This year is starting to look like one of the most successful holiday seasons for the sporting goods industry in the last five, due in large part to the efforts of successful online sporting goods retailers. While Shop.orgs marketing team heavily promoted the Monday after Thanksgiving, or “Cyber Monday,” as the busiest e-commerce day of the year, most Internet retailers feel that the day simply marks the beginning of their busy season. Online retailers continued to build momentum this year through today, the last Monday that consumers can have their goods shipped in time for Christmas without paying higher shipping costs.
According to BizRate Research, 58% of online retailers are reporting year-over-year holiday sales increases of 30% or higher. The most popular marketing initiatives have been direct e-mail promotions with 92% of retailers using this method, while 71% utilize paid search engine marketing. Free shipping with conditions is the most effective promotion with 62% percent of retailers citing it as being their most successful program driving holiday sales. Unlike brick & mortar retailers who are struggling to maintain pre-holiday sales growth and decent margins, these online promotions appear to be effective in driving both traffic and sales. BizRate said 30% of consumers surveyed started their online shopping earlier than last year.
Akamai Technologies has been tracking online retail traffic and consumer spending throughout the holiday season, and according to their latest research, shoppers were visiting retail sites over Cyber Monday at a rate that jumped more than 20% compared to the previous Monday, and nearly 50% compared to a month ago. At the highest point last Monday, more than 3.1 million people per minute were visiting online shopping sites across the globe. Mondays, which are the busiest online shopping day of any week, usually average 1.3 million visitors per minute.
Additionally, ComScore Networks released a study showing online retail sales during the holiday season from November 1 through December 2 increased 24% to $9.8 billion. According to the same ComScore study, the sporting goods industry easily outpaced the rest of the retail industry with sales increasing 59% during the same period.
In the sporting goods market, GSI Commerce is the primary player in the online retail channel, handling sales, distribution, and marketing for most major brick & mortar chains as well as several online-only organizations. SEW spoke with Bob Liewald, GSICs EVP of sports merchandising, who said that their sales growth has been accelerating considerably since Cyber Monday and is currently well above plan. The company is forecasting that sales will peak on either December 13 or 14 and remain strong through December 18.
For the holiday season, Liewald said GSIC is running several promotions, but for the most part is not feeling pressure on its margins. By far, the companys most successful promotions include different free shipping offers. GSIC will run promotions at different times offering free shipping on purchases over $99, or free shipping on various categories or brands.
On a category basis, winter apparel is the primary growth sector, with offerings from Columbia, Under Armours Cold Gear, and The North Face leading the way. All types of ski apparel were said to be selling well including jackets, pants, and bibs. Liewald also said that Nautilus new SelectTech dumbbell set, at a retail price of $399, will easily be one of their top five revenue producers, if not the top. Last years NHL lock-out caused sales of table games to slow somewhat, but Liewald said that the category is rebounding nicely this year. Footwear is showing some growth with Asics technical running shoes a top producer. But unlike their brick & mortar counterparts, Liewald said that GSIC is still seeing strong sales in classic footwear, especially Reebok and adidas product. Traditional team sports products are also doing quite well this Christmas, with sales of football equipment and backboards leading the category.
GSIC is placing an additional $3 million in orders from vendors this week in order to replace sold-out product. The company has already needed to re-stock inventory in some surprising categories. Liewald said that “Heelies,” the shoes with wheels in the heel, have sold out several times, and sales of scooters from Razor and other vendors seem to increase every Christmas.
GSICs outdoor category is also one of the sectors that is performing above expectations with re-orders slated for some of the key categories. Liewald said that sleeping bags and technical daypacks were both selling through well.
The outdoor industry is one of the sectors where GSIC has some considerable competition and it is helping to lead holiday sales growth in the Sporting Goods industry (See BOSS_0549). Backcountry.coms VP of marketing, Dustin Robertson, said that Cyber Monday sales were up 92% compared to last year. The company realizes nearly 45% of their annual revenue in the four weeks following Thanksgiving. On Cyber Monday and the preceding Sunday, the company was processing an order every 16 seconds to hit roughly 6,000 orders per day. EMS doubled their e-commerce sales over the Thanksgiving holiday thanks to their newly re-designed Web site and reported comp-store sales that were up in the 20% range.
REI is reporting increases in the 30% to 40% range over the course of their Holiday Sale. Much of REIs success online has been in its ability to integrate its website with its brick & mortar locations by offering in-store internet kiosks, and in-store pick-up for items offered on the web. According to the company, these options drive sales through both channels and keep customers loyal to the REI name.
>>> As success stories like REIs filter out into the broader sporting goods industry, and companies like GSIC offer more technical innovation that will allow its clients to take advantage of programs similar to REIs offerings, it is likely more and more sporting goods retailers will integrate their online presence with their physical locations and use their marketing dollars to drive sales to both locations.
