Online marketplaces offer access to endless search options where consumers and sellers can benefit from a number of advantages over the traditional retail market.
In the field of sporting goods the main evolution has mainly concerned on direct sales to the consumer (B2C).
This does not change the fact that manufacturers and distributors have also been able to take advantage offered by these digital platforms that have allowed the meeting between supply and demand and simplified the transactional aspects even for transactions of significant volumes (for example, the supply of customized clothing to sports clubs, especially in team sports, or the provision of equipment to public and private bodies operating in tourism).
The increase in online sales of sports sector has been favored by several factors, both on the supply side and on the demand side.
First of all, consumer behaviour and habits are constantly evolving towards informed but increasingly efficient and less time-consuming shopping methods.
In addition, sellers have made increasing investments both in technology and logistics, to achieve a more direct sale to the final consumer. These investments have concerned both their corporate website and the opening towards the marketplaces, which are confirmed as the way to obtain the best results in terms of the relationship between fixed costs and sales volumes.
The advantages offered by online channels in the sale of sports goods
The distribution of sporting goods on online marketplaces has many advantages for consumers, including:
- The breadth of the selection. The absence of constraints typical of the physical market allows you to have virtual and infinite shelves, in which professionals can find exactly what is right for them.
- The ability to compare different price opportunities, either between two products within the same showcase or between similar products offered by different sellers or to consider buying a product on a marketplace.
- Reviews left by consumers who have already purchased, received and tested the product in question, to take advantage of the social proof.
- The purchase advice that artificial intelligence is able to provide thanks to the analysis of the behavior’s buyer compared to other online users.
- Accessibility geographically and in time. The online shops are open 24/7 and it can be reached regardless of the geographical location from which the search is made.
Among the main benefits for sellers, the following aspects stand out:
- Ability to reach customers at any latitude, thanks to the absence of geographical constraints.
- The optimization of costs, since the online sale involves mainly variable costs and on average lower than physical channel.
- Opportunities to have visibility that would not be achievable in the offline market, thanks to content investments that also allow select brands to make their products appear alongside those of market leaders.
- Take advantage of the collection of countless data about consumer preferences and behavior, through the analysis of online traffic and conversions in purchase.
The opportunities for sales and communication for Sport brands offered by digital
It is important to see how the marketplaces have evolved to become ideal spaces for the sale of sports products, from the simplest to the most technically complex. The sale of clothing presents the need to choose the correct size, which for technical sportswear is even more important. This is the case with footwear.
All marketplace platforms now allow to integrate descriptions with cards containing curves sizes, allowing consumers to make correct choices and minimize the rate of return.
For product lines such as sports footwear and equipment, it becomes essential to insert multimedia content that allows to highlight in greater detail the technical characteristics of the product. This allows customers to make targeted decisions based on their needs and, on the other hand, manufacturers to better communicate the distinctive features of their brand compared to the competition.
Amazon has implemented a relevant tool, namely the possibility of creating a Brand Store in which to insert descriptive and photographic content, videos and fact sheets on the technical aspects of products that also allow to better convey the communication of the brand in accordance with its positioning and commercial strategy.
The distribution chain: evolution and opportunities
Thanks to these aspects, it is easy to see how traditional players in the field of sports products have adapted their distribution strategies, driven by the need to cope with increasing competition from online channels. Many of them have adopted a multi-channel approach, combining the new benefits of the online to the ability for consumers to try and wear products in physical stores, especially important for clothing or sports footwear.
In racquet sports, for example, where the tastes and needs of athletes are more specific, it is also essential to test the products before buying them, especially if the average ticket is high.
Several actors, who born offline and implemented successful digital distribution strategies, have even created their own marketplaces, through which to dramatically increase the breadth of the proposed selection and realize omnichannel and seamless strategies.
This has also allowed these shops, whose offer was mainly focused on their own brand, to expand their business by distributing third-party brands of the main market leaders. This evolution has the double effect of increasing the sales and also the traffic in entrance with consequent loyalty of the customers.
The sports marketplace market in Europe
In the current European market sees a progressive increase of vertical platforms dedicated to Sport and Outdoor.
Alongside the giants such as Amazon, Zalando (more performing on life-style sportswear), Kaufland and Bol.com (the most active in Netherlands), we see platforms with vertical and multi-category focus as French Cdiscount and Alltricks, that in 2022 has increased by 50% the breadth of its offer thanks to the inclusion of a section for sports products “Second Life”.
Among the players who have achieved a very successful digital transition and who have developed their own markeplace in which to sell the products of third-party brands, the most significant example is certainly Decathlon.
The global leader in the field of sports has opened its marketplace in more than 14 countries in Asia and Europe, thanks to over a thousand partners sellers for a total of over 400 thousand products available in the showcase. A key aspect of this strategy has been the possibility to activate collaborations with both international and local brands, in order to offer locally a range of customized products in line with the demand of each country.
Given the large number of channels and the complexity of managing direct sales to a variety of countries, it becomes crucial for sports companies to have dedicated teams to manage the digital business with a targeted focus. The need to operate in compliance with the requirements of all these platforms, to manage catalogues and order management in the languages of the countries of destination of the goods, to manage relations with multiple points of contact, makes it convenient to rely on business partners with a proven track record in online sales, but especially with the technologies needed to simplify this complexity and streamline processes.
The latest sales trends in the sports goods market
Online sales have characterised sales trends even more during the period of the pandemic, the effects of which have also changed in the long term the way consumers shop and have led to a strong approach to the world of sport, both with regard to the disciplines that are practiced in the open air, and for home training.
The outdoor world has been the sector that has benefited most from this effect, together with cycling and running. But the rediscovery of outdoor activities has also affected the world of water sports favoring a real surge in the sale of products such as SUP (Stand Up Paddle) and Kayak.
At the same time, there was a boom in sales in the fitness sector, driven by the search for accessories for home training and the disciplines that can be practiced within the home (yoga, free body gymnastics, weightlifting).
In the graph below we can see that, especially in the outdoor category in the US market, the increase in volumes was driven by clothing and accessories, accomplice the fact that these compartments also have a replacement rate higher than footwear and equipment, characterized by long-term use.
Online has been an essential driver of growth during the pandemic, allowing sellers to compensate for the inevitable loss of revenue in the physical sector with the growth of digital sales.
However, the pandemic has also meant growing challenges for producers and distributors, which have led to a sharp increase in the prices of raw materials and transport, resulting in higher price lists and reduced profitability.
At this time, the growth in online volume, which involves variable costs and on average lower, has partly mitigated the loss of profit and pushed more companies that had anticipated the digital transition.
In the chart below we have some examples that show for some of the leading companies of sports products, how the component of online sales has recently contributed to the growth of the business share made with direct sales to final customers.
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Edited by Marco Gaggero
Category Manager, BrandOn Group