Here is our final installment of the 2019 industry outlook. Thank you to all the industry executives and business owners who shared expectations, hopes and concerns for the new year. This was the biggest response we’ve ever gotten, with almost 60 participants, prompting three parts instead of the usual one or two.
For the rest of the series, click here to read Part 1 and click here to read Part 2. And be sure to keep reading SGB Executive throughout the year as we dig into the topics presented this week and the ones yet to arise.
Anne Cavassa, President, Saucony: “As we look forward to 2019, we’re incredibly optimistic about both the industry and our brand. Though consumer distrust is at an all-time high and a dynamic political climate has created a vigilant market environment, consumers are prioritizing brands that are authentic, honest and transparent. Brands need to put a stake in the ground and stand for something that consumers believe in, that engage with their hearts and minds, and that exist for a higher purpose.
“In 2018 we spent significant time as a team exploring why runners everywhere connect with Saucony. Simply put: We empower the human spirit. When we deliver on this brand promise−with every stride, on every run and in every community−we resonate on a more personal level with our consumer to build authentic love for the brand.
“Besides our brand values, we’ve also taken stock of where we stand with our business and product. We know our playbook and will play with offense. We’ll continue to lead with innovation, a mindset that comes to life in our product but goes beyond into manufacturing, marketing and our team culture. Elevating the fit experience remains a priority for us with our ISOFIT™, ISOKNIT™ and FORMFIT™ systems. We anticipate many exciting growth initiatives including the women’s segment and trail running. This year, as we celebrate the tenth anniversary of the award-winning Kinvara, we look forward to further pushing the boundaries of innovation as we shape the next generation of performance footwear for runners everywhere.”
Gene McCarthy, President and CEO, Asics America: “As we look ahead to 2019, we are optimistic and can feel the momentum for our brand. We have taken the time to test, learn and really evaluate the strongest connection points that will resonate with our core consumer in running. Tomorrow, we launch GEL-Nimbus 21 model with the technology and innovation this brand is known for. Further, we are excited about new partnerships and opportunities this year from working with Dr. Jordan Metzl and his Iron Strength community to how we activate in new ways with our partner Live Nation.”
Michael Magerman, President and CEO, United Sports Brands (Shock Doctor, McDavid, Cutters, Nathan, XO Athletic): “It is shaping up to be a banner year for us. We have repositioned our focus internally to be more consumer and customer centric. This shift has had a tremendously positive impact across all of our brands. We are already seeing positive impact with consumer engagement online, in store (both sell-in and sell-through) and with consumer satisfaction levels.
“Tariffs, recession and other business issues out of our control are all concerns. But our brands — Shock Doctor, McDavid, Nathan and Cutters — are the leaders in each of their key product categories. Maintaining that leadership is always a challenge. We are constantly challenged by new competitors, shifting consumer preference and customer demands. My optimism comes from our people. Our people are our strongest asset. Our team’s passion, innovation, work ethic, compassion and attitude lead us as a company and inspire me as the CEO.”
Greg Thomsen, Managing Director USA, adidas Outdoor: “Fortunately for adidas Outdoor, with strong pre-season orders in house, we have a pretty good idea of what 2019 will look like overall from a sales point of view. Clearly for adidas Outdoor Trail Running styles will continue to experience tremendous growth in sales and distribution and strong retailer response to new innovative designs, such as the new Terrex Free Hiker will re-define the hiking/street category. Overall, we see the industry, year after year, becoming more competitive, focused and fundamentally driven by the tried and true qualities of “Innovation” “Performance” and “Value.” There are no “small” details, only details.
“My main concerns are on maintaining clear consumer focus and Brand positioning to ensure credibility, authenticity and consistency in our target markets. Overall I believe 2019 will be a very good year and that in 2020 we will look back and hope to continue that success.”
John Wilson, Co-Founder and President, Stance: “We are coming off a solid year that was marked by a lot of evolution for us, especially in relation to the retail landscape that we all find ourselves in. Over the last nine years we have done the hard work of building a brand, so in 2019 our efforts will be focused on ensuring customers experience it the right way in the best retail and within our own retail. As we look forward, it’s exciting to see the myriad of ways brands are now able to have one-to-one interactions and build relationships with customers. From social, to in-store, events, to our wholesale partners, we are now able to have much deeper and more meaningful connections with our customers that will dramatically shape our business going forward.”
Matt Carlson, President and CEO, NSGA (National Sporting Goods Association): “Sporting goods retailers and team dealers face challenges that could make 2019 as volatile as the stock market has been in recent months. Retailers and dealers face trade and tariff issues, uncertainty from state to state about collection of sales taxes for online purchases, the growing hope for passage of the PHIT Act, and increasingly restrictive distribution of products that our members counted on for robust sales only a few years ago.
“How our members choose to address these and other challenges will go a long way in determining their success. Finding collaborative, reliable, and top-quality suppliers continues to be a top priority. Tariffs on items produced in China are passed along to customers as a not-so-hidden tax and could have a dampening effect on sales.
“These kinds of suppliers can reach leading retailers and team dealers directly by participating in NSGA’s Innovations Arena, which is held during NSGA’s 55th Annual Management Conference and 21st Annual Team Dealer Summit in May. There, companies come to share their latest innovations with industry leaders. Relationships are created and developed at opportunities like the Speed Networking sessions.
“NSGA has led the industry in advocating on behalf of its members. When the U.S. Supreme Court struck down the “physical presence” rule regarding online sales tax collection last summer, there was great uncertainty among online sellers on how to proceed. While states sort out their differing approaches to this issue, we are providing information for our members, so they can avoid potentially costly errors.
“For a decade, NSGA has fought for passage of the PHIT Act. The bill came close to reaching the finish line before the last session of Congress ended with only House passage of some of PHIT’s components. We will continue to strongly support the original tenets of the PHIT bill when it is re-introduced in both the House and Senate.
“Our members want to continue participating in the lucrative licensed products market, selling jerseys, caps, jackets and other items that their customers want. Rather than working with their reliable retailer and dealer customers, pro sports leagues have chosen to limit distribution of their products to a handful of outlets. This, and other exclusionary practices in our industry, should be soundly rejected as they challenge industry sustainability.
“We look forward to additional collaboration with reliable business partners to address these and other issues throughout the year in a positive and productive way.”
Dick Sullivan, President & CEO, PGA TOUR Superstore: “The golf industry continues its momentum in 2019 showing signs of optimism, stability and growth after coming off a strong 2018. The National Golf Foundation (NGF) reported in 2018 that the golf business has grown to an $84 billion dollar a year industry, up 22 percent from five years ago. And, the face of golf continues to change, in particular more women and millennials are coming into the game. 35 percent of beginner golfers were women and 70 percent were under the age of 35 (NGF).
“The future of the game lies in efforts to promote the game, make it more welcoming and showing beginners how much fun the game is. The launch of new equipment and products feature technologies that are designed to improve a golfers game, whether they are an avid or beginner. The PGA TOUR is also coming off a strong year where TV ratings for their events were up more than 20 percent in 2018. They will build on that success this year as they rollout their new TOUR schedule where we will see bigger tournaments being played earlier in the season. The return of Tiger to the winner’s circle and him competing with the ‘young guns’ has also provided a positive impact on the overall industry. For example, when Tiger was in the hunt on Sunday at the Valspar Championship, we saw a huge surge in the sale of Tiger Woods hats by more than 800 percent the following week.
“PGA TOUR Superstore, the country’s leading golf retailer, continues to dominate industry, and will open at least six new stores in 2019 as we accelerate our growth strategy to expand our brick-and-mortar presence by more than 50 percent over the next three years. We currently operate 35 stores in 15 states across the U.S. Our business model has demonstrated continued success, serving more than 7.5 million customers annually. We have tripled our store count across the United States over the last several years and will continue to be opportunistic and aggressively invest in our brick-and-mortar business. Our innovative experiential retail model and our focus on integrating and investing in our e-commerce business for a solid omni-channel presence is resonating with our customers.
“We remain committed to focusing on our guests and providing the best services and customers service in-store and online. All retailers say it, but executing on that brand promise is different. For us, it’s about building relationships, not transactions.”
Strick Walker, CMO, Merrell: “Our focus is on enabling people to experience the power of the trail. More than ever, folks are looking to unplug and reconnect with nature. It seems as the world becomes more connected, participation in activities that help people “unsubscribe” for a moment are on the rise. They say hike is the new yoga. So we continue to design the best, most versatile footwear and apparel for the trail.
“As a brand, we celebrate diversity in the industry and protect the natural environments we all rely on. The outdoor industry seems to be aligning around these issues and that’s reason for much optimism. We’ll continue our “One Trail” initiative this year—celebrating the tapestry of people who actively enjoy the outdoors—different geographies, body shapes, ethnicities, orientations and intensity levels. We’ll continue to support public lands initiatives and protection of wild places through our membership in the Conservation Alliance. Additionally, we’re actively addressing the sustainability of our products and processes. We have a variety of products launching in 2019 that show a commitment to more sustainable practices and materials.
“We’re expanding our lifestyle and apparel lines, while continuing to produce award-winning products for people looking for performance product (hiking, trail running, training). We’re focused on who we are as a brand and we’re excited about the future of the business.
“Personally, I hope we’ll all continue to appreciate our connection to the natural environment. I’m excited that people are still getting out there and getting after it. I’m lifted by the fact that businesses are getting behind important issues like public lands, making more sustainable products, and using their resources to have important conversations that go beyond product. In the age of technology, there’s still a big and diverse group of people who believe that with air in your lungs and a good pair of shoes, you’ve got everything you really need.”
Scott Brown, CEO, Vintage Electric: “We feel really good about the year ahead. Not only have we been generating a ton of great buzz for our brand over the last year or so, but the e-mobility market in general continues to go through the roof! There are more and more electric products, brands and programs entering into the market which in turn is educating potential customers and equating to more sales. At Vintage Electric our products cross into more than just the regular bike channels – we joke that we make ‘motorcycles’ for car enthusiasts and bicycles for the motorcycle crowd. Our job is to get people outdoors and open up their imagination about what you can do with an electric bike.
“My concerns would be that given the boom of the e-mobility market it can be hard to find a niche, but as a small company we are laser focused on creating inspiring products that stand out from the crowd and communicate a brand message that remains on point. New brands and products means more competition for all of us, but optimistically it also means greater demand potential from many new and excited prospective customers. This growth in conjunction with new tariffs that have been imposed are tough for brands to swallow as well, so we need to remain focused on what we do best so we can continue our own positive growth trajectory.
“What gives me optimism? The incredible outdoor spaces in this country are still alive and well, and more people are looking to get outside to explore. Everyone has an adventure close to home, and at Vintage Electric we can help make those adventures happen and make them much more feasible for the average consumer. We have all seen those smiling faces when people come back from a first test ride or full on adventure on our e-bikes, which is always the most encouraging! Our bikes bring an entirely new customer audience to the market and in turn they provide our family of customers new opportunities and adventures to last a lifetime.”
Chris Frankel, Head of Human Performance, TRX: “Outlook is great! Health, fitness, and sports continues to grow as an “industry” and lifestyle choice across generations. Baby boomers are more active than previous generations and looking to be vital and energetic as long as possible. Younger generations are embracing fitness, performance, and sports participation as a requirement in their lifestyles. Exercise is as much a social, emotional, and mental component of life as it is a physical endeavor. We are in an exciting transitional phase in our culture where the intersection of technology, information, connection to each other, and to our environment are converging with positive implications for what we do and how we do it as an industry. We are in a position to do well and do good at the same time—what could be better?
“The paradox of choice, half-baked ideas, and pseudo-science concern me the most. With the explosion of information in your pocket and a less than optimal science-based educational system in place, the average person is overwhelmed with figuring out “what should I do, how should I do it, how often, how intense…?” We are definitely in a buyer beware environment, which puts the average person at risk of having a poor experience and turning them off to the most important be behaviors needed for a high quality of life; movement, exercise, nutrition, and recovery.
“But what makes me optimistic is the growing improvement in “Health IQ “and individual accountability for a self-care lifestyle. I observe some exercisers today are as informed about nutrition and exercise as fitness professionals from 10 years ago. A more informed and educated customer is driving our industry from the bottom up. The amount of basic and applied science, along with evidence-based practices, are driving our industry from the top down. Technology and assessments once only found in hospitals or university labs is now accessible at one-tenth or less the cost to a much wider audience. So, we have better “BS” detectors and we will have to hold ourselves to higher standards, not just ethically, but by customer standards. Professional integrity, evidence-based products and programming, smart and effective technology integration, plus creating authentic and compelling experiences within communities will win the day. What is the most cutting-edge technology? It is and always will be client/member/athlete education! This what we have been building our Mission, Vision, and Values upon at TRX for over a decade. So, I am very optimistic.”
Dustin Combs, President, BOGS Footwear: “We’re coming off some of the best Fall sell-through that Bogs has experienced in the 17-year history of the brand. There is some talk of uncertainty as to where the economy will be next Fall but we don’t expect that to impact our pre-book significantly. The seasonal business is healthy and we see a lot of opportunity in the more versatile, three-season product that is driving our growth.”
Rick Case, Founder and CEO, Nite Ize: “We are excited about the year ahead as we celebrate our 30th year in business with our largest product launch ever. Our mission is to continue designing and manufacturing inventor-driven products that organize your life, protect your gear, light your way, and creatively solve your everyday problems.
“With customers from all walks of life, our team is up for the challenge of developing innovative solutions that consumers trust with a focus on the small details that make big differences.”
Ryan Sullivan, CEO, Xenith: “We see the potential for tremendous growth and continued innovation for the sports equipment industry in 2019. At Xenith, we feel especially optimistic. We are poised for strong growth following the introduction of the Xenith Shadow helmet, our collection of football training gear and apparel – all launched in the last quarter of 2018. The Xenith product team continues to innovate and discover new opportunities to enable the athlete’s pursuit on and off the field.
“Football is a fascinating game and a staple in American athletics. As the sport increasingly faces complex adversity, we are ready to take on these challenges and use design-forward thinking to increase the safety of the game. There is a wide-range of factors in the game of football that contribute to player protection and performance – such as equipment, rules, using proper techniques while playing in practice and games, to name a few. At Xenith, our focus is on meeting the highest standards of excellence and performance for our products. We are committed to listening to players and coaches to learn what they want and need in their equipment.
“For example, the Xenith design team analyzed hundreds of hours of on-field, in-game feedback sessions about helmet performance and combined the findings with lab data, computer simulations and materials science to create the innovative design of the Xenith Shadow, our new flagship helmet. We built upon our existing patented helmet technology – evolved and simplified to improve fit and protection while increasing comfort and minimizing distractions – to deliver a helmet made for tough, game-time situations. Across all dimensions – fit, feel, comfort, protection and price – we believe the Xenith Shadow is the most advanced helmet in the game. These are the athlete-centric innovations that will take the game to new places in 2019.”
Nick Sargent, President, SIA (Snowsports Industries America): “Looking into my snow-globe and seeing all the early 2019 snow totals from East to West, I feel very hopeful for the snow sports industry. The 2018 season to date (through November) data indicated a 16 percent growth in total dollars spent on snow-related soft and hard goods over the same period last year. I feel a large portion of these early season sales came from early season snowfall. The categories supporting the 16 percent period-over-period growth include: outerwear (up 19 percent); snowboard equipment (up 16 percent) and Winter/Snow Accessories (up 15 percent). With 24.3 million Americans ages 6 and older participating in snow sports at least one time per year, with a higher than average HH income, the outlook is bright for the 2019/20 season.
“I have two considerable concerns for 2019. One is namely the tariff battles between NA and China and their effects on our members and the consumer. Second, I’m concerned about the global environment, and its rapid increase in temperature which will ultimately effect snowfall, water, and our snow sports retail sales. Lastly, we’re very concerned with participation and are working with NSAA and other industry stakeholders to address that and come up with a holistic approach.
“But overall I’m a very optimistic. Currently, SIA/OIA/NSAA are working on an a monumental collaboration. We felt that our organizations need to combine forces to drive change. On day one at ORSS, at the SIA Kickoff Breakfast: Wednesday, January 30 we will be making a significant announcement to the industry, media, and retailers. This partnership is the first step in combining forces to fight against a common goal. See you at the breakfast.”
Michael Duffy, VP of Global Sales at Klean Kanteen: “Klean Kanteen is planning for growth in 2019. We are coming off a strong year and expect that to continue. More consumers are choosing reusables as the current atmosphere is filled with discussion and actions taking place with respect to reducing plastics and single use items. This is beneficial to our business and other businesses that create solutions to support efforts that are good for the environment. I have concerns about the political rhetoric and threats around increasing or implementing additional tariffs, as this could be extremely challenging for our business. I am optimistic about the current economic climate and award-winning products Klean has recently developed. We are getting credit for our innovative approach to design and being pioneers in creating products that solve a consumer problem while doing less harm to the environment.”
Eric Shear, Global Vice President, PMI’s Stanley brand: “As a 100+ year-old company, the Stanley brand has seen a lot. The company has survived times of economic uncertainty and witnessed trends come, and go and we continue to thrive as a company by staying true to ourselves while remaining relevant to our consumers. It’s awesome to watch as new generations of fans are introduced to the brand and see how they interact with, and use, our products. The past 5 years have seen explosive growth in the bottle and mug category, so much so that it can be confusing – total drinkware fatigue! But as the category matures we believe this will quiet down and the introduction of new brands will need a more strategic approach and long-term commitment, which will be great for both retailers and consumers. The exciting thing has been the consumer’s education about, and exposure to, the various technologies and offerings available – they’re learning what they like and what they don’t. We might be a 100+ year old brand but at Stanley, we’re always up to something new and we’re planning to continue to exceed consumer expectations as this new generation of consumers becomes even more discerning.”
Leslie and Paige Temple, Founder/Owners Boatgirl: “With the new initiative in North Carolina to promote outdoor recreation companies and products, we are feeling very positive about the outdoor industry in North Carolina for the upcoming year. In addition, we are seeing small manufacturing operations pop up in North Carolina and an increasing number of consumers are seeing the benefits of quality products made in NC and the USA.
“With recent changes in leadership, changes in the economy are unpredictable and could affect consumers’ attitudes toward buying products.
“We feel very confident and optimistic about Americans becoming more and more educated about buying products that are made in the USA that are higher quality than those made overseas and support our own economy. Our line of Boatgirl bags are durable, functional, and high quality and an increasing number of consumers are seeing the benefit of well made products. We are optimistic about our ability to provide women with products that allow them to accomplish their goals effectively and with style.”
Photo courtesy Merrell