Outdoor Recreation Industry Sees Significant Growth With Changes In Consumer Behavior Sparked By Covid-19

Since 2020, the Covid-19 pandemic has significantly impacted consumer behavior, especially when it comes to outdoor recreation.

After lockdowns kept people indoors for much of the spring and summer of 2020, Americans went outside in droves, with nearly 7 million people taking part in any type of outdoor activity, from skiing and snowshoeing to hiking and fishing .

However, with March being the second-highest revenue month of the ski season after December, the early spring 2020 resort closures have had a devastating impact on the industry.

According to figures from the National Ski Areas Association (NSAA), 93% of ski areas closed operations early due to the pandemic; As a result, the industry suffered an estimated $2 billion loss due to lost revenue not only from skiing and snowboarding, but also from summer conferences, weddings, and other major events.

In 2021, however, a confluence of factors led to a surge in growth in the retail sector of the industry, which continued into 2022 and is expected to continue into 2023.

The market size of the sporting goods retail industry (which includes sports equipment, firearms and hunting equipment, athletic apparel and athletic shoes) in terms of revenue is $67.8 billion in 2023, according to the latest figures from IBISWorld. (It’s important to note that the IBISWorld figures only consider retail sales, not online sales.)

The industry has grown at an average rate of 6.7% per year in the US between 2018 and 2023, with a significant jump from 2020 to 2021. In fact, the sporting goods industry in the US has been growing faster than the economy as a whole.

Matt Eby, CEO of private equity firm Seawall Capital, attributes the significant increase in participation in outdoor activities to a variety of behaviors related to the pandemic. Seawall Capital acquired Kent Outoors, a collection of outdoor brands including BOTE and Kona Bicycles, in 2020.

“People had extra time because they no longer had to commute; The work-from-home environment allowed them to take up new activities that became hobbies,” Eby said. “Hobbies become habits and habits become part of your lifestyle.”

While there’s a possibility that “some of these people will drop out,” says Eby, “Covid has created some lasting changes in our society, and some of those changes are in work-life balance expectations.”

As Eby notes, most people don’t immediately buy the highest quality gear and jump straight to the toughest trails when taking up a new activity, be it mountain biking or snowboarding.

Someone might buy a fairly basic bike or snowboard setup and then upgrade their gear over time as their skills improve. They move up the product pyramid, a long purchase and replenishment cycle at the basic consumer level.

The product pyramid differs according to price point and thus according to the level of engagement of the consumer. The top of the pyramid represents the “hyper enthusiast,” says Eby, and many of the brands that Kent Outdoors represents are at or just below that level.

“It’s a real lifestyle for them,” Eby said. “You talk about costs – and there’s definitely been cost inflation, no one disputes that – but once you’ve already decided that you’re a mountain biker and have a brand that you prefer, let’s hope it’s Kona, you have.” a high willingness to spend on this product because this product enables you to lead the lifestyle and activities you love. It is very meaningful to you.”

In this way, Eby feels that brands that fall in the middle of the top of the product pyramid are fairly insulated from recessionary or inflationary effects. For those consumers who have made their favorite outdoor activity a lifestyle – even those who may have only taken up an activity during the pandemic – they have made a “fundamental behavioral choice” to invest in that activity. Spending victims may appear in other areas, e.g. B. on vacation or when going out to eat.

Which activities have grown the most? Golf equipment, camping equipment and snow sports equipment were particularly strong categories.

While not a part of outdoor recreation, climbing gear is one sector of the sporting goods industry as a whole that has seen tremendous growth after taking a devastating hit during the pandemic. Between March 2020 and June 2021, the US fitness industry lost a total of $29.2 billion in revenue.

According to a February market outlook, the climbing gear market will grow at a compound annual growth rate (CAGR) of 9.5% over the period 2021-26. Climbing seems to be growing so much in part because gyms have been closed for so long due to the pandemic, so climbers were quick to stock up on gear like shoes and chalk bags when they reopened.

Climbing gear was a “particular strength in the portfolio and categories we’re tracking,” Eby said. “Members are coming back very strongly now, but because the gyms have been closed for a long time you’re seeing a rapid increase.”

Snowsports grew 11.7% from 2020 to 2021 and 27.2% on a two-year basis to $683.6 million. In particular, touring (also called uphill skiing or skinning) has become an important motor for outdoor recreation.

In winter 2020, the Snowsports Industries America (SIA) attendance report recorded a 57% increase in backcountry/AT (alpine touring) attendance. The NSAA End of Season 2021-22 survey found that 62% of U.S. ski resorts currently allow uphill access — a 30% increase from 2012-23, the first year the survey surveyed resorts with uphill access.

Rising interest in touring has prompted brands like Black Crows to adjust their product offerings accordingly.

“It’s something we’re researching and developing products for,” said Tristan Droppert, Black Crows’ North American Marketing Manager. “Our touring product is unique and well received because it is well balanced and can perform well both uphill and downhill.”

These changes in product offerings, driven by increased interest, are impacting the rest of the industry as well. Ski resorts like Colorado’s Copper Mountain and Aspen Snowmass have been actively working to strengthen their tour offerings, and many are actively adding new terrain to their mountain profile.

Many resorts have started offering either a wristband program or a $50-$70 paid hill pass for a season, and some include it for free with a season pass. Would-be uphillers can also rent this gear at some resorts.

In the outdoor industry, “innovation is paramount” to keep consumers buying products, says Eby. “The best brands in outdoor are the brands that put the product first: build an amazing product that delivers what the brand promises, delivers performance… but it also has to be new, exciting or innovative.”

What about the people who want to start rock climbing or skiing (or start their kids in a new activity) but don’t want to buy all that expensive gear until they’re sure it’ll last? Overall, rentals are now a “relatively small piece of the pie,” Eby says, but if brands and the retailers they work with are smart about how they do it, it can be another avenue for growth.

Action sports icons Travis Rice (freeride snowboarding) and Cam Zink (freeride mountain biking) saw an opportunity for a new initiative in the recreational space. Their brainchild was the online gear marketplace SENDY, which allows users to buy, sell and rent outdoor gear anywhere in North America.

The platform not only connects adventure seekers who share a love of the activity, but also reduces the amount of products that end up in landfill each year and allows people to try a new activity without making a huge financial investment.

SENDY’s early focus is on categories such as cycling, hiking and camping, mountain biking, skateboarding, snowboarding, skiing, surfing, climbing, fishing, motocross, paddling, running and wakeboarding.

Having had a period of such rapid growth in the outdoor gear space, it seems inevitable that it will slow down soon. But Eby predicts a powerful force that will boost space again in the coming decade.

“The millennial generation has been talked about so much because it’s such a big generation and it’s entered those prime years where they start having kids,” said Eby, who has two school-age children. “People spend a lot of money for their children in nature; One of the greatest gifts you can give your children is a love of nature, which will be a powerful economic force for consumers over the next five to 10 years.”

Zink also specifically mentioned youth participation in outdoor activities as a selling point for SENDY.

“I reap the benefits for my own kids — depending on how many sports they play and how fast they’re growing, we can find more curated, higher-quality gear for the same price or less as they grow,” Zink said.

With interest in outdoor recreation gear increasing significantly since the pandemic began, there is a very real chance that much of this gear will end up in landfills as children outgrow their gear or as people give up their newfound pursuits altogether.

Fortunately, this industry growth is dovetailed with consumer demand for sustainability. More than ever, outdoor consumers are looking to support brands to help protect the environment.

Responsibility and sustainability are key, but the message must be authentic. “You can’t just put a sticker on a product that says ‘CO2 neutral’,” said Eby. “Consumers will see through this.”

As a result, brands like Burton Snowboards and Patagonia recently announced plans to become carbon neutral across their businesses by 2025.

When consumers support retailers who have made a commitment to produce sustainably and use services like SENDY to recycle and reuse old gear rather than discarding it, the outdoor spaces where activities take place are where people have settled in since the middle 2020 fallen in love, persist for generations to enjoy.