Sneakernomics: Solutions for the Sports Retail Industry
Matt Powell, Vice President, Senior Industry Advisor ;
In my annual predictions here, I explained why 2018 is positioned to be another mediocre year for the U.S. sports industry, as it is following in the footsteps of the tepid sales growth, heavy promoting, and weak profits of 2017. What can the industry do to reverse these fortunes? There is no magic bullet, but there are several steps that brands and retailers can take to improve results and get the industry back on track.
First and foremost is the need for great product. Brands have continued to make and sell products that consumers don’t care to buy, which has further fanned the flames of promotion. Technology as fashion is out of style right now (and may never come back). It’s sportswear and athleisure that rule the runway, and brands and retailers must feed this trend.
The industry also needs a new hot look. The modern runner trend which has carried the market for the last few years is getting ubiquitous. The industry must quickly address this and find the next new idea, before the modern runner gets played out.
Brands and retailers must also carefully curate their assortments to address their core consumer. Gone are the days of being all things to all people. Likewise, retail formats must be more diverse and focused; cookie cutter formats are antithetical to the market. Personalization is the new currency, and “Brand Me” will be the most important brand of all.
That said, there is a crying need from the consumer for uniqueness and differentiation -- small is the new big. Across the landscape, we see growth coming from smaller brands and unique items. Brands need more items, not fewer, to address this need.
Private label looks more appealing every day, as retailers seek shelter from the promotional storm. Brands and retailers must collaborate to create private brand footwear and apparel.
Celebrity collaborations must either become commercial in nature or be abandoned. Microscopic releases might drive Instagram likes, but they do nothing for the business.
The line between what is an athletic shoe and a casual shoe continues to blur. We only need to look at Steven Madden’s athletic business last year to see the future. The nimble brand and retailer will be the winner.
Our business must be omnipresent, available to the consumer wherever, whenever, and however they want to shop. Physical stores must be places of discovery to surprise and delight our customers. At the same time, the retail transaction must be frictionless. All impediments to speed must be removed.
Last but certainly not least, data must drive decisions. In this fast-changing fashion environment, rich data will inform the best decisions. Forecasting and predicting have never been more essential.
Expectations are that 2018 will be a challenging year for sports retail; however, retailers and brands that adopt these recommendations will find it to be a more successful year than their peers.
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