In today’s world, it seems everyone is an athlete, an outdoorsman, and a yogi. Or wants to be. Or at least wants to look like one.
To help you win in this growing market, The NPD Group provides the broadest and deepest global view of the sports and recreation marketplace available today. With NPD you get the most complete, accurate, and comprehensive information about your products’ sales and your consumers to help you track trends, identify business opportunities, and grow sales.
The NPD Group’s data delivery tools equip you to dig into your products’ performance at the category, brand, and item levels. And you can take a step back to understand the macro view of sales trends by looking across relevant categories (apparel, footwear, equipment, and accessories), for a complete industry view.
A team of dedicated sports industry analysts will help you put the data in context. They mine our consumer and point-of-sale (POS) research to tell you who buys your products – and your competitors’ products – and where, when, how and why they use them.
The NPD Group has the largest POS footprint in the industry. NPD collects weekly and monthly sales data from over 30,000 doors globally, spanning all industry channels of distribution, including independent specialty stores, sport specialty stores, sporting goods, department stores, mass merchants, and ecommerce. This allows you to continuously monitor sales of men’s, women’s, and children’s sports apparel, footwear, equipment, and accessories.
The Retail Tracking Service delivers the most detailed point-of-sale information available to guide your critical business decisions. Standard measures available at the category, brand, and item levels include unit sales/share, dollar sales/share, and average selling price. Advanced measures available for specialty channels include inventory, margins, and GMROI.
Stay on top of shifting preferences and trends with insights from consumer panelists who have agreed to provide information about their purchasing habits, usage, and attitudes. You can use this information to analyze consumer behavior, preferences, and purchase drivers as input for product development, brand management, and marketing strategies.
Athletic and Outdoor Segmentation
Identify and reach specific consumer groups so you can efficiently target and capture your most valuable consumers. Use NPD’s Athletic and Outdoor Segmentation to drive more sales using targeted messaging. It also can help you refine your merchandising mix and assortment once you understand the differences among key consumer segments. Seven athletic segments and four outdoor segments are included.
Assess regional strengths and opportunities, monitor competitive performance by region, and plan and evaluate effectiveness of targeted activities. Call on NPD’s insight into retail sales in specific regions or store groupings using Geo Level information from our Retail Tracking Service.
Checkout Tracking℠ uses a new approach called “receipt harvesting” to help you understand and address shifting consumer tastes and changing retail dynamics. It can give you a winning advantage – access to the most detailed information about what’s in consumers’ market baskets, based actual receipts from both online and brick-and-mortar retail purchases. Its data covers purchases at the category, brand, and item levels, so you can analyze competitive shopping carts and identify purchasing patterns. Plus, you get precise purchase and demographic details linked to individual footwear buyers.
You have opportunities. You face threats. What you need are smart, quantifiable methods of distinguishing one from the other and maximizing your chances of success. NPD’s Analytic Solutions Group includes a team of senior leaders with extensive experience developing and delivering analytic solutions that address strategic marketing, sales, and planning issues.
We combine NPD POS and consumer information, industry expertise, and custom survey research – then add state-of-the-discipline research techniques and methodologies to explain the "why behind the buy.” Through advanced modeling and analytic services, we offer insight into what will happen in the future, not just what has happened in the past, answering your most pressing business questions:
- What consumer segments should we target and why? How do we know if we’re successful over time?
- What is the optimal feature combination for my product?
- How do I monitor my performance in my sales territories, distribution areas, etc.?
- Is your promotion strategy attracting new buyers or just moving forward sales you would have gotten anyway?
- How will a competitor’s price drop impact your sales next quarter, and how should you respond?
- Will my product category grow or decline? Why? What does this mean for my market share?
- What’s the competitive landscape and where are my best opportunities (Food)?
- Which products are hot? How should we respond?
- What’s the sales potential and ROI for my new / revamped product idea?
- Is our online advertising set up for off-line sales success?
- How effectively will a new in-store display we’re developing boost point-of-sale transactions?
- Which of the new communications we’ve worked so hard on communicates the product’s value proposition most effectively?
See how clients have used our analytic solutions to solve their business challenges in our Analytic Solutions Case Study Library.
New consumer segmentation — the only source for insight about attitudes, behaviors of consumers who buy outdoor apparel and footwear
New consumer segmentation — the only source for insight about attitudes, behaviors of consumers who buy fitness/athletic and outdoor apparel and footwear
How can you move up the ranks when it comes to consumers’ favorite fashion footwear brands? In both women’s and men’s, word of mouth and recommendations are major influencers on consumer purchase decisions. Our Footwear Brand Focus Report shines a light on brand awareness, ownership, perceptions, purchase intent, affinity, consumer profiles, and more.
Building the best-ever view of the global sports and recreation marketplace
Sales performance, pricing, and brand insights for skiwear in France and Germany
Active wear today is no longer exclusive to athletic apparel; recent growth in key makeup categories coincides with the rising popularity of makeup as the latest workout essential. In the U.S., prestige makeup sales increased by 11 percent to $7.6 billion in the 12 months ending February 2017, accounting for over 80 percent of total industry gains*, according to global information company The NPD Group. Growth in foundation, primers, eye brow, and lip color products, as well as those formulated to be long-lasting and waterproof, are playing into the trend.
The urbanized and less-traditional camping phenomenon has made its way into the U.S. climbing market. Beyond the mountains, increasing popularity of indoor climbing has sparked new interest in the activity, helping the industry to grow by 13 percent in the 12 months ending January 2017, according to global information company The NPD Group. The industry has grown its sales by $52.9 million since 2014, reaching a four-year high of $175.5 million.
Digital Foodservice Ordering Continues Double-Digit Growth in U.S. and Now Accounts for 1.9 Billion Foodservice Visits
The use of mobile apps, text messages, and the internet to order food from a restaurant or other foodservice outlets grew by 18 percent last year and now accounts for 1.9 billion foodservice visits, reports The NPD Group, a leading global information company. While currently more orders are placed using websites, orders placed with a mobile app are growing more strongly, according to NPD’s daily tracking of how consumers use restaurants and other foodservice outlets.
U.S. Athletic Footwear Industry Grows 3 Percent to $17.5 Billion in 2016, Despite Turbulence in Q4, NPD Group Reports
The U.S. athletic footwear industry grew by 3 percent in 2016*, generating $17.5 billion, according to global information company The NPD Group. Unit sales also grew by 3 percent and average selling price remained flat, at $60.81.
U.S. Athletic Footwear Industry Grows 3 Percent to $17.5 Billion in 2016, Despite Turbulence in Q4, NPD Group Reports
The U.S. athletic footwear industry grew by 3 percent in 2016*, generating $17.5 billion, according to global information company The NPD Group. Unit sales also grew by 3 percent and average selling price remained flat, at $60.81.
Bicycle Parts and Accessories Categories Influenced by Shifts in Technology and Consumer Purchasing Behavior, NPD Group Reports
Key trends within the $6.4 billion U.S. cycling market tied to technology launches and pragmatic purchasing on the part of consumers have heightened the importance of specific categories within the industry, namely tires and tubes, wheels and wheel parts, and lubes/cleaners, according to global information company The NPD Group.
The NPD Group Finds Art of Matching the Right Athletes With the Right Brands a Challenge for Marketers
Choosing Olympic athletes for endorsement deals depends on more than just aligning with the right product category; the athlete’s fan base and the brands they use are equally critical to a successful partnership between brands and athletes, according to global information company, The NPD Group.
As More U.S. Consumers Take Road Trips this Summer, Sales of Camping-Related Products Increase, NPD Group Reports
More Americans are hitting the road this summer, and as they prepare for their family vacations and outdoor adventures, sales of outdoor and camping-related products within the $19 billion industry are on the rise, according to global information company The NPD Group.
The NPD Group Expands Sports Retail Tracking Service to Offer the Broadest View of U.S. Cycling Marketplace
Global information company The NPD Group today announced that it has expanded its Retail Tracking Service to provide the most comprehensive view of the $6.4 billion U.S. cycling market.
As Warmer Weather Approaches, Recreation Kayak Sales See Double-Digit Growth, Driven By Fishing Kayaks, NPD Reports
As water sport season draws near, sales of recreation kayaks were up 21 percent, or over $42 million, and 18 percent in unit sales in the 12 months ending February 2016, according to global information company The NPD Group. Looking at the top items that make up this increase, the vast majority of those items are fishing kayaks.
From getting in and out of stores, to placing orders online, to getting products to the marketplace—everything is faster in retail today. How has this changed the retail landscape in sport, what does it mean for manufacturing in the U.S., and how will this ultimately impact the consumer?
Performance running, walking, basketball and hiking shoes are trending negatively, while retro, non-performance footwear categories remain strong. What does it take for performance footwear to make a comeback? How can these brands innovate and integrate retro elements to tap into consumers’ desire to project active lifestyles? Find out in this video featuring sports industry analyst Matt Powell.
The active apparel and footwear business is growing at a much faster rate than fashion apparel and footwear. With over 2,000 activewear brands and sales up 10 percent, what will brands need to do to stand out in this noisy marketplace? How will celebrity and performance brands fare? Find out in this video featuring sports industry analyst Matt Powell.
When the Sports Authority went under, nearly 20-30 percent of the sports business evaporated overnight. How has this retailer’s absence in the marketplace impacted other retailers and e-commerce, and what does this mean for the sports industry at large? Find out in this video featuring sports industry analyst Matt Powell.
Going to the Winter Outdoor Retailer Show? Meet us at Market Booth #111! There’s so much to look forward to at Winter OR in Salt Lake City. See why we’re excited – watch Sports Industry Analyst Matt Powell’s new video.
Competing in the hot-and-getting-hotter U.S. athletic and outdoor markets makes it necessary to understand the purchase behavior of every kind of consumer, from core athletes to those who are barely active. You can use NPD’s segments or create your own to gain targeted insight into your consumers up close. Here’s a look at what the data can tell you.
Want to make killer products people love? If so, you need to distinguish the winning ideas from the losers, move fast to keep ahead of trends, and prepare yourself for the possibility of a hot category’s decline.
Discover how Generation Z is set to shake up the sports and outdoor retail markets in this video featuring industry analyst, Matt Powell.
Sports Industry Analyst Matt Powell weighs in on the importance of gender in the sports space. Learn how the development of products geared specifically to women will impact the marketplace.
In this new video series, NPD Sports Industry Analyst Matt Powell discusses Millennials' impact on sports industry trends. See how Gen Y behavior is changing the golf, cycling, and camping industries, and what it means for your business.
Insights and Opinions from our Analysts and Experts
How can brands and retailers better resonate with Millennials, who hold tremendous influence now and in the future? It starts not with knowing, but understanding them.
Millennials are focused on societal needs. They feel a great sense of community with their generation, including those around the world. Millennials tend to support progressive causes including a higher minimum wage, and are willing to pay higher prices to pay for these causes. Their beliefs are integrated into their choices as consumers.
Tying into that, Millennials feel compelled to make the world a better place. They have been described as “conscious capitalists,” and expect corporations to be “good citizens.” They believe brands should participate in causes and be a force for good.
Millennials’ shopping behavior is not passive, but it’s a social experience to be shared with friends. Millennials want to interact with brands, to co-create products and to participate in the brand experience. They want to discover new and dynamic products from a proven name, approved by their peer group. Millennials today are looking for relevance and authenticity. They want to develop relationships with brands that deliver a personalized, customized experience. Brands that don’t understand and respond to these needs will fail.
Millennials seek brands that feel unique to them, and make them feel unique. These brands have been vetted and approved by their peer set. Taught to be curious their entire lives, they are incredibly smart, savvy, and know how to research a brand. Millennials don’t see a boundary between consumers and brands.
Consequently, Millennials are more engaged with products. They want to interact with brands and want to share feedback. They want to collaborate with brands. Brands must create a feedback loop that allows Millennials to share their thoughts.
Because Millennials are internet trained, there is an expectation for instant gratification. Email is too slow and cumbersome, while text messaging is more immediate and can be used when a phone call is inconvenient. Twitter, Instagram, and Pinterest share thoughts in real time.
Seeing as Millennials are so digitally engaged, and have shared so much knowledge with their peers, they are early adopters of new ideas, concepts, and products. This will drive the speed of change even faster than we’ve known. Leveraging early adopters will build brand equity.
The concept of branding has changed in that Millennials are so much more aware of a product’s attributes and issues, and therefore consumers are much less brand loyal. If a competitor’s product is perceived to be better or to perform more in line with their needs, they will change in a heartbeat. Consequently, brands must keep their consumers well-informed and up-to-date, not just on what’s in the market now, but what’s coming next.
Millennials have been hit hard by the Great Recession. Good paying jobs have been hard to find. Many are saddled with massive college debt. This has created a frugal generation, and Millennials are always looking for value; however, don’t read frugal as cheap. Millennials may be cautious with their purchases, and research them extensively, but if they decide a more expensive option is the best solution, that’s the decision they will make. Millennials want value for their hard-earned money.
In the words of Simon Sinek, “People don’t buy what you do; they buy why you do it.” This line captures the essence of the Millennial generation’s core values. Though diverse and complex, Millennials as a whole are connected, digitally engaged, and value conscious. Brands and retailers must market their products today in a way like never before.
From foodservice to fashion, it seems that all retailers these days are looking to attract the elusive Millennial. If you work in the industry, chances are you hear the term used at least a handful of times per day. But are Millennials the be-all and end-all of retail success?
In Canada’s sports apparel and footwear market the answer seems to be no. While the Millennial consumer is certainly important to sports apparel and footwear brands, we have actually seen their interest in the segment decline over the last year. What’s even more interesting is that despite this lagging Millennial demand, the market still continues to grow. In fact, in 2016 sales in the space outpaced the casual/fashion segment for the third consecutive year.
Interestingly, despite their reduced interest in the segment, Millennials continue to garner the attention of marketers. However, it is Gen X (i.e. those ranging in age from 35- 45) who seem to be increasing their spending habits (buying not only for themselves, but also for their Gen Z children).
Alone Gen X and Gen Z are two of the smaller portions of the population accounting for 16 per cent and 19 per cent of the population respectively. That said, marketers seem to dismiss this demographic when crafting advertising and marketing strategies.
I would argue that this is a missed opportunity.
When we look at Canada’s sports apparel and footwear market, the spend by Gen X grew a whopping +12 per cent year-over-year in 2016. That spend was split 60/30 (some have Millennial children) between themselves and their Gen Z children. They significantly over spend their proportion to the population accounting for half of the active spend and driving 75 per cent of the growth in the market…yet no one is really paying attention!
And while Millennials will likely continue to be the focus of a wide range of marketing tactics in the near future, it’s worth considering the fact that they tend to embrace specific brands and convenience while Gen X tends to focus on performance channels to outfit themselves and their families.
So before you sign off on your brand’s next marketing campaign, consider who you are targeting – the answer, at least in the sports apparel and footwear market, may surprise you.
Brands used to market to Boomers; successful brands today market with Millennials.
Millennials, or the generation born between 1981 and 1996, are now a larger group than the Boomers, who were born between 1946 and 1964. They account for one-third of all retail spending, and soon they will represent 50 percent of the workforce. In the sports industry, 90 percent of athletic footwear gains in 2016 were driven by Millennials or the proceeding generation, Gen Z. These two cohorts accounted for 70 percent of sneaker sales in 2016.
The Millennial generation is much more diverse than previous cohorts, being 38 percent non-white compared to the Boomers, who are 22 percent non-white. In addition, with more than one-third of Millennials having a college degree, this generation is also the most educated in history.
Millennials are constantly interviewing brands, meaning that a brand has to prove itself, every day. For Boomers, there were fewer shopping choices, shopping outlets, and sources of product information. For Millennials, those elements are infinite. On top of that, these elements are always in their pockets, on their mobile devices.
Many Millennials have never known a world without the internet. Because of that, Millennials are more connected to each other than any previous generation. This means they share everything. When they want to know something or get an opinion, they consult their peer group. As a result, Millennials’ groups are much, much larger than those of the boomers.
Boomer generation marketing was reactive. Brands ran an ad campaign and measured how many consumers responded. Millennials don’t react, but interact. They are part of the branding process, from sharing a great YouTube ad, to advising friends on purchase experiences, to giving positive and negative feedback directly to a brand. Remember, just because it’s easy to hit the “Like” or “Favorite” button, does not mean those recommendations are given out lightly (and a “Like” is just as easily reversed).
Contrary to the shopping experience Boomers are most familiar with, physical stores are no longer the place where consumers learn about products; they are the places to try out products, not research. Millennials go to physical stores to see if products fit or if the color is right. Physical stores must adapt to this fundamental shift.
Malls are no longer where young people hang out; now they hang out on their phones. Next time you are in a mall (and I’ll bet it will be a while), go to the food court. Most of the people there are retirees, nursing a cup of coffee. The top-end malls will survive, but the rest are doomed.
“Omni” or “all” channel is old-school thinking. Millennials don’t care about your businesses logistics or Chinese walls. They want what they want, whenever, wherever, and however they want it. If your brand can’t offer it to them that way, they will move on. Your brand experience must be completely transparent and seamless, with no hidden quirks. There is only one channel: all of it.
The lesson here is, engage rather than market; listen well and respond; and provide value. Find out where your customers are living—digitally—and involve them there. Seek interaction, not reaction. Market with Millennials.
2016 was not kind to the golf industry. Nike announced it was exiting the equipment business, Golfsmith went bankrupt and shuttered, hundreds of golf courses closed, and Ben Hogan filed for bankruptcy (again). The largest brand, Taylor Made, with the greatest share and best roster of players, is for sale and seemingly cannot find a buyer. What’s going on?
Golf rounds fell sharply at the beginning of the Great Recession, but as the economy has improved and the recession officially ended, rounds have not bounced back. Some elders lost too much of their retirement savings in the recession to spend on golf, but the real issue is much deeper than that.
In order to offset the decline in rounds, golf manufacturers released too many new and competing technologies. New releases were coming out so frequently that the consuming public could not keep up. This created a glut of deeply discounted products that were not moving off the shelves.
Big-box golf retailers showed nice growth in the early days of the recession, but that growth largely came from industry consolidation. As courses closed, so did the pro shops. The failing golf business forced mom-and-pop golf shops to shutter. Market share flowed to big-box, masking the underlying trend.
What happened to create this reversal of fortune? The golf Industry failed to attract Millennials to the game. The National Golf Foundation reported that there were 400,000 fewer golfers in 2013, with 200,000 of the decline coming from Millennials. Since Millennials represent 25 percent of the nation’s population, this decline is devastating to the sport.
So, why don’t Millennials play golf?
Millennials value ease, speed, and efficiency in their endeavors. Raised on the internet, “instant gratification” is the expectation. Over four hours of essentially doing the same thing over and over is against the idea of speed and efficiency.
They are also the most inclusive generation. Millennials want to share their experiences with as many friends as possible. Golf says, “all of you can play, as long as it no more than four. Boomers, on the other hand, value exclusiveness. The idea of paying to have the privilege of exclusive membership to play golf is counter to Millennial values.
Millennials are the most diverse generation ever, and they have embraced diversity like no other generation. The lack of diversity at Augusta National, the crown jewel of the sport, is just one example of how golf does not qualify as diverse. Mark King, former President of Taylor Made/Adidas Golf cited the lack of “minorities playing, women coming into the game” as reasons for golf’s decline.
Millennials’ most important crusade is the environment. Golf is not green. Many courses smell like a chemical factory. Courses require tremendous amounts of water to stay in shape.
Millennials were hit hard by the recession. This caused them to seek value in every purchase. They are willing to spend on things they think are important, but always look at purchases with a value lens. Spending big money on rounds and equipment apparently does not connote value to Millennials.
Golf rules are Byzantine. Compare the USGA regulations to the “Spirit of the Game” in a favorite sport among Millennials, Ultimate Frisbee: “Spirit of the Game. Ultimate relies upon a spirit of sportsmanship that places the responsibility for fair play on the player.” This is essentially the only rule in Ultimate.
At least for the time being, the values of golf do not match up with the values of Millennials. Golf has lost the Millennials.
In 2015 Congress passed the Protecting Americans from Tax Hikes (PATH) Act. One of the main provisions of PATH was to slow down taxpayer refunds for the Earned Income Tax Credit (EITC) and/or the Additional Child Tax Credit. The slowdown was intended to give the IRS more time to investigate for fraudulent claims. It is estimated that about 28 million taxpayers filed for EITC in recent years.
The effect of this slowdown in payments means that the IRS will not be issuing EITC refunds until February 15, 2017. Taking weekends, processing time, and the Presidents’ Day holiday into account, estimates are that refunds will not begin to be received until February 27, and many may extend into March.
EITC benefits low to middle income households with children. It allows parents to claim up to $3,300 for one child and more than $6,250 for three children. The magnitude of the credits is in the tens of billions of dollars.
Since most low to middle income families are living paycheck to paycheck, this tax credit is a financial windfall. Many low to middle income families spend their tax refunds as soon as they receive it.
The timing of the refund has a profound impact on sports retail, particularly sneaker sales. In years past, processing glitches have delayed refunds and the industry suffered until the refunds hit.
We can expect a soft February for sales of athletic footwear and apparel due to this new law. While the industry will make up these sales in March, it will make trending difficult and retailers and brands anxious. Coupled with a late Easter this year, Q1 will be a challenging one for the sports industry.
My colleague Marshal Cohen recently wrote a blog, “An
Urgent Message for Retail,” and in it he states that during the holiday season, “…consumers appeared to have grown numb to the early and constant promotions” and “[w]e have witnessed the demise of promotion’s reign as king of shopping influencers.”
The sports industry has been relatively immune to the cancer of relentless promotions – at least until Holiday 2016.
Sure, there has been discounting in the sports categories that are in systemic decline. Golf and fitness equipment like treadmills are two that come to mind. For the most part, though, the sports industry has been able to avoid counting on deep discounts to drive sales. Until now.
Holiday 2016 will go down as one of the most aggressively promoted years in sports retail. Here are some examples as to why, and what it means for this year.
While the massive sweatshirt category has been in decline for more than a year, brands and retailers seemed to think that it would magically bounce back. Instead, it took “40% off” pricing to produce a meager sales result and clear distressed inventory. With such deep discounting this leads me to think, what will it take to grow the business in 2017? Also, mid-market footwear retailers began boot promotions with “Buy One, Get One Free” starting on Black Friday. No one makes money with deals like that. Some brands also began to weaken or ignore their own “Minimum Advertised Price” policies in an effort to spark sales and clear stocks. This led to a free-for-all discount environment, which will continue into 2017.
On another note, NPD has found on several occasions that consumers are not purchasing products, including clothing and accessories, adorned with giant logos the way they used to do. Yet, sports brands and retailers trotted more of the same, in the hopes of achieving a different result. This caused markdowns to ensue.
In addition, an athleisure “bubble” was created as more fashion brands and retailers tried to grab a piece of the still strong category. Hundreds of new brands tried to jump in on the performance apparel boom. As they fail in 2017, the market will be flooded with deep discounts on poor imitations of activewear.
Of course, the ongoing retail rationalization has yet to improve this toxic situation. We won’t see any relief for this in 2017 either. More sports stores will likely close in 2017.
The sports industry is headed down the path of the teen retailers, where steeper discounts are no longer effective in clearing stockrooms, let alone driving sales and profits.
So how does the sports industry avoid this slide? We must get back to the core principles that built this business.
The sports industry is an inspirational and aspirational business. We inspire others to get fit and to improve their sports. Participants aspire to make themselves better. A race to bottom on price does neither.
Unrequited demand is another fundamental strategy in the sports business. If demand is not met, there is no need to promote.
Innovation has always been a cornerstone of the sports industry. Even in the distressed sweatshirt category, innovative and more technical products sold well this holiday and posted big increases. We must find ways to keep innovation strong. This will help fend off the athleisure bubble as well.
The sports industry has always been about premium and exclusive products. We must emphasize the premium nature of our business and avoid trying to grow by the lowest prices.
Segmentation has also been a core principle in sports. We must double down on having clear and distinct lines for different categories of retailers. Brands must also intentionally rationalize the number of retailers in the space, buy elevating the winners and letting the others improve or fall by the wayside.
Finally, the sports industry must stop chasing artificial targets set by Wall Street. Driving to an arbitrary growth target is a recipe for disaster. Brands and retailers must do what is right for the long term health of their businesses, rather than a short term and inconsequential goal set by the stock market.
If the sports industry can return to its core values, it has a much greater chance of being healthy once again.
About every month or so, someone in the mainstream media will “discover” that sneakerheads exist. They often seek me out to ask what drives this phenomenon and what their value is to the market.
A formal definition of a sneakerhead is a person who collects, trades, and/or admires sneakers as a form of hobby. Sneakerheads, like most collectors, are passionate and dedicated to their subject. Many are very knowledgeable about the origins and history of sneakers. Many spend a great deal of time and money studying the category and its past, while building their collections.
I have a deep respect for the passion, commitment, and knowledge that sneakerheads possess.
Sneakerheads have been around since brands began to associate athletes with particular shoe styles. In the 1970’s, the best New York City street ballers had the coolest and rarest shoes, which were supplied by the brands. When Nike reintroduced the Air Force 1 at the behest of East Coast urban retailers, the fervor ratcheted up a notch. Serious collecting started with the first Jordan shoe, banned by the NBA. Other brands entered the act by signing players and creating special shoes just for them. Later, when Nike began re-issuing “retro” Jordan’s, new and old collectors sought to start or fill in collections. Then sneaker collecting was off to the races.
With the advent of the internet, we reached a whole new dimension in the world of sneakerheads. Isolated collectors could now connect with each other. Rumors about releases and special products bounced all over the web. Opinions about favorite shoes could be shouted (and shouted down) across time zones and continents. All of this helped heat up the sneakerhead world even further.
And then came ways to buy and sell your favorite sneakers through peer-to-peer websites like eBay. This changed the game dramatically. Soon, rare styles were selling for multiple-times their original retail value. Prices escalated, which brought on opportunists.
Finally, brands began to do collaborations with artists, musicians, and celebrities, creating specially designed, extremely limited edition styles. The brands intended for such shoes to give them further hype and credibility within the sneakerhead community. Because collaborations were very limited in quantity, they became highly desirable. Collaborations created yet another market for collectors.
Very quickly the sneakerhead world went from collecting for fun to profiteering. As resale prices escalated on limited edition shoes, a new type of “sneakerhead” came into being: the speculator. Looking merely to make a quick buck (or hundreds of quick bucks), many more buyers got into the game with the sole intent of flipping limited edition shoes, sometimes on the same day they bought them.
Sneakerheads have always sold and traded their shoes, but never to this degree and intensity. The introduction of a large number of resellers has raised the resale prices of shoes and kept traditional collectors from acquiring the shoes they coveted.
Sneakerhead sales information has always been a little tough to pin down, but one angle is to look at the sales of the kinds of shoes that sneakerheads are interested in and make an estimate. These shoes are generally Brand Jordan retro or marquee basketball shoes (endorsed by big-name players), or shoes tied to collaborations (though these are very limited in terms of the number of pairs available and don’t amount to much in sales). Of course, we cannot assume that every one of these shoes went to a sneakerhead; however, even if we take all of these shoes into account, the portion is still less than 3 percent of the total U.S. athletic footwear business, which is hardly a substantial number.
Since sneakerheads have a rather minor impact on overall retail sales, how else can we assess their impact on the business?
The sneakerhead “press” has little influence outside the sneakerhead community. The sneakerhead media is comprised of everything from very large and sophisticated publishing organizations, to guys doing YouTube videos in their mom’s basement. All live in fear of offending the brands that they depend on to keep them fed with pictures and information about upcoming releases. In the sneakerhead press, there is very little original content and frequent cut-and-pasting of content from other sources. Because the sneakerhead media is unwilling or unable to speak the truth to power, their influence is very limited, except inside the echo chamber that is sneaker culture.
Individually and for the most part, sneakerheads lack a voice outside the echo chamber. Nevertheless, astute brands and retailers are listening to their collective voice. If the overall sentiment is very good or very bad about a particular product, color, or material, brands and retailers should adjust their plans accordingly. As I have often said, the most important thing to remember in using social media is not to talk, but to listen.
Sneakerheads are a deeply committed community of collectors and aficionados. They do not represent a major portion of sneaker sales, and while they do create a lot of hype and buzz that can be good for brand equity, this brand equity is difficult to measure. Within the echo chamber, the voices of sneakerheads are loud, but those voices do not carry.
The National Sporting Goods Association (NSGA) recently published a study entitled, “Scouting the Hispanic Market,” which explores the opportunities around Hispanics and the sports business. Multicultural consumers are increasingly becoming a larger part of the U.S. customer base, with Hispanic and Latino Americans making up the largest ethnic minority.
One of the most important truths about the Hispanic market is that just because a demographic may speak the same language, its people do not all act in the same way. Those from the Dominican Republic have different interests and preferences than those from Mexico and both, in turn, are different from people of Puerto Rican heritage. For instance, one may prefer baseball, the other soccer, and so on.
Also, people of different origins are clustered in the U.S. in different ways. In the book Diversity Explosion, William Frey explores the different ethnic makeup of U.S. regions and cities. For instance, while Los Angeles has the greatest Mexican population, Chicago has the fourth-largest in the U.S. New York houses the greatest group of Puerto Ricans and Miami the most Cubans. Each group has its own unique characteristics.
Frey points out that the Hispanic population tripled from the 1970’s to the 90’s as it reached 35 million, and then grew another 15 million in the 2000 decade, reaching 50 Million in 2010. Most of this recent growth came from net birthrate rather than immigration. One-third of all Hispanics in the U.S. are under 18-years old. As compared to Whites, Hispanics in the U.S. are more likely to be in a “traditional” household of a married couple with children.
Today, most major American cities are majority non-white. While Hispanics remain concentrated in major metropolitan areas like LA, NYC, and Miami, most of their population growth is coming in new regions where Hispanics do not yet have as deep a concentration of the population. It is these new areas where Hispanic population growth will have the greatest impact. They are also the areas of greatest opportunity for the sports business.
With that background, let’s summarize the NSGA report. Today, Hispanics make up 17 percent of the U.S. population at about 55 million people. Hispanics collectively represent $1.5 trillion in spending power. By 2030, they are projected to be 22 percent of the U.S. population, or 77 million residents. By 2055, they are estimated to comprise nearly 27 percent of the population, or 112 million people. Many estimate that by 2055 (if not sooner), the U.S. will be majority non-white.
The NSGA identifies the core values of Hispanics as “family unity, responsibility, selflessness and connectedness.” Ninety-two percent of Hispanics view sports as an important part of their lives -- a greater percentage than non-Hispanics. “Having a sense of community is also important for Hispanics and sports can be a way to stay integrated,” according to the study.
Fitness activities such as running generate the greatest interest in participation by Hispanics. Again, Hispanics have a greater interest in fitness than non-Hispanics. Outdoor activities such as camping and hiking and team sports also rank high with Hispanics, and higher than non-Hispanics. Given the penetration of youth in Hispanic families, sports participation can be a major point of leverage.
From a commerce perspective, Hispanics enjoy shopping as a social activity, and it is often enjoyed as part of a family activity. Purchase decisions are often driven by recommendations from their social network of family, work, and friends. Hispanics also tend to be more brand loyal than non-Hispanics.
There are obviously huge opportunities to capture incremental business in sports from the Hispanic consumer. Retailers must create an inclusive atmosphere in their stores, and leverage Hispanics’ brand loyalty. Understanding which brands Hispanics align with is a critical concept.
Community-based events are another way to engage and leverage the family-oriented behavior of the Hispanic consumer. Hispanics use sports to bond with family and their social network. Brands and retailers need to be part of that relationship.
Trust is critical to capture the Hispanic consumer. Retailers and brands must be Hispanic-friendly and Hispanic-oriented. Brands and retailers that earn the trust and loyalty of the Hispanic sports consumer will win in the future.
It was a rocky year for the outdoor industry. The void created by the bankruptcies of Sport Chalet and The Sports Authority had a huge impact on the industry, and the warm weather did not help. But an underlying cause was very much self-inflicted.
From my point of view, the industry needed to focus on newness and shifting to a more lifestyle approach, and less on continuing along the same path and expecting to reach a different destination.
Overall sales for the outdoor industry (including athletic specialty, sporting goods, outdoor specialty, and sport specialty e-commerce) were soft in the 12 months ending November 2016. Dollar sales declined in the low single-digits. The last three months were particularly difficult, with sales down in the low double-digits. The decline primarily stemmed from the athletic specialty/sporting goods channel, which saw sales fall in the mid-teens. This is no surprise as the Sport Chalet and The Sports Authority bankruptcies closed over 20 million square feet of sporting goods retail, or about 10 percent of the market.
Looking at specific categories, we see that the vast majority of the top-selling outdoor footwear styles sold from September through November were the same as in 2015. The lesson here is, if we don’t give the customer newness, we become a replacement business. Further, if you covered the logo on most of the shoes, you would be hard pressed to identify the correct brand. Too much sameness is the kiss of death in retail today.
Outerwear sales were up in the 12 months ending November 2016, yet flat in the latter three months compared to the prior year. While part of this was warm weather, a sea of sameness at retail had to have a negative impact. We are seeing major share shifts away from the traditional share leaders as consumers are on the hunt for fresh ideas.
Camping, which had been a driving force for outdoor, has also slowed and sales have now been down. Again a lack of newness has hurt this category.
Even hot categories like coolers, which had been experiencing exceptional growth, have now begun to cool off. Coolers and cookware saw sales slow dramatically over the last three months.
The outdoor industry has a great opportunity to capture the hearts and minds of Millennials and Gen Z. The values of the industry are well aligned with these cohorts. But these cohorts also demand new, fun, and “good enough” products. The industry is just not providing that right now.
The outdoor industry can rebound from this difficult time, but it will take changing the business model and altering the way we view the consumer to achieve it.
Source: The NPD Group, Inc. / Retail Tracking Service, Outdoor Industry View, 12 months ending November 2016
I mentioned in my 2017 predictions blog that stock market analysts have criticized major sneaker brands including Nike, by saying that the footwear market lacks innovation. Nothing could be further from the truth, although the innovation might not be in the usual places.
I have said repeatedly that we are in the golden age of innovation in the world of sports. We have two very strong technologies in Nike Flyknit and Adidas Boost that are a long way from maturity and continue to grow. Brands are introducing new ideas all the time. For example, the Nike Air VaporMax, a shoe without a conventional outsole, will debut in a few months. There is no lack of technological innovation in footwear today.
Perhaps what is fueling what I consider a misunderstanding is that we are currently in a fashion cycle where the consumer is not seeing technology as fashion. That trend of “technology-as-fashion” in running ended at the close of 2013 and in basketball a year ago. Retro is currently ruling the fashion cycle. The most important message here is that the consumer, not the brand or retailer, is dictating what fashion is today. Even if the brand has great technology, the consumer is voting against that right now.
In addition, I believe analysts have overlooked the fact that much of the innovation today is happening behind the scenes. We are making amazing leaps in innovation in manufacturing. For example, Reebok’s “Liquid Factory” promises a whole new way to make an upper. Most brands are using 3D printing in prototyping and we are beginning to see finished shoes partly made with this technology. Feetz is creating custom-made footwear entirely using 3D printing.
As another behind-the-scenes example, Nike’s Flyknit has virtually zero waste and has taken hundreds of manufacturing steps out of production. Nike has also partnered with Flex to bring innovation to their supply chain and manufacturing techniques.
Brands are bringing some manufacturing to U.S. soil in an effort to speed up the production cycle. Under Armour’s “Lighthouse” center and the Adidas “Speedfactory” are but two examples.
Robotics also has the potential to take costly labor steps out of the manufacturing process. Every day we are hearing of a new method or technique that is on the horizon or actually in use.
Brands are also creating connected products that give users feedback on their health and on how to play their sport better. I’ll cover this in greater depth after CES 2017 .
There is also a ton of innovation going on at retail as well, as physical stores fight for a share of the market. Nike’s new store in Soho is filled with ways to bring the internet into the store to enhance the customer experience. Adidas’s new Fifth Avenue store represents the next level of concept retail. Footlocker is making great strides on curated assortments, and its new store on 42 nd street will take interactivity to whole new level.
We are seeing plenty of innovation in e-commerce as well, as brands and retailers begin to deliver on the promise of seamless, frictionless, transparent commerce that carries across multiple devices and into physical stores.
From where I sit, I see a continued commitment to innovation in the world of sports.