SECTOR FOCUS Sports sector key players and performance
SECTOR FOCUS Sports sector key players and performance: The market for sporting goods in Europe is serviced by a diverse group of online and omnichannel retailers, and every country in the region has at least one significant retailer that is ranked among the Top 100.
For instance, Germany possesses a number of players who are currently ranked. This is a decent indication of the size of the market in Germany for goods and equipment related to sports and the outdoors.
It is also due to the fact that customers from other countries in Europe, particularly those that are close by, like Switzerland, Austria, Poland, and the Czech Republic, are patronizing these various businesses, which is helping to keep them in business.
The United Kingdom, on the other hand, only has one company in the top 20, and that company is Sports Direct. This is because the UK has a robust internal 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 the sportswear giants Nike and Adidas, internationally through all of these other retailers as well as in branded stores everywhere.
The fact that each of these Top 20 merchants also sells a very extensive variety of garments, footwear, and equipment for fashion, outdoor activities, and leisure is another distinguishing feature of these stores.
According to the chart located on page XX, practically all of them participate in sales across all of these categories, in addition to selling associated equipment. Some also sell bicycles and other types of non-motorized vehicles that are utilized for sports and leisure activities.
The market for sporting goods is distinguished in another way by the presence of a section of customers who are strongly ingrained in the practice of purchasing specific and specialized things.
This would seem to indicate that there is a market for more specialized, boutique-style stores that sell sporting items. The reality is that the market is controlled by giant multi-segment merchants that are able to combine the purchasing power of a large organization with the ability to offer specialized item segmentation both in-store and online.
Performance
Figure 1 (on the left) depicts the average global revenue of the 10 major European retailers of sporting goods, and Figure 2 (on the right) depicts the European web traffic to the 12 largest European retailers of sporting goods.
RetailX took a look at the top 10 retailers in terms of traffic and averaged their revenues and traffic over the course of the last four years for revenue and over the course of the last five years for traffic in order to get an idea of how well the European sports goods sector is doing.
In terms of revenue, the industry is projected to see a period of slower growth between the years 2018 and 2021. As was previously said, the pandemic caused a decrease in revenue in 2020, which continued until 2021, when it was followed by an increase that brought it back up to 2019’s levels (see Figure 1).
This seemingly slow turnaround hides the reality that the business has suffered pandemic challenges that other retail sectors have not endured. It is more dependent on social mingling and physical places, both of which were discontinued in 2020 and only saw occasional returns in 2021.
The market for sporting products is highly dependent on these factors. Instead, the industry has had to pivot toward marketing athleisurewear as well as sports and leisure wear designed for a wider variety of activities in order to generate growth. Keeping this information in mind, the increase in revenue for the industry appears to be very outstanding, and it is anticipated to continue to improve beyond the year 2022.
Statistics
The traffic statistics bear this out (see Figure 2). Between 2017 and 2019, online sales across the industry experienced a fluctuating trend, which was driven by consumers’ preference to make in-store purchases of performance sports items and equipment.
As a consequence of this, the considerable decline in traffic in 2020 demonstrates that the shift to online shopping that was observed in other industries during the lockdown occurred in a significantly less significant manner in the field of sports goods.
Despite this, traffic continued to decrease throughout the year 2021. This points to a return to traditional retail among a significant portion of consumers interested in performance sports goods.
It’s also possible that this is an indication that many of the people who were shopping for athleisurewear and sportswear for non-sporting purposes had returned to work and were wearing more formal attire, which led to a decrease in the quantity of online shopping done in the sports sector.
Given that the market is flooded with large retailers selling across all segments of the industry, it is likely that going forward, the competition on price, delivery, and sustainability is only going to intensify.
This is because the market is saturated with large retailers selling across all segments of the industry. This could lead to a concentration of the market, or it could result in merchants expanding into new product categories, possibly focusing more on health and wellness, nutrition, and digital health gadgets.