The coronavirus crisis is accelerating trends already present in the marketplace, and perhaps none is greater than people’s demand to shop online. This shift is particularly important to the athletic and outdoor industries.
“We are going to continue to see an acceleration in e-commerce penetration [post COVID-19],” The NPD Group senior sports industry adviser Matt Powell said during yesterday’s Sports & Fitness Industry Association webinar. “Going into the pandemic we said we thought the e-commerce portion of athletic footwear would grow from 32% to 50% in five to 10 years. I think we cut that time frame in half.”
During the SFIA “Monitoring the Impact of COVID-19 and the Road to Recovery” webinar, Powell stated the DTC footwear business — which includes e-commerce as well as factory outlets and full-price brand stores — for the first five months of the year has been a relative bright spot despite the challenges the industry was facing.
According to NPD data, DTC was only down 12% for the year as of May compared to the steeper 20% decline in all other channels. As for brands in the athletic space, DTC was a major part of their overall sales for the period including Nike (24%), Adidas (31%) and Vans (57%).
Specifically for e-commerce, while NPD data showed the fashion footwear market was down 11% to $3 billion for the first five months of the year, athletic footwear fared far better, with a 25% climb to $6 billion for the period.
The outdoor market, although with dimmer sales, fared similarly in terms of preferred shopping channels.
During the SFIA webinar, Powell shared NPD data that revealed a 25% drop in outdoor footwear sales for the first four months of 2020, resulting in a $282 million loss. In the athletic specialty/sporting goods and outdoor specialty retail channels, footwear sales fell 28% and 42%, respectively.
Despite the declines, outdoor footwear sales in sport specialty e-commerce were positive, with NPD data showing a 17% climb for the first four months of the year.
Although stores are starting to open around the country, Powell is confident online shopping will become even more the norm.
“A lot of consumers are learning to buy things online that they never bought before, whether it was groceries or a meal or sneakers, and I don’t think they unlearn those lessons as we come out of the pandemic,” Powell explained.
And the rise of e-commerce increases alone, however, isn’t why the athletic and outdoor industries should shift their focus to digital. Powell believes by year’s end there will be far fewer brick-and-mortar locations to shop in.
The industry insider shared Coresight Research projections for 2020 physical retail closures during his presentation. The firm’s projections that Powell shared stated there could be anywhere from 20,000 to 25,000 brick-and-mortar stores closed by year’s end.
“I think we will continue to see over-leveraged retailers and brands in trouble, we’re going to see retailers that are heavily dependent on mall struggle a bit because I think we’re going to see the malls closed,” Powell said.