More than 50 percent of consumers say they will buy fewer items, while about 20 percent say they will trade down to less expensive brands. The expectation for an upcoming dip is reinforced by recent demand dynamics, which saw peaks in and the first half of with many purchases supported by economic stimulus.

After an exceptional performance during the pandemic, durable goods for individual private use, such as sports equipment, are likely to be most affected.

Pressure on performance is expected to be unavoidable. Overall, sporting-goods companies need to develop strategies that will help them navigate current challenges. And raising prices may not be the solution in the context of reduced demand—especially given the wide availability of more affordable options.

In an inflationary context, a holistic approach considers six key action areas:. Through these commercial, operational, and financial levers, companies can get a grip on recessionary impacts, shape their business model to current needs, and position for a speedy return to growth.

The key for decision makers will be to manage these priorities based on their unique circumstances while embracing a positive lens that builds longer-term competitive advantage. United States: Data from the NPD Group and insights from its senior industry adviser Matt Powell show a strong postpandemic recovery in by the US sporting-goods market that surpassed performance in many categories.

In , the US market was exposed to the many forces shaping the global market, leading to unit sales declines of 4 to 8 percent in the first nine months, compared with levels, which was not offset by higher average selling prices.

These unforeseen volume declines led to significant overstocking and heavy discounting in the second half. Athletic footwear and activewear saw revenue declines of 4 to 6 percent in the first nine months of , driven by weakening consumer demand and conservative assortments.

Equipment categories had a hard time beating their record years of and Home fitness equipment saw a 28 percent revenue decline compared with the same period in The exception was e-bikes, which continued to grow strongly Exhibit 2.

China: In , the Chinese sporting-goods market saw a largely flat performance, in stark contrast to double-digit expansion over recent years. However, in the longer term, factors such as the expansion of the middle class Exhibit 3 and rising demand from women unlike in Europe and the Americas, women in China spend 15 to 20 percent more on sports and fitness than men may promise a return to growth.

Local brands such as Anta and Li-Ning are competing fiercely—for example, by offering more women-focused products—and are capturing market share. Thus, there is rising pressure on international brands to raise their game. Brand relevance increasing. Building brand heat and loyalty is more relevant than ever, especially in a recessionary context, where consumers tend to rely on trusted brands.

The consumer journey is shifting, especially when shopping for lifestyle categories. Whereas previously, consumers were motivated first by factors such as functionality, design, and price, they are now increasingly driven by brand.

In the lifestyle apparel category, sporting-goods companies are on a similar journey as fashion companies, involving a need to build strong and trusted brands that leverage the direct-to-consumer revolution, collaboration with other brands, and community marketing.

Sustainability: time to deliver on promises. Brands, retailers, and manufacturers have made bold promises of a more sustainable future, but are they up to the challenge? With self-imposed deadlines on the horizon, it is time to deliver. Two priorities could shape their agendas:. In an environment where both regulators and consumers are targeting greenwashing, companies should carefully consider how they deliver on their actions and ambitions Exhibit 5.

It starts with the design and raw material selection. The next stage is how we build the product. We need to develop products that are easy to recycle, and we need the brands to collaborate and drive this. Nearshoring: a potential solution for supply chain disruptions.

Supply chain disruptions, higher trade barriers, and geopolitical turmoil are putting pressure on supply chain security and leading to higher costs.

Nearshoring can unlock a range of benefits in a disruptive context: control and derisking of the supply chain, agility and speed, cost structure competitiveness, protection against trade barriers, and a more sustainable operating model in the eyes of consumers.

Still, nearshoring does not always go according to plan, evidenced by the fact that some companies have recently reversed nearshoring decisions. Whether to nearshore or not should be decided at a product level, assessing exposure to supply chain shocks, the need for shorter lead times, and the economics.

It is important that the nearshore country meets the requirements for raw materials and components and offers the right capabilities and capacity.

A detailed business case should take into account a holistic set of variables to determine financial impact and feasibility, as well as potential government incentives.

I believe you need to start with a merchandising and assortment plan. Which portion of my assortment is predicated on speed, cost premium, and full-price sell-through? Which part is instead based more on scale and volume, which I prefer to source from the global network?

Sporting-goods industry: a hot target for private investors. The sporting-goods industry has grown strongly over the recent years and is likely to continue on that path, amid rising consumer health awareness and deepening interest in outdoor lifestyles and athleisure apparel.

In addition, the industry has proven to be more resilient in downturns, bouncing back faster than others. Furthermore, it comprises many smaller but well-differentiated brands, which make attractive targets for consolidation or growth plays.

AMP created narratives that framed the product line, along with communication architecture and content that explained its benefits and, in turn, drove sales. All Rights Reserved.

Privacy Policy Privacy Settings Cookie Settings. OUR POV. When it comes to sports equipment and apparel, we know the route to adoption starts with driving trial, fostering participation and reaching influencers. We design ecosystems and experiences that accomplish each of these outcomes while telling a compelling product story.

CASE STUDIES. TaylorMade DIGITAL ECOSYSTEM AND COMPANION PRODUCTS. Helping win the product innovation race with cutting-edge digital.

Read Our Case Study. Using digital to help a global brand connect in social and at retail.

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