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. 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.
NPD’s information is a critical ingredient in new product forecasting, segmentation, price and promotion evaluation, and market forecasting. Categories include hiking, camping, snow and ski, cycling, running and fitness, athletic footwear, active apparel, and team sports equipment.
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, 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 more than 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.
Monthly Retail Tracking: 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.
Weekly Retail Tracking: Monitor product launches, promotions, and seasonal sales cycles, especially when fast market response is required. This service delivers a clear view of a promotion’s impact during the week or weeks the promotional event occurred. It gives you the flexibility to more effectively analyze sales influenced by holidays, seasons, and even weather events. This service also allows you to analyze actual market price changes with increased precision, so you can better align pricing with drivers, and make apples-to-apples comparisons to the previous year.
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 down to the DMA level, 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 delivers the most comprehensive view of consumer purchase behavior for general merchandise categories, across all retailers over time. To help you adjust your marketing focus and fuel growth, Checkout E-commerce offers the most complete and accurate view of the online channel, including first- and third-party sales for Amazon and other marketplaces. It covers more than 400 e-commerce retailers including direct-to-consumer and provides an early read on emerging players.
NPD’s Analytic Solutions group includes senior leaders with extensive experience developing and delivering analytic solutions that help clients predict areas of risk and growth to improve marketing and product development. By combining NPD’s unique data assets and industry expertise with state-of-the-discipline research techniques and proprietary solutions, our Analytic Solutions team is able to answer clients’ most pressing business questions.
Our partnership with the Outdoor Industry Association (OIA) gives OIA members the ability to access a top-level outdoor industry report covering sales of outdoor equipment, equipment accessories, apparel, and footwear, at a discounted price.
The report provides insight into performance across the three core outdoor retail channels: outdoor specialty; sports specialty ecommerce; and athletic specialty & sporting goods. With this insight on outdoor industry retail trends, industry members gain easier access to current market opportunities and trends to better evaluate the business of outdoor retail, drive sales, and improve results.
The report is intended to provide a comprehensive view of the core outdoor marketplace, including growth and sales trends across all outdoor categories from hiking, camping and climbing to trail running and mountaineering.
In this report you can review sales
- Time periods (current, 3 month rolling, 12 month rolling)
- Sub class
- Sub class segment
This report provides the following metrics:
- Dollars sold
- Dollar share
- Units sold
- Unit share
- Average selling price
For nearly a decade, our Global Sport Estimate has been the go-to source of industry insight for sports industry leaders around the world. You can use the 2017 release to explore new data and insights on the categories that matter to your business. No other source matches this report’s breadth and depth of sports industry insight. See what sports activities and product categories are capturing consumers’ attention and spending, across 19 countries and 17 sports. Use it to spot opportunities for growth and investment, understand the dynamics in a variety of sports, assess your market share, and gauge the impact of exchange rates.
In the U.S. bike specialty market, mountain and electric bicycles are leading the pack today. Higher price bands are growing; new brands are emerging; and innovations in drivetrains, suspension, and electronics are taking place.
Let it Snow! Early Season Sales for Snow Sports Gear Begin Strong, but Weather Shifts the Game, Reports NPD
Early 2017/2018 season sales for the U.S. snow sports market were off to a great start; however, a lack of snow caused December sales to fall short, according to global information company The NPD Group. Dollar sales grew 8 percent from August through November 2017 compared to the prior year, but a 6 percent decline in December slowed the season-to-date’s growth rate down to 1 percent. Thus far, the snow industry generated $3.9 billion in retail sales during these collective five months.
The U.S. athletic footwear industry grew by 2 percent in 2017, generating $19.6 billion in sales, according to global information company The NPD Group. Unit sales also grew by 2 percent and average selling price remained flat, at $58.16.
Sales of Baseball Bats Grow Double Digits as New USABat Approved Products Begin Hitting the Market, Reports The NPD Group
Baseball/softball bat sales in the U.S. were down in the 12 months ending October 2017,* but experienced a turnaround in the last two months to coincide with the updated USA Baseball Bat (USABat) guidelines, according to retail sales data from global information company The NPD Group. Looking at the eight weeks since new USABat approved products began reaching store shelves in September, dollar sales for the category have grown by 11 percent, with the growth being driven by a 24 percent increase in average selling price.**
Electric bicycles are showing strong year-over-year growth in the U.S., with dollar sales growing by 95 percent in the 12 months ending July 2017, and unit sales up 96 percent, according to global information company The NPD Group. A $64.9 million category today, electric bicycle sales have nearly tripled over the last 36 months.
The back-to-school shopping season isn’t about one-stop shopping, reports The NPD Group, a leading global information company. Back-to-school shoppers make an average of 16 trips to purchase back-to-school related products between July and September, according to NPD’s receipt mining service, Checkout TrackingSM.
Water may seem like a small luxury, but consumers are showing that they are willing to pay the price for it. According to global information company The NPD Group, Inc., hydration represents a $345.7 million category within the core U.S. outdoor industry*, with sales up 16 percent in the 12 months ending May 2017. Dollar sales have grown by $94 million in the past two years, or 37 percent.
Global information company The NPD Group today announced that it has expanded its Retail Tracking Service to provide the most comprehensive view of the U.S. team sports equipment market. Data will encompass the major categories of basketball, football, baseball, softball, soccer, hockey and field hockey, racquet sports, golf, and lacrosse.
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.
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.
It’s no secret that brick and mortar retail is in trouble. Even industry giants are closing hundreds of stores. How can retailers bring shoppers back to physical stores? Hear what some Millennials had to say about the future of sports retail.
Phone calls, texts, or email? Watch now to hear how Millennials prefer to communicate.
The changing shopping tastes of the younger generation are implicated in the closing of hundreds of stores and are leading them to mostly shop online. But, what can retailers do to change this habit and get this age group to shop in stores? Watch this video to hear what some Millennials had to say.
Everyone talks about how millennials are changing the way shopping is done, but how true is that really? Matt Powell chats with graduate students at Rutgers University to find out what their shopping habits are.
Retailers’ days of being all things to all people are over. Consumers want to shop in stores that seem to be made just for them. Find your muse and focus on that customer. Watch Matt Powell’s view on why designing assortments for your customers is a vital component in today’s retail landscape. And, don’t forget to download his guide to retail success.
All shopping is social. Your customers share their experiences pre-purchase, at purchase, and post-purchase. How can retailers capitalize in that sharing? Watch Matt Powell’s new video on how social media impacts in-store business and be sure to download his guide to retail success.
In the U.S., one in every four athletic shoe purchases happens online; in Germany, that number is one in three. There always will be physical stores, just fewer of them. And mobile plays an increasingly important role as the primary shopping method. Watch Matt Powell’s take on how the Internet is impacting physical store sales and make sure to download his guide to retail success.
There are too many stores in the U.S. Right now, the retail market has over 23 square feet for every man, woman, and child in the country. See Matt Powell’s recommendations on getting ahead of in-store opportunities and make sure to download his guide to retail success.
The back-to-school season isn't about one-stop shopping anymore. Find out what it is about these days.
Sports and Footwear Industry Analyst Matt Powell shares his insights on the sneaker industry in this documentary DeadStock "The History of Resellin,” which tells the story of the sneaker game and its highs and lows.
Insights and Opinions from our Analysts and Experts
A lot has been written about improving the customer “experience” in sports retail. No one would argue the importance of great customer experience. But experience can mean different things to different people, and even different things to the same person depending on circumstances. Let’s explore the different kinds of customer experience and how sports retailers can respond.
Retail must be easy. The transaction experience must be as stress-free and frictionless as possible. Once a purchase decision is made, get the product and customer out of the store as quickly and simply as possible. Lines at the register or multi-step checkouts are not conducive to a great experience.
Retail must be personal. “Brand Me” is your customer’s favorite brand. Well curated assortments are critical to serving “Brand Me.” Personalization through special offers and loyalty programs leverage the retailer’s best customers. Elevated and knowledgeable service adds to the personalization.
Retail must surprise and delight. Part of a memorable experience is discovering the unexpected. Retailers must feature newness, and the newest products must tell great stories. Today’s consumer wants unique products, made by unique brands, and sold in unique retailers. Private label, if well executed, can be a component here.
Retail must offer value. Like it or not, the price equation is firmly part of the retail experience today. Price has never been more important to the consumer. At the same time, value also means getting the most for your money. Understanding this balance is key.
Retail must be flexible. Not all of the same characteristics apply to every encounter. Sometimes consumers just want to get in and out of the store as quickly as possible, while sometimes they want to be pampered. Not every new initiative works. Astute retailers will test and respond.
The retail experience has never been more complicated, or more important. The successful retailers will be those who offer the greatest experience.
Overall for 2017, U.S. team sports equipment sales declined in the single digits, but below the surface it was a mixed bag, with notable pockets of growth.
Baseball equipment sales for the full 12 months were down in the low singles; however, a solid increase in sales during Q4, as new regulation compliant bats hit the market, was a bright spot for the category. The strength in bats carried the other baseball categories with it. This baseball boost helped the team sports equipment market as a whole for the quarter, with Q4 sales up in the low-single digits and closing the year on an optimistic note. I expect the positive baseball trend to continue through springtime, and provide a nice lift for the market as we move through 2018.
Basketball sales fared well, growing in the low single digits for the year, as participation continued to improve. Racquet sports also grew in the low singles, as Baby Boomers are looking for an easy entry and inexpensive fitness activity.
Soccer had a challenging year, with sales down in the low teens. With 2018 being a World Cup year, I expect sales to bounce back.
Sales of American football equipment were down in the low singles, as parental concerns about injury weighed on the sport.
On the other hand, heightened safety concerns have been a boon for protective gear sales, which grew in the mid-teens for 2017. Parents are spending more on ways to keep their kids safe from injuries and concussions while playing sports, and this will continue to be a growth opportunity for the equipment market. Protective gear should be a major thrust for every sports retailer. There are three protective gear makers in the winners column for 2017: Shock Doctor, McDavid, and Battle.
In terms of brand highlights, Rawlings had a good year, even in the face of the changeover due to the baseball bat regulation. Easton could not quite overcome the switch in bat regulations, but I expect it will have a better 2018. Everlast grew on interest in mixed martial arts.
Overall, I expect the team sports equipment business will remain challenged for 2018 as participation continues to slide in a number of sports, but leveraging the growth areas and unlocking new opportunities in the activities that can use fresh attention, will likely boost sales in the months ahead.
Of the 20+ industries NPD tracks, one of the fastest growing in 2017 was the beauty industry. Sales in the U.S. were up a robust 6 percent compared the tepid, low single-digit growth in the sports industry.
I asked my colleague Larissa Jensen, NPD’s beauty industry analyst, for some thoughts on why beauty has done so well, in hopes of learning some lessons that may be applied to improving the sports business.
Here are the top five trends Larissa identified as driving the beauty industry’s successes today, and where I see the applications for sports retail:
Natural/Wellness – Natural brands are outpacing the growth of all beauty categories in the U.S. (makeup, skincare, and fragrance). In skincare specifically, natural brands are the largest brand type and made up half of the category’s dollar volume gains in 2017. In fragrance, natural brands make up only 1 percent of sales, but grew 8X faster than the category.
The sports industry has always had a strong connection to sustainability. Perhaps a renewed focus on this goal and a greater understanding of Gen Z’s interest in “clean living” could benefit sales. Brands that share the values of their consumers will win in 2018.
Indie Brands – Legacy brands are looking for ways to remain relevant in today’s market. In skincare, brands outside the top 20 make up the majority share of dollars; they are growing the fastest and gaining the most share points. But more generally, smaller brands are winning in beauty because:
- They are nimble and able to react to trends more quickly.
- They look to consumers, not other brands, for inspiration on what to launch.
- They have a clear focus and a targeted market.
I’ve written on several occasions that “small is the new big” in sports. Today’s consumer wants unique products, sold by unique retailers, made by unique brands. Mega brands must come up with ways to “act small.” Brands and retailers that try to be all things to all people will struggle. Curated assortments, clearly defined muses or niches, and fresh retail approaches will be the keys to success in 2018. No brand or retailer has gone out of business by listening more closely to their consumers.
Social Media – This is the biggest driver in makeup as it provides the biggest impact via social sharing; it’s easy to see a ‘before and after’ effect. The top 10 brands in makeup are often the most buzzed about brands on social platforms. Influencers play a big role here, and we have seen in our data how influencer collaborations typically generate more sales than the more traditional celebrity collaborations.
“Rent-a-celebrity” is starting to play itself out of sports. Athletic endorsers no longer produce significant retail results. Paid celebrities are viewed by the consumer as phony, but honest, unpaid influencers continue to have sway in the market. Peers remain the most important influencers. Brands that can harness this trend will win.
Experiential Retail – Brick-and-mortar still holds the largest share of sales, and brands need to win here to win overall. Strong online sales alone will not drive growth. Specialty stores are where consumers shop more often, enticing consumers with unique brand and product offerings in a fun retail environment. Also, we have seen an influx of pop-up and pop-in stores in high volume cities including NY, LA, and San Francisco, which allow manufacturers to immerse the consumer in their brand experience, and provide Instagrammable photo ops for consumers to share on social media.
Retailers need to “surprise and delight” their customers. Retail stores that look the same, visit over visit, are uninspiring. Products, brands, and retailers must tell exciting and provocative stories to attract consumers and get them returning to their stores.
Beauty specialty stores are particularly hot right now. Some feature a “mass to class” product lineup, and offer sampling add-ons, and hair and nail services. Consumers can spend hours in these stores and share that experience with their friends. Sports retailers must think about how they can replicate this kind of experience.
Dotcom – This area of the beauty market has seen double-digit growth since NPD began tracking it. At the highest level it’s about convenience across all categories, but the dynamics of online differ by category. In fragrance, where penetration is the lowest, it’s about replenishment. In skincare, where online penetration is highest, it’s about easy access to online reviews, providing consumers the confidence to purchase this more complicated and higher price-point category. In makeup, replenishment and experimentation (new launches) play a role in the gains. Online only brands (like Kylie Cosmetics and ColourPop – before it went into Sephora) draw lots of excitement through social media and their limited edition strategy, leveraging the “fear of missing out” (FOMO) trend.
Footwear is one of the highest e-commerce penetrated categories. Yet, it seems that the sports industry’s online approach is purely transactional, rather than relationship building as we see in beauty. The big challenge is how to get customers to visit websites often, not just to shop but to build a relationship with the retailer or brand, as the beauty industry has done.
There are many important teachings for the sports industry to learn from beauty. In today’s retail landscape, industries cannot live strictly in their silos, but must see the bigger pictures and learn from each other. Retailers and brands that take a more progressive approach can expect success in the future.
In my previous blog, I wrote about the ways in which retailers can revolutionize the in-store environment to survive the internet age. Shopping must be an experience for today’s consumer, but each consumer has a different definition of “experience.” So, how do retailers strike the right chord?
Retailers must develop their own “muse,” or an iconic customer that represents the core of their business. In creating their muse, retailers must target and tailor the experience to their core customer. Brands and products that do not line up with this muse must be exorcised. Retailers must challenge their thinking periodically on their muse, but they must always have a “north star” to lead them.
Once the muse has been created, retailers must curate their assortments to be focused on this muse and its tangents. Their brands must illustrate a clear point of view in their product assortments.
Not every brand will survive this contraction. Retailers must pick the brands they think will be winners and elevate them. Brands that are predicted to win in the future must be nurtured and over emphasized. This does not necessarily mean dropping brands not designated as winners, but retailers must wean themselves off these brands. Remember, brands and retailers no longer create trends; the consumer is in charge now. Brands and retailers must feed these trends.
In addition, consumers want to know where a retailer stands on key social issues, and this must be reflected. Retailers must take positions on social issues that are important to their core customer, even if it risks alienating others.
Loyalty programs are also beneficial, but then again must be tailored to the muse. Retailers should not waste consumers’ time with meaningless features and too many communications.
To tie everything together, retail must be omnipresent – available to consumers whenever, wherever, and however they want. Retailers must have one common pricing, one common inventory, and one common message. Anything short of that is failure.
By blending the experience with core values, retailers can improve every aspect of the physical store, which is a must if they are to survive the internet age.
In 2017, growth in the U.S. athletic footwear and activewear markets meagerly improved. While sales in physical stores declined, online sales grew in the high single-digits. We can expect this pattern of online sales driving industry growth to continue.
At retail, a record number of physical stores closed in 2017 and it’s expected that even more will close over the next two years. Some have predicted that there will be 25 percent fewer malls in the U.S. Sports retailers are facing a very challenging time, especially in the brick-and-mortar channel.
Of course brick-and-mortar sports retail will continue to exist, but the industry must accept the fact that there will be fewer physical stores in the future, physical stores will contribute a smaller portion of total sales, and that profits in physical stores will get squeezed.
In this downsizing, which doors will close? Retailers must look towards building models that predict which stores are the likely closure candidates and move swiftly to get those units behind them. Stores that just break even today are never going to make money again. Stores that are in malls with vulnerable anchors will likely not survive. We cannot expect stores that are not growing now to return to growth. Closing marginally profitable or unprofitable doors improves the health and profitability of the remaining smaller companies. Retailers must be ruthless in their rationalization strategies.
Retailers must respond to this new normal. To compete in this new world order and hold onto their territory, they must elevate the shopping experience.
Today we have the ability to make the shopping experience more personal than ever before. With contextual marketing, retailers can know what their shoppers bought and can find ways to add on to or enhance that purchase. Consumers want to shop at retailers that know their needs and desires, sometimes even before they know themselves.
Shopping must also be easy and frictionless. Too many steps and too much time wasted are all negatives for today’s consumer. In addition, all shopping is social today. A consumer’s most important influencers are his/her peers. Retailers must make it easy for shopping to be more social.
Part of making shopping easier is to bring the internet into the store. Physical and virtual shelves need to be more fluidly intertwined. Retailers should arm sales associates with devices that can easily access inventory. These devices can also be great training tools for the sales associates.
Physical retail also needs to elevate the quality of their sales associates. With a tight labor market and increasing minimum wages, we can now demand more from our sales associates. If we pay peanuts, we get a different level of quality than if we pay top dollar and can demand the best.
Not all of these suggestions are easy. Many are complicated and expensive, but retailers must transform shopping into a unique and cohesive experience if they are to survive in the age of the internet.
Like the rest of the sports world, the U.S. outdoor retail business was challenged in 2017. For the 12 months ending November 2017, sales declined in the mid-single digits. The void created by The Sports Authority and Sport Chalet bankruptcies made the comparisons even more difficult. One bright spot was that the trend improved, with sales flat rather than down, in the last three months. Whether that positive momentum can carry into 2018 remains to be seen.
For the last 12 months, outdoor industry sales declined in the high single-digits within the athletic specialty/sporting goods channel. In outdoor specialty sales were flat, and in sport specialty e-commerce, sales grew in the low singles.
By category for the 12 month period, footwear declined by about 10 percent, apparel and accessories in the mid singles, and equipment in the high single-digits.
Apparel is the largest category in the outdoor market, driven by outerwear. By channel, apparel sales declined in athletic specialty/sporting goods, but grew within sport specialty and e-commerce.
Outdoor equipment sales were down in all three channels. Sales in outdoor specialty were the most concerning, down in the high single-digits.
Outdoor footwear sales were down sharply in athletic specialty sporting goods, and were also down in outdoor specialty. A bright sport was the sport specialty e-commerce channel, where sales were up in the high single-digits.
For the 12 month period, many of the smaller brands had nice increases, as did Patagonia, Arc’Teryx, Kuhl, Hydroflask, Sorel, Carhartt, and Adidas. Nike, Under Armour, The North Face, Yeti Coolers, and Columbia all posted declines.
Given the reported weak gun sales, I expect that the outdoor categories will be challenged in the athletic specialty/sporting goods channel for 2018, as weak gun sales could lead to weaker traffic for other outdoor products. E-commerce should be the best performing channel, tracking the rest of sports sales online.
After last week’s Outdoor Retailer show, it is clear that there is no new hot item or must-have category that is of scale to move the industry. While some brands will outperform, some of the larger brands will still lag the industry. I expect 2018 to be a year of discovering and transitioning for the outdoor industry, to better position it for the long-term growth it needs.
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.
The golf retail market in the U.S. remains challenged, largely impacted by the fact that Millennials are not picking up the game at the rate that Boomers are aging out of it. As I wrote about here, there are major structural issues which have hurt this business.
Golf equipment sales were challenged in 2016 and look to be even worse in 2017; total golf sales year-to-date through November 2017 declined in the mid-teens. Across key categories including golf clubs, balls, and gloves, sales have not fared positively.
Specifically, golf club sales—an indicator of new players entering the game—were down by more than 20 percent. Nike’s exit from the category accounted for about 13 percent of the total decline in clubs. Of the major brands, only Cobra picked up a low-teens sales increase and +260 basis points in share. Callaway and TaylorMade both acquired share from the Nike void, but have experienced a decline in club sales over last year. A bright spot for the category, however, was a 5 percent increase in the average selling price.
Golf ball sales—an indicator of rounds played—declined in the mid-single digits. The Nike golf ball clearance has had a negative impact on the category, as has a sales decline from category share leader Titleist. TaylorMade, Callaway, and Top Flite, who appear to have benefited from Nike’s exit, grew between 110-250 basis points year-to-date.
Of the top 15 brands in golf, Cobra, Top Flite, and Pride were the ones to show gains year-to-date.
The golf equipment business is a market share game right now; for someone to win, others must lose. What the golf industry needs to focus on is participation, both in terms of holding onto their existing participants and adopting new ones.
Source: The NPD Group / U.S. Retail Tracking Service, January-November 2017
On the surface, the 2017 results for the U.S. sports industry appear to be below average, but not a disaster. When we understand that it was an extraordinarily promotional environment that drove these results, we realize that things still weren’t as great as they have been in prior years.
The issues that plagued the industry in 2017 still exist as we enter 2018. Some of the necessary steps that brands and retailers must take to correct these issues will further harm topline results. However, these steps must be taken if we are to recover the aspirational and inspirational foundation that built this great industry.
I have low expectations for athletic footwear in 2018. Brands have stated that they will tighten advertising policies to try and rein in the rampant promoting we saw in 2017. While these are the right steps to recovery, it means that in the short term retailers and brands will do less business. Acceptance of this fact is the first step to improvement.
Brands have also stated that they will cut back on the distribution of formerly coveted products to try and drive demand back up to lost levels. Again, this is the correct strategy, but in the short term it will mean fewer sales for brands and retailers. It remains to be seen if the cache can be restored.
While reported inventories are improving in terms of quantity, the quality of inventory remains poor. There still is far too much performance basketball and running products in the market, which is creating markdowns at retail. Brands and retailers must work to shift inventories away from performance. The consumer is quite clear in telling us they have no appetite for “performance-as-fashion.”
On the other hand, the sport lifestyle sneaker category will be the primary growth vehicle in 2018, though increases will moderate. The “modern runner” look has become too pervasive, and the industry needs a new hot look to lift sales.
Those brands that thrived in 2017 will continue to do so; those that did not, will not. New, smaller brands will flourish in 2018 as the consumer seeks differentiation and retailers seek relief from the unprecedented promoting that drove the meager increases from the mega brands.
Athletic apparel will not see much improvement over 2017. The category was on promotion for nearly the entire year, and difficult comparisons will make growth challenging. A lack of a new items or looks for apparel will also dampen results. This remains a major opportunity.
In terms of other key opportunities, private brands, which were a bright spot for apparel in 2017, can flourish in the 2018 environment as retailers seek relief from the downward promotional spiral. Women’s athletic apparel remains the greatest opportunity for the industry, and one that the industry continues to squander. The sports industry needs to look to the white-hot beauty industry for cues on how to reverse fortune.
Beyond footwear and apparel, the sports equipment market will face the ongoing challenges of declining participation. Fewer kids playing sports means less equipment sales.
The baseball business will have a decent year as new bat regulations will drive sales; however, this is a one-off benefit, and retailers and manufacturers will have to seek new ways to keep consumers engaged.
One bright spot in team sports remains protective gear. Parents whose kids are still playing sports are very concerned about injury, and justifiably so. There is a major retail opportunity to leverage this concern.
The golf business will remain challenged as Millennials are not picking up the game and Boomers age out. Golf is a share game now, where winners will win by taking from losers.
The outdoor industry woes will continue as it remains too focused on pinnacle product and less aimed at the everyday user. Likewise, the cycling and run specialty businesses are also too focused on pinnacle users.
Overall, we will continue to see retail rationalization in the sports industry, as there is far too much mediocre retail in the space. I expect that 2018 will be a challenging year for the industry, and one of transition. In the coming weeks I’ll share some thoughts on what I see as solutions for improving the industry in the months ahead.
The New York Times published a fascinating article a couple days ago on WowWee Brand’s Fingerlings toy, one of the hottest toys of the holiday season. In it, I found several interesting lessons for the sports industry.
“For decades, there has always been a must-have holiday toy” - Last year, the Adidas Superstar was the must-have shoe. It was the first time in years that the top-selling shoe was not a Nike/Jordan product. In 2017, we do not have a “must-have shoe,” and sales and margins are suffering for it.
“The $84 billion global toy industry is struggling for the attention of children obsessed with smartphones and tablets. Global toy sales have been growing each year, but at a slower pace than video games” - The sports business has also struggled for the attention of today’s kids. There are many competitors for kids’ attention and parents’ money.
“The average life span of a toy fad is about eight months from its launch until it’s marked down.” “The life of an item is a little rockier” than it used to be, said Walmart’s VP of Toys. “We move as a country faster from one thing to the next” - In the sports industry we have seen fashion cycles become ever shorter. Brands and retailers must figure out new ways to bring products to market more quickly. The sports industry must be more responsive to changes in consumer interests and preferences.
“Cultivating the success of a hot toy carries its own risks, including managing supply…WowWee says it did not intentionally create the shortage. But whether by design or happenstance, there is no question that scarcity fuels a toy’s mystique. ‘The reality is that you are better off having some disappointed children this year in order to excite them next year’ ” - Much of the sports business was built on unrequited demand. That strategy has been abandoned, chasing higher revenues. We must get back to scarcity as a motivator for purchase.
“It’s like coming up with a hit movie or a hit song. If you see signs of success, you pour gas on it” - Brands and retailers must become more responsive to shifting tastes and the winds of fashion. The sports industry has to figure out ways to “pour gas on” new trends and items. Micro-collaborations are not the answer.
“You know you can trust a toy company if its toys fart. It knows what kids want” - Two takeaways here: A sense of humor is essential in today’s market. More important, we’ve got to get back to knowing our customer.
“When the toy business is good, it is really fun. When it is bad, it is really bad” - Enough said there.
“Over the decades, the industry consolidated and retailers struggled. The rise of social media — where toys can be instantly validated or just as quickly panned — has raised the stakes for companies like WowWee. There are less shades of gray. You either fail or you succeed” - The sports industry must react better to the changing retail landscape and the methods in which we market our products.
“Walmart invited hundreds of children to a convention center to play with a range of new toys, including the Fingerling. Based on the children’s feedback, the retailer named the Fingerling one of its 25 top-rated toys for the holidays and purchased more monkeys” - Walmart and the toy brands understand the value of listening closely to your customer.
We sometimes act as if the sports industry exists in a vacuum. As we can see from this article, there are lessons to be learned outside our industry; these are lessons we should be learning every day.