Over the past two years, we all know that retail industry growth has been - let’s say - slightly challenged by the recession. But for the past year, the outdoor sports industry has shown consistent growth, vs. flat to negative growth for other categories like apparel and footwear. As an example (source: Leisure Trends Group), for all sources of revenue in this industry – chain stores, specialty stores, Internet – overall retail sales rose 12% in March 2010 vs. March 2009, 6% over March 2008; May and June saw similar trends. Here’s a link to more details on this research. What are some of the reasons why the outdoor industry continues to outpace the overall retail market? Here are some thoughts:
• Passion for the outdoors. People need an outlet in good economic times and bad – if outdoor activity is that outlet, nothing will prevent the purchase of that neoprene wicking shirt, pair of hiking boots, or new tent. I am not a big fan of shopping but do enjoy buying the latest attire and equipment to properly outfit me for a trip to the mountains or lake.
• High margin hardlines. Items like skis, crampons, and camping equipment. These are typically high priced, high margin items that people make an investment in - in other words, activities like skiing, hiking, climbing, camping, can get pretty expensive. And very lucrative for outdoor equipment companies.
• Understanding the customer results in the right, high quality product. It’s rare that you purchase something from an outdoor retailer and it’s not a high quality product; and if it’s not, most retailers have a very liberal return policy – think L.L.Bean. This leads to loyal customers and a consistent stream of product quality information that improves overall product, and bottom line, performance.
• Good customer experience. Outdoor sports retail stores are eminently “shopable”. If you’ve ever gone into an EMS, REI, Patagonia, or other outdoor sports store, you know what I mean: easy layout, not cluttered, very well merchandised to really spark the feeling of being in the outdoors, and activities like seminars and climbing walls. I remember when my daughter was three, we were in REI and she was outfitted with climbing shoes and harness and scaled the in-store climbing wall. She still talks about what fun it was today!
Besides having a personal interest in this market as an unabashed outdoor sports lover, my business interest is that Siemens’ software product for the retail space, Teamcenter for Softlines, Hardlines, & Footwear, is perfect for outdoor companies to manage their product development process. I say this with conviction due to our ability to capture customer needs and enormous sets of specifications, as well as manage line planning, design, global calendar management, and global collaboration with the internal development team and suppliers, across multiple merchandise categories.
We’ll be attending the Outdoor Retailer show in Salt Lake City this week, and I’ll be blogging while there. Look forward to seeing our friends from Black Diamond, the AAFA (American Apparel & Footwear Association), OIA (Outdoor Industry Association), and others.