That's the lesson.

JULIE HYMAN: --is the bottom line. All right, thanks, Brooke. Appreciate it.