Sneakernomics: Predictions 2025

The very first prediction I should make is that I should not be making predictions this year. 

The macro environment is too precarious.  The two biggest and most unpredictable macro issues are mass deportations and tariffs.

Mass deportations will be a drag on the economy and inflationary. 

·        Retailers are reporting a falloff in traffic from Hispanics, much like we saw in 2016.

·        I saw a report recently that 30% of agriculture workers are unauthorized and 25% of meat processing workers are unauthorized. Mass deportations will cripple these industries and drive prices up.

·        The 11-million-person target represents about 3% of the US consumers. If 3% of consumers are deported, business will surely be affected negatively.

Tariffs will be inflationary.

·        Tariffs are taxes on the consumer.

·        While brands and retailers will do their best to absorb the additional cost of the tariffs, prices will have to rise.

·        Higher prices will hurt retail.

Assuming somehow these macro issues are avoided, the underlying business environment is improving.

Newness/freshness drives sales

·        We still look stale at retail.

·        Retailers need to take on more risk.

·        Brands need to respond to that.

·        This point is not necessarily about technical innovation.  It’s more about having products the consumer has not seen and grown tired of.

Smaller challenger brands will continue to thrive.

·        Smaller brands continue to deliver fresh new ideas.

·        Consumers want uniqueness, which the smaller brands deliver.

Share shift will continue on footwear walls.

·        As Nike continues to work through its issues, challenger brands continue to take share.

·        Nike’s number one position is not in jeopardy, but the brand will likely continue to shed share.

·        Brands that are fresh will leverage this situation.

Performance-as-fashion trend maintains.

·        This trend started in footwear but now has a strong foothold in apparel.

·        The days of hoodies and sweatpants are not over but there is not much energy there.

·        We’ll see the trend expand from tennis skirts and running shorts into other categories.

Women will drive the trends.

·        Men’s footwear trends have always been about scarcity and hype.  With that model in triage, women have taken a leadership position in setting trends.

·        Women are not driven by hype but rather by style and access, enhanced by influencers.

·        The recent Samba and Gazelle trends are an example of that leadership.

But women will remain underserved by the market.

·        The industry still has not properly responded to the need for women’s lasted performance footwear.

·        Even in sportswear, she still is the afterthought.

Color is everywhere (too much?)

·        At TRE, color was the big story.

·        Very bright, very performance oriented

·        But is it too much?

·        How to hook up apparel?

Category trends in footwear

·        Performance run will be the star category.

·        Lifestyle basketball and run will be challenged on the Nike reset.

·        Reto still strong net of Nike

·        Outdoor and Athletic continue to merge.

·        Cold weather continues to be challenged.

Don’t sleep on Skechers.

·        Skechers has always been the brand we wanted to ignore.

·        Skechers is now closing in on $10 billion (bigger than Jordan)

·        How can a retailer claim they are focused on the female consumer and not carry the #2 women’s brand?

Business becomes more normal (as in plannable)

·        It feels like things have finally stabilized.

·        Inventory is under control; promotions abating.

·        I don’t expect robust growth, but I do think we will return to a time when we could plan the business and execute.

All in, barring the macro issues I began with, I expect 2025 to be a good but not great year.