September’s Leap in Outdoor Sales
The Leisure Trends Group does a lot of good work. On October 20th, they sent out an email you may have seen announcing record September outdoor retail sales of $462 million up 17% over a year ago. Leisure Trends analyst Scott Jaeger said it was the strongest September since they started keeping records in 1998.
Great news obviously. But I’d like to offer a perspective on those results that’s a bit different from what Leisure Trends offers. Here’s a quote from the release.
"As we have seen over the past several years in both our consumer studies and the retail tracking numbers, consumers will spend on their passions, even in uncertain and difficult economic times," states Jaeger. Jaeger continues "Most Active Americans recently shared with us their current attitudes towards their favorite outdoor recreational activities and the products they buy to do those activities, and the following quotes sum up this willingness to spend on what matters."
"These are the things that bring our family and friends together. They are very important to us."
"My sports are not a luxury, they are a necessity. They keep me healthy, both physically & mentally, make me more effective & competitive at my work, and improve my family relationships."
"I am so pumped to be able to actually spend a little bit more money this winter on my favorite gear."
I’m not saying this is wrong. But there is a sense of glorying in our own wonderfulness that bothers me a bit. Actually it bothers me a lot, but I’m trying to be subtle here. Not my strong suit.
Back in April I wrote about SIA’s end of year sales report. SIA (using numbers provided by Leisure Trends, he points out with only a minor sense of irony) reported that through February for the season, winter sports sales were up 13% in dollars but only 8% in units. In February, unit sales fell by 2% and dollar sales by 1.5%, but gross margins rose by 8%. I suggested the results were at least partly because, as an industry, we were controlling inventory. I wrote:
“Won’t it be fun when customers start coming in [next fall- as in now] looking for cheap stuff and you can tell them that not only isn’t there any, but if they don’t get what they want now, they may not get it? You’ve already improved your gross margin by next year just by not having a bunch of inventory left and we’ve collectively improved our brands’ images.”
“As an industry, we go to conferences, hold trade shows, create learn to ski/ride programs, run all sorts of programs, do studies advertise and promote, and spend overall millions of dollars trying to get people to try riding/skiing and stick with it.”
“But I’d hypothesize that we could forgo a bunch of that if we just didn’t get so damned greedy and continued to control our inventories. Oh, and we- you, that is- could make more money with less risk.”
“Now, I’m the guy who’s always said every business is going to (and should) make the decisions that they perceive to be in their own best interest. That’s true. But it looks to me right now that what’s good for your business is probably good for the industry in at least this one instance. Everybody left standing in the ski/board industry has figured out, finally, that there’s no way to make money in winter sports if you’ve got a pile of left over inventory. And also you won’t be able to pay your bills.”
Leisure Trends is talking about the outdoor industry and I’m talking about the winter sports business, a subset of outdoor. Still, I don’t think winter sports is the only industry that has had to learn the hard way the lesson, and opportunity, of inventory management since the economy went south. And in September, I suspect a whole lot of outdoor sales are winter sports related.
We do ourselves a disservice if we conclude that our customers bought our products because they really, really love us and can’t get along without us. I hope that’s part of it, but I think what you’re seeing is more the result of your smart business practices last year then a renewed gushing of affection.
Your customers are responding to a lack of closeouts and an understanding that they need to buy what they want at full margin now if they want to get it.
Keep up the good work.
I am just an avid skier loving to read the inner workings of the ski industry. But is it not true that the hard goods ski businesses have been watching their inventory for a number of years now?
Hi Lisa,
Well, when the economy went south in 2008 the ski industry (and the snowboard industry and a lot of other industries) got caught with a lot of inventory they couldn’t move. When that happens, it takes a year or two to work it off. And finally, last year, they got it cleaned up and started to reap some benefits. My hope is that most companies have learned that inventory management is the key to making, or not making, money in a one season business- especially when the economy is weak.
Thanks for the comment,
Jeff