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?
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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
As More U.S. Consumers Take Road Trips this Summer, Sales of Camping-Related Products Increase, NPD Group ReportsMore 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 MarketplaceGlobal 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 ReportsAs 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.
10 Ways Younger and Older Millennials Shop Differently
The retail world is obsessed with Millennials.
It wouldn’t be a normal day if newsletters, tweets, and the media didn’t overflow with headlines on the latest Millennial trend, how to “harness” their alleged power, or how to reach this malleable and unpredictable segment.
Who are these Millennials? Do a quick Google search, and you’ll learn they’re foodies. Social media savants. Selfie experts. Experience seekers. Value hunters. Convenience junkies. Savvy shoppers. They’re “authentic.”
In demographic terms, they’re people between the ages of 18 and 34 who reached young adulthood around the year 2000.
But Millennials don’t like to be stereotyped as Millennials. We get it, Ryan Seacrest—they’re tired of being generalized into a broad demographic box and find the label patronizing. They just want to be treated as unique individuals.
When it comes to the wide-spanning age bracket, they do have a point—the difference between life in your late teens and life in your early 30s is pretty substantial. Do 18-year-old you and 34-year-old you want the same things, behave in the same way, or buy the same stuff?
With this in mind, we decided to divide the group into two smaller segments for study: younger and older Millennials. We set out to learn how these groups differ, both attitudinally and behaviorally, in their retail choices. We learned a lot, like the fact that older Millennials over-index in loyalty apps. And younger Millennials shop more at department stores.
If you’re a retailer or manufacturer looking to better understand the complexities of these highly-coveted sub-segments across the retail and foodservice spaces,
The Gen Y Gold Rush
Before we dive into retail specifics, let’s review an economic reality to set the context: U.S. Millennials haven’t had it so easy. Coming of age during the Great Recession, 13.8 percent of those 18-29 are unemployed or out of the workforce, far above the national jobless rate of 5.1 percent. And they’re a “boomerang” generation—33 percent stay at home with their families and fewer live independently. (Who can blame them? Seven out of 10 college grads from 2014 have a student loan, owing an average of $28,950 per borrower.)
But debt and other deterrents haven’t kept Millennials from buying things.
Any obsession with the Millennial demographic—also known as Gen Y—is with good reason. U.S. Millennials outnumber Baby Boomers by nearly 10 percent, surpassing them as the nation’s largest living generation in 2015, according to the U.S. Census Bureau. They’re estimated to reach $1.4 trillion in annual spending by 2020—roughly one-third of all retail spending. So retailers and manufacturers need Gen Y’s share of wallet to increase their market share. And this dependence will only intensify as Boomers continue to age and the Millennial segment gains purchasing power. Frankly, if you’re a retailer who’s not focused on this budding segment, we’re seriously concerned. (Please call us immediately and we’ll help.)
Given that Millennials are such an expansive, diverse group, our Chief Industry Analyst Marshal Cohen reminds us that there are many ways to divide up this set for study; segmentation by age is just one way to showcase their differentiated spending. But make no mistake about it: age really does matter. As consumers navigate through shifts in life stage, it reflects back in their purchasing behavior.
When we divide the group into two segments (ages 18-24 and 25-34), there are already some major demographic differences to note. For one, older Millennials are more educated and have a higher income, shown by data collected by our partner, CivicScience. But with more than one-third of 18- to 24-year-olds still in college, they can’t be expected to have the same level of education or earning power. Older Millennials are less racially diverse and are primarily white (74 percent compared to 68 percent of young Millennials). A greater percentage of young Gen Yers are single/never married (80 percent compared to 44 percent of older Millennials), fewer are married (only 10 percent compared to 40 percent of older Millennials), and fewer parent a child (10 percent compared to 40 percent of the old Gen Y segment).
The two groups think and behave differently, too. Younger Millennials are more optimistic about the state of our economy. They’re less likely than their older counterparts to think Donald Trump would make a good president, and more likely to see the new “Star Wars” movie. Younger Millennials are more likely to applaud Bernie Sanders’ performance in the first Democratic debate. And they eat granola with a higher frequency than their elder Millennial brethren.
So how do these differences play out on the retail floor? Here are 10 ways the groups differ in their shopping behavior:
1. Young Gen Y Specialize in Beauty
We studied the receipts of 8,766 Millennials through our Checkout TrackingSM service, following the purchases they made during the first half of 2015, both online and offline. This revealed younger Millennials devoted a greater share of spend to specialty beauty retailers compared to the total Gen Y population. The younger set significantly over-indexed at retailers like Lush, meaning they are more likely than the senior Gen Y group to visit a specialty beauty retailer when they need new concealer or mascara.
But there were also some “neutral” beauty brands that earned consistent share of wallet across the Millennial age bracket. Both Gen Y groups devoted about 20 percent share of beauty spend to Bath & Body Works and 22 percent share to Sephora. The only specialty beauty retailers where older Millennials significantly over-indexed compared to their younger comrades were The Body Shop and bareMinerals.
But it’s not all about specialty shops when it comes to cosmetics. In an online poll of 15,031 U.S. adults conducted from January 2014 through January 2015 through our partner CivicScience, we asked respondents where they buy most of their makeup and cosmetics. The result? Millennials do the majority of this shopping (49 percent) at superstores like Walmart, Target, and Costco—a greater share compared to that of the total U.S. adult population (45 percent). And younger Millennials demonstrate a slightly greater affinity for superstore makeup than older Millennials.
When it comes to how Millennials shop for beauty products, their purchasing behavior is pretty consistent throughout the segment, but there are also some differences. Our Shopper Engagement survey fielded in August 2015 showed Millennials old and young are equally likely to browse in store and buy in store (58 percent). Younger Millennials are more likely than older Millennials to browse and buy online (20 percent vs. 17 percent), less likely to browse online and buy in store (14 percent vs. 15 percent), and less likely to browse in store and buy online (8 percent vs. 10 percent).
"With so many retailers and brands trying to court this segment, it becomes very competitive and challenging to win share of younger Millennials’ discretionary, hard-to-come-by spending"
2. Young Millennials Shop More Specialty Apparel
The Millennial segments demonstrated the biggest discrepancy when we looked at share of wallet devoted to specialty apparel stores. Young Gen Yers like shopping in specialty stores for specific items, devoting 3.2 percent share of wallet to this retail channel, compared to older Millennials’ 2.1 percent share and the total adult population’s 1.9 percent share, shown by Checkout Tracking receipt data.
Marshal Cohen thinks reaching younger Millennials requires laser-like focus. “With so many retailers and brands trying to court this segment, it becomes very competitive and challenging to win share of younger Millennials’ discretionary, hard-to-come-by spending”, he explains. Millennials want to shop and play at places that market their products directly to them. If they feel you’re “for real,” or in other words, not only including them, but genuinely speaking directly to them—they will be more inclined to shop with you.
Specialty fashion retailers are the perfect example. We took a deep dive into data on some of these top retailers to see at which specific retailers younger Millennials over-indexed compared to more senior Millennials over a 12-month period. One look at the over-indexing stores on this list, and you’ll see just how these specialty stores fared with the younger Millennial.
Here we see very clearly how young Gen Yers spend a significantly lower share of their apparel spend at children’s retailers (Carter’s and The Children’s Place) compared to the older Millennial segment. The data reflects young Gen Yers’ preference for stores like Hollister and American Eagle over places like Ann Taylor and Banana Republic.
What we found particularly significant was the fact that two of the most neutral apparel retailers—Lululemon and The North Face—earned similar wallet share among Millennials of all ages, demonstrating activewear’s ability to transcend ages 18 to 34.
But Department Stores Aren’t Dead
Given younger Millennials’ affinity for specialty apparel retailers, perhaps we can understand Macy’s decision to mimic this specialty/boutique feel by opening a basement floor dedicated entirely to the younger consumer (Gen Z and young Millennials), only showcasing the brands most relevant to this age group.
But it is important to note that across the entire channel, Millennials of all ages devote a greater share of wallet to department store spend than the rest of the U.S. adult population. And younger Millennials are also more likely than older Millennials to have shopped at department stores. While the younger group is more likely to have shopped at Nordstrom, the older group is more likely to have shopped at Sears.
Interestingly, while younger and older Millennials differ in their likelihood to have shopped at Nordstrom (26 percent vs. 15 percent), the likelihood of the groups to have shopped at Nordstrom Rack, the fashion retailer’s off-price subsidiary, is not as polarizing (25 percent versus 22 percent respectively). Though less significant, younger Millennials are slightly more likely to have shopped at Marshall’s, while both age groups are equally likely to have shopped at TJMaxx.
3. Younger Millennials Are Sportier
Though activewear share of spend is consistent across the Millennial spectrum, budding Millennials are more likely than older ones to have shopped at sporting goods stores (29 percent vs. 20 percent reported to have shopped at one in the past year). The differences were significantly pronounced at REI (49 vs. 16 percent). There were also marked differences at footwear retailers Nike (40 vs. 19 percent) and Finish Line (32 vs. 19 percent).
So does this mean younger Millennials are more active than their older counterparts? Our Sports Industry Analyst Matt Powell shed light on this question. “I’ve been talking a lot about viewing the generational changes on a spectrum (from the oldest Boomer to the youngest Gen Zer), rather than as distinct and dramatic changes,” he explained. For example, Boomers are mostly white, conservative, less technically inclined, lavish, and not particularly focused on health or fitness. In contrast, Gen Z is less white, liberal, tech-reliant, frugal, and very health/fitness focused. And Millennials fit somewhere in between on this spectrum.
“So when we think of changes moving along a spectrum over time, it is logical that younger Millennials behave somewhat differently than older ones, and in this case—have a greater focus on fitness and health,” Matt explains.
That’s not to mention that as older Millennials buy homes and start families, they spend less money on themselves (and less on things like sports equipment), while the younger Gen Yers do not yet have those financial obligations.
4. Younger Millennials Eat Healthier, Cook Less, and Shop Wholesale
When it comes to the food and beverages they order, younger Millennials are more likely than older Millennials to look for benefits they can obtain by eating healthier, seeking items that provide energy, are filling, reduce stress, and build muscle. These are messaging opportunities for building a younger Millennial customer base.
In addition, young Gen Yers are more adventurous than older generations in their food choices, with 47 percent of younger versus 40 percent of older Millennials claiming to choose something new (compared to only 34 percent or less for older generations). And younger Millennials have other considerations when trying something new. For example, convenience is at the top of the list. Items that are quick to order, prepare, and consume with easy portability and little mess satisfy this need.
An analysis of data from CREST®, our flagship restaurant and foodservice information service, found the Millennial segment experienced the greatest decline in restaurant visits of any generation from 2007 to 2014. This decline was greatest among the older Millennial segment (the group more likely to have kids under age 13 in the household). And if you’ve ever been responsible for a child at a restaurant who is having a meltdown or making a concoction out the table condiments, you get it. Not to mention the impact of having more mouths to feed; the relatively cheaper expense of eating at home was the primary reason for the decline in visits among older Millennials. Healthy eating concerns also played an integral role in the decision to eat at home.
Older Millennials are also more into cooking than are younger Millennials, with just over half of the older segment saying they love or like to cook. It may be easier to attract younger Millennials back to restaurants because they are not as tied to cooking at home.
Last month Whole Foods revealed it will open a line of grocery stores specifically targeting the Millennial shopper. These smaller stores will offer curated, limited selections of products at value prices. While research indicates Millennials do like to specialize, our Checkout Tracking receipt data indicates an affinity for wholesale clubs across this segment. When it comes to at-home food purchasing, younger and older Millennials devoted the greatest share of wallet to wholesale clubs Costco and Sam’s Club, and were similarly likely to have shopped at each grocer. Younger Millennials over-indexed at BJ’s and Publix, but under-indexed at Safeway.
"When it comes to accessories, younger Millennials are not the robust market one would think they are..."
5. Young Gen Yers Devote Less Spend to Accessories
Accessories are growing fastest among the Millennial segment. These consumers are responsible for the greatest share of the category’s purchases, with spending up 15 percent from one year ago. Younger Millennials, however, under-index (compared to total Millennials) in the share of wallet they devote to this category. We found this stat surprising, so we asked our Chief Industry Analyst, Marshal Cohen for his thoughts on the trend.
“When it comes to accessories, younger Millennials are not the robust market one would think they are,” Marshal explains. “Traditional thinking has younger Millennials spending more on accessories, as they tend to be more affordably priced than apparel items. But with less discretionary funds, young Millennials need to be very picky about what and when they buy. Spending across a wider scope of ‘necessities’ like phones, data plans, and even food competes for young Millennial spending on experiences—and that means things like accessories will fall short on the priority list for spending.”
6. Older Millennials Use More Loyalty Apps
Older Millennials are more likely than younger Millennials to be a member of a retailer’s loyalty program. But one surprising trend is that older Millennials are more likely than tech-reliant younger Millennials to have at least one retailer’s app downloaded on their mobile device (48 percent vs. 33 percent). The older group is also more likely to frequently use the downloaded app (46 percent often use their app to browse, look for product information, or shop compared to 38 percent of young Millennials). Older Gen Yers substantially over-indexed for use of mobile apps from Target, Walmart, CVS, Dollar General, eBay, Rite-Aid, Best Buy, Gamestop, and Costco.
7. Millennial Youth Need Less Stuff and Shop Less in Store
Younger Millennials are more likely than older Millennials (28 percent vs. 23 percent) to say they have shopped at brick-and-mortar stores less often than last year, primarily because they don’t need to buy as much as they used to (41 percent). This is also a factor of Millennials’ attraction to experiences, and their desire to do more and buy less.
Older Millennials are more likely than younger Millennials to shop less at brick-and-mortars because they cannot afford to shop as much as they used to (32 percent vs. 25 percent)—perhaps a reflection of the financial demands of parenting.
Both groups are similarly likely to have shopped at Amazon and to be members of their loyalty program, though younger Millennials are more likely to be familiar with Amazon as a place to buy consumer electronics. Older Millennials are more likely to have shopped at direct mail/e-commerce sites like eBay.
When it comes to shopping for apparel, younger Millennials are more likely than older Millennials to browse in store and buy in store (62 percent vs. 51 percent), but less likely to browse online and then buy in store (10 percent vs. 16 percent). Younger Millennials are also less likely than older ones to browse in store and buy online (8 percent vs. 14 percent).
8. Younger Gen Yers Are More Adam Levine, Older Are More Metallica
Our BrandLink® solution reports that if you’re looking for a celebrity endorsement that would appeal to Millennials of all ages, B.o.B. and JT are your guys (that’s Bobby Ray Simmons, Jr. and Justin Timberlake to all you non-Millennials). Both would be good fits to target younger Millennials (index 225 and 132 respectively) and older Millennials (index 167 and 137 respectively).
If you want to home in on younger Millennials, Adam Levine and Daniel Radcliffe are good choices (index 138 and 134 respectively), but they could miss the mark for older Millennials.
Only trying to target older Gen Y consumers? Metallica and Guns N’ Roses would fit the bill (index 130 and 121 respectively), but might not have the same recognition, let alone impact, with young Gen Yers.
9. Older Millennials Buy More Kids’ Stuff
Younger Millennials under-indexed compared to the total Millennial segment in child-related categories: baby products and toys. Specifically, older Millennials are more likely to have shopped at Babies R Us, The Children’s Place, Toys R Us, and Party City. This isn’t surprising, since the 18-24 segment is less likely than the 25-34 segment to parent a child. And in today’s day and age, baby photos don’t really start to take over your Facebook or Instagram feeds until you hit your mid-to-late-20s.
The same trend applies to pet products: older gen Yers are more likely than Millennial youngsters to have shopped at pet stores like PetSmart and Petco.
10. Older Millennials Have More Home-Related Expenses
We know it might sound shocking, but younger Millennials also under-indexed in home improvement, appliances, tools, and home textile purchases. Older Millennials are more likely to have shopped at home hardware stores like Home Depot and Lowe’s in addition to home specialty stores like Bed Bath and Beyond, Crate and Barrel, West Elm, and Pottery Barn. But, really—no surprises here. What 20-year-old do you know who is remodeling her new home, buying a fancy KitchenAid, investing in a state-of-the-art power saw, or ordering a new line of linens? Let’s face it, whether you’re in school or starting your first job, it’s all about scrounging up repurposed furniture from older family and friends or simply sticking with mom and dad for a few more years until you get your feet on the ground. And when young Millennials finally do uproot themselves, typically this means moving to an urban environment where there are more jobs and inhabiting smaller, rented, and/or shared homes that require fewer furniture expenses.
Older and Younger Millennials: Two Distinct Segments
In the world of market research, people aged 18-34 are typically grouped into one giant segment for study. But they do not share the same experiences, think, or act the same. Half the group grew up on Britney Spears, the other on Justin Bieber. Some grew up with Facebook in middle school, while the rest didn’t create an account until after having their first child. Moreover, this 16-year span represents a pivotal coming-of-age period, and the differences between the oldest and youngest Millennial can be great, as evidenced by our top 10 list. It’s time to start treating these segments as two distinct groups, to better get to know them and to speak to them directly if we want to earn their precious spending power.
This year’s Back-to-School season
Test Ahh the Back-to-School shopping season! That make or break time of year for many of the manufacturers and retailers who toil in the world of academic supplies and related paraphernalia.
It can be a stressful time. And although the stress levels this year are likely no worse than usual, the stressful time is extending. The back-to-school season is now much longer than it used to be.
The reasons are numerous -- rapid delivery and the ease of shopping online let consumers procrastinate; retailers themselves have looked to drive BTS sales earlier in the year by promoting items at the start of the summer; and those early-summer promotions tend to lead to discounting as the start of school approaches, rewarding bargain-conscious consumers who wait until the last minute.
The result is that that the BTS season is stretching on both ends.
Research from Google shows that consumers are beginning their search for BTS purchases earlier and earlier. This year’s BTS-related searches began a week earlier than in 2014, and three weeks earlier than in 2013.
At the same time, research from The NPD Group shows that consumers are doing their BTS clothes shopping later than usual. The majority of consumers surveyed didn’t start shopping until early August, which is generally considered the end of the season. And many consumers aren’t expecting to finish shopping until after the school bell rings.
As The NPD Group’s Marshal Cohen put it: “When so many consumers are planning to do their back-to-school shopping in the months not traditionally considered part of the season by retailers, it’s time to break with tradition and change the way we market and measure this shopping season.”
So just when will the BTS season hit its peak? Below are the dates when BTS sales peaked last year in a number of retail categories. Assuming that the early indicators of a lengthening season hold true, then the next few weeks will prove to be the top of the slope.
Peak Week in Sales in 2014
Grocery Stores = August 30
Drug Stores = August 23
Brick & Mortar = August 23
Online = August 16
Average School Start = August 23
Making the (up)grade
Among the more interesting developments in this year’s BTS season is that one of the bigger items in the shopping cart -- the notebook PC -- is facing some unusual challenges.
Microsoft is in the process of rolling out its Windows 10 release. And the timing of that -- in the middle of what is traditionally the second-largest season for notebook sales -- presents challenges to both retailers and PC manufacturers.
“Traditionally an OS release has been a positive occurrence for hardware sales, but this year that typical cadence has been called into question,” according to Stephen Baker, vice president of industry analysis for consumer technology at The NPD Group. “Windows 10 has been positioned by Microsoft mostly as a software upgrade and with the short window of time between the release of the OS and its general availability the stock of Windows 10 PCs in retail stores, primed to take advantage of the season, is likely to be fairly limited until around Labor Day which is probably too late for an incremental burst of selling.”
In other markets, things look a bit better.
For example, early indicators suggest that sales of athletic footwear will be quite high. Dollar sales in the category grew 8 percent in the first half of the year, while the average selling price rose 7 percent.
“June is a prelude to back-to-school, making this mid-year performance a positive indicator for the back-to-school season,” according to Matt Powell, sports industry analyst, The NPD Group. “These sales results in the first half of 2015 bode well for a strong second half of the year.”
The big winners for BTS are likely to be retro running shoes, which saw sales soar in the first half.
Pencil it in
As you’re waiting to see what the final numbers are for BTS 2015, you may want to do some shopping for the teachers in your life. As it turns out, teachers spend a fair amount of their own money for classroom supplies. That hardly seems fair.
So if you’d like to help, check out our infographic on what teachers need for the classroom this year.
Insights and Opinions from our Analysts and Experts
According to NPD, which represents the most comprehensive roster of reporting retailers, comprising more than 50 percent of the U.S. retail athletic shoe market, sales of athletic footwear in the U.S. for the first third of the year (January-April 2016) were solid. Both dollar and unit sales grew in the low single-digits with average selling price up slightly, mostly on mix.
So far, the bankruptcies in the industry have had little impact on sales, but that could change over the next 90 days. I expect these “going out of business” sales to have a minimal impact on the industry. The greatest impact will likely come early, when the assortments are best. Channel checks revealed obsolete and broken inventories in the stores slated to close.
The big driver of growth for the year so far remained the classics category, with sales growing more than 25 percent. The largest branch of the classics is retro basketball, driven by Brand Jordan. Retro tennis has had the greatest percentage growth, paced by the Adidas Stan Smith franchise. Retro running has also had a healthy increase. Virtually every major brand in retro running is showing strong increases. I expect the retro trend to last for some time to come.
Weakness in performance basketball has been cited by several retailers over the last few quarters. Performance basketball was one of the few categories that saw a decline in average selling price for the year so far (declines in average selling price often accompany a soft business). Of the major brands, only Under Armour has shown growth here. I expect the declines to moderate as we come against easier comparisons in the second half, but I do expect basketball will remain challenged.
Running is the largest of the athletic footwear categories, but remains bifurcated. Total running sales are up in the low-singles; however, performance running (80 percent of the category) is down in the high-singles, while lifestyle running grew more than 40 percent for the year so far. Most of the major brands in performance running have struggled, with Adidas being a standout exception. We can expect lifestyle running to continue to expand.
Casual athletic grew in the mid-single digits, mostly on robust growth from the Adidas Neo collection. Converse Casual has also been strong. We clearly are in a major non-performance cycle right now. I expect the short term will remain challenging for the performance-focused brands. Brands that have a diverse portfolio of products should be thriving.
Sport slides are back in fashion, no doubt driven by the retro trend. Sales for the year grew about 10 percent. Nike is a big winner here. We can expect this trend to continue and should be on the lookout for new emerging brands in this space.
Outdoor sandals did not fare as well, likely due to the wet spring. Chaco, Skechers, and Teva all had nice increases, counter to the overall market trend.
Walking continued to decline after several years of good growth. Skechers struggled here. Hiking had a low single-digit increase. This category was hot in 2015, but again was suppressed by the wet spring. Columbia and Nike outperformed in hiking.
Men’s and women’s both had low single-digit increases for the year so far. Men’s was hurt by poor basketball results. Women’s was weakest in walking. Kids grew in the high single-digits for the year so far. It is important to remember that a significant driver of the kids business is teen girls buying “boys’” shoes.
By channel for the year so far in athletic footwear, shoe chains led the pack with sales up in the mid-single digits. Athletic specialty/sporting goods rode out the negative basketball trend with a low single-digit increase, and average selling prices increased overall. Department stores and national chains both had low single-digit declines. Running specialty stores declined in the mid-single digits.
Looking at positive brand growth year to date, Nike/Brand Jordan and Converse performed well, but it’s Adidas and Under Armour, with sales up more than 40 percent and 70 percent, respectively, that stand out. Adidas is having a fabulous year, now reclaiming #2 share in the U.S. sneaker market. Asics and Brooks sales declined in the low teens, as robust retro growth could not offset weakness in performance. Saucony sales grew in the mid-single digits. Puma is clearly riding the retro trend with sales up about a third. Vans sales grew in the low teens.
The second quarter has typically never been that important for the sneaker business. I expect sales to be a little choppy early on, as the bankruptcies will be most disruptive then. By the time back-to-school arrives, the bankrupt stores will be out of good shoes. The negative basketball trend will have abated and the Olympics will give a lift to the business. I expect sneaker sales in the second half to bounce back to previous levels. With 10 percent of the sporting goods retail space closing by Labor Day, the remaining market will be stronger and healthier.
Source: The NPD Group, Inc. / Monthly Retail Tracking Service, January-April 2016
Data is collected from the athletic specialty, sporting goods, chain store, department store, and other channels. Athletic footwear includes the following categories: Sport Leisure, Outdoor, Performance, and Work/Occupational/Safety.
Have you sent a text today? Of course! Chances are you’ve sent more texts than you have received calls. However, looking back to the last time the Toronto Raptors were in the second round of the NBA playoffs in 2001, texting wasn’t necessarily a viable form of communication. Don’t get me wrong, you could text, but the process was extremely involved and convoluted. Typing a single letter required the user to mindlessly poke at his or her key pad several times. Don’t even get me started on how frustrating the process of correcting a spelling mistake on a mobile phone was! Nevertheless, it’s safe to say that just as technology has evolved a lot over the last 15 years in Canada, so too has basketball. In the late 90’s The Toronto Raptors began to attract a new consumer; in many cases a younger fan who was getting his or her first taste of Basketball. 15 years later and these millennial consumers have developed into die hard Raptors supporters; they are now the ones driving the market and controlling nearly two-thirds of the spend in terms of basketball related merchandise and athletic apparel. And while the Toronto Raptors first broke into the league in 1995, it wasn’t until 2012 that the city collectively began to support the team.
Since then, “WE THE NORTH” has become a collective rallying cry that unites an entire country behind its sole NBA franchise. The success of The Raps has truly propelled basketball in Canada and led to a whole new breed of NBA fans north of the border. Recently, Canadians have also been dominating on the court. In 2013, Toronto born Anthony Bennett was drafted first overall by the Cleveland Cavaliers. Then in 2014, Andrew Wiggins, another Canadian born player, was selected first over all once again by the Cleveland Cavaliers. Toronto’s own Drake was also recently given the role of “Raptors Global Ambassador”, after his tireless support of the city and the team.
Yes, it seems that basketball in Canada has finally caught on with the masses – albeit over 20 years after the country got its first and only NBA team. All of these events have helped to drive awareness and attention for the sport. And as basketball has grown in popularity with Canadian fans, so too has the amount of money that fans are willing to spend on b-ball related purchases.
Basketball shoes have grown from an $84M industry per year in 2013 to $147M in February 2016, +20% CAGR. Of course this pace can’t be kept up as we have seen the growth slow to +7% in the past year but that still outpaces the Athletic footwear market as a whole. All of this growth and all of this attention isn’t just driving the sport; it is really driving the fashion of the sport.
The largest factor influencing these purchases is the look. A third of purchases are influenced by the look/colour/matching of an outfit, etc. On the other hand, consumers tend to be influenced by Athlete endorsements only 6% of the time. Will the market continue to move higher? It’s hard to say. But one thing is for sure, if the Raptors can continue to keep winning deep into the post-season, it’s quite possible that basketball related shoe and apparel sales will continue to grow exponentially in Canada.
As far back as 2009, the NBA hinted that it would follow in the footsteps of other international professional leagues and display advertisements on players’ jerseys. We saw a touch of this during the 2016 All-Star Game in February, when uniforms were sporting the KIA logo.
Last Friday, as I predicted back in June 2014, the NBA Board of Governors approved the sale of ads on jerseys beginning in the 2017-2018 season, as part of a three-year trial. I’m firmly convinced that the NBA experiment with sleeved jerseys was designed to create more room for such ads.
Leagues are always looking for new revenue streams, and ads on jerseys is a strategic move which will bring in millions of dollars each year.
NBA Commissioner Adam Silver said, “Jersey sponsorships provide deeper engagement with partners looking to build a unique association with our teams and the additional investment will help grow the game in exciting new ways. We’re always thinking about innovative ways the NBA can remain competitive in a global marketplace, and we are excited to see the results of this three-year trial.”
Silver is correct that jersey sponsorships will foster a new bond between players and their fans, who want to not only support, but also dress like their heroes. It’s also important to recognize that a uniform is not simply a fashion item, but ultimately it directly correlates to performance. The changes that are happening will not only influence the sport and brand mindset of fans and viewers, but take the game to another level.
It’s only a matter of time before NBA players will become walking billboards. I fully expect that NBA team jerseys will be updated every season, to keep up with changing ad campaigns and corporate sponsors – and to encourage fans to buy the latest one.
Athletes today are viewed not only as heroes on the field, but as cultural and fashion icons to the American people. We live in a culture where they are revered more than just feet on the playing field, and where their style of dress, brand endorsements, and even political opinions can influence consumer behavior. The monetary weight that they carry is not too shabby either. The world’s 100 highest-paid athletes, according to Forbes’ list, earned over $3 billion in total from June 2014 through June 2015. With the amount of money that is invested into these athletes each year, they must be doing something right for the brands and sports they represent.
It may come as a surprise that a number of pro golfers made the list, including Phil Mickelson, Tiger Woods, and 26-year-old Rory McIlroy. While this is beneficial to golf’s image, the sport is not on par with the up-and-coming consumers it desperately needs to attract: Millennials and Gen Z.
According to the National Golf Foundation, more people are trying out the game for the first time; however, overall golf participation is declining, with numbers more in line with the pre-Tiger Woods figure we saw in 1995.
The golf culture does not identify with Millennials, who have an affinity for outdoor activities and shared experiences such as camping, climbing, and backpacking; nor does the sport distinguish itself among the Gen Z’s, who like team sports as well as activities that mirror the Millennials. Golf as we know it is quite the opposite of what these generations seek, and contradicts a number of their core values:
1) The game is slow and, for generations who are used to everything being a click away, it’s far from being instantly gratifying.
2) It’s expensive and, for generations that need to be spending conscious, the cost to play and purchase/rent the necessary apparel and equipment is not of value to them.
3) Golf is exclusive, and for generations who want to be inclusive, paying to have the privilege of an exclusive membership is not of interest.
4) Its rules are too complex, which is unappealing to these generations who want a minimal amount of rules.
5) There is a lack of diversity in golf, as the CEO of the PGA of America said himself, in contrast to the Millennials, who are the most diverse generation ever and have embraced diversity like no other generation.
We’re seeing Millennials like Rory McIlroy engage and succeed in golf, but this type of testimonial alone is not enough to breathe new life into the sport. The key to winning as a sports brand today is to make fashionable products, particularly footwear and streetwear, for the Millennial and Gen Z generations. Though applying this to golf is a challenging task, golf brands and retailers need to keep this trend top of mind when figuring out how to boost participation for their sport.
The athletic and outdoor industries have traditionally been “guy” industries, illustrated by the fact that most of the executive boards and management teams of major companies in this space fall short when it comes to gender diversity.
Historically, most athletic brands have used the strategy of “shrink it and pink it” to develop women’s products. But tailoring a man’s shoe to a woman’s foot is not the solution. Girls are made differently than boys; a man’s foot is more rectangular in shape, while a woman’s is more triangular and narrower at the heel than the forefoot. Simply making smaller men’s shoes results in ill-fitting women’s shoes, and we all know that fit is very important to consumers – not only in footwear, but apparel as well.
To determine what they must do, brands and retailers must first understand the female consumer.
- Women are females first and customers second. Brands need to develop women-specific products in order to grow this important segment of the athletic and outdoor markets.
- Women are often the problem solvers in their relationships. If your product can make her life better, easier, cheaper and faster, that goes a long way. Versatile, multi-functional products are a real plus.
- Sweat the details; she will notice. Spend time making your product the best it can be for the price. Little details can make the difference between a product she buys and one she loves.
- Female consumers are very willing to connect with brands and retailers via social media. At the same time, they are sharing everything with their friends. For decades, retailers and brands have been telling us how and what to buy, but the shift to social shopping will see female customers “selling” to each other.
Next brands and retailers can move into what they need to do.
- They need to celebrate femininity. Many women embrace their femininity and have taken to the broader concept of “lifestyle.” Her shoes and apparel have to function, be comfortable, be versatile, and be cute.
- They must be loyal to women. Loyalty in this case means consistency in design, direction, and product performance. Female shoppers want to understand and follow the evolution of the brand, but they also demand consistency in both how the product looks and how it performs.
- Show her how to wear it. Products that are fully accessorized at retail are a huge plus. Helping women put an entire outfit together is another great way to be loyal.
- If you build a brand relationship with a female shopper, she becomes a brand ambassador. If she trusts your brand, she will tell her friends and family about it. Strong brands must deepen and nurture that relationship. The minute you take her for granted, you’ve lost her.
- Women, especially Millennials, want brands that share their values. Brands and retailers must express their vision and mission in clear and concise terms, and open a dialogue with their customers about these values.
There’s a gap in the industry, which I see as an opportunity for brands to step in and better understand and speak to women’s retail needs. During a time when gender lines are blurring and products are being marketed to accommodate everyone across the gender spectrum, this is as good a time as any to develop new ways to sell and create products.
College basketball fans around the country are rejoicing; NCAA March Madness 2016 has begun. In addition to being one of the biggest U.S. sporting events of the year behind the Super Bowl, March Madness is also one of the prime opportunities for the athletic footwear industry.
Much of the opportunity has to do with marketing. Signing college teams is more of a marketing ploy than a direct sales story. These contracts can be worth several hundred million dollars. The contracts can include footwear, uniforms, other apparel, and direct payments to coaches.
Nike once again dominates the court as this year’s tournament begins, having shoe contracts with 44 of the 68 teams and providing uniforms for 41 of those teams (the three other teams will wear Russell uniforms). Both Under Armour and Adidas will have a greater presence at the tournament compared to last year; Under Armor is providing uniforms for 10 teams, up from six last year, and Adidas for 14, up from 11 last year.
Here are the most important times of the year for basketball shoe sales, and March Madness makes the list.
Sneaker sales peak during Christmastime, and some of the biggest weeks of the year for basketball shoes are around this holiday. With the advent of gift cards, these weeks have become even larger in relation to other weeks of the year. Brands often schedule releases to take advantage of this natural buying time. Typically, the largest Jordan retro release of the year occurs around Christmas.
The NBA All Star game has become another very important sales period for basketball shoes. As the game is showcased for the skills of some of the best players in the game, it’s a logical time for brands to showcase some of their best products as well.
Black Friday is another key sales period for basketball shoes. While many retailers have turned the Thanksgiving holiday shopping period from a couple of days to a couple of weeks, for the most part, sneaker brands have held their releases until the Friday after Thanksgiving.
Back-to-school is another important season. Today, kids often wait for school to start to see what other kids are wearing before beginning their back-to-school shopping, which moves the sales period later than in previous years. While this remains an important sneaker sales period, the traditional timeline for back-to-school shopping (usually mid-July through early September) is now extended. This means we can expect to see back-to-school sneaker sales spread over a longer period of time.
The fifth most important selling period for basketball shoes is during March Madness. Sales during this period are not that much higher than an average week, but still enough to move the weeks into a top spot for the year.
March Madness aside, the real lesson here is that brands have to create great products 52 weeks out of the year. Consumers demand fresh ideas with every shopping trip. Brands that create one new look and hope to ride it for months will not succeed.
Social and digital fitness trends are having a profound impact on the sports industry. The growing popularity and emergence of programs and events such as CrossFit and The Color Run show that the consumer’s definition of fitness is evolving. While solo, gym workouts in the company of music streaming through headphones will not cease to exist, the popularity of dance party-style fun runs has only just begun. Add to that the digital fitness component; from heart rate monitoring to sleep tracking, digital fitness devices are tracking more than just our every waking move. This, too, is influencing the consumer’s relationship with fitness.
These trends are being driven by the Millennials – a generation which has changed and continues to change the landscape of retail. While it may seem as though we’ve heard enough about them by now, their influence cannot be overlooked. Millennials are a transitional generation – a link between the former generation and a truly digital one. They now outnumber Boomers and will comprise one-third of all retail sales in the next five years.
A critical difference between Millennials and their predecessors, the Boomers, is their approach to fitness. The Boomers who exercised frequently tended to buy a lot of expensive equipment and binge on an activity. Millennials, on the other hand, are committed to a healthy lifestyle, but in a much more lighthearted and less serious way. They don’t want to be defined by any one activity; they want to have fun and share those experiences with their friends, making fitness activities social ones.
Another key differentiator between Millennials and Boomers is the former’s reliance on technology for feedback in their fitness activity. Millennials want to measure, track, and share their fitness regime with their friends. As a result, awareness and sales of digital fitness devices have grown substantially in 2015, with sales growing nearly $22 million compared to 2014*, as a greater assortment of products offering a variety of features and price points has hit the market. With more features available, this has translated to more ways for fitness devices to be relevant across the spectrum of consumers from soccer moms to soccer players, and keep these consumers engaged.
Fitness has evolved from an independent activity to a social occasion. It’s an activity that can engage us with society just as much as it can provide a break from it. The digital component is adding yet another fresh spin on fitness. Together, these two trends are altering the way in which we think about sports and fitness. For brands and retailers to be successful, they must keep pace with the times and ride the wave of the next generation of consumers.
*Source: The NPD Group, Inc. / Retail Tracking Service, U.S. Sports Equipment, Annual 2015
After a morning of retail reconnaissance, this is what Black Friday looks like in the Sports industry.
Sports retailers began to send out Black Friday offers as early as the first week of November, with most offering deals the Sunday before the Thanksgiving holiday. This has reduced the need for shoppers to get up early and, ultimately, will weaken the importance of Black Friday as a shopping event.
After the warmest October on record, mild temperatures continued to dominate most of the country. The unseasonable temperatures are hurting the cold weather businesses. One year ago, the East Coast had a major snow storm, which jumpstarted the winter businesses. Eastern retailers will face very tough comparison this year.
Tying into the warmer autumn weather effect, cold weather apparel and footwear remained challenged. With department store retailers predicting big discounts on these categories, we should expect this business to remain weak and then see major price reductions as we approach Christmas.
In terms of athletic footwear, many shoes featured in Black Friday-themed flyers were advertised at full price. This confirms the continued strength of the athletic footwear trend. Discounting on price in athletic footwear was at a moderate level.
Specifically, the Black Friday Jordan Brand releases are typically one of the largest of the year. This year’s shoe is the Air Jordan 8 Aqua Remastered ($190). The Air Jordan 8 Aqua was first worn during the 1993 NBA All-Star Game in Salt Lake City. It is one of the most wanted by fans.
While performance basketball has plateaued, Marquee Retro Basketball is still one of the strongest categories in athletic footwear.
In athletic apparel, the discounting was muted, just as we saw in athletic footwear. Most of the major advertised items were only 25 percent off, while many key items were advertised at full price. Sales are strong for athletic apparel outside of cold weather categories.
Looking at major brands, the week of Black Friday is one of Nike’s sanctioned events, thanks in large part to its Minimum Advertised Price policy. Retailers were permitted to feature select Nike products at 25 percent off. This was a very successful event during back-to-school.
Fans of Under Armour (UA) can score a deal as well. To parry the Nike MAP week, UA is offering 25 percent off all Baselayer and Big Logo hoodies. Under Armour Thrill running shoes (MSRP $59.99) were offered at $39.99.
The licensed apparel/fan wear category remains challenged. Retailers featured deep discounts this Black Friday, as much as 50 percent off. There are very few exciting new ideas in licensed apparel.
Looking at devices, last year wearable technology items were featured in many Black Friday flyers, mostly at full price. As the category appears to be plateauing, the marketing of these times appeared to be reduced.
As we saw last year, the challenged gun business saw some of the deepest discounts. We can expect this business to remain difficult over the near term.
While the golf business in big box retailers appears to have stabilized, golf equipment was heavily discounted for Black Friday. The Millennials remain a major structural problem for the golf industry.
We are having a terrific overall year in the sports business. The sports industry again appears to be off to a solid start for the holiday season.