Retail's problems include sporting goods retailers
26 October 2016
Sporting goods are not immune
The outdoor and sporting goods segment sees its share of shake ups that mirror what’s taking place in the retail industry as a whole. Large big box chains like Sports Authority have closed stores or closed shop altogether. Recently, we have seen behemoths Bass Pro Shops and Cabela’s consolidating.
But there are major differences with the sporting goods retailers and the rest.
Big box retail has long suffered through a period of decreasing same store sales as once loyal customers flock to other alternatives. Some of these alternatives are other brick and mortar stores, to be sure. But, in reality, it’s the explosion of online retail (read: Amazon) that’s overtaken the retail category.
In the outdoor and sporting goods segment, however, the defection from brick and mortar to online hasn’t occurred yet, at least not to the degree in other parts of retail. The outdoor and sporting goods segment is, at least for the moment, insulated from the migration to online platforms. (Read our retail market study here.)
Sporting goods are kind of personal
A key reason for buying sporting goods in store is that, for the core outdoor and sporting goods consumer, purchases are very personal. Bow hunters need to feel how a bow handles. A fisherman needs to feel the flex in a rod. An avid hiker would likely not purchase a boot without knowing how it feels being worn. This has allowed many of the outdoor and sporting goods retailers to be more or less insulated from online alternatives.
Then there are the brands. Bass Pro Shops, Gander Mountain (now Gander Outdoors) and REI focus more on outdoor activities like fishing, hunting and camping, respectively. Stores like Academy Sports and Modell’s focus more on traditional team and individual sports.
Dick’s is much more of a generalist, calling itself the “largest omni-channel full-line sporting goods retailer in the US.” Dick’s also owns Field and Stream, Golf Galaxy and True Runner, which further demonstrate the industry’s move to specialization.
Little real differentiation
While many outdoor and sporting goods stores have been successful in carving out their niche, it’s a niche carved out only by their product focus, not their brand focus. Closer examination reveals that there is little differentiation in this category beyond some of the pseudo-specialization of products. Simply put, the brands themselves do not differentiate one versus the other. Which means the brands do not provide a value to the consumer. So other values become more important such as location and cost. Not brand loyalty.
Sure, a consumer might decide to go to a Bass Pro Shops, REI or Dick’s just to look around.
But the products are what bring consumers to the store, not the store itself. These retailers recognize this too, with each of them is trying to create a better in-store experience. (You get the full treatment at the Bass Pro Shops in Springfield, Missouri, for example.) More and more, stores like Field and Stream and REI are also trying to make their stores more of an experience.
Which they should do, but it doesn’t create long-term preference.
At this point, it’s difficult to imagine further consolidation in the outdoor and sporting goods category. The major players are surviving this nasty retail environment for the moment. However, they all must make investments in their continued viability. While creating a better shopping environment is critical, it can be easily be copied and improved upon.
Investments must be made in brand differentiation that goes beyond outdoors, country, athlete or camper. These terms describe what their customers are but fail to describe who they aspire to be. Aligning with that will differentiate the outdoor and sporting goods stores from the others. And keep them viable in this dangerous retail era.