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Nov 11, 2019

Let’s Grow the Pie, Not Fight for the Last Slice

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Earlier this fall, my son played his first season of flag football. While I could write an entire post about his team and their play, I want to focus instead on the broader collaboration that supported the league, as it provides a roadmap to growth for sports manufacturers and retailers.

Tackle football has been facing challenges over the last decade, as the risk of head injury and publicity around these concerns are factoring into participation rate declines. According to the National Federation of High School’s latest participation study, football participation declined by 3% in the last year and is now at its lowest participation level since the 1999-2000 school year.

Instead of accepting the fate of a declining category, both The National Football League (NFL) and Dick’s Sporting Goods are making investments in an attempt to grow youth participation by focusing on flag football. In fact, according to the Sports and Fitness Industry Association (SFIA), participation in flag football is on the rise. Based on SFIA’s 2017 participation study, flag football was one of the top growing sports activities, up 6% in participation.

Growing football participation, and thus the category, by focusing on flag football benefits both the NFL and Dick’s. The NFL gains new fans, as many kids get to play flag football in NFL team logoed jerseys, while Dick’s gains short term revenue by being the go-to source for shoes, mouth guards, and training equipment.

This is just one example of a strategy focused on growing a category versus gaining share, which in turn provides growth for brands and retailers. This partnership clearly benefits both the brand and retailer, who ultimately have a common goal.

In cycling, deliberate focus on the electric bike (e-bike) category is also creating growth. This growth rate is roust, with e-bike dollar sales up 183% over the last two years, according to NPD’s Retail Tracking Service. The growth rate is so robust that even brands losing market share continue to benefit from absolute growth. This opportunity for profit, even while losing share, creates a powerful incentive for manufacturers and retailers to support non-profits, like PeopleForBikes, that are advocating strongly for the category.

Sometimes, brands also benefit from category growth that is circumstantial. Look no further than the growth of rock climbing shoe sales after the release of the Academy Award winning documentary “Free Solo,” which captures Alex Hanold’s journey to climb El Capitan without safety equipment. This raised the bar on the public’s exposure to rock climbing, and following its release climbing shoe sales doubled in growth, according to NPD.

All of these examples point to opportunities to find new growth by boosting interest in a category through increased exposure as opposed to “beating” another brand. In all three examples, growth stemmed from efforts to invite participation versus direct brand competition. As some sports activities face dwindling enthusiasm due to safety concerns or increased media and gaming consumption vying for our share of time, this focus on activity and category growth is a powerful strategy for brands and marketers to create revenue. In the spirit of Thanksgiving, let’s place more focus on growing the pie, and less on competing for the last slice.

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