SFIA’s 2011 State of the Industry · Planned Marketing Expenditures Increases/Decreases. Source: SGMA Research powered by Sports Marketing Surveys . As indicated by the State of
37
SFIA’s 2011 State of the Industry PRESENTATION WORKBOOK
SFIA’s 2011 State of the Industry PRESENTATION WORKBOOK
About This Data… The charts and graphs provided within this document were pulled
directly from this year’s State of the Industry Report to provide you with visual aids that would assist you in facilitating presentations.
The graphics are all properly sourced and a description is provided
below each slide within the slide notation box. We recommend that you provide all of this data within your presentation to provide background information to your audience.
Disclaimer: There is no altering of the charts or graphs provided within this
document. The data displayed within these visual aids are to be used as is.
If there are any questions about the information provided please
contact Neil Schwartz at Sports Marketing Surveys/SFIA Research at [email protected] or at 561.427.6047.
The logos provided below, for your convenience, are to be used ONLY within your presentations to reference the source of this data where you find it necessary.
Category 2009 2010 Change (Actual)
Change (Projected
March 2010) Total Sports Equipment $20,098 $20,410 1.39% 3.10%
Total Exercise Equipment
$4,164 $4,344 4.14% 5.70%
Sports Apparel $28,168 $29,581 4.78% 2.25%
Athletic Footwear $12,267 $12,608 2.70% 2.25%
Licensed Merchandise $6,925 $7,292 5.03% 5.30%
Total Equipment, Apparel and Footwear
$71,622 $74,235 3.52% 3.72%
Industry Sales 2009 & 2010
Source: SGMA Research powered by Sports Marketing Surveys
Presenter
Presentation Notes
Sales numbers for major categories show clearly the consumer is still a value- oriented, budget-driven shopper. The largest increase was in Licensed Merchandise, attributed to pent-up demand and the consumer’s desire to identify their affiliation with their favorite team or sport. The Sports Apparel categories, where products often do double duty as casual or daily wear, and Fitness Equipment, where sales mirrored the continued strength of participation in fitness activities, showed solid increases. While Americans continue to play sports, a small increase in Equipment sales indicates consumers are purchasing new sports equipment at a slower pace.
Source: Bureau of Economic Analysis, U.S. Commerce Department
Presenter
Presentation Notes
Certainly, the slight upturn in the economy has helped increase sales in our industry. However, the sales performance of the sporting goods industry, measured against Gross Domestic Product (GDP), outpaced the increase in GDP for the first time since 2007. We believe this indicates the industry has aggressively marketed their products, and American consumers continue to embrace the sports and fitness lifestyle.
Source: SGMA Research powered by Sports Marketing Surveys
Presenter
Presentation Notes
Sixty percent of respondents to our survey indicated they believe they will need additional manufacturing capacity in 2011 and will increase production by an amazing 23%. Of those companies planning an increase in production facilities, 11.5% will use U.S.-based factories while 8% will use offshore facilities.
Source: SGMA Research powered by Sports Marketing Surveys
Presenter
Presentation Notes
As indicated by the State of the Industry Survey, respondents plan to aggressively increase marketing expenditures in 2011 over 2010 levels. This bodes well for industry growth in 2011, tempered by forecasts of consumer-borne cost increases in gas and food.
Source: SGMA Research powered by Sports Marketing Surveys. Will not add up to 100% as a result of multiple answers.
Presenter
Presentation Notes
The overall news is positive for the sporting goods industry. Even considering the uncertainties of the economy, our research tells us consumers continue to aspire to be involved in sports and plan to spend more money for sports and fitness activities and equipment in the coming year.
Category 2009 2010 Change (Actual)
Change (Projected
March 2010) Total Sports Equipment $20,098 $20,410 1.53% 3.10%
Total Exercise Equipment
$4,164 $4,344 4.14% 5.70%
Sports Apparel $28,168 $29,581 4.78% 2.25%
Athletic Footwear $12,267 $12,608 2.70% 2.25%
Licensed Merchandise $6,925 $7,292 5.03% 5.30%
Total Equipment, Apparel and Footwear
$71,622 $74,235 3.52% 3.72%
The Sports and Fitness Products Industry Rebounds
Source: SGMA Research powered by Sports Marketing Surveys
Presenter
Presentation Notes
Sales numbers in 2010 for all categories showed growth, led by licensed merchandise, sports apparel and exercise equipment. Athletic footwear and general sports equipment grew also, but not at the same rates as the other categories. None of the categories have achieved the levels they were at in 2007 and 2008. With the only exception being athletic footwear, none of the categories reached the sales projections made for the 2010 SOTI Report.
Sports Apparel 29,502 29,643 28,168 29,581 4.78% Athletic Footwear 12,952 12,370 12,268 12,608 2.70% Total Equipment, Apparel and Footwear***
68,419 66,987 64,844 67,065 3.31%
Manufacturers’ Sales of Sporting Goods, 2010 Millions of wholesale dollars, U.S. only
Source: SGMA Research powered by Sports Marketing Surveys
Presenter
Presentation Notes
* Optical includes sunglasses, goggles, binoculars and hunting scopes. ** Other includes accessories for categories not specifically listed, archery, electronics used for sports (gps, heart rate monitors), field hockey, firearms , fishing, games, rangefinders, scoring devices), scuba , sports videos/sports software, training devices, track and field, watches, wheel sports. *** Does not include licensed merchandise. Analysis of sales in 2010 show that categories with substantial growth had fallen the deepest in 2009, with the exception of Mixed Martial Arts, (MMA). MMA continues to show strong growth fueled by the popularity of the sport within the 18–34 year old demographic and continues to take market share from traditional combat sports including boxing.
Millions of Dollars – Wholesale, U.S. Only, By Category
Source All Charts: SGMA Research powered by Sports Marketing Surveys. All charts in millions of dollars
Millions of Dollars – Wholesale, U.S. Only, By Category
Source All Charts: SGMA Research powered by Sports Marketing Surveys. All charts in millions of dollars
Millions of Dollars – Wholesale, U.S. Only, By Category
Source All Charts: SGMA Research powered by Sports Marketing Surveys. All charts in millions of dollars
Millions of Dollars – Wholesale, U.S. Only, By Category
Source All Charts: SGMA Research powered by Sports Marketing Surveys. All charts in millions of dollars
Presenter
Presentation Notes
We have included Recreational Transport numbers indicating the consumer is looking at the RV market as a value proposition, which matches the overall sports and fitness buyer’s consumer attitude. Additional items in this group include watercraft, snowmobiles, bicycles and motorcycles
Source All Charts: SGMA Research powered by Sports Marketing Surveys. All charts in millions of dollars
Millions of Dollars – Wholesale, U.S. Only, By Category
Millions of Dollars – Wholesale, U.S. Only, By Category
Source: SGMA Research powered by Sports Marketing Surveys
Presenter
Presentation Notes
The 2010 World Cup stimulated licensed merchandise sales to some degree, although retail wide product shortages reduced overall sales and left a lot of pent-up demand. There is concern among retailers and vendors the upcoming Women’s World Cup will have no impact on product sales and might be negatively affected by an NFL and/or NBA lockout.
Source: SGMA’s 2011 State of the Industry Report
Presenter
Presentation Notes
Based on results from the 2010 Physical Activity Council Participation Survey we have a good view of the active consumer’s spending decisions in 2010. A total of 22% of active Americans had spent less on sports, fitness and recreation and a further 15% delayed spending.
Source: SGMA’s 2011 State of the Industry Report
Presenter
Presentation Notes
Based on results from the 2010 Physical Activity Council Participation Survey we have a good view of the active consumer’s spending decisions in 2010. A total of 22% of active Americans had spent less on sports, fitness and recreation and a further 15% delayed spending. In either scenario, the consumer spent less or did not spend money on sports equipment to a greater degree than any other activity related expenditure. Reduced spending may indicate consumers decided they could get another year out of their current equipment or would forego personal training or lessons. Hopefully, this indicates a pent-up demand for products and services. Interestingly, consumers indicated they also cut back more on “Pay To Play” activities than they did on “Memberships In Country Clubs or Health Clubs”. Does this mean consumers spent less on team sports, with “Pay To Play” than individual activities at country clubs and health clubs? Participation numbers would indicate this is not the case.
Reaching Profitability by Cutting Cost
Source: SGMA Research powered by Sports Marketing Surveys: Will not add up to 100% due to non answers.
Presenter
Presentation Notes
When reviewing the SOTI survey, the data indicated in 2010 management cut cost in some areas, which in some part lead to the increase in profits, while increasing spending in other key areas. Areas that bore cost reductions included advertising, sponsorships, player endorsements and personnel. The most interesting increases in 2010 were in new product development and distribution centers. This is consistant with the observation that the industry is driven by product innovation. Surprisingly, personnel spending decreased by only 1% on average.
Reaching Profitability by Cutting Cost
Source: SGMA Research powered by Sports Marketing Surveys: Will not add up to 100% due to non answers.
Presenter
Presentation Notes
Vendors are reporting aggressive planned increases in expenditures in 2011 for personnel, sponsorships, player endorsements, sales promotions, advertising, market research and new product development. In comparison to 2010, spending will slow down for new distribution centers, acquisitions and manufacturing capacity in 2011. All are indications the retrenching accomplished in 2010 is believed to be sufficient by management to support anticipated growth in 2011.
n/a = not asked in 2010 Source: SGMA Research powered by Sports Marketing Surveys
Presenter
Presentation Notes
Two new concerns, not asked in prior years, were reported in 2011, Emphasis on Product Quality and Integration of Related Businesses. With the consumer focus on the price/value relationship it is easy to understand the additional emphasis on product quality. When speaking with knowledgeable industry executives, the second new concern is Integration of Related Businesses, was harder to quantify. New businesses ranged from travel agencies, instructional academies, manufacturing facilities and lifestyle related activities. The concerns focused on the possibility the retailer would lose focus on their primary business.
Source: SGMA Research powered by Sports Marketing Surveys. Annual State of the Industry Survey
Presenter
Presentation Notes
There is mixed news in the raw materials market as cotton rose to $2.197 per pound on March 7, the highest in 140 years of trading in New York, after flooding in Australia and Pakistan plus freezes in China ruined crops. However, with farmers around the world planting more cotton to profit from high prices, cotton prices are expected to plunge 51% to $1 a pound by the end of 2011 according to a Bloomberg survey of 14 analysts and traders. This action may not help with products for the 2011 market but bodes well for the future. Manufacturing capacity remains a key point of emphasis in our conversations with industry executives. In an effort to reduce cost many offshore factories drastically reduced capacity during the recession.
Data as ranked by companies responding to the SGMA SOTI survey. “All Other” is all other countries not specified. Source: SGMA Research powered by Sports Marketing Surveys
Source: SGMA Research powered by Sports Marketing Surveys
Presenter
Presentation Notes
Sixty percent of respondents to our survey indicated they need additional manufacturing capacity in 2011 and will increase production by a substantial 23%. Interestingly, in a reverse trend, of those companies planning an increase in production facilities, 11.5% will use U.S. based factories while 8% will utilize offshore facilities. No one in this year’s survey reported plans to reduce production capacity.
Col
6-12 13-17 18-24 25-34
1 Swimming For Fitness
Working Out With Weights
Working Out With Weights
Working Out Using Machines
2 Bicycling Swimming For Fitness Swimming For Fitness Working Out With Weights
10 Working Out Using Machines Martial Arts Backpacking Backpacking
Ranking Of Most “Aspirational Activities” by Age Group
Source: SGMA Research powered by Sports Marketing Surveys
Presenter
Presentation Notes
In 2011, many consumers appear to want to put their money where their heart is and get back out there and get off the sidelines. While it is clear that consumers want to get out there, what they plan to do and how they plan to do it appears to be taking on a new trend and pattern. We feel optimistic, based on a variety of factors, listed below, we found in the 2010 participation numbers. Increased participation among a number of key sports and activities. An expressed desire to increase the amount of travel done for participation in favorite sports and recreational activities. Consumers having “aspirational activities” show a desire to participate in the coming year. An expressed desire to participate in favorite sports and recreational activities however, spending habits will change as result of the economic conditions. Niche sports continue to find new participants and look to continue their growth trends.
Col
35-44 45-54 55-64 65+
1 Working Out With Weights
Swimming For Fitness Bicycling Swimming For Fitness
2 Swimming For Fitness Bicycling Working Out Using Machines
Working Out Using Machines
3 Bicycling Working Out Using Machines Swimming For Fitness Bicycling
4 Working Out Using Machines
Working Out With Weights Hiking Camping
5 Hiking Camping Fitness Classes Working Out With Weights
6 Fitness Classes Hiking Working Out With Weights Hiking
Ranking Of Most “Aspirational Activities” by Age Group
Source: SGMA Research powered by Sports Marketing Surveys
Presenter
Presentation Notes
In 2011, many consumers appear to want to put their money where their heart is and get back out there and get off the sidelines. While it is clear that consumers want to get out there, what they plan to do and how they plan to do it appears to be taking on a new trend and pattern. We feel optimistic, based on a variety of factors, listed below, we found in the 2010 participation numbers. Increased participation among a number of key sports and activities. An expressed desire to increase the amount of travel done for participation in favorite sports and recreational activities. Consumers having “aspirational activities” show a desire to participate in the coming year. An expressed desire to participate in favorite sports and recreational activities however, spending habits will change as result of the economic conditions. Niche sports continue to find new participants and look to continue their growth trends.
Source: SGMA Research powered by Sports Marketing Surveys
Presenter
Presentation Notes
Thirty six percent of all inactives are under the age of 34. In the case of this chart, the shorter bar represents the more positive situation. So if we look at the 6-12’s and the 13-17’s, in both cases we see that the numbers of inactives in those two youngest age groups have grown from 2008 to 2010. There are now over 4 million inactives just between the ages of 6 and 12. Given all of the publicity we just can’t seem to get younger people to be more active.
Source: SGMA Research powered by Sports Marketing Surveys
Presenter
Presentation Notes
Inactivity rates, even using this broadest definition of activity, have increased over the last three years. The light blue line represents inactivity as a percentage of the population, the dark blue line is inactive participants in millions.
The Top 10 Demographic Market Areas (DMA) For Specific Types of Fitness Activities
Class Based Fitness Percentage Free Weight Training Percentage Salt Lake City 41.1% Salt Lake City 29.7% San Diego 34.3% San Diego 28.7% Kansas City 31.6% Austin 28.7% Austin 31.6% San Antonio 28.2%
Portland, OR 31.4% Raleigh-Durham (Fayetteville) 27.4%
Seattle-Tacoma 31.2% Dallas-Ft. Worth 27.3% Washington, DC 31.0% Washington, DC 27.2% Atlanta 30.8% St. Louis 26.0% Minneapolis-St. Paul 30.8% Pittsburgh 25.8% San Francisco-Oakland 30.7% Atlanta 25.6% Orlando-Daytona Beach 30.4% Columbus 25.2%
Cardio Machines Percentage None Percentage Austin 31.1% Norfolk-Portsmouth-Newport 73.5% Salt Lake City 30.9% Jacksonville 65.0% San Diego 30.9% Louisville 65.0% Raleigh-Durham (Fayetteville) 30.8% Greensboro-High Point-
Winston Salem 64.0%
Detroit 29.7% Baltimore 62.9% Dallas-Ft. Worth 29.1% Grand Rapids-Kalamazoo 62.0% St. Louis 28.3% Memphis 61.8% Columbus 28.2% Harrisburg-Lancaster 60.9% Kansas City 28.0% Tampa-St. Petersburg 60.5% Cincinnati 27.9% Wilkes Barre-Scranton 60.4% Phoenix (Prescott) 27.7% Milwaukee 60.0%
Source: SGMA Research powered by Sports Marketing Surveys
Presenter
Presentation Notes
The tables above show the Top 10 DMA’s for certain types of fitness activities and the Top 10 least active DMA’s for any type of fitness activity. There are correlations that can be drawn when comparing the demographic marketing areas. Areas which are warm, fair weather climates tend to have a higher percentage of participants in all activities, based on the active, outdoor lifestyle prevalent in these markets. Also, the more active markets tend to be more upscale, affluent markets.
Top 20 Sports With Most Growth Potential By 2015
Source: SGMA Research powered by Sports Marketing Surveys
Presenter
Presentation Notes
The methodology used in these 5 year projections of sports participation reflect a combination of multiple data sources. First we took the previous 4 year trend in participation for the respective sport and did a forward looking analysis based on the data. All of the data from the yearly participation study has been coded using the Geo-Demographic profiling system from Nielsen Claritas. Nielsen Claritas provided us with their five year projections based on the most current census data. By combining these two data sources, we are able to determine if a sport or activity will receive a push forward or a pull backwards when it comes to participation based on expected changes in the U.S. Population. We selected a few of the sports that we measure based on the available sample sizes. In addition, sports or activities with a small base of participants may show a larger percentage change simply based on the smaller numbers.
Source: SGMA Research powered by Sports Marketing Surveys
Presenter
Presentation Notes
As we have been reporting in the past two years, P.E. is the pathway to all the activities listed. For example, you are 3.3 times more likely to take part in team sports if you have P.E. than if you don’t have P.E. Outdoor activities, cycling, running/jogging plus all the activities listed above show similar increases in activity among those who have P.E. at school. Furthermore, the more frequently children have P.E. at school, they are even more likely to be active overall during their school years as well as other activities, and as an adult.
Source: SGMA Research powered by Sports Marketing Surveys
Presenter
Presentation Notes
Another of the key pathways to frequent sports participation is Casual play. While the days of heading to the playground are all but gone, parents and community leaders have to find ways to get kids away from their computer screens, TVs, video games and mobile devices and out playing sports. It is Casual sports participation that leads to school participation and that will only lead to more active adults later on in life. An analysis of growth/decline rates in terms of Core and Casual participants reveals increasing Casual participants goes hand in hand with increasing Core participants for the fastest growing sports. For the sports that are declining, the loss of Core participants is the main driver.
Source: SGMA Research powered by Sports Marketing Surveys
Presenter
Presentation Notes
For the top 25 fastest growing sports, Casual participation increased by 16% and Core participation by 8% for an overall growth of 12%. The bottom 25 sports by comparison, Casual participants declined by 3% while Core participants declined by 8%. The key messages learned from participation trends are that Core and Casual participants are critical to sports growth; increasing Casual participation will grow Core participation and retaining Core participants is critical to maintaining that growth.
Source: SGMA Research powered by Sports Marketing Surveys
Presenter
Presentation Notes
For additional detail on sports and fitness participation trends please see the SGMA Topline of Participation report for 2011.
Vendors Plan to Increase Athlete Endorsements and Sponsorships in 2011
Source: SGMA Research powered by Sports Marketing Surveys
Presenter
Presentation Notes
Interestingly, the top player endorsement ratings are equally split between team and individual sports participants and the Top 10 are all men. One has to go to the 13th ranking to find the first female sports endorser, Lindsey Vonn. The only other female athlete in the top twenty is Serena Williams at number 17.
Event 2009 2010 Change Olympic Games Winter 66.5% 67.2% 1.1% Olympic Games Summer 67.1% 65.1% -3.0% National Football League 60.6% 60.5% -0.2% College Football 52.5% 52.8% 0.6% Major League Baseball 53.0% 51.7% -2.5% College Basketball 41.3% 43.0% 4.1% National Basketball Assoc. 43.3% 42.2% -2.5% National Hockey League 34.6% 34.8% 0.6% NASCAR 33.2% 31.2% -6.0% PGA Tour 30.5% 30.8% 1.0% Women's Tennis 28.8% 28.4% -1.4% College Baseball 26.6% 27.5% 3.4% X Games 26.9% 26.5% -1.5% International Soccer 23.5% 26.4% 12.3% Men's Tennis 27.3% 26.3% -3.7% Major League Soccer 23.9% 25.0% 4.6% Pro Boxing n/a 24.5% n/a Women’s NBA 22.5% 23.3% 3.6% Ultimate Fighting UFC 22.7% 21.5% -5.3% LPGA 21.1% 21.3% 0.9% WWE 19.2% 19.1% -0.5%
Fan Preferences for an Event Or League 2009/2010
Source: SGMA Research powered by Sports Marketing Surveys
Presenter
Presentation Notes
The table data represents those in the U.S. population that rate themselves as fans of a particular league or activity at the “little, somewhat or very” levels of interest. The change column indicates the change in ranking from 2009 to 2010
SFIA Research, powered by Sports Marketing Surveys is the sole provider of marketing research and analysis for the Sports and Fitness Industry Association (SFIA). This partnership places SMS at the forefront when it comes to marketing research for all things sport, sports participation and current trends in sports. Sports Marketing Surveys USA has been in business since 1985, providing qualitative marketing research and information for many of the leading manufacturers and retailers in the sports products industry.
Sports and Fitness Industry Association (SFIA) SFIA Research/ Sports Marketing Surveys 8505 Fenton Street, Suite 221 6650 West Indiantown Road, Suite 220 Silver Spring, MD 20910 Jupiter, FL 33458 P: 301.495.6321 P: 561.427.0647 F: 301.495.6322 F: 561.427.0648 E: [email protected] E: [email protected] www.sfia.org www.sfia.org
