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Jan 21, 2020

Overarching Themes Impacting Sports Retail in 2020

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Last week, I outlined my outlook and expectations for the major footwear, apparel, and equipment categories within the sports retail space. These outcomes are largely dependent on trends and events happening more broadly today. Below are the key, bigger picture themes I expect will influence sports retail during the year.

Trade concerns and uncertainty will loom over the industry making planning particularly challenging. More brands will move manufacturing out of China where they can. My greatest concern is if the Chinese consumer turns on Western brands. If sentiment goes against the West, the biggest driver of brand growth will quickly dry up.

A potential recession will be another dark cloud over the business. However, if we were to go into recession, there are some opportunities. Traditionally, categories such as running shoes and camping equipment have outperformed in a recession, even as discretionary purchases diminish.

The presidential election will be a distraction in the second half of the year. Consumer sentiment rides on the outcome.

E-commerce, as it has, will dominate the space. I anticipate that all of the growth we will see in 2020 will come from e-commerce. Physical stores remain a liability. We will continue to have rationalization in sports retail. Some businesses have just been passed by, while others will be cut by brands as they frantically grow their DTC. There will be fewer sports retail doors at the end of 2020 compared to the beginning.

Data will be more important than ever. With the consumer in charge of fashion trends, brands and retailers must mine the data to uncover the next new thing. Success will go to the informed and nimble brands.

The Olympics will have little retail impact. It will be an opportunity for brands to showcase new technologies and models; however, the Olympics remains more of a marketing play and awareness builder than a sales driver.

I expect that eSports and sports gambling will grow exponentially in 2020, but will have little impact on the sports retail business. Endorsements may sell a few t-shirts and sneakers, but will have no real commercial impact.

Women’s sports will continue to thrive, as will the women who play them. This remains the sports industry’s greatest opportunity. But support for women must be deep and sincere. Saying something and doing another will not work.

Inclusivity, diversity, and sustainability are all topics that are top of mind for young consumers. Brands can do well while doing good. But brands must be transparent and purposeful about their efforts. It is not enough to espouse empty platitudes. Brands must live out their values transparently, or suffer the consequences.

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