Home Blog 2019 Holiday Takeaways for the Sports Industry
Jan 7, 2019

Sneakernomics: Nobody Wins a Race to the Bottom

Subscribe to our blog

The U.S. sports retail business used to be aspirational and inspirational. Consumers used to believe that these products would help them perform better, which would often lead to being inspired to take up new activities. And if the products didn’t help their performance, most consumers were happy with how they looked wearing them.

Now, we have a race to the bottom; and that’s a race nobody wins.

Holiday 2017 was the most promotional on record – that is, until Holiday 2018. This season’s promotional activity was driven by the brands, which are making it ever more apparent that their growth comes at any expense, including that of their wholesale partners.

Most brands kicked off their holiday promotions before Black Friday, setting the tone for the season. One brand took 40 percent of its outlet pricing, signaling both a sales and inventory problem. Another was deeply discounting every week during the season.

The retailers were not immune to the promotions, with one taking 25 percent off the whole store (which is the surest way to sell all the good stuff at a discount and be left with the rest in need of further reductions).

We’ve trained our customers to wait for the deal. The products selling quickly are those that consumers think they can flip in resale marketplaces. And even that model is starting to show flaws. In an unprecedented event, one reseller took 15 percent off a popular “designer’s” shoe before the holidays. Resale multiples continue to sag.

What caused this to happen? Weak product lines, failed business models, and too much reliance on old thinking is my opinion.

It’s not too late to change the course here. But brands will have to be disciplined (and do less business, in the short term). Retailers will have to be restrained from chasing the last (and least profitable) sale.

It’s going to be hard to put that genie back in the bottle, but it is possible. We need to return the industry to one of aspiration and inspiration or we run the risk of just being another teen retailer, with massive discounts needed to populate the stores. This new year brings with it new opportunity for the industry to change course.



Stay current in your industry
SUBSCRIBE

Related Blog Posts

Tagged: Sports


Make Way for the Anglers
Make Way for the Anglers

Fishing has established itself as a growth driver for the U.S. paddlesports market, but is also emerging as a focus of growth for the broader specialty outdoor market. Dirk explains how, and why, fishing apparel and equipment are making their way into more stores that once avoided the category.

Sneakernomics: Back-to-School 2019 Athletic Footwear Trends
Sneakernomics: Back-to-School 2019 Athletic Footwear Trends

NPD’s sports industry advisor Matt Powell offers up his perspective on how the back-to-school season of today differs from years past, and what athletic footwear brands and products are trending this year.

Sneakernomics: Athletic Footwear and Activewear’s Performance in the 1st Half of 2019
Sneakernomics: Athletic Footwear and Activewear’s Performance in the 1st Half of 2019

NPD Sports Industry Analyst Matt Powell reviews the performance of athletic footwear and activewear categories during the first six months of 2019. From sport and performance footwear to athletic attire and more, this performance review takes a look at where the industry currently stands and could potentially be heading.

Sneakernomics: First Half 2019 Team Sports, Golf and Fitness Equipment
Sneakernomics: First Half 2019 Team Sports, Golf and Fitness Equipment

Given all the headwinds in team sports and golf, the industry fared better than expected in the first half of 2019. In this post, Sports Industry Analyst Matt Powell breaks down increases and declines from the first half of the year.

Newsletter

Subscribe and get key market trends and insights relevant to your industry each month.

We will not sell your information. View privacy notice.

Follow Us

© The NPD Group, Inc.