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Nov 27, 2018

Sneakernomics: Hot Topics at the Outdoor Retailer Show

Matt Powell, Vice President, Senior Industry Advisor ;

Sports

@NPDMattPowell

At Outdoor Retailer’s first ever November show earlier this month, I put a different spin on the format of my industry trend breakfast and focused on a Q&A, taking questions from the audience. Here are some the questions and common themes I’ve identified as being top of mind for folks in the industry.  

We are seeing more subscription boxes at our doorstep, Millennial-friendly catalogs in our mailbox, and pop-up stores around our cities. What do you see as the future of these retail trends for the apparel and general soft goods markets?

While there’s a lot of hype around subscriptions, we are seeing a high level of subscription abandonment. If subscription services are to succeed, they need to develop products that are more personalized. They also must leverage their best customers, as they represent the majority of the sales. Catalogs present another way for brands and retailers to be omnipresent – available to the consumer whenever, wherever, and however they want to shop. Pop-ups are fun and a great brand builder, but I don’t expect them to be commercially profitable in the long run. However, with the amount of retail vacancies, there may be an opportunity to exploit the lower rents.

What are some of the major generational trends? What other cohorts should the outdoor industry focus on bringing in? 

Boomers are no longer acquiring many things. Instead, they are spending their money on experiences, such as travel. The outdoor industry has so far failed to fully leverage this interest in travel. Millennials remain cash strapped, so they are looking for value and versatility. The outdoor industry remains too focused on pinnacle products and is leaving money on the table. The secondary market (rent, buy used, Uber-like services) is ideal for the Millennial as it is less expensive for each use and much more convenient. Both Millennials and Gen Z consumers are supporters of sustainability, and the outdoor industry must raise the bar on speaking forcefully to these issues. In terms of other groups that should be emphasized, the outdoor industry continues to underserve the female consumer. The women’s market is our greatest failure, yet our great opportunity. In addition, in presentations I have highlighted a study done by the National Sporting Goods Association (NSGA) on the opportunity to leverage the interests of the Hispanic consumer in the outdoor industry. So far, this suggestion has been largely ignored, but I believe there’s opportunity with this consumer segment.

As more brands focus on sustainability, do you see economies of scale helping to drive down cost, so the consumer does not necessarily have to pay more for these products?

I do think we will see some cost relief due to scale, but sustainable products are always going to be more expensive. However, a recent NPD study showed that one-third of Millennial women are willing to spend more on sustainable products. The study also showed that many consumers have no idea whether they are buying a sustainable product or not. The industry can do much more to educate consumers and tell their sustainability story.

How important are collaborations within the outdoor industry? Who is doing it well, and why?

The outdoor industry is far too focused on pinnacle athletes; the emphasis must shift to the everyday user. The beauty market is a great industry to learn from in this regard. When we look at the beauty business, which remains one of the hottest industries that NPD tracks, there are some important lessons. Beauty is moving away from celebrity influencers to micro-influencers who have a small, but loyal following. These micro-influencers are honest, open and relatable.

How do you see e-commerce and brick-and-mortar blending together? In today’s retail environment, what do you see as the most effective avenues for marketing to consumers?

The internet will continue to be the primary sales driver for the outdoor industry. However, lines are blurring; is “buy online, pick up in store” a store purchase or an internet one? We are seeing more stores serving as warehouses for internet sales. At some point, we may no longer be making the distinction, but e-commerce will remain the dominant growth story. Digital remains the easiest and most cost-effective way for brands and retailers to tell their stories. The platforms may change, but the web will remain the best marketing tool.

How can small specialty retailers successfully compete with the bigger players? Is there an advantage to building a local presence, or must they set their sights on geographically broader markets?  

Hyper-local is a key differentiator between the smaller and bigger players in the market. Specialty retailers must be immersed in the community they serve, but broaden their consumer reach within these communities. Specialty retail has a reputation for focusing on the pinnacle user, but there is also opportunity among the everyday user. In addition, specialty retail must have an internet presence, even if it means using a third-party provider.


Upcoming Event


Trend Presentation and Breakfast at Outdoor Retailer Summer Market

Date: Wednesday, June 19 | 7:00 – 9:00 a.m. MDT
Location: Denver, CO
Speakers: Matt Powell, Senior Industry Advisor, Sports, The NPD Group | Julia Day, Executive Director, Business Development, Sports, The NPD Group
Overview: Join us for breakfast and see where the marketplace is going and what your customers are thinking. This popular presentation will help you understand current market trends and dynamics, explore who is coming into your stores, and discover what drives them there. Get a winning advantage — a clear view of exactly what's happening in outdoor consumers' shopping trends. Breakfast will be available at 7:15 a.m., giving you an opportunity to connect with analysts and executives from our Sports practice prior to the presentation. Note: You must be registered for the Outdoor Retailer Summer Market to attend. 

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