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.
Just because retail stores are experiencing some hard times does not mean that shoppers aren’t making purchases. It is true that US. retail sales fell again in June 2017 (by 0.2%) after a small decline in May (by 0.1%). However, two months of small declines after 16 months of increases may not yet be a “trend.” Let’s wait and see. Summer vacations may spur some impulse vacation shopping and spending in restaurants and at summer resorts.
In the meantime, let’s look at a trend that does seem to have some upward momentum—pop-up shops. Vogue calls pop-up shops the future of shopping. With some retailers leaving malls and store-fronts due to a myriad of reasons—downsizing, bankruptcy, and changes in marketing and sales strategy—pop-up shops are taking advantage of these vacancies. Some retailers are now hesitant to sign long-term leases, leaving more locations available for pop-up shops.
Goals of Pop-up Shops
Constructing a pop-up shop can provide you with many benefits. For retailers who are selling only online, having a popup shop can provide that “touch and feel” opportunity for customers to interact with their products. The increase in foot traffic can raise visibility and brand awareness. Pop-up shops can help you to create a deeper relationship with your customers—building loyalty or showing your appreciation for their business. You can test a new market and educate prospective customers on your product line. In addition, you may be striving for “Boundaryless Retail”—a notion introduced by Mindy Grossman of HSNi—the expansion of products into more and more channels.
Location of Your Pop-up Shop
How do you decide where and when to erect your Pop-up Shop? Economics, such as the cost of rent, marketing, and inventory, will likely have a huge impact on your decision. However, store-fronts and malls with high foot traffic that are close to your target demographic should be considered.
Products That Work Well for Pop-up Retail
When we think of pop-up shops, we invariably think of temporary Hallowe’en and Christmas stores. It is true that seasonal products are a good option for pop-up shops. However, other products are also conducive to this format. Products that are an impulse buy, have a lower price point, or offer the shopper a taste of affordable luxury are good possibilities for pop-up shop success. In addition, products that support the urgency to buy are also promising. After all, the pop-up shop is only there for a limited time!
Get Started with Your Pop-up Shop
inRiver PRIME Partner, Sophelle, recently published their latest Focus Report, entitled “Boundaryless Commerce: Pop-up Retail.” We invite you to learn more about the strategies, tactics, and technologies that are available to support you in this effort. Don’t miss this trend and opportunity! Download the report today.
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