What factors affect pricing, and how to work correctly with the retail price of shoes
Shoe retail is one of those segments that depends very much on the seasonality factor. In turn, pricing in the shoe business depends on many factors - from cost to weather vaprices and regional features.
SR expert in working with the assortment and its management Emina Poniatova talks about the key principles of price formation for the shoe range, as well as about the main pressure factors and challenges of 2025 for shoe sellers, and gives recommendations on how the store to remain successful and profitable.
Emina Poniatova is an expert in the fields 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 the analytical department - "CenterObuv" and Modis. Author and speaker at courses at Fashion Factory, SkillBox and Fashion Advisers schools, consultant and online coach, teacher of REU named after G.V. Plekhanova.
Pricing in the shoe business depends on many factors: cost, market positioning, competition, demand and brand strategy. Let's consider the key principles of price formation.
1. Production cost The base price is formed from the costs of:
If a pair of sneakers costs 2,000 rubles in production, the minimum price should cover these costs + profit. To do this, it is necessary to understand and take into account all factors and costs, including advertising costs, and often, the cost of goods does not even include storage costs and balances by the end of the season. Ideally, all factors should be correctly calculated and necessarily included in the cost of production.
2. Margin and profitability
Usually the mark-up 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 above.
Retail price formula through markup:
Retail price = Purchase price × (1+Surcharge in shares)
It is important to use a differentiated approach when calculating profitability or markup: put a lower markup for the basic assortment, a higher markup for a fashion or risky assortment.
3. Competition and market positioning
Here, the bulk of stores work in three segments:
Economy segment: prices are below average market prices, emphasis on sales volume;
Middle segment: balance of price and quality (Nike, Adidas);
Premium: high price as a status indicator.
Analysis of competitors' prices helps to choose the optimal range and decide on the price level. But having chosen positioning, it is necessary to adhere to the initial strategy and convey to the target audience the key values that formed the basis of pricing.
4. Demand and seasonality
The shoe segment is very dependent on seasonality. Ways to influence price and demand:
Discounts in the off-season (sale of winter shoes in spring);
Price increase for trend models (for example, limited edition sneakers);
Flexible prices (for example, dynamic pricing in online stores).
At the stage of forming the first retail price, it is necessary to take into account all the input data and lay down the possibility of influencing the price within the season - through discounts and promotions. The mark-up is higher at the entrance to a number of products - this makes it possible to give a discount or launch this product under the promotion. The lower mark-up means our confidence in sales and minimal discount opportunity. That is, the higher the risk of non-sales of products, the higher the mark-up.
Thus, we insure our risks.
5. Sales channels and their impact on the price
Today, companies and brands work simultaneously in several channels:
Offline stores - higher price (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 sales channel has its own specifics, but now the most relevant is the strategy of omnichannel - the use of all sales channels to optimize costs. You can start with online sales, marketplaces or wholesale sales and then connect offline stores.
6. Brand and perceived value
The retail price may be affected by the degree of fame, brand recognition:
- well-known brands can overprice 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 abroad).
Exclusivity (handmade, limited collections).
1. Economic factors
Decrease in purchasing power due to inflation, crises or rising unemployment.
Cost growth (logistics, raw materials, energy resources).
What to do?
Optimize the assortment (emphasis on the available segment + premium for a loyal audience).
Implement flexible discount and installment systems.
2. Competition and digitalization
Growth of online sales (pressure of marketplaces, D2C brands).
Customer expectations: fast delivery, personalization, convenient return.
What to do?
Develop omnichannel (online/offline integration, fitting via AR, click&collect).
Strengthen digital marketing (targeting, UGC content, collaborations with influencers).
3. Sustainable development and ethics
Demand for eco-friendly shoes (recycled materials, carbon neutrality).
Regulatory requirements (taxes on "fast fashion", bans on harmful materials).
What to do?
Introduce sustainable collections, work with local manufacturers.
Communicate with the client and tell him about your environmentally friendly initiatives (through packaging, social networks).
4. Changes in consumer trends
Shifting demand towards comfort (sneakers, unisex models) and hybrid shoes (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).