Sports retailers must adapt to online demand, warns report

17 May 2021 Consultancy.uk 3 min. read
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Global sports participation is expected to increase by one billion people by 2025. Amid this, ecommerce is becoming an increasingly important part of sportswear retail, and will account for over one-third of purchases over that same period. 

In the wake of the pandemic, and a year characterised by lengthy periods of being instructed to stay indoors, the world’s population seems determined to spring back into action in the coming years. According to a new study by sports e-commerce and tech platform Signa Sports United and Boston Consulting Group (BCG), global sports participation is set to spike drastically by 2025.

With a billion-person rise to 3.5 billion active sports participants over the coming four years, the study suggests that this would put the size of the global sports market at $1.1 trillion. Accounting for $475 billion of spending and anticipated to grow 7% annually to reach $670 billion in 2025, sports retail is the largest part of this market. 

E-COM GROWING DOUBLE DIGITS IN ALL KEY REGIONS, WITH U.S. REACHING 40% SHARE IN 2025

With retailers having struggled so demonstrably over the last few years, this is growth which cannot be ignored – however, according to the researchers, only those able to adequately adapt to the digitalising market will be able to fully capitalise on it. By the estimations of Signa and BCG, the ecommerce segment of sports retail was hovering around 10% across global markets in 2015 – but it has grown by more than 15 points in the intervening years.

While this is partially due to the huge shift of shoppers to online platforms during the Covid-19, the study does not anticipate a reversal on this as social distancing measures ease. Following that acceleration from the last year, online sales in sports retail will continue to grow until 2025, with the researchers estimating that ecommerce will account for 32% of the European market by then, and a huge 40% of the US market. This is in anticipation of sports ecommerce continuing to see double-digit CAGR from 2020-2025, growing three times faster than sports offline retail.

BRAND DIRECT-TO-CONSUMER (DTC) SHARE ACROSS SELECT SPORT VERTICALS

So far, brands targeting the global football retail market have adapted most rapidly to this potential. BCG and Signa found that while soccer and other team sports account for 19% of the brand-to-consumer (BTC) sports retail market, 8% of this is already made up of brands selling directly to the consumer via an online portal.

In comparison, while fitness makes up a narrowly smaller portion of the BTC market at 20%, just 3% of this is via online brand sites – suggesting it is positioned relatively poorly to make the most of the ecommerce boom.

With that being said, when equipment-heavy sports brands targeting consumers for fitness or cycling do take to selling via the internet, they are performing more solidly in terms of consumer satisfaction. This suggests that if more retailers in this segment would simply commit to opening online platforms, their breadth of assortment, tailored recommendations and exclusive products would satisfy consumers at purchase enough to see sales stats rise rapidly. 

CONSUMER SATISFACTION ACROSS JOURNEY PHASES

The report found that across the inspiration, research, and purchase phases, online shoppers were happier at the purchase phase in both equipment-light sports like football, and equipment-heavy sports like fitness. Light sports saw consumers confirm a 56% satisfaction rate at the time of purchase when shopping from an online sport vertical specialist, compared to just 43% for an offline equivalent.

Meanwhile, 62% of heavy sports consumers were satisfied buying from online sport vertical specialists, compared to 45% for offline transactions. 

Volker Haemmerle, Partner at BCG, said of the findings, “It is imperative that sports retailers understand the consumer mindset and unique opportunities for growth when making critical business decisions.”