The Truth about the Outdoor- and Sports industry


There exists an astounding similarity between established political parties and the sports and outdoor industry. It seems as if neither understands certain developments in our societies, resulting in actions (and inaction) that gradually push them towards irrelevance. At this point, we feel, a solution may only be possible if we admit to some hard truths.


Young people are interested in more than short-lived trends—digital or otherwise

Just weeks after the recent European Parliament elections it became obvious that something akin to awakening is taking place in our societies. People of all ages, but especially very young people, took to the streets and stood up against the mealy-mouthed indifference exhibited by mainstream political parties. The feeling that the political sphere is not acting in the interest of younger generations is culminating in the "Fridays for Future" movement—an outcry that swiftly transcended national borders. Meanwhile, mainstream politics reacted with a mixture of surprise and perplexity. Mostly because nobody really believed that Millennials were interested in anything more than their own Instagram feeds.  

So, what happened? After all, mainstream political parties were convinced to have done their bit to rope in the younger generations by offering town-hall forums on social media, YouTube channels, and ironic campaign messaging in crazy colors. Conventional wisdom had it, that this should have been enough to keep suspending younger people in a kind of political hibernation. Fat chance! The younger generations are making a stand. They are fighting back, demanding truthfulness, honesty, and integrity from politicians.   


The sports and outdoor industries face a similar dilemma

For almost ten years now, we in the sports and outdoor industry are carrying on with a debate about impending changes triggered by the advent of the millennial generation as a consumer group. We are talking about growing spending power and novel digital habits, about their impact on sales and marketing concepts. All the while, we try and come to grips with the new reality of selling weather-proof products in the age of climate change. Sadly, industry analysis treats these phenomena as mere passing trends or effects that lie far in the future, shying away from realizing hard truths: we are right in the middle of a social, economic and ecological upheaval.  

It appears, "old white men"—to borrow an epithet from current political discourse - are not only still reigning supreme in the political sphere, but apparently also in the sporting goods and outdoor industries. Their answers to the demands made by younger generations are quite similar to the outdated arguments of politicians. For example, decision-makers have still not realized that millennial enthusiasm for outdoor products stems less from a desire to be fashionable but is a direct outcome of changed values. Young ideas and alternative ways of life are seen as mere disturbances in a world that, by and large, is working just fine. A profound lack of understanding declares everything that is young and new to be a passing fad, a fashion, or novelty of no consequence. Brands and products are tweaked and optimized, but the spirit and attitude of companies remain the same. One almost gets the feeling that decision-makers would love to go back in time, back to when everything was clear-cut and easy to read. It is precisely this longing for the past, the backward and closed sentimentalities that younger generations are beginning to turn away from.  .  


Reality check

For the most part, today’s reality for brand name companies and retailers looks like this: sales numbers are dwindling, inventory overflows have become the norm, pre-order numbers are decreasing, store visitors ditto. There is also more costly bargaining between manufacturers, distributors, and retailers, while brick-and-mortar and online sales cannibalize each other. The industry lacks coalescence, comprehensive concepts and — most of all — the courage to face up to the truth that change on a grand scale is already happening.


Sustainability strategies are all the rage

Never before as in the past few years, our industry talked and wrote so much about “sustainability”. To name but two examples: the EOG (European Outdoor Group) initiated the “Sustainability Charter”, while the media brought a trove of sustainability rankings into being that supposedly monitor industry players. However, most of these alliances, coalitions, and rankings are utter nonsense, lacking expertise and resources to define meaningful standards for sustainable strategies with which useful rankings and ratings may be instituted. And what’s more, many of these bodies lack genuine sincerity when it comes to the subject; in truth, they are not much more than toothless appeals for entirely voluntary action. So, the question is, how can meaningful change ever take place, if we do not drive towards it with all-out intensity? How can the sports- and outdoor industry earnestly sail under the colors of sustainability if business models remain adamantly growth-centric? Why is there no sincere focus on the subject, and why is there no real effort as to consumer education? This simply cannot work, because, in the end, growth and expansion mean only this: demand for more resources, more products that need to be manufactured, more packaging, more shipping, and, of course, more waste. In short, strategies that only address sustainability in a limited industry context are doomed to fail if the concept of growth is not substituted by more socially and ecologically responsible concepts (i.e. reconstruction of ecosystems, creation of participative opportunities, etc.). So, what are we to do?


The age of the honest brand is upon us

Speaking truthfully about one’s own position in the industry as well as in the grand scheme of things will become a model for achieving success. For some this may sound amusing; others might find it downright threatening. But we predict, already over the next few years honesty and sincerity will positively become game-changers. Millennials, as well as Generation Z, are not only maturing into having the most spending power ($ 200 billion in the US alone) but also bring with them an entirely new set of values that will have a great impact on businesses. A recent piece in Forbes Magazine, written in collaboration with Label Insight Research, a market researcher, states: „Millennials will only interact with brands that are open and transparent, stand for more than their bottom line, and address environmental and socioeconomic issues in the community.” (1) It follows that brands who are honest about their self-given values, their mission, and vision, and who are coupling their business models with social and ecological transformation (and stringently act on this) will win the trust of these generations. On the other hand, brands that only pay lip service to these values will keep losing trust and will end up in irrelevan


Outlook

The sports- and outdoor industries will have to face up to substantial changes, otherwise, the current state of things will only worsen. Ideas like the “mega season”, meaning an annual creation of comprehensive collections and then branching off into micro collections instead of the full two-season model, should be expanded on. It would be much closer to actual customer needs, simply by incorporating every form of use (attributes) and deployment (functionality) for an entire year (or: cycle) and not having to replace the entire inventory twice each year. However, this would only work if retailers and manufacturers collaborate on a new level. It would require great powers of innovation from brands, who’d have to come up with new and long-living and versatile product lines. It would also require flexibility and credibility on the part of retailers, to whom falls the task of presenting these innovative collections with new ideas and concepts on the sales floor. To this end, logistics would need to be re-aligned so that the customer always has access to products for every given weather condition or changing trends. The current war of attrition for sheer survival would need to be ended, otherwise manufacturers and retailers simply face the collapse of their business models — the fate companies like Sears, Macy’s and Poler have suffered may serve as a warning here. But most of all, the industry would need to develop new business models that veer away from single-minded growth models towards integrated, socially responsible, and ecologically aware concepts. The Benefit Corporation movement and its partners (e.g. Patagonia) are leading the way here. In order to effect meaningful and lasting changes, younger generations should be enabled to input and co-create on a new level. Incidentally, the same goes for politics…  

The current median age of executives in Germany is 51 years and older / United States is 58 years and older. (2) Companies that understand the zeitgeist, and sincerely intend to act on this understanding, are well-advised to place more responsibility in the hands of decidedly younger people. The weltanschauung and values of the older and younger generations differ radically, and the pace of global transformation is extremely rapid. Manufacturers and retailers need to hurry up with understanding what drives the markets of the future.  


(1) Quote Forbes 2018/11/15
 

(2) Statista 2018/10/30: Average Managers Age / Bloomberg: Average Manager Age USA