By Thomas J. Ryan and Eric Smith
This is the second installment* of SGB Executive’s Annual Survey of what the leaders in the active lifestyle market are projecting for the coming year and where we asked large, medium and smaller brands and retailers in sporting goods, footwear, apparel, outdoors, and tactical two questions: What gives you optimism and what causes you concern in the coming year? Read yesterday’s Part One coverage here.
»Amy Beck, President, Oboz
Balanced positivity with a dose of reality. It is an election year which, in itself, adds a level of excitement and uncertainty while ever-changing consumer behaviors and the retail landscape provide both opportunities and challenges. Additionally, the growing conversations around the challenges our world is facing are real. We are at a critical time in our world with respect to global warming, the use of natural resources and our planet as a whole. The outdoor industry has been a leader in prioritizing sustainability and environmental initiatives. Our challenge is balancing our business, selling footwear so people can enjoy the outdoors with a responsibility to our planet and future generations. The first relies on consumer consumption, while the latter pushes back with an emphasis on the reduction of not only consumer consumption but also of raw materials, energy, water usage, and more.
As an industry, we have the opportunity to continue to come together for good, encourage and support people to get outside and collectively make a difference in protecting and preserving the outdoors for future generations.
As with so many things, the greatest challenges also present themselves as the greatest opportunities. By sharing best practices and finding ways to come together as an industry we can bring balance to the competing ideas of selling more goods and being responsible global citizens. We can compete on the sales floor, but we should be working together on land use, energy reduction and climate initiatives. If we don’t do so soon, there won’t be wild places for us to explore and enjoy.
As for Oboz, we are excited for 2020 as we are in a time of continued growth and change. Oboz is in a growth mode in terms of our business and in the number of our employees. We want to ensure that as we grow we retain our values as a company and a brand, as well as our culture. Being True to the Trail means more than just being committed to hiking, it means to be thoughtful in all you do no matter where your trail leads in life. Being True to our people, our community, our experiences, and your footprint are all very important to us and are more than just words on paper.
As we head into 2020 you will see our continued commitment to our retail partners increase, we will heighten our focus on the consumer and double-down on our core tenants of Quality Fit and Service. We will build out our sustainability/CSR roadmap and will continue to focus on our efforts around tree planting, reducing our carbon footprint and working to be a force for good.
»Matthew Betcher, Creative and Marketing Director, Allied Feather & Down
When it comes to ingredients in the outdoor industry, we expect to see brands take more of an Occam’s Razor approach, and the biggest shift over the next year will be how brands and consumers talk about the end of a cycle, as opposed to the origin story. Up until now, enormous resources have been put toward developing “more sustainable” synthetics focusing on how those fibers were created and from where. There are dozens of different options of varying degrees all boasting use of recycled fibers. But, as we have seen through recent ocean plastic research, the importance of the origin of the fiber pales in comparison to what happens to it at the end of its use. Brands—and consumers—are now starting to be more concerned about things like “biodegradability” than “recycled.” And when one starts to look at such issues, there seems to be a shift to more natural options. The irony, and where the Occam’s Razor principle comes in, is that materials like down and wool have been around for decades and still produce extremely high performing and all-natural and biodegradable options. And in the case of down, it can be processed with a minimal amount of resources while providing insulation that is significantly lower than a representative recycled synthetic insulation (according to a recent LCA released by the IDFB). Sometimes the best solution is the simplest one.
One major factor of concern is the increasing factory sourcing of ingredients. Traceability and transparency will increase to grow in importance and many times giving up sourcing of all materials to manufacturers can result in, at best, a lack of transparency, and at worse, material processed in ways that can damage local environments as well as the overall quality of the product.
The other issue that concerns us is how much greenwashing is being done by marketing departments. We feel like the consumer is becoming increasingly intelligent, but far too often we see brands play to ease of marketing something like “vegan” and “recycled” as being the most sustainable options.
One of the biggest things that give us optimism, from a product development perspective, is this growing acceptance to consider what happens to all these materials at the end of their use. This alone is leading to a shift to reconsider long-existing natural fibers like down but also to push the development of new technologies towards a direction where we ultimately leave less footprint on the planet by actually leaving less. By focusing so much on the origin and how something was produced seems to us irresponsible if what happens to it as the end of its life is not considered equal. Down is a great example of insulation that still has no equal in terms of warmth to weight, range of use, sustainable processing potential, and still safe for the environment at the end of its use.
»Fabrizio Gamberini, Global Chief Brand Officer, President, Vibram Corp.
Despite the macroeconomic situation (with the U.S. presidential election, China and now Iran, too) Vibram is pretty bullish about the future for four reasons:
- Our leadership position during 2019 further strengthened, and we are ready to announce new prestigious partnerships.
- Our Consumer is looking for the confidence provided by Vibram in outdoor, now into new areas of technical grip. That is why Running (just think running on the wet streets if Oregon) or Sportswear (just think about crossing the Madison Avenue on a cold and icy February day) are on our radar. We know we can improve a lot of the game.
- For Vibram, it is also the year of the re-activation of Vibram Five Fingers. We are planning to do a global relaunch of the product line in collaboration with a famous marketing agency.
- Our connection with the consumer is getting stronger and stronger. The example most evident is the success of our Boston based Sneaker Forums, always filled with a couple hundred young talented and very FTW-oriented people. Our consumer is fully aware of the Vibram heritage.
What concerns me? A financial crisis developed by one of the elements mentioned above and the tendency (by only very few brands) to focus on cutting costs instead of providing value-added to the consumer. It is an issue for them and potentially therefore for us.
»Jay Getzel, Director of Outdoor, Pet & Toy, Nite Ize
Much of what happens in 2020 will be dictated by the spring/summer snowpack, the overall economy and consumer confidence heading into the election year. For Nite Ize, I expect our growth trend to continue through 2020. We’ve consistently outpaced the industry growth average in our category as we establish ourselves as the “go-to” impulse brand across an array of retail partners with continued innovations in lighting and dry bag solutions with our expansion of the RunOff Waterproof Bag collection featuring TRU Zip technology.
The election is the hot button issue for 2020. Most election years come with a degree of economic uncertainty and may cause consumers to hold onto disposable income. We are keeping a close eye on current conversation and pending plans relating to tariffs.
I’m encouraged by the industry’s continued focus on sustainability, inclusivity and the environment. The more responsive our brands, retailers and consumers become to what’s relevant and impactful in the outdoor industry, the better equipped we are to grow participation in outdoor spaces and to grow the consciousness that will keep it here for future generations to enjoy.
»Mike Joyce, President and CEO, PrimaLoft
Coming into the year after a strong 2019, my general feeling on 2020 is bullish. As macro-economic indicators are relatively stable around the world, the US economy continues to expand and 2020 is looking to continue that trend. Holiday retail reports to-date show a favorable comparison to 2019 as consumers continue to look for versatile and innovative products. Sustainable products are no longer a trend…they are table stakes.
2019 concerns over U.S./China trade and tariffs remain but the future looks brighter and progress is being made. The most recent global events involving the U.S. and Iran are a major issue to watch. This could have a significant impact on global economies, consumer demand and supply chain if the situation escalates.
»Christian Lovenskiold, Head of North American Sales and Marketing, Amundsen Sports
This may sound odd, but we see specialty brick-and-mortar retail as a bright spot in the bigger evolution of retail. Our partners put a premium on customer experience, carefully curating apparel collections and providing an environment for brand interaction that simply cannot be replicated online. When done right, we feel this experiential shopping model will remain strong.
Our biggest concern right now is growing too fast. As a premium Norwegian brand at the beginning of a push into the U.S. market, we’re seeing demand for our products grow rapidly. Our plan for slow growth is still on track; however, it is difficult to balance increasing demand with our desire to move slowly and still stay relevant and profitable.
The way the American shopper is increasingly embracing quality materials, construction and storytelling, Amundsen has all three of these areas well covered. We source only the finest materials, partner with the best factories and embrace the heritage of our brand’s namesake, which positions us well for the modern consumer.
»Becky Marcelliano, Outdoor Marketing Manager, Salomon NA
Our industry outlook for 2020 is bright. The industry continues to shift as consumer shopping habits demand change, but adaptation has been admirable in many ways in all channels. At Salomon, we’re heading into a really exciting year. We plan to continue our wildly successful WMN campaign with a new twist on the concept of beauty. We’re dedicating more resources than ever to sustainable innovation practices and ways we can give back. It’s a big new day for us.
What’s concerning to us is our continued exploration in finding the best value at trade shows. We all know the shifts have been quirky, and we’re working with it the best we can. Perhaps it’s not a concern so much but more of a conversation about how to invest in ways that are most impactful on the business and least impactful on the environment. It’s a work in progress.
What I’m most optimistic about is the work being done to get more people of all backgrounds outside. The human connection to our wild places helps foster earth stewardship and provides an understanding of its importance. This is essential for all of us. Like many other brands, Salomon has added focus in product design and marketing stories that are aligning with a more urban consumer and those who are newer to the outdoors. In a way, we feel like we’re expanding ourselves into new areas of possibility and relatability. It’s empowering for both consumers and the brands playing in this blend of outdoor and lifestyle. It sparks what’s needed to create a movement.
»Mel Mogil, President and CEO, California Innovations And Arctic Zone
In spite of 2019 being a year of turmoil with uncertainty surrounding tariffs and the economy, Arctic Zone is feeling upbeat and looking forward to 2020/21. We are seeing growth in the everyday cooler, lunch bag and the food carrier categories as more consumers are spending time outdoors and the definition of the outdoor experience is becoming more inclusive. This past year, we worked especially closely with our retail partners through this turmoil to deliver innovative new products outdoor consumers are demanding while continuing to provide value.
To leverage this growth, we are expanding Arctic Zone and Titan’s reach into smaller outdoor retailers through investment in technology and distribution networks enabling us to get our products to more consumers. The 2020 outdoor consumer wants to be educated and to know what they are buying, and we deliver that information to them in-store and online.
While there are concerns in the outdoor industry and across CPG industries in general around the fracturing of retail between brick & mortar, DTC and the major on-line retailers, we firmly believe that there is a place for everyone. A shakeout of this kind is natural—the strongest, most creative retailers and brands will survive and we will be better equipped to engage consumers for the longer term.
From a market perspective, we see continued growth in the ‘urban outdoors’ and ‘cross over’ outdoor products being used every day. We will address the trend by providing consumers products that easily transition from city parks to nearby rivers and waterways. To that end, we will expand our line of patented Titan self-inflatable and collapsible coolers and backpacks that provide high-end insulation and that are compact to meet people’s limited city storage space.
»Chad North, Founder, NorthxNorth
Sustainability will continue to be the reigning concern for outdoor products and practices, especially in apparel. Natural materials like merino wool will continue to grow in popularity but only in tandem with sustainable farming and production practices. Outdoor companies that create great products sustainably, from supply chain to shipping and beyond, will be the ones to move ahead and make a difference. Since NorthxNorth’s launch in 2016, sustainability has been at the core of our merino wool apparel business and continues to direct how we operate and grow.
Climate change and microplastic pollution are concerning. We are aware of the changing climate in Australia, which is predicted to have an impact on Merino wool production as early as 2030, and the growing concerns over pollution caused by synthetic clothing. Beyond that, we see climate change globally as a threat to the production of natural materials in general.
The resilience and environmental leadership role of our industry give me optimism. We have the numbers and the influence to affect global change, whether it has to do with the environment, animal welfare or sustainability. All of these things are only becoming increasingly important every year. And as an industry loaded with passionate, aware people, I see us coming together to do our part and help others make the right decisions.
»Wylie Robinson, Rumpl, Inc.
Looking ahead to 2020, I am optimistic and excited about the trajectory of the outdoor industry. We’re continuing to see outdoor products cross-pollinate into consumer’s everyday lives each year, and that trend does not appear to be slowing. Additionally, more than ever before, consumers are demanding that brands exhibit some type of sustainability focus when creating their products and in their corporate action. In 2019 more than two-thirds of consumers considered sustainability when making a purchase and are willing to pay more for sustainable products. This is a win for everyone.
One major challenge that brands and consumers will continue to face in 2020 is the ongoing trade war with China. Because China has an absolute and comparative advantage in producing most outdoor goods, I do not anticipate brands will leave China in favor of a tariff-free supply chain. At the end of the day, brands will be forced to increase prices, and U.S. consumers will feel the brunt of this trade war.
»Nora Stowell, Global Sales & Marketing Leader, Gore Fabrics
The industry is seeing that brands who are purpose-driven and making sustainable choices on products that are safe for the environment, made of recycled materials or can be recycled themselves, are winning in the market, especially with younger consumers. At Gore, we are very motivated by this trend and optimistic about our own efforts to support sustainability goals. This is one of our top initiatives at Gore so that we can better support our customers and align with their sustainability goals. We are planning to sign up for OIA’s Climate Impact Challenge and encourage other leading companies in the industry to do the same.
At the same time, we are feeling a bit of uncertainty within our industry, especially with the upcoming election. There are several global concerns that will impact our business including the unresolved issue with tariffs in China and how this will impact manufacturing, pricing, consumer choice, and loyalty. A rising sense of nationalistic pride is also a concern as this has led to consumers only wanting to buy from home country brands. And finally, conflict is rising worldwide, stoking theories of recession and reduced consumer spending overall.
While these challenges continue to exist, Gore believes we need to focus on what’s important which is to continue to deliver the best in class innovative products and technologies to help our customers inspire consumers to spend more time outside.
»Janice Tennant, CMO, Cat Footwear
After spending time in the homes and workplaces of our consumers and hearing first-hand about their desires, needs and passions, I am optimistic about the outlook for 2020. Consumers acknowledge that times are tough, but they are passionate about helping to drive positive change in their lives and communities. As a result, they are demanding stylish products that are flexible and tough enough for different environments and occasions as they pave this path of change. It is critical that our brand does not lose sight of this human connection, even amidst an increasingly competitive landscape and tough business conditions. At Cat Footwear, we are maintaining focus on this truth— by innovating and creating new lines of shoes and work boots that solve real consumer problems and exceed their expectations so they can perform and be at their best on and off the job. From our Cat Excavator Superlite work boot collection for men and women to our Cat Code collection for everyday wear, Cat Footwear is committed to being the brand that is championing progress for their consumers and the industry.
»Thor Tingey, CEO and Co-Owner, Alpacka Raft
Overall the packrafting industry is doing well and continuing to mature. Packrafting has spent a long time as a fringe paddlesport with a great group of devoted loyalists, but also many skeptics. But, the detractors are fading away, and we are seeing more and more kayakers and rafters adding a packraft to their boating quivers. Packraft consumers also know there are good packraft options at almost any budget or interest level on the market, which is great for Alpacka because we’re able to service the top of the market and individuals looking for premium high-quality packrafts. We are optimistic about the future of packrafting and feel it has really cleared the hurdle in terms of becoming recognized as a super fun and legitimate way to paddle.
Our concerns lie with not just packrafting, but with the overall outdoor industry. As a whole, the outdoor industry is falling short when it comes to protecting the places we recreate. There are some notable players both big and small who are doing great things, but a significant portion of the industry is owned by investor groups who are focused on profits first and resource conservation only to the extent that it has a good marketing angle.
We believe that there are three important ways that the industry can contribute. First, is an excise tax on outdoor gear. The sporting goods industry pays federal excise taxes which have contributed billions of dollars for resource protection; however, the outdoor industry is aggressively lobbying against any similar taxes, despite the record of benefits and the fact that they hit all brands similarly. The second is in manufacturing. Most outdoor products are manufactured in countries with weak environmental regulations, labor regulations and human rights records. Outdoor brands need to do better about holding their manufacturers to a higher standard. Finally, outdoor products generate a tremendous amount of unnecessary single-use waste. Outdoor gear is built to be used hard, yet it is typically shipped in single-use plastic with multiple hang tags, stickers and often a fancy display box all of which will most certainly be thrown in the trash. It looks great in the store and most certainly affects sales, but at some point, we have to decide whether we want to agree as an industry to scale back some for the sake of a lot less waste.
At Alpacka Raft, our packrafts are made to order in the USA and shipped with minimum packaging. We pay fair wages to our employees, and we donate to multiple conservation organizations. We would happily collect an excise tax to fund our public lands better. We know it can be done by others in the industry, too. Bring on 2020.
»Matthew Tingler, Managing Director, Consumer & Retail Investment Banking, Baird
We continue to expect positive momentum and favorable conditions for the outdoor category and for the broader sports, fitness and lifestyle segments in 2020. Participation in these categories remains relatively strong which should support consumer demand and overall market growth; however, companies that continue to drive innovation through not just product enhancement, but also in how they connect and engage consumers, will be most rewarded.
Consumers have more options today than ever before, which has increased the importance of brand authenticity, product differentiation and consumer connectivity, but companies must be thoughtful in their approach particularly in an ever-changing omnichannel environment and with the rise of social media as a marketing vehicle. We expect physical retail, despite continued challenges, will remain an important conduit as consumers continue to value product and brand interaction. However, direct-to-consumer strategies remain essential in order to build brand awareness and establish consumer engagement.
While deal activity for the outdoor category was not as robust in 2019 as it had been in some recent prior years, financial investors continue to favorably view the category due to its enthusiast nature which generates strong consumer engagement and brand loyalty. Further, we expect strategic buyers to be active as they look to acquire brands that provide access to new products, markets and technologies that can be leveraged via their greater financial and operational resources. Many of the market’s largest companies are either flush with cash, have low leverage or are trading near all-time high valuations, thereby providing significant acquisition capacity. Notable factors that may harm market growth or deal activity, in our view, continue to be tariffs and global economic and political instability; however, we do not foresee a slowdown in domestic economic activity in the near-term as overall conditions remain supportive.
»Travis Titus, Owner, Titus Adventure Company
From our perspective as an innovative 4×4 vehicle rental company, we are very optimistic about the year ahead. Cities are becoming more densely populated and people are becoming more aware of the environmental impacts of their day-to-day choices. By offering an affordable and convenient alternative to owning a 4×4 vehicle, we see people opting for more fuel-efficient vehicles and mass transit for the daily commute while opting to rent the right vehicle for the days when they really need it.
I want my kids and my grandkids to be able to grow up skiing and recreating outdoors in Colorado just like I did, and we’re trying to do our part as a new concept in transportation to make that possible. Ultimately my concerns are those of a new business owner. Will enough people embrace this concept to make it successful, and am I doing everything I can to help this become a reality?
The growth of the sharing economy and the success of ride-sharing services like Uber makes me optimistic for the future. We’ve already established that the concept of ordering a car only when you need it works, and I feel this will be the same case for 4×4 vehicles as well.
»Noah Waterhouse, President & CMO, Stio
Generally speaking, we’re bullish on 2020. The economy’s resistance to 2019’s threats and Stio’s own performance give us confidence in continued strong growth over the next year. Trade conflict, tariffs and the potential for a downturn do demand caution and discipline in managing the business. The rising cost of customer acquisition means customer loyalty and retention is paramount. At Stio that manifests in our focus on always improving product, obsessing over the customer experience and optimizing efforts in all departments to gain efficiency. While we can’t control macro-economic conditions, we can provide the best in class product, a truly authentic brand message and an exceptional customer experience across all channels. Combine those efforts with discipline around demand planning, purchasing and performance marketing, and we have a solid recipe for 2020.
*If you would like to contribute your comments for consideration for tomorrow’s third installment, please submit them by email to SGB Executive Senior Business Editor’s Thomas J. Ryan or Eric Smith.
Photo courtesy Getty