The golden opportunity for specialty outdoor retailers

The NPD Group’s trends experts explain why specialty retail is suffering and what it can do to get back on its feet.
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From electronics to apparel, dog food to toilet paper, consumers are turning to e-commerce avenues for their convenience and speed. And with product reviews at their fingertips, price comparison capabilities just a click away and two-day shipping that’s often free, why wouldn’t they? This trend toward screen-tap shopping is hurting outdoor specialty retailers, especially the ones without a website set up for e-commerce, says Matt Powell, senior industry advisor, sports, for The NPD Group.

For one thing, they’re often missing out on the broader segment of what’s been called “outsidesy” customers. Pointing to the uptick in the fashion boots category, which includes outdoor brands like Sorel and Hunter, Powell says “There’s far too much energy put on the real hardcore enthusiast, the pinnacle consumer, as opposed to the more everyday consumer.”

Given current trends toward spending money on experiences rather than “things,” the travel category is another area Powell feels retailers are selling themselves short. He argues that without much trouble, stores could put together a travel section—just a few versatile apparel items, sunglass options for him and her, and a small rack of guidebooks—and capitalize on this upward-moving category.

The travel category is one of the most popular for Denali, a retailer in Connecticut.

The travel category is one of the most popular for Denali, a retailer in Connecticut.

"Better" has its limits

On the other hand, some outside forces are working against specialty retail. The rise of secondary markets where consumers have easy outlets to rent and borrow makes short-term solutions more attractive, and in many cases less expensive, than buying an item to have for the long-haul.

Powell also points to the current emphasis on versatile, cross-category items suitable in multiple different settings, whether it’s trail-to-tavern apparel or packs that serve as both hiking day pack and commuter bag in one. “This generation is very strapped for cash,” Powell says, noting the prevalence of college debt, the fact that Boomers are holding onto higher-paying upper-management positions and “committed consumption” expenses like Netflix, Blue Apron, and Amazon Prime. “They’re trying to stretch their dollar as far as they can, and versatility is one way to do that.”

That isn’t to say that Millennials won’t splurge on an expensive piece now and then (consider the popularity of $600 Canada Goose jackets); they just have to see the value in it. The problem is, product innovations have slowed down, at least in Powell’s eyes. Products are “better, but marginally better as opposed to 20 percent better,” he says. “I’m not sure that the consumer is saying, ‘I have to go out and buy this latest innovation in “x” because it’s so far superior to what I already have.’”

It’s hard to make a featherweight jacket even lighter or a near-bulletproof fabric even more durable, so instead brands are focusing on innovation in their manufacturing processes through more sustainable fabrications and less waste. Their focus is on-point given results from an NPD Future of Apparel study published earlier this year showing that the environment is the Millennial consumer’s greatest concern, with one-third of these women willing to spend more on a sustainable product. But with further data showing that consumers often buy more sustainable products without realizing it, it’s clear that brands have room to improve communication around this point, which will in turn help retailers sell their products.

What online shopping can't replace

Specialty snowsports retailers seem to have it slightly easier than their outdoor counterparts given that the high-touch nature of their sales—think boot fitting, ski tuning, and mounting bindings—often requires they be done in person. “Unless you know exactly what you want in your size, you’re probably not going to be buying that online,” says Julia Clark Day, executive director of business development at The NPD Group.

That’s a lesson the outdoor industry can learn from. In addition to offering products that appeal to non-pinnacle consumers (like lifestyle apparel) and organizing their stores to reflect current trends (like travel), Powell recommends they learn from e-commerce, but focus even more on something he believes the internet can’t offer: Community. “Outdoor retailers must cast a broader net for customers, while at the same time embracing the internet and ramping up the in-store experience,” he says.

At their core, specialty retailers must be more than just a transactional seller. “They need to create a sense of community with their customers where people feel like it’s a gathering place for like-minded people,” Powell says. “The consumer today still likes to shop in physical stores, but we have to give them a reason to do that.”

Skis and snowboards lined up on a rack at a resort

Alpine equipment sales saw a drop between April and October 2018, while snowboard and nordic equipment experienced an increase in sales.

By the numbers

Fall sales have been up across a number of snowsports categories with data from The NPD Group showing double-digit increases in outerwear, handwear, and headwear, among others, for the August to October 2018 timeframe.

Clark Day attributes this growth to one thing: snow. “When people are anticipating a cold winter, they’ll buy,” she says.

With a number of ski areas opening before their traditional start dates and powder continuing to accumulate across much of the country, Day projects that November and December numbers will be similarly high. But she adds the caveat that given how late snow came last season, the good news might be artificially inflated. “There’s early snow on the ground and it’s continued to snow,” she says. “But for something to be up isn’t that hard; we had terrible sales last year.”

CategoryDollar Sales (Aug 2018-Oct 2018)Dollar % Change (Aug 2018-Oct 2018)

Outerwear

$515.6 million

22%

Handwear

$32.2 million

22%

Headwear

$38 million

21%

Alpine Equipment

$113.8 million

-4%

Nordic Equipment

$2.6 million

27%

Snowboard Equipment

$56.9 million

13%

Snow Goggles

$9.8 million

5%

Snow Sports Helmets

$11.5 million

13%

Sports Equipment Bags

$3.2 million

19%

Footwear

$46.2 million

14%

Source: The NPD Group/ Retail Tracking Service

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