Last year, the sporting goods industry experienced a series of changes that altered the realities of many manufacturers, wholesalers and retailers. Stores like The Sports Authority, Sport Chalet, and Eastern Mountain Sports filed for bankruptcy.
Yet, health-conscious consumers are purchasing sporting goods and focusing on healthy lifestyles; the sporting goods market saw current value retail growth of 40% from 2011 to 2016. So what gives for these bankruptcies? Well, online sales of sportswear recorded much faster growth of 159%. If brands and retailers are unable to compete online, they can’t thrive, much less survive.
The new sporting goods consumer is digitally savvy and expects more than ever when it comes to their shopping experiences.
Here are 4 Elements Shifting the Sporting Goods Industry
1. Decreased foot traffic + increased online shopping.
Across industries, less people are visiting stores. They are instead turning to online shopping, mobile sites and apps to make purchases.
To respond, some big retailers have turned to in-store experiences to draw customers back in. Think Lululemon’s yoga classes or American Eagle Outfitter’s concert series. A new wave of experience-based retail is being implemented in an attempt to increase foot traffic. Brands are looking to establish themselves as lifestyle brands, meaning that they want to be relevant in multiple arenas of their consumers lives.
2. The saturation of the activewear market.
Traditional clothing brands continue to launch workout clothes and accompanying products. You can now buy yoga pants and even yoga mats at clothing stores like H&M, Gap, and Aritzia. To remain competitive, stores like Dick’s have launched their own branded lines, like a Carrie Underwood’s CALIA line, only available at Dick’s.
3. Pricing free-fall.
Regardless of their location, the new digital consumer can compare brands and check prices before buying. Pricing strategies therefore have to be transparent and nimble. Dick’s Sporting Goods, for instance, has followed the path of Best Buy by guaranteeing the lowest price for any of their products. Check out their ad spot on the guarantee:
This is a dangerous reality for smaller retailers who might not have the ability to change their profit margins so easily.
4. Increasing preference for direct-to-consumer.
With a streamlined online presence, brands can interact directly with their consumers. In fact, 35% of millennials say they are more likely to shop for sporting goods on a brand manufacturer’s website. Compare this to 25% of non-millennials who say they prefer shop with the manufacturer. One in four is not negligible.
From Nike and Under Armour to Michael Kors and Ralph Lauren, brands are therefore increasing their direct-to-consumer business in order to cut their reliance on retailers like department stores.
So what is a retailer/distributor/manufacturer in sporting goods to do?
It’s not all doom and gloom. To stay competitive, sporting goods merchants need a smart and adaptive digital strategy. In our publication “The End of Sporting Goods Retail As We Know It”, we have outlined some of these challenges and their eCommerce responses. Download it today.
Absolunet is an eCommerce agency and integrator with 200+ people obsessed with delivering results, creating ROI-producing (and award-winning) eCommerce experiences since 1999.
You are likely already aware at the speed at which the B2B e-commerce market is growing. While the B2C market is expected to be about $523 billion annually by 2020, the B2B market in the US is expected to be nearly double that at $1.1 trillion, according to the Forrester/B2BecNews Q1 2017 B2B Buy-Side Online Survey.
Along with this rapid growth, you have also likely heard about the many disruptors in the B2B market.
Disintermediation of supply chains is resulting in competition between former partners, as new partnerships form. Enterprises practicing ”business as usual” may find themselves with slimmer margins or being squeezed out of the channel altogether. Amazon Business is growing at 20% per month and already has more than 30,000 vendors signed on. With all these choices and the ability to rapidly price shop, brand loyalty is also taking a nose-dive.
On top of all of these changes, B2B buyers are behaving differently from how they used to. They are, in fact, acting more like B2C shoppers, which is who they are when they aren’t at work. Sixty-seven percent of ‘Millennial generation’ B2B buyers prefer to shop online, compared with 51% overall. Ninety-two percent of US buyers have used Amazon to research a work-oriented purchase and 74% confirm that buying online is more convenient that buying from a sales rep.
The takeaway is simple: B2B buyers now expect a rich e-commerce experience, each and every time.
Get Ahead with the Best Product Information
It is no surprise that B2B buyers begin their product search on Google or, increasingly, on Amazon. What may surprise you is where they complete their search and where they ultimately buy. You got it—it is where they find the best product information. Great product information is good for your top and bottom line!
So, What’s Next?
If you would like to continue delving into these data and insights, please join us to continue the discussion on July 20 at 1 PM CDT. Together with our partner, DATAgility, we are hosting a webinar to talk about:
Register now for the webinar, Why Manufacturers Need PIM in Their E-commerce Stack on July 20, 2017 at 1 PM CDT, hosted by DATAgility and inRiver. Hear more aboutthe changes in the B2B online marketplace and how you can ensure that you are doing everything you can to give your customers the best digital experience possible.
Kathryn Zwack, Senior Content Marketing Manager, inRiver
In the world of digital commerce, “customer experience” has become the buzz word, or buzz phrase, of the day. Digital commerce enterprises—whether B2B or B2C—want to provide their customers with the best possible online buying experience.
By 2020, companies expect that customer experience will be more important than price and product offerings as the key method of differentiating their brand. This is not really all that surprising, considering that buyers have shown that they will pay a premium for convenience and that they can be brand agnostic if they find the right product.
Getting buyers to find your product quickly through compelling product content and targeted personalization are the keys to e-commerce success. In fact, one study revealed that 70% of respondents indicated that customer identification or personalization of customer experience is a leading priority for 2017.
The question is: How do you create a great customer experience?
inRiver has teamed up with two of our most valuable and most experienced partners to try to answer that question. We are collaborating with Episerver and Rightpoint on the strategies and tactics that can help you provide a stellar customer experience each and every time. Join us on Thursday, April 20, 2017 for a complimentary webinar where we introduce these concepts.
At this online event, we will cover a number of topics, such as:
In addition, we will discuss how to create great product content to use in your personalization efforts. Last, we will highlight some great real-world examples that show how your B2B and B2C peers are creating great customer experiences.
You know that customer experience is one goal of your e-commerce initiatives. Don’t miss this great opportunity to learn more about the tools and strategies to meet your e-commerce goals.
Kathryn Zwack, Senior Content Marketing Manager, inRiver Inc