Children's footwear market: confident development and conscious consumption
31.08.2021 7994

Children's footwear market: confident development and conscious consumption

Interview with Elizaveta Turks - CEO of the company PRISM, a distributor of European brands of children's footwear: PABLOSKY, Superfit, ELI, Legero, IMAC. The PRISMA company has been operating on the market since 2008 and during this time has become a supplier of the largest Russian retail chains of goods for children and marketplaces. In our conversation, we touched upon the prospects for the development of the children's footwear market and trends in consumer behavior.

Elizaveta Turks Elizaveta Turks - General Director of PRISMA (distributor of European brands of children's footwear PABLOSKY, Superfit, ELI, Legero, IMAC).

Elizaveta, how do you assess the current situation in the footwear market? How strongly did lockdown affect sales in the children's footwear segment?

If we focus on consumer behavior and the mood in society as a whole, we can assume that the most difficult period has been left behind. During the pandemic, sales in the children's footwear market fell significantly less than in the adult market, where the turnover fell by 20 to 30%. Since children are constantly growing, they need new shoes here and now, so the deferred demand is not formed. But there are shoe types whose sales have fallen sharply and are not looking to grow, such as children's party shoes.

A feature of 2021 can be considered an explosive demand for school collections. Last year, sales of footwear for classrooms and physical education dropped due to the introduction of a distance learning system. And in August 2021, we see that among our wholesale customers and on marketplaces, new items from the school collection of our brands are sold out even before the period of peak demand. In our own retail, we are seeing a 30% increase in sales of school shoes to the maximum indicators of the pre-crisis period!

When, in your opinion, will the children's footwear market return to pre-crisis levels?

This will depend on the pace of the fight against the pandemic and on the population's income situation. Since we represent brands in the “medium plus” price segment, our audience is residents of the capital and large cities, where the economic recovery will obviously proceed at a faster pace. Therefore, according to the optimistic scenario, this is the first half of 2022, with more complex scenarios for the development of events - 2024.

Brands with a strong product and investing in marketing will hit pre-crisis levels in the coming year. For example, our Austrian partner, Legero, following the results of the Superfit custom campaign for the fall-winter 2021 season, not only increased the volume of orders by 28% compared to the fall-winter 2020 season, but also received an increase of 4% in the number of pairs in relation to pre-pandemic fall-winter 2019 season, which was very successful.

But even if the overall volume indicators are fully restored, the market will no longer return to the structure it had before the crisis, neither in terms of the distribution of sales by channels, nor in terms of the composition of the participants' brands.

How will the share of sales channels change in the short term?

In the short term, more than half of all purchases in the children's clothing and footwear segment will be made online. Lockdown prepared shoppers to shop comfortably remotely. On the example of our own online store euromarca.ru, which started working 10 years ago, we are seeing a constant increase in sales, so in July 2021 we launched a new modern version of the site. However, traditional shopping is still important as family shopping is a favorite pastime. At the same time, retail sales will shift to professional shopping centers, and the process of reducing the number of outdated shopping centers has already begun.

Our company is currently working in all sales channels - it is our own offline and online retail, cooperation with all the largest Russian marketplaces, sales to wholesale customers by preliminary order and from a free warehouse. Therefore, our primary task is to optimize all business processes as much as possible and reach a new technological level in accordance with market requirements.

But if we talk about the medium term, the future of the market for goods for children, just like any other, lies with omnichannel - the creation of a single system of interaction with the client at different touch points, when the client can make purchases or communicate with the brand in any way convenient for him.

Will there be a change in prices for children's shoes in 2022?

An ambiguous, but interesting situation has developed. Footwear manufacturers are forced to raise prices, as logistics have risen in price, the price of oil and derivative polymers has risen by up to 25%, cotton raw materials have become more expensive by 40%, and packaging materials by 10%. But the companies whose brands we represent on the Russian market have decided to take on most of the increased costs in order to keep prices attractive. And we, for our part, decided to support them in a similar way. As a result of the change in our pricing policy, wholesale customers will receive additional income, which will be enough to form competitive prices. So, for example, the mark-up for the spring-summer 2022 collection will rise to 2,35 while maintaining the level of recommended retail prices.

How critical is the price factor for your company and the market as a whole?

According to the results of a survey of buyers of our own chain of stores "Euromark", conducted in the spring of 2021, price is a significant, but not a determining criterion for choosing children's shoes. For 78% of parents, the convenience and comfort of the model are much more important, which directly affect the health of their children. 81% of respondents attach great importance to the quality of materials and technologies used. The design of children's shoes is important to 50% of consumers, and the price is important to 49% of survey participants.

To make prices more comfortable for our customers, we conduct retail promotional campaigns and use a pricing method based on determining the price elasticity of demand for each shoe model at a particular moment.

Now the market as a whole is under the influence of the pricing policy of marketplaces, the pricing of which takes place according to a given program algorithm. This is good for the buyer, but it is quite difficult for the seller, since with a low purchasing power of the population, prices will constantly be regulated by discounts and create a dumping effect for offline retail, which does not contribute to its development.

Elizaveta, you receive information from your European partners "first-hand", could you say a few words about the situation on the European market?

Some shoe manufacturers have been severely affected by the pandemic, but this is more true for those vertically integrated holdings, where the structure included their own retail chains and commercial real estate. Some of the companies with local European production have already been able to quickly recover.

Since the beginning of the pandemic, the pace of change in fashion trends has not become as rapid as before, so most manufacturers release collections that are less wide in number of models, but obviously more commercial. The trend towards the use of environmentally friendly materials is not only continuing, but also expanding. Also, the trend of using recycled raw materials, in particular plastic, continues.

You touched upon a topic that is actively discussed today - the fight for the environment. Please tell us how your partners are implementing the principles of the concept of "responsible consumption" in practice?

The European companies with which we cooperate have half a century of experience in the production of children's shoes, and the development strategy towards brand sustainability is very important for them: if a company cannot take responsibility for its actions, it has no future.

Our partners initially focused on caring for the environment, but now they are telling consumers much more about the technologies and methods that allow us to save the planet for posterity. For example, for the production of footwear, the PABLOSKY company uses the leather of animals raised for the food industry, thereby reducing waste, only substances that are harmless to both humans and nature are used for leather processing. In the production of footwear, the company uses water-based glue without any harmful chemicals, and also consumes energy from solar panels (the factory is located in Spain). In the new collection, there are many models with recycled plastic soles.

As for the Superfit brand, most of the models for the spring-summer 2022 season are represented by the Superfit + VIOS line. The term VIOS means a combination of the Latin words “vivo” (life) and “via” (path), as well as the Greek word “bios” (nature), that is, its philosophy in the natural and conscious path of the brand to harmony with people and nature.

This achieves a holistic approach to shoe production - Superfit develops the best footwear for children, taking care of their development, and + VIOS means the use of high quality, environmentally friendly materials and renewable raw materials that help save resources and protect both people and nature in the long term. ...

The concept of smart consumption is not a momentary trend, but a new reality. Therefore, it is important to instill this consumption pattern in consumers, starting from childhood. In the near future, companies that deny sustainability are unlikely to find a loyal audience. Already, there are buyers who are choosing exclusively ethical products, and their number will only grow.

Thus, our European partners PABLOSKY and Superfit create not only beautiful and functional models, taking care of the correct development of our children, but also treat the environment with utmost respect, which is clearly demonstrated by the collections of the spring-summer 2022 season.

Based on the results of online presentations, there was a lot of positive feedback from distributors from all over the world. The PABLOSKY and Superfit collection spring-summer 2022 will definitely become a commercially successful project for our partners. We look forward to sales growth in 2022!

Interview with Elizaveta Turks - CEO of PRISMA, distributor of European brands of children's footwear: PABLOSKY, Superfit, ELI, Legero, ...
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