Sporting Goods Stores

1. Sporting Goods Stores Slow Growth, But Still Headed Toward the Finish Line

2. No Pain, No Gain • Total consumer purchases of sporting goods from all channels for 2014 was estimated at $63.64 billion dollars, a 2.5% increase over 2013. Total revenues of US sporting good stores for 2013 were $43.2 billion, which was essentially the same as 2012. • A significant pain point for the industry is the uneven growth in sports participation in the US. The National Sporting Goods Association’s (NGSA) 2014 Sports Participation Report revealed that just one-third of the activities listed in its report had increased participation during 2013. • Dick’s Sporting Goods, the largest US sporting goods retail chain, reported that Q2 2014 comparable sales increased 3.2%, but would have increased 7.8% if it wasn’t for the decline in the number of golfers and hunters, which is historically responsible for almost one-third of the chain’s revenues. MEDIACENTER

3. The Stars of the Industry • The future is filled with expansion plans for the largest US sporting goods retailers. Dick’s Sporting Goods leads the way with a goal of more than 800 locations by 2017. • In the run specialty channel, LIDS is adding more LIDS Locker Room and LIDS Clubhouse locations. Bass Pro Shops plans to open 20 new stores from 2015 through 2017, while Cabela’s will be focusing on opening smaller stores in smaller markets. • Based on 2013 sporting goods sold, the top 5 retailers were Walmart, $9.3 billion; Dick’s Sporting Goods, $6.0 billion; Target, $4.2 billion; Academy Sports+Outdoors, $3.9 billion; and Bass Pro Shops and The Sports Authority, $3.5 billion each. MEDIACENTER

4. Buyers’ Best Brands • According to SBG Weekly’s Brand Strength Topline Report 2014, the perceived quality of footwear, apparel and equipment continues to be the most important factor that influences consumers’ brand loyalty and purchases. • The influence of price continues to decline: 6th in importance for footwear and 5th for apparel and equipment. Consumers’ personal experiences with brands and brands’ innovation/technology and environmental initiatives are more important. • The top 10 US sporting goods brands, according to SBG Weekly’s Brand Strength Index, were Nike, Adidas, Reebok/RBK, Under Armour, New Balance, Puma, The North Face, Columbia, Converse and Asics. MEDIACENTER

5. Participation Affects Revenue Generation • According to the NGSA 2014 Sports Participation Report, participation in snow sports increased 5.3%; however, these segments declined: team sports, 1.8%; fitness activities, 2.2%; shooting sports, 6.3%; wheel sports, 8.5%; and outdoor activities, 9.3%. • In a similar report from the Physical Activity Council, it measured a slight decline of physical activity among all Americans, 6+, from 28% to 27.6% for 2013. • American’s participation in outdoor, water and fitness sports remained approximately the same as 2012; however, individual sports decreased 3.7% and team sports decreased 1%. MEDIACENTER

6. The Trends Treadmill • “Athleisure,” or casual workout attire, is proving to be a boost for sporting goods stores’ revenues. Sales have increased 5% per year since 2010, totaling $68 billion for 2014, and are projected to reach $100 billion by 2020. • Physical activity is one of the biggest drivers of the wearable technology market. Fitness wearables, such as FitBit and the Nike+ FuelBand, provide sporting good stores with another product category that is expected to grow significantly, to more than 111 million units worldwide by 2018. • Although many major sporting goods retailers have experienced a decline in sales of hunting equipment and apparel, the number of female hunters has increased more than 25% since 2006. Today, they are 11% of the 13.7 million US hunters. MEDIACENTER

7. Advertising Strategies • Sporting goods retailers should take advantage of television’s more than 90% penetration of Baby Boomer households to promote fitness and outdoor sports footwear, apparel and equipment. • Suggest that retailers create a family sporting goods bundle at a special price that would allow each member of the family to choose one footwear, apparel or equipment item to match the sports or physical activity they prefer. MEDIACENTER

8. Advertising Strategies • Sporting goods stores that promote the “athlesiure,” or casual workout attire, concept should have an opportunity to grab market share from clothing stores and department stores. • Promotions, events, and sports league sponsorships can help enhance image. These are also great sponsorships to advertise on television. • Social networking should be leveraged by every small and growing business. By creating a business page on Facebook, customers have the opportunity to spread the word with their networks ― free advertising that cant’ be bought. MEDIACENTER

9. Social Media Strategies • Because participation is the primary factor that will bring more people into a store, sporting goods retailers should use social media to promote the benefits of physical fitness. Invite local fitness experts to be guest bloggers and/or provide videos that will help boost participation. • Sporting goods stores in regions with greater interest in hunting can develop a separate social media campaign to attract the growing number of female hunters. Consider using Pinterest to show apparel choices, so women can dress “fashionably.” • Invite customers to submit photos and/or videos of them participating in physical activities and commenting on how the footwear, apparel and/or equipment they bought at the retailer have contributed to their enjoyment and health. MEDIACENTER

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