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Sneakernomics: The State of the Outdoor Industry

Jan 11, 2017
Matt Powell, Vice President, Industry Analyst ;
Sports

It was a rocky year for the outdoor industry. The void created by the bankruptcies of Sport Chalet and The Sports Authority had a huge impact on the industry, and the warm weather did not help. But an underlying cause was very much self-inflicted.

From my point of view, the industry needed to focus on newness and shifting to a more lifestyle approach, and less on continuing along the same path and expecting to reach a different destination.

Overall sales for the outdoor industry (including athletic specialty, sporting goods, outdoor specialty, and sport specialty e-commerce) were soft in the 12 months ending November 2016. Dollar sales declined in the low single-digits. The last three months were particularly difficult, with sales down in the low double-digits. The decline primarily stemmed from the athletic specialty/sporting goods channel, which saw sales fall in the mid-teens. This is no surprise as the Sport Chalet and The Sports Authority bankruptcies closed over 20 million square feet of sporting goods retail, or about 10 percent of the market.

Looking at specific categories, we see that the vast majority of the top-selling outdoor footwear styles sold from September through November were the same as in 2015. The lesson here is, if we don’t give the customer newness, we become a replacement business. Further, if you covered the logo on most of the shoes, you would be hard pressed to identify the correct brand. Too much sameness is the kiss of death in retail today.

Outerwear sales were up in the 12 months ending November 2016, yet flat in the latter three months compared to the prior year. While part of this was warm weather, a sea of sameness at retail had to have a negative impact. We are seeing major share shifts away from the traditional share leaders as consumers are on the hunt for fresh ideas.

Camping, which had been a driving force for outdoor, has also slowed and sales have now been down. Again a lack of newness has hurt this category.

Even hot categories like coolers, which had been experiencing exceptional growth, have now begun to cool off. Coolers and cookware saw sales slow dramatically over the last three months.

The outdoor industry has a great opportunity to capture the hearts and minds of Millennials and Gen Z. The values of the industry are well aligned with these cohorts. But these cohorts also demand new, fun, and “good enough” products. The industry is just not providing that right now.

The outdoor industry can rebound from this difficult time, but it will take changing the business model and altering the way we view the consumer to achieve it.

Source: The NPD Group, Inc. / Retail Tracking Service, Outdoor Industry View, 12 months ending November 2016


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