STATE OF THE INDUSTRY
Outdoor Biz Looks to the Future, Which Should Happen Before Dinner
By Bill Schneider, 4-24-06
| |
 |
| |
|
|
Like so many segments of our economy, the outdoor biz has become all about boomers and soft goods and driven by the Internet. At least that’s some of the intriguing information I gleaned from the 2006 State of the Industry report from the Outdoor Industry Association.
All in all, times are reasonably good for outdoor retailers and manufacturers. At least two-thirds of us do “outdoor activities,” and sales went up 8 percent in 2004 (last year with full results), outpacing overall U.S. retail gains, “as more and more Americans embraced the active outdoor lifestyle,” the report boasts.
“Outdoor recreation occupies an enviable position at a unique time in American history,” the report states. “It offers the solution to problems of obesity and inactivity, and it’s beginning to receive recognition as a major contributor to America’s economic vitality.”
Such reports traditionally strive to put a smiley face on any situation, but there are clearly some promising trends in the outdoor product biz. Here are a few tidbits from the report:
The largest markets are Baby Boomers (born 1946-1964) and what’s now called “Millenials,” which are young folks (born after 1978) and just coming into the marketplace looking for a mini-Espresso maker for their next backpacking trip. Boomers buy equipment to enjoy the solace and silence of a remote mountain lake. Millenials buy equipment to jump out of airplanes on surfboards with a Mountain Dew in each hand. And both spend a lot of money on outdoor gear and apparel. The report didn’t speculate why the so-called Generation X (between these two groups) didn’t buy as much outdoor stuff.
Outdoor recreation is trending away from backcountry activities to “frontcountry” areas. The term, frontcountry, originally coined by federal agencies, has now been picked up by the outdoor industry to mean areas close to home where busy people can enjoy outdoor activities after work and before dinner, such as three of fastest growing activities--snowshoeing, canoeing and trail running.
The report cites tent sales to reinforce the trend to more accessible outdoor recreation. Large tents used for car camping and family excursions top sales of lightweight backpacking tents, which have actually declined in sales for the past three years.
Like most industries, the outdoor biz is deep into the transition to a box store mentality. Already, most people buy outdoor gear in chain stores such REI, Cabelas, Eastern Mountain Sports and Sportsman Warehouse. Chain stores far outpace ($3.9 billion in sales) smaller specialty retailers ($2.2 billion). Interestingly, though, online outdoor retailers and catalogers chalked up almost as many sales ($2.1 billion), so like most industries, the Internet is rapidly changing the outdoor biz. In fact, the OIA report suggests online sales are posed to “take off” and predicts 20+ percent growth for the next several years.
The outdoor industry has been growing steadily for the past three years after a fairly serious dip in sales in 2001, primarily attributed to the terrorism attacks. The industry also enjoyed good growth from 1997 to 2001.
Most outdoor dollars went to buy bicycling equipment ($5.5 billion) with fishing a close second ($5.4 billion).
Apparel dominates sales with 44 percent of all outdoor equipment sales. Make that 57 percent if you include footwear. With outdoor gear sales essentially flat for the past three years, apparel sales contribute to almost all of the industry’s growth.
The top choices for outdoor fun are, listed in order of popularity: bicycling, fishing, trail running, hiking, camping and paddling.
Earthy tone colors for apparel and gear continue to gain in popularity compared to bright colors.
Snow sports participants spend more annually on their outdoor activities than, listed in declining percentage, camping, bicycling, trail sports and water sports.
A growing body of science suggests that kids engaged in “nature play” thrive in ways their inactive peers don’t such as having advanced coordination and agility and being sick less often.
Industry leaders quoted in the report see “an urgent need” for policy makers to protect wild places and backcountry destinations “to ensure there are places to play and a long-term vibrant recreation economy.”
OIA expects “morphing” of multiple outdoor activities into one, such as hiking to a backcountry campsite and doing yoga and pilates. Ditto for combining kayaking and sport fishing.
“The outdoor industry is no longer about escape,” the report concludes, “at least not in the sense that it was 20 years ago. Instead, it’s an integral part of a healthy life—something more and more people realize they need.”
Footnote: The full report is only available to OIA members and the media, but you can read a summary on the OIA website.
Like this story? Get more! Sign up for our free newsletters.
Comments
For example, Columbia just purchsed Mountain Hardwear a couple years ago and a few weeks ago Purchased Moonstone for something like 20 million, only to shut down operations as of Fall 2006. It seemed like a lot of money to waste just to drive a fork into the competition of the market.
thanks for the chance to comment, keep up the good writing!
T Frank