The sports retailing landscape is continuously changing due to new technology and ongoing changing consumer habits and preferences. We discuss 10 major future trends which will have a big impact.
Sports retailing landscape changing rapidly
If one thing has become clear during the current Corona crisis, it is that brick and mortar retail sales have taken a hit and are unlikely to recover to old levels. Consumers tend to increasingly buy online and many of them won’t be back until a decent vaccin has been discovered. In contrast on-line retailing has taken a boost. No doubt more consumers have discovered the ease of buying on-line. Sports retailing forms no exception. It means (sports) retailing strategies might change quicker than formerly anticipated.
Fierce competitive landscape
Where do you buy your sportswear? Are you buying it on-line or in the store? If on-line, do you buy it with an aggregator such as Amazon, or at a sports retailer like Decathlon? Or are you turning straight to the website of the manufacturer? And if you buy your stuff in the street, is it in a sports supermarket or are you going to a flagshop store of your preferred brand? Probably it will be a mixture of all of these. Sports retailing is far from easy and the battle for customers is fierce. We discuss some trends and 10 future developments within sports retailing.
Todays demanding customer
The average sports retail customer has changed a lot over the years. With technology advancing rapidly he has all the knowledge at his fingertips. He or she can shop both in the store as easily as on-line. Equipped with a mobile phone, he or she has not only all the product info available but also knows where he can buy all his sporting goods cheap. He wants 24 hour access as much as he wants convenience. The product he or she buys should express his/her personality, whilst sustainability is becoming ever more of an issue. He listens to what influencers are saying. Welcome to the environment in which today’s sports retailer has to operate! It’s definitely far from easy.
10 important future trends to be expected
1. The shift from bricks to clicks is ongoing
Shopping online will continue to gain market share vis-a-vis shopping in stores. Within sports retailing an estimated 40% of consumers order their sporting goods online now. For retailers it is essential to have an e-commerce platform whilst simultaneously aggregators like Amazon, E-bay and Alibaba continue to take market share. Don’t expect this trend to slow down. The convenience of home delivery, the availability of extensive product information and the ability to shop 24/7 are key catalysts behind this trend. You don’t have to be clairvoyant to predict that the number of sports retail stores will continue to decline.
2. Shift in focus from sales to entertainment and experience
Stores will transform into entertainment and experience centers rather than shops that are selling products. The focus of retailing is slowly changing from POS (Point of Sale) to POE (Point Of Engagement). I am even inclined to say Point of Entertainment. Stores in the future no longer will have sales as a primary objective jbut entertainment and experience that in turn should result in sales. People no longer go to stores to buy something as they can do this online. Instead they are primarily interested in experiences, something the internet does not offer.
How is this reflected in a store? Well, brands like Nike and Globetrotter are already experimenting with different formats that entertain their clients and hence improve engagement levels. Think of inside basketball courts, where you can try out your new shoes, a waterbasin where you can test your new canoo, high tech touchscreens where you can see yourself wearing your new outfit. Think about a counter where 3d printers make your cutomized personal shoes, think of Virtual Reality experiences, workshops that teach you how to improve your technique, yogaclasses, iglos with sub zero temperatures where you can test your gear. The possibilities are endless!
It’s like a day at the amusement park, where clients enjoy different rides and combine their visit with a stop at the restaurant. Expect blended new concepts where sports centers are combined with healthy food restaurants etc, etc. Entertainment per square meter will be the new metric instead of sales per square meter. Fun and entertainment in the end will translate into sales, that’s the strategy for the future.
3. Technology will be the name of the game.
Both In-store and online, you are nowhere without state of the art technology. Robotics, VR, AR, chatbots, face recognition, Artificial Intelligence and fulfillment systems. These are just a few of the technologies used in modern sports retailing. If you want to be a winner, great technology is a prerequisite. Virtual and Augmented Reality should enhance the customer experience. Think for example of trying on a new outfit when browsing through a store. AR/VR will show you what you look like and which color suits you best. AR/VR technology will also provide the necessary in-store entertainment as you can see in the video below.
Chatbots combined with AI will be there to assist you online, enhancing your online journey. But there is much more. What to think of the backoffice? Order fulfillment and stock management will be fully automated and largely done by robots. Sensor embedded shelves will track inventory and in time replenishment. Obviously, this will require huge investments. The big players will win. If you are small, you only stand a chance if you are a niche player and leverage your products through an aggregator. If you think, above technologies are the most important ones, watch the video below as there is much more in store.
4. Customer engagement will become even more important.
With online retailing gaining share from bricks and mortar, customer engagement will be the key marketing strategy. In order to stand out, you have to create the best possible customer journey. It’s all about knowing your customer and creating an everlasting impression. It’s flexibility and ease all the way and obviously offering great products!
It means excellent customer and after sales service, great product information, loyalty programs, a multichannel strategy and having a great in store experience. Brands like Nike and Decathlon seem to be at the forefront of this trend. Watch this Decathlon video below and you will understand what I mean.
5. Big data key in getting to know your customer
Artificial Intelligence will be a blessing for the sports retailing (and retailing in general) industry. It’s not about collecting the data (that’s the easy part) but all about analyzing them. With AI widely available in the future, retailers will be able to predict future customer behaviour by analyzing the past. This will provide them with a great tool in servicing their customers. What are their needs, what will be their behavior, how can their journey be personalized. Talking about engagement! Additionally by knowing your customer, retailers also will be able to better utilize recommendation systems, potentially enriching the shopping experience.
6. Customer demand will boost innovation.
The current customer has changed a lot through the years. One for all solutions seem to be no longer en vogue. Each client has individual preferences expressing his or her personality. Hence the modern client wants a product specifically fabricated for him or her. It means tailor made products will become more important. Moreover, similar to having the newest mobile phone, many also want to have the latest and most fashionable shoe or wearable. It means lifecycles are likely to become shorter and the speed of innovation is likely to go up.
7. Brand marketing will become even more important.
Marketing is one of the ways to stand out and to reach the customer. As GenZ is going to be the main consumer cohort, the impact of influencers and technology will further increase. TV and magazine ads will be out, social media and storytelling will be the main ways to communicate.
Also interesting to read: How GenZ will change the world of sports
8. Sustainability and recycling will further gain in importance.
The new generations are all about sustainability and environment. It means retailers will pay extra attention to these issues. It means sneakers that can be recycled, ecofriendly materials that can be recycled. Look for example at Freitag, which is producing bags that are made from recycled truck tarp or what about Nike’s space hippie shoewear.
Expect more and more products like these in sports retailing stores.
Also interesting to read: Sports going green
9. Athleisure wear will become an important new trend in sports retailing
Athleisure wear blends sportswear, fashion and casual wear. It means clothes designed for athletic activities are worn for other purposes such as work clothes, casuals, to school or social occasions. Leggings, yogapants, shorts, sneakers are just a few examples of this trend. The growth of this trend has been rapid and is here to stay as working at home will become ever more important whilst clothing is becoming less formal. GenZ doesn’t want it any other way. Comfort counts!
10. Manufacturers competing with retailers
Nike, Adidas, The Northface etc etc. There are so many sports brands which now have their own flagship stores directly competing with the general sports retailing formats. It is a way to communicate directly with their consumers, leveraging their online offering and part of their multichannel strategy. More brands are likely to follow.
Also interesting to read: 10 important future fitness trends
What do you believe? Do you have any opinions on the future of sports retailing. If so, please share your thoughts below or write me a personal mail.