Matt Powell
Vice President, Senior Industry Advisor, Sports
@NPDMattPowell
At a high level, I am expecting a challenged holiday season for the sports retail business. There are far too many new variables and too many unpredictable influences bubbling up for me to presume otherwise. It is clear that we are in a very slow recovery from the COVID-19 recession.
Amazon Prime Days kicked off the holiday season last week, with brands and retailers also following suit by planning their own aggressive promotions to try and ease the Amazon share grab. With that, I expect the October sales results to be very strong due to excessive promotions. Brands and retailers will have to try and hold onto those gains as the season progresses. I believe that when it comes to the sports categories, Black Friday in-store sales will disappoint compared to prior years, as will the weekend business leading up to Christmas.
I expect we will see athletic footwear sales decline in the low single-digits for Q4, as a lack of new products will dampen results. There will be some bright spots, though. Running shoes should outperform the market as consumers continue turning to the activity to stay fit while also remaining socially distant. Brands and retailers must remember that many of these new runners are beginners, not elites, and will therefore be seeking more mainstream product rather than higher-priced running shoes. Another bright spot is in hiking and cold/all weather boots, which have sold well early on including in August, likely driven by the same socially distant fitness forces. Assuming the weather cooperates in that it is cold early and often, it should be a favorable selling season for boots. For the same reasons, the outerwear business should also fare well in the upcoming months.
On the other hand, some categories face more risks this season. With many states cancelling or postponing their winter sports seasons, this action does not bode well for basketball shoes and sales may disappoint. Sport lifestyle footwear has done fairly well during the pandemic, but brands must be very careful of oversaturating the market.
In terms of sports apparel, I expect activewear sales to decline in the low single-digits for Q4. While consumers are purchasing more comfy clothing these days, the overall softness in the apparel market will keep growth in check.
Turning to the hard goods side, sports equipment has experienced an unprecedented sales lift during the pandemic. Sales of bikes and home fitness equipment, in particular, have surged. I’m confident that sales growth will continue through the holiday season as demand remains high and manufacturers and retailers boost their inventory; however, I do expect the growth rate will slow down. In many cases, these purchases are “one and done” – if you bought a bike in June, you don’t need a new one in November, and the treadmill purchased over the summer won’t need to be replaced for years to come. The opportunities for these markets lie in complimentary purchases for existing customers – products consumers want or need as part of their riding or exercise routine, for example – and in acquiring new customers.
There are likely new customers out there who are considering an equipment purchase, and for the most part, these consumers are beginners to the activity as opposed to elites. Brands and retailers must market differently to these newcomers, with products best suited to their abilities and skill levels, which is quite a pivot from the elites who make up their base.
Entry level golf equipment, racquet sports, and basketball equipment have also been stars during the pandemic and should continue to thrive during the holidays. On the other hand, scholastic sports equipment—namely football, basketball, lacrosse, soccer, and volleyball—will struggle.
While I expect the sports retail business to face challenges overall this holiday season, many of the products that have been selling well in recent months will likely continue to do so.
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For more information or to speak with Matt Powell, contact me at [email protected] or 516-625-2203.
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