On an SFIA Coronavirus Update Webinar, Matt Powell, VP and senior industry advisor, The NPD Group, explored whether the current strength in fitness and cycling is sustainable; the recent bounce back in golf, running footwear, other categories; and shifts the sports industry may face due to COVID-19.
One of the most encouraging findings was favorable trends around exercise:
- 63 percent of respondents plan to run after COVID-19, up from 50 percent who ran before the emergence of COVID-19, 51 percent ran during the pandemic;
- 38 percent plan to exercise at home post-pandemic, up from a quarter prior to COVID-19 and 43 percent during the pandemic;
- 11 percent plan to use online or app-based exercise classes post-COVID-19, up from 6 percent before and 13 percent amid the pandemic.
- 21 percent expect they will bike ride after the pandemic, up from 11 percent before and 11 percent during the pandemic; and
- 14 percent anticipate they will practice yoga after the pandemic, up from 10 percent before and 9 percent during the current COVID-19 phase.
Powell noted that some of the anticipated growth in areas such as at-home and online fitness reflected activities newly discovered as consumers were forced to adjust to stay-at-home mandates and, for some, the closure of gyms. (NPD did find that 29 percent expect to exercise at a gym post-pandemic, up from only 2 percent who did during the pandemic as well as 27 percent before.)
But Powell also suspected people would embrace healthier lifestyles. He said, “When we look at the casualties of the pandemic, many of the people who lost their lives had pre-existing conditions. They were overweight, diabetic, smokers, etc. I think we’re going to see people trying to live a healthier lifestyle to avoid future issues.”
He also believes social distancing will continue to some degree coming out of the pandemic and benefits activities such as running that allow distance between participants. Finally, with the arrival of the recession, Powell noted that activities such as running tend to pick up due to economic reasons. “People who are out of work may be thinking about how to lose 10 pounds inexpensively, and buying a pair of running shoes is a pretty inexpensive way to do that,” he said.
Accelerated Shifts Toward Online, DTC And Private Brand
A speedier migration to online purchasing is also expected to occur post-pandemic as more people adopt e-commerce amid store closures and social-distancing calls. NPD’s data finds that from March through May, online penetration in footwear was 51 percent and 45 percent for apparel. In the same period a year ago, online made up a quarter each of purchases for footwear and apparel.
Expansion in private label for stores and DTC for brands is likewise expected to accelerate due to the pandemic.
In the five months through May, growth in private-label active apparel was flat, significantly outperforming the 17.8 percent decline in the category overall. Private label made up 28 percent of athletic apparel purchases in the twelve months through May versus only 3 percent of athletic footwear.
In DTC among footwear brands, sales were only down 12 percent through May versus a 20 percent decline at remaining wholesale partner channels.
Among key footwear brands, Nike did about 24 percent of its U.S. business at DTC in the first five months and DTC was up 1 percent for the brand versus a decline of 20 percent at sales through wholesale partners. Adidas, where DTC accounted for about 31 percent of its U.S. business in the first five months, saw 18 percent DTC growth versus a 12 percent decline at wholesale partners. Vans, where DTC accounted for 57 percent of revenues in the first five months, saw significantly less of a decline in DTC versus wholesale accounts.
While some of the DTC gains reflect online growth, Powell expects brands to continue to be “very aggressive” in expanding DTC sales in part because the pandemic is expected to lead to the closure of wholesale partner doors.
The majority of Powell’s discussion explored NPD’s findings around category performance amid the pandemic based on the company’s reach into point-of-sale data.
Running A Bright Spot In Athletic Footwear
Athletic footwear sales were down 19.8 percent in the first five months through May as a 2.6 percent increase in average selling prices was more than offset by a 21.8 percent tumble in units. The category had started out with 3 percent growth in January and February before descending 32 percent from March through the end of May.
Sports leisure styles were down 17 percent versus a 24 percent decline in performance footwear. Sports leisure had been outperforming performance prior to the pandemic.
Among brands in footwear, sales in the five months were down 20 percent at Nike, 21 percent at Adidas, 23 percent at Skechers, 21 percent at New Balance, 29 percent at Under Armour, 16 percent at Asics, 28 percent at Vans and 42 percent at Converse.
Comparatively, Nike’s Jordan brand outperformed, down 6 percent. Powell said the brand benefited from having more product in the marketplace in conjunction with “The Last Dance” series on ESPN. Puma, only down 4 percent, also comparatively performed better.
Brooks was an outlier, climbing 10 percent in the first five months. The gain represented a rebound from last year when Brooks faced inventory shortages due to a transition to a new distribution center. Among smaller brands, Hoka One One and On, the Swiss running brand, both stood out with strong gains this spring.
Powell said running sales overall have been “quite strong” over the last five or six weeks as people have picked up or become more dedicated to the activity amid the pandemic. Said Powell, “I think running footwear could be one of the positive winners coming out of the pandemic.”
In line with past findings, however, NPD found most sports shoe purchases aren’t being used for specific activities. When NPD surveyed customers who bought a pair of sports shoes and asked what do they intended to do with their purchase, only 14 percent said they intended to use their purchases to participate in sports.
Apparel Struggles Amid Pandemic
Active apparel was down 17.8 percent in the first five months of the year, reflecting a decline of 8.9 percent in units and 9.7 percent in average selling prices. In the first two months of the year, active apparel was up 1 percent
The biggest drops in the five months were seen in knit shirts, swimwear and pants as people are not traveling as much during the pandemic. Sweatpants were a bright spot as the item has become the “home uniform” with people encouraged to stay at home, said Powell. The sports bra also picked up with Powell believing that reflects a trend toward comfort.
Among major sports brands, only Champion, up 3 percent, gained in the five months. In active apparel, sales were down 19 percent at Nike, 26 percent at Under Armour, 29 percent at Adidas, 29 percent for Columbia, 26 percent at The North Face and 17 percent at Puma. Among non-sports brands, Hanes grew 22 percent and Fruit of the Loom was down modestly as both benefited from being sold in Walmart and Target stores that remained open during the pandemic. Dickies, the work brand, managed a 1 percent gain in the five months.
Similar to the findings on athletic footwear, NPD found that only 25 percent of people said they planned to work out in the active apparel they had purchased.
Tennis, Golf And Basketball Gaining Traction In Team Sports
The Team Sports category started off the year strong with 13 percent growth over January and February before sliding 23 percent from March through May. Overall, sales were down 14 percent in both dollars and units in the first five months of the year.
One outlier category is basketball, which grew 38 percent in the five months. Powell said sales of portable and in-ground hoop systems were helped by some towns removing hoops at public parks to support social distancing mandates. Families, he added, were also looking for activities their kids could do at home safely and “shooting hoops in your driveway is one of those things that you can do, if there are only one or two people playing.”
Also positive was racquet sports, up 19 percent in the five months. Powell said the sport of tennis is seen as “somewhat safe for social distancing” and pickleball continues to increase in popularity. Racquet sports were up 36 percent in May with some tennis courts closed in March and April.
Golf sales were down 15 percent through May but have bounced back as states have reopened their golf courses. In May, the golf category grew 21.5 percent.
The biggest declines not unsurprisingly went to categories supporting team play as spring seasons for canceled or postponed. Baseball was down 39 percent in the five months and soccer fell 21 percent. Protective gear lost 48 percent and team equipment bags were down 29 percent. Training equipment showed a gain in sales, likely reflecting athletes looking to training aids to work out in their garage or backyard.
The top-ten brands by incremental dollars in the Team Sports category in the five months were: Spalding, Lifetime, Everlast, Silverback, Wilson, Franklin, Goalrilla, Penn, Century and Cobra Puma Golf.
Home Fitness Takes Off Amid Pandemic
In the fourth months through April, the Health and Fitness Equipment category sales grew 62.9 percent. The gains were driven by a 45.5 percent increase in units and 12 percent in average selling prices. Sales were already solid in January and February, up 6 percent, before vaulting 230 percent over March and April as gyms closed and the already-healthy home-fitness trend reached another gear.
Among categories, sales grew 70 percent for cardiovascular machines, 67 percent for free weights, 45 percent for fitness accessories, 70 percent for strength training products, 27 percent for home gym weight machines and 74 percent for yoga & mat Pilates. Treadmills, spin bikes, dumbbells, rowing machines and yoga mats were the top-five sub-classes as measured in incremental dollar gains.
The top five fitness brands measured by incremental dollar gains in the four months were: NordicTrack, Cap Barbell, Private Label, SPRI and Sunny Health & Fitness. The data does not include any growth coming from subscription services such as Peloton or Mirror.
Powell said growth in some fitness categories may slow due to supply issues. Anecdotally, for example, NPD is hearing that free weights are facing out-of-stock issues at retail. Powell also noted that a major purchase, such as a stationary bike, maybe an incremental purchase but it also may have been planned for later in the year and bought earlier due to the pandemic. Another similar big-ticket purchase also wouldn’t be expected to reoccur for a few years.
On the other hand, Powell believes the home fitness trend will be supported by some continuing apprehension about going to gyms. Said Powell, “It’s very difficult to go to a gym today with the kind of social distancing rules that are in place in most states.”
Cycling Sales Jump 44 Percent Through April
In the year-to-date period through April, cycling sales were up 44.3 percent with unit sales ahead 24.6 percent and average selling prices up 15.8 percent. Bikes, by far the largest category in cycling, led the gains with a 62 percent hike but every category trended solidly positive. In the bike category, big gains were seen with kids bikes, up 70 percent; transit bikes, ahead 76 percent; and leisure bikes, 120 percent. Electric bikes, which had been on a strong pace well before COVID-19, was ahead 95 percent in the four months.
By comparison, road bikes, the largest segment, was up only 8 percent with sport-performance road bikes and a number of tech accessories showing declines. Powell said the cycling industry tends to be focused on the pinnacle consumer but COVID-19 is opening up opportunities to target the family and more of the beginner cyclist. Said Powell, “We have a chance to introduce newcomers to our industry.”
The top-five selling cycling brands were: Schwinn, Specialized, Trek, Huffy and Mongoose.
Outdoor Industry Finds Few Bright Spots
For the year-to-date period through April, the Outdoor category was down 25 percent in dollar sales and 28.1 percent in units. Outdoor started the year with soft sales, down 7 percent on a dollar basis in January and February before nosediving 43 percent in the March-to-April timeframe year over year.
Among categories, the three largest – sportswear, footwear and outerwear – were all down 25 percent. The apparel accessories, undergarments and bags categories saw steeper declines.
Among channels, sport specialty e-commerce was a bright spot with particularly strong gains in equipment and apparel.
Among categories, the few positive categories were “survivalist” categories such as dehydrated food, portable power and water filters. Powell believes the strength highlights concerns by some that “things were going to get even crazier than they’ve gotten” amid the pandemic. Slippers were also positive as people are seeking comfort in their homes. Gains in smokers, grills, coolers and kayaks pointed to families looking to recreate in their backyards and nearby their homes.
Photo courtesy NordicTrack