What factors influence pricing, and how to work with retail prices for shoes
Footwear retail is one of those segments that is highly dependent on seasonality. Pricing in the footwear business, in turn, depends on a multitude of factors, from production costs to the vagaries of weather and regional factors.
SR's expert in product assortment and management, Emina Ponyatova, discusses the key principles of pricing footwear products, as well as the main pressure factors and challenges facing footwear retailers in 2025, and offers recommendations on how to ensure successful and profitable retail.
Emina Ponyatova -
expert in the areas of “Assortment planning”, “Analytics and category management” with more than 15 years of experience in the fashion industry. Work experience: buyer and category manager - brands Replay, Pepe Jeans, Hugo Boss, Armani Collezioni, Stefanel, Missoni. Head of Analytical Department - TsentrObuv and Modis. Author and speaker at courses at Fashion Factory, SkillBox and Fashion Advisers schools, consultant and online coach, teacher at the Russian Economic University named after G.V. Plekhanov.
Pricing in the footwear business depends on many factors: cost, market positioning, competition, demand, and brand strategy. Let's look at the key principles of pricing.
1. Cost of production
The base price is formed from the costs:
- materials (leather, textile, rubber, fittings);
- production (labor, equipment, rent);
- logistics (delivery of raw materials and finished products);
- overhead costs (marketing, packaging, certification).
Example:
If a pair of sneakers costs 2,000 rubles to produce, the minimum price should cover these costs plus profit. This requires understanding and accounting for all factors and expenses, including advertising costs. Often, the cost of goods doesn't even include storage costs and end-of-season inventory. Ideally, all factors should be accurately calculated and factored into the cost of production.
2. Markup and profitability
Typically, the markup in shoe retail is 50-300%, depending on the segment:
- Mass market (Zara, Bershka) – 50-150%
- Premium (Geox, Ecco) – 100-200%
- Luxury (Gucci, Louis Vuitton) – 200-500% and higher.
Formula for retail price using markup:
Retail price = Purchase price × (1 + Markup in shares)
or
Retail price = Purchase price + (Purchase price × Markup in %/100)
Example of calculation:
Let's say a store purchases a product for 2,000 rubles, and the markup is 30%. In this case, the retail price would be as follows:
2,000 × (1 + 0,30) = 2,000 × 1,30 = 2,600 rubles
Reverse calculation (markup from retail price):
If the retail price and purchase price are known, you can find the markup as a percentage:
Markup (%) = (Retail price − Purchase price) × 100%
When calculating profitability or markup, it is important to use a differentiated approach: set a lower markup for basic products, and a higher markup for fashion or risky products.
3. Competition and market positioning
Here, the majority of stores operate in three segments:
- economy segment: prices below the market average, emphasis on sales volume;
- middle segment: balance of price and quality (Nike, Adidas);
- Premium: high price as an indicator of status.
Analyzing competitors' prices helps you choose the optimal price range and decide on a price level. However, once you've chosen your positioning, it's important to stick to your initial strategy and communicate the key values underlying your pricing to your target audience.
4. Demand and seasonality
The footwear segment is highly dependent on seasonality. Here are ways to influence price and demand:
- discounts in the off-season (winter shoe sales in spring);
- increasing prices on trendy models (for example, limited edition sneakers);
- flexible prices (for example, dynamic pricing in online stores).
When setting the initial retail price, it's important to consider all input data and factor in the ability to influence the price during the season through discounts and promotions. A higher markup at the start of a product line allows for discounts or promotions. A lower markup indicates confidence in sales and minimal discounting potential. In other words, the higher the risk of product unsold, the higher the markup.
In this way, we insure our risks.
5. Distribution channels and their impact on price
Today, companies and brands operate across multiple channels simultaneously:
- offline stores – higher prices (rent, staff);
- online sales – you can reduce the price by saving on rent;
- wholesale purchases – volume discounts;
- Marketplaces – high traffic, but also high competition.
Each distribution channel has its own specifics, but an omnichannel strategy—using all distribution channels to optimize costs—is currently the most relevant. You can start with online sales, marketplaces, or wholesale, and then expand to offline stores.
6. Brand and Perceived Value
The retail price may be influenced by the degree of brand awareness and recognition:
- famous brands may inflate prices because of their image;
- Startups often start with low prices to attract customers.
7. Additional factors
- Customs duties (for imported footwear).
- Exchange rate (if materials/production is abroad).
- Exclusivity (handmade, limited collections).
1. Economic factors
- A decrease in purchasing power due to inflation, crises or rising unemployment.
- Increase in cost (logistics, raw materials, energy resources).
What to do?
Optimize the product range (focus on the affordable segment + premium for a loyal audience).
Implement flexible discount systems and installment plans.
2. Competition and digitalization
- Growth of online sales (pressure from marketplaces, D2C brands).
- Customer expectations: fast delivery, personalization, easy returns.
Develop omnichannel (online/offline integration, try-on via AR, click&collect).
Strengthen digital marketing (targeting, UGC content, collaborations with influencers).
3. Sustainable development and ethics
- Demand for eco-friendly footwear (recycled materials, carbon neutrality).
- Regulatory requirements (taxes on fast fashion, bans on harmful materials).
What to do?
Introduce sustainable collections and work with local producers.
Communicate with your customers and tell them about your eco-friendly initiatives (through packaging and social media).
4. Changing consumer trends
- Shift in demand towards comfort (sneakers, unisex models) and hybrid footwear (office + sports).
- Growth of the secondary market (resale, shoe rental).
What to do?
Monitor trends through social networks (TikTok, Pinterest).
Test new models (for example, collaborations with designers).
5. Logistics and supply chains
- Geopolitical instability (breaking chains, sanctions).
- The need for rapid response to demand (accelerating production-to-shelf).
What to do?
Diversify suppliers (Asia + Türkiye/Eastern Europe).
Implement demand forecasting technologies (AI, BIGdata).
6. Personalization and customer experience
- Waiting for customization (design adjustment, 3D printing).
- The importance of service: consultation, after-sales service.
What to do?
- Implement loyalty programs with personalized offers.
- Train staff in soft skills (consultations on sustainability, selection by style).
Let us draw a conclusion from all of the above.
Success in 2025 will require footwear retailers to:
- flexibility (adaptation to the economy and trends);
- digitalization (improving CX, channel integration);
- sustainability (ecology + ethics as a competitive advantage);
- focus on the client (personalization + service).
Retailers who can combine these elements will not only be able to withstand the pressure but also increase their market share.
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