Sporting Goods Report: Chasing The Tribe

Sporting goods sales often are driven by shoppers with a "tribe" mentality, according to marketers in the category.These are shoppers who are avid enthusiasts, and passionate and loyal to their brands, whether it's a favorite club or racket, or an alma mater or local pro team. But, like most categories, the recession has thrown a curve into that mix."Shoppers are more diligent today before letting go of their dollars," says Brent Hutton, vice president of consumer business for Life Fitness exercise equipment in Schiller Park, Ill. He says shoppers are doing more research to make sure they maximize the value of their purchases.This new emphasis on value and price has translated into consumers' mindsets when selecting activities, too, according to a study by the Sporting Goods Manufacturers Association in Silver Spring, Md. "Feeling more pressure from diminished disposable income and leisure time, people looked in 2009 to get the best workout and most enjoyment possible from the money, time and physical exertion they put into their sports and fitness activities," says Tom Cove, SGMA president and CEO. "Active Americans favored easily accessible, low cost-to-participate, 'efficient' sports and fitness options."That's not good news for sports products marketers and retailers, and statistics show it, according to the National Sporting Goods Association in Mount Prospect, Ill. Sales were "down a tick" in 2009 for the second year in a row, reports Larry N. Weindruch, director of communications. The group expects sales to rebound slightly in 2010.However, the survey by SGMA found encouraging news for 2010 and beyond. In 2009, 25% of "core" sports participants said they spent less on sports products and gear than in 2008 -- but 23% said they will increase their spending in 2010, and 20% said they plan to spend more on travel to compete in and play more sports.Loosening Loyalty"Brand loyalty still plays a huge role in shoppers' decisions," says David Lloyd, a partner in the LG&P Instore Agency, an in-store marketing and shopper research firm in Paramus, N.J., that works with Callaway Golf.But for today's value-driven shopper, there is a slight chance to get a consumer to brand or product switch. "If a golfer buys Callaway, he might consider options within that overall brand," he says. "But if Callaway is effective with its integrated marketing strategy, it may be able to get the shopper who goes in to buy another company's driver to look at similar options across brands that might meet his needs."However, that shopper typically will only consider a few brands that he perceives as equal in quality, Lloyd notes. "Consumers have an idea of what they think they'll be comfortable with among a group of brands." It's up to the brand to then convince that loyal shopper that its qualities are similar and provide more benefits than brand loyalty offers.Brad Holder, director of consumer marketing at TaylorMade Golf Co. in Carlsbad, Calif., agrees that consumers don't stray far. "There's a lot of loyalty in the market," he says. "But there is some price sensitivity that was hidden a few years ago. And there are a lot of golfers right now with obsolete clubs in their bag, because clubs get better and better every year. Consumers understand that, and up to 70% of them are still undecided on what to purchase when they get to the stores."That means brands must be fresh and maintain relevancy. Prince Sports, for instance, has updated its brand imagery "through all aspects of our products to create a consistent brand look within our product segments," says Nicholas Skally, senior marketing manager at Prince Sports in Bordentown, N.J."Our main goal is to create a younger, fresher image with our brand architecture and identity," he says. "Our packaging needed to be clearer, to create a more functional segmentation strategy and to make the branding more prominent, cleaner and brighter overall."The largest revamp in the company's history, the redesign creates a consistent look for all merchandising in a category where brand names are extremely important, Skally says. "It had become unwieldy. Every new product had a strong look, but they were straying further from our original goal." The changes include more eco-friendly materials, such as easily recycled plastics, soy inks, glueless box construction and recycled cardboard. The company also is trimming back packaging, especially in secondary shipping cartons. "The tighter we pack, the less material is used and the lower the shipping costs are."Brands are focusing on their message and ensuring they are easy to identify and shop, says John Heath Olguin, vice president of brand communication for Modell's Sporting Goods, the 137-store Northeast retailer. "In the past few years, I've seen a shift to easier color-coded packaging with a lot of information, to make the presentation more specific," he says. "It's elevated the packaging to a very clean, organized, easy-to-shop format that includes the information needed to make a purchase decision."Retailers are focusing more attention on their brands, too. Nowhere is that more apparent than at Modell's. Under the banner, "Your Modell's is Getting Better!" the chain has revamped its in-store presentation to make its categories easier to shop (see sidebar below)."We basically remerchandised the store with improved adjacencies to enhance our visual merchandising with a strong emphasis on core products," Olguin says. "The presentation has become much cleaner, clearer and very cohesive, so it's easier to navigate the store."Pro SportsThe loyal mindset in sports probably originated with team sports, with regional loyalties superseding other factors. "Fans are tribal," says Dave McCarthy, vice president of integrated marketing for the National Hockey League, New York. "They want to wear the colors and support their team." Adds Stu Crystal, vice president of consumer products for Major League Soccer, New York, "The win-loss record makes a difference in every market."Both soccer and hockey are expanding, executives say, going against the grain of sporting goods in general. Soccer is still gaining new fans, especially in a World Cup year such as 2010. New teams are being added regularly, with the new Seattle Sounders enjoying big merchandise sales this year. Vancouver and Portland will be added next year. "The 'empty-closet syndrome' helps us as we expand," he says.Connections to professional players in recreational sports, such as golf and tennis, also play a big role, marketers say, as consumers connect with specific players and want to use their equipment. Those connections extend to event merchandise, such as championship hats and T-shirts worn in the locker room, notes McCarthy. "If consumers see their favorites wearing it, they want to be part of it. Exposure can make sales skyrocket, and we try to build on that."TaylorMade's Holder agrees. "Our goal is to keep our brand name in front of fans on the tour."At the same time, the NHL has played down player appearances and autograph signings. "Shoppers tend to come in for the autograph and leave," McCarthy says. "The event or value needs to be tied into the purchase: a gift with purchase, etc."Adds Skally of Prince, which sponsors several athletes, "You have to get into the consumer's head and decide how they will respond best: to an athlete's image or a feature callout, etc. It depends on the shopper's age, sex, capabilities and other factors."Holder says, "Different golfers have different styles and ways of playing. We have to explain which of our products best suit their style so they buy the optimal club for their needs."Store-Within-a-StoreLeagues are expanding their sales capacity by introducing more types of branded products and encouraging retailers to create a "store-within-a-store" concept to create better adjacencies and impulse purchases."A team shop encourages add-on sales," says NHL's McCarthy. "Hockey is a mature business, so it can take new products to increase sales." TaylorMade also is expanding its store concept, with several custom fitting shops in Europe and America (see case study in related articles below).The NHL has worked with retailers to create one-stop shops, such as Target's Fan Central. "Sporting goods stores have used this approach frequently, and now mass merchandisers are using it, too," McCarthy says. Many of these stores are targeting women with their merchandising, he notes, as they are the demographic most often browsing through the store to be attracted to add-on purchases.Major League Soccer, likewise, has worked closely with Toys 'R' Us to create a MLS shop around the World Cup. "In the last few years, we've seen growth in interest from sporting goods stores, and we're receiving tremendous support from Target and Walmart. We're getting more attention throughout the retail channel. Specialty stores are still important, but the big chain stores can do so much volume."Life Fitness works closely with both specialty shops and mass merchants to create that store-within-a-store feeling, says Hutton. "Mass stores give us a better opportunity to be in front of families shopping together," he explains. "Both types of stores can complement each other, but they have different needs, and marketers need to understand those distinctions."The company even encourages specialty chains to open stores in areas where Life Fitness needs coverage. "We focus on market voids and underserved areas, but we want to be selective because we have stringent requirements," Hutton says. "We can marry our knowledge of who our customers are with the retailer's knowledge to determine where we can be successful."Members of the In-Store Marketing Institute can see nearly 1,100 images of sporting goods displays in the Image Vault at Instoremarketer.org. In the Image Vault search feature, select "Sporting Goods/Recreation" under the "Product Category" drop-down menu.

Sporting Goods Report: Chasing The Tribe

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