SECTOR FOCUS Sports Sector Key Players
INDUSTRY FOCUS Key players and performance of the sports sector
INDUSTRY FOCUS Key Players and Performance of the Sports Sector: The sporting goods market in Europe is served by a diverse group of online and omnichannel retailers, and every country in the region has at least one significant retailer ranked in the top 100.
For example, Germany has a number of players who are currently ranked. This is a good indication of the size of the market in Germany for goods and equipment related to sports and outdoors.
This is also because customers from other European countries, especially from the nearby countries like Switzerland, Austria, Poland and the Czech Republic, support these different companies, which helps to keep them in business.
The UK, on the other hand, only has one company in the top 20 and that company is Sports Direct. That’s because the UK has a robust single market, but its appeal across Europe is limited.
The distribution of retailers across the continent is further influenced by the availability of certain top brands, such as sportswear giants Nike and Adidas, internationally through all these other retailers, as well as in branded stores everywhere.
The fact that each of these top 20 retailers also carries a very extensive range of clothing, shoes and equipment for fashion, outdoor and leisure is another distinguishing feature of these shops.
According to the table on page XX, virtually all of them participate in sales in all of these categories, in addition to selling related equipment. Some also sell bicycles and other types of non-motorized vehicles used for sports and leisure activities.
The sporting goods market is characterized in another way by the fact that there is a segment of customers who are deeply rooted in the practice of buying specific and specialized things.
This seems to indicate that there is a market for more specialized, boutique-style shops selling sporting goods. The reality is that the market is controlled by giant multi-segment retailers who are able to combine the buying power of a large organization with the ability to offer specialized item segmentation both in-store and online.
Figure 1 (left) shows the average worldwide sales of the top 10 European sporting goods retailers and Figure 2 (right) shows European web traffic to the top 12 European sporting goods retailers.
RetailX looked at the top 10 retailers in terms of traffic and averaged their sales and traffic over the last four years for sales and over the last five years for traffic to get an idea of how well the European sporting goods industry does.
In terms of revenue, the industry is forecast to experience a period of slower growth between 2018 and 2021. As noted, the pandemic caused a sales decline in 2020 that lasted until 2021, when it was followed by a surge that brought it back to 2019 levels (see Figure 1).
This seemingly slow turnaround hides the reality that the company has suffered from pandemic challenges that other retail sectors have not weathered. It’s more dependent on social blending and physical locations, both of which were discontinued in 2020 and only occasionally returned in 2021.
The sports products market is highly dependent on these factors. Instead, to generate growth, the industry had to focus on marketing casual wear and athletic and casual wear designed for a wider range of activities. Considering this information, the revenue increase seems very outstanding for the industry and it is expected to continue improving beyond 2022.
Traffic statistics confirm this (see Figure 2). Between 2017 and 2019, online sales across the industry saw an erratic trend, driven by consumers’ preference to purchase performance sporting goods and equipment in-store.
As a result, the significant drop in traffic in 2020 shows that the shift towards online shopping seen in other industries during the lockdown has taken place to a much lesser extent in the sporting goods sector.
Despite this, traffic continued to decline throughout 2021. This indicates a return to traditional retail for a significant portion of consumers interested in performance sporting goods.
It is also possible that this is an indication that many of the people who bought casual and sportswear for non-sports purposes had returned to work and were wearing more formal attire, leading to a decrease in the amount of online shopping in the sports sector.
With the market flooded with large retailers selling across all segments of the industry, it’s likely that competition over price, supply and sustainability will only intensify in the future.
This is because the market is saturated with large retailers selling across all segments of the industry. This could lead to market concentration or lead to merchants expanding into new product categories and possibly focusing more on health and wellness, nutrition and digital health devices.