POST COVID-19 Outlook on Sporting Goods Industry & Market Trends: The Good, The Bad and The Greatest Opportunities Ahead
Over the next five years towards 2025 , according to IBISWorld’s analysts’ early forecasts the sports participation was expected to spur the pent-up demand for Sporting Goods and supplies. Rising consumer spending combined with higher disposable income in the last quarters of 2019, was expected to stimulate industry revenue growth, as more consumers require sporting goods for their health and fitness. While more consumers were expected to purchase more sporting goods, the industry was caught by surprise when the pandemic created havoc. While quarantine and lockdown left some merchants gasping for air other specialty stores like bicycle stores went on fire as sales skyrocketed. Here is why, you should read these industry highlights and take ways. You may find out why and how to turn the tide and brace for a new future.
First what do we know about the sporting goods industry and who are the main players?
Industry Definition and Categories
Industry Definition and Categories Sporting goods refer primarily to specialty articles like bicycles, camping equipment, exercise and fitness equipment, apparel, footwear and other goods and accessories. Products are sourced from sporting goods manufacturers, distributors and wholesalers and then sold to the general public via retail stores. Department stores, mass merchandisers and retailers that exclusively sell apparel are not included in this category.
Main Industry Products and Services include:
- Sporting equipment
- Firearms and hunting equipment
- Athletic apparel
- Athletic footwear
- Athletic uniforms retailing
- Bicycle (except motorized) retailing
- Bowling equipment and supply retailing
- Diving equipment retailing
- Exercise equipment retailing
- Fishing supply retailing
- Golf equipment and supply retailing
- Saddlery retailing
- Swimming apparel and accessories
- Other sporting goods (e.g. scuba, skiing and outdoor)
Sporting Goods Stats and Post-Pandemic Takeaways
There are three key strategic issues that sports organizations, sporting goods retailers should consider, to recover from the crisis while making a bold play for the age of change and transformation. The continuing COVID-19 crisis as discussed in our latest blog has created an enormous feeling of uncertainty regarding the new normal as many questions are hard to answer at this stage:
Which changes are going to persist?
What will the new world look like if another spike takes place within the next few weeks or months?
How will people and firms adapt to the mutant landscape?
Experts across the spectrum are bewildered by the impact of the ongoing disruptive events impacting the retail sector at large. Any other spike will shaken the loosening foundations, creating bipolar reactions as some retailers have doubled their sales figures from online traffic whereas many brick and mortar stores have lost so much ground during the shopping quarantine and curfews. Depending on the business model and digital maturity level, some will continue to thrive while other sporting goods shops will continue to struggle. While our research series, surveys and playbooks at multidev.com are not scientific, we have enough antennas in the retail sector and community to assess the damages and whitespace opportunities.
In fact, there are many different scenarios, and we may not have all the answers you are looking for, but we can certainly share our observations, market research data and insights with our retail community network.
Here are some Thorny Business Dilemmas & Challenges:
There are three key strategic opportunities that sporting goods retailers should consider in the post-pandemic phase, to recover from the black swan effect while making bold moves to ramp-up their recovery strategies.
- How to go from brick and mortar driven retailer to a digital retailer savvy
- How to leverage digital tools to support retail operations
- How to expedite the digital transformation in a frugal and systemic manner?
But first, let’s examine the state of play and how retailers in the sporting market like those served by ChainDrive has responded to post-COVID-19 side effects. Who are the benefactors and how to weather the next spike?
The shifting landscape for sporting industry: The Good, The Bad & Ugly
Let’s start with the bad and ugly side of the pandemic on this retailing sector. When major leagues worldwide began suspending their sports championships in early March 2020, it underscored the seriousness of COVID-19. Mandatory social distancing radically impacted one of the largest markets in the world. Live sports in USA have taken the largest hit, wiping out all kinds of revenues—live coverage, media, sponsorships, ticket sales, and in-venue sales which led to massive layoffs, furloughs and staff cuts.
It is unclear after this unprecedented event how long it will take fans to get back into stadiums to watch their favorite teams playing. Both players and fans are reluctant to attend crowded fields. Deloitte’s US Economic Forecast sees a 50 percent probability of a recession and a 30 percent chance of a financial crisis, depending on how quickly the virus is contained. A severe downturn will likely disrupt the sports value chain, from fans to investors.
How to recover stronger than ever: The Good & The Fortunate
The long pause has given brand managers, franchise owners, retailers and wholesalers enough time to rethink their customer relations, brand building strategies and community relations.
Those who managed to stay connected with their audiences whether through social media platforms, video conferencing, sustainable efforts have scored big with their fans, customers, followers and ambassadors. Franchises shops, gift shops, online boutiques and sporting goods alike have seen tremendous support for their charity actions, fund raising campaigns to help those on the front line. Messages of empathy from sports elites, players, fans and sports aficionados have been very effective and popular during the pandemic times. By leveraging the screen time, many sporting goods retailers have seen a huge leap in online sales as more people turned their attention on health, home fitness supplies (treadmills), yoga, bicycles, running clothes, etc. Stand alone stores, outlets and sporting shops outside the malls have hit new milestones in terms of sales and growth; especially those who have adopted smart omnichannel gateways like ChainDrive sporting goods store software for agile-ready retailers.
How the Pandemic Fueled the Biggest Bicycle Boom in History
According to Statista, US bicycle market went through the roof as consumers went out of their way and budgets to get their hands-on bikes before it’s too late. According to figures from the NPD Group’s retail tracking service, bicycle sales in the United States soared in March 2020, with some categories seeing growth rates of more than 100 percent compared to the previous year.“ Consumers are looking for outdoor- and kid-friendly activities to better tolerate the challenges associated with stay-at-home orders, and cycling fits the bill well,” said Dirk Sorenson, sports industry analyst at NPD, adding that kids bikes and affordable adult leisure bikes were selling particularly well.
Sporting goods outlets and specialty stores that offer a wide range of bicycle gears and equipment have been authorized to stay open if they happen to be outside malls or on the street level with a front entrance; therefore performed well during the pandemic as consumers became more health conscious and wary about their immune systems.
The Chicago Tribune published a juicy article on the bike frenzy. In their article title ‘’Bicycle sales boom during coronavirus pandemic: They are buying bikes like toilet paper’ ’, David Sharp and Kelvin Chan who investigated the phenomenon explain the sudden surge of bicycle sales worldwide as follows.
Fitness junkies locked out of gyms, commuters fearful of public transit, and families going stir crazy inside their homes during the coronavirus pandemic have created a boom in bicycle sales unseen in decades. In the United States, bicycle aisles at mass merchandisers like Walmart and Target have been swept clean, and independent shops are doing a brisk business and are selling out of affordable “family” bikes.
Bicycle sales over the past two months saw their biggest spike in the U.S. since the oil crisis of the 1970s, said Jay Townley, who analyzes cycling industry trends at Human Powered Solutions. “People quite frankly have panicked, and they’re buying bikes like toilet paper,” Townley said, referring to the rush to buy essentials like toilet paper and hand sanitizer that stores saw at the beginning of the pandemic.
The trend is mirrored around the globe, as cities better known for car-clogged streets, like Manila and Rome, install bike lanes to accommodate surging interest in cycling while public transport remains curtailed. In London, municipal authorities plan to go further by banning cars from some central thoroughfare.
The craze led to massive shortages and price hikes due to the shrinking inventories and the unprecedented demand. Our sporting goods retailers across Canada and USA have seen a huge surge in pent-up demand for bicycle gears, equipment’s and garments including high end bikes, home fitness products, yoga, etc.
Here again sports retailers with smart inventory POS solutions like ChainDrive sporting goods store software made the difference when it comes to Open-to-Buy, retail analytics, price management among many custom-tailored solutions available for specialty stores who cater to indoor and outdoor sports enthusiasts across Canada and USA where street level and open space outlets have been allowed to stay open. Retailers who were digital ready and had rugged mobile or adequate ecommerce gateways faired better than those who relied on brick and mortar traffic only.
Why having the right Sporting Goods Store Software System matters?
With ChainDrive for Sporting Goods Retail software, the sports retail shops had no trouble coping with the surge in retail transactions during hectic seasons like Christmas, Boxing Days, Black Fridays or any intensive shopping calendars. ChainDrive’s omnichannel users benefit from intelligent size analysis in both areas of sportswear and athletic footwear segments. In addition, handling your footwear segment is further simplified by advanced pre-pack and mismatch management functionality, making ChainDrive sporting goods store software the right ERP and POS system for handling all the intricacies of sporting goods retailing.
Sporting goods stores which offer a full array of sports gears and equipment going from swim suits to cross fit training accessories, from fitness, yoga, soccer and sky surfing to golf accessories and outdoor sports have been able to capture online and offline traffic with ease. Employees who had to dash constantly back and forth to find the right sizes and brands in a fast-paced environment can rely on many agile and dynamic tools to respond quickly and precisely while being assisted by smart dashboards and metrics to visualize in real time all queries.
A sporting goods store can get very hectic and stressful if store managers have inadequate sporting goods store software solutions and technologies like those offered by Multidev Technologies to help them boost their overall performance. Point of sale systems can do wonders to keep your business engine revved-up in times like this. Store sales associates can check and locate in real time which items are in stock at all times, handle process returns, exchange pre-purchased goods, offer authorized discounts or refunds, etc.
If you have more questions or want to know more about how ChainDrive can help you step-up your retail operations, contact our retail management software team just dial 1.800.820.1412 or log on https://chaindrive.com/free-live-demo/ to book a live demo.