Why footwear brands are rethinking allocation and what it means for margins

Footwear brands often think they have an inventory problem and this is true. But while they endeavour to solve this industry-wide issue, they also neglect to address allocation.

If you ask a typical footwear brand, they’d tell you that selling out is rarely a problem.

Ask them if they can sell well across every size, store and channel, however, and you’ll get a very different answer.

Footwear is synonymous with volume, but surprisingly, with a decent system in place, the volume isn’t as tricky to manage compared to dealing with where all those SKUs actually end up.

Brands could have a full warehouse yet still lose sales on the shop floor. You know the story:

Wrong sizes. Wrong places. Wrong time.

Popular styles end up missing key sizes, unsellable stock clogs up the tail end of your assortment and the only lever is to markdown.

This isn’t just an inventory problem. It’s an allocation problem.

The hidden cost of tailed inventory

When stock is misaligned with real demand (e.g., size-level, store-level, region-level), the fallout compounds quickly:

• Incomplete size runs mean you lose the sale entirely
• Dead stock accumulates in low-performing locations
• Markdown pressure starts building from day one

The trouble footwear brands find is that many systems simply weren’t designed for this level of nuance. Size curves differ by region.

Some partners require item-level prep before delivery. Some orders can’t be split.

More and more often, we’re seeing that fulfilment needs to flex across channels and geographies in real-time. It can’t be static anymore. Demand changes fast.

From one-size-fits-all to smart, responsive allocation

Leading footwear brands are navigating this shift by embracing more agile ERP setups that aren’t rigid, demanding fixed-size packs and static allocation rules.

Footwear-specific ERPs allow for smarter prioritisation, strategic stock distribution and intelligent compromise.

For example, when demand outweighs supply, priority hierarchies can ensure your key wholesale customers, top-tier stores, or VIP accounts get the sizes they need, without manual intervention.

Brands also use these tools to ringfence stock and guarantee availability for planned call-offs, or allocate from multiple channels to ensure critical online orders are fulfilled without delay.

These systems typically run allocation calculations twice daily, giving you a complete snapshot of your order status while still allowing for priority adjustments as new stock arrives.

This provides the agility to react to stock fluctuations, vendor delays or shifting customer behaviour.

Breaking the cycle of markdown dependency

One of the most powerful outcomes of better allocation is how it reduces the need for reactive discounting.

By fulfilling size curves more accurately through features like size exceptions handling, the system helps minimise situations where you’re left with fragmented inventory.

When allocation rules are applied effectively, you can make more informed decisions about stock distribution before problems compound.

The ability to handle exceptions like extreme sizes more flexibly (e.g., shipping orders without XXL if a continuous size run is still possible) also means fulfilment can go ahead without holding everything up.

All of this adds up to higher full-price sell-through, lower waste, and a far more predictable margin structure, particularly in highly seasonal markets like footwear.

Smarter, safer and more financially responsible

Modern ERPs tailored for footwear allocation don’t just help improve your inventory management; they protect your business and margins.

Leading brands now run automated credit checks during allocation, ensuring stock isn’t released to customers who exceed their credit limits.

Others are implementing priority-based allocation logic into their systems, so inventory is assigned based on your defined customer hierarchy, alongside up-to-date sales data, customer value, and supply conditions.

This results in fewer gaps, more fulfilment confidence, and a better handling of working capital and financial risk.

Allocate with confidence

For footwear brands allocating inventory across channels, seasons and regions, footwear-oriented ERPs have quietly become one of the most critical levers in the business, touching sales, customer satisfaction, margin protection and growth.

ERPs like our own, embedded in D365, ensure that allocation isn’t rigid, reactive or manual.

If you’d like to discuss how our ERPs can improve your allocation process, feel free to drop us a line today.