Major retailers, such as Target, Office Depot and Home Depot, report strong sales in green goods through the recession and studies indicate consumers’ commitment to buying environmentally friendly products has not fallen off.
Yet even as green product sales continue to thrive, industry insiders say, retailers need to tweak their message to emphasize quality and value in addition to the environmental attributes.
“The challenge is promoting the efficacy and innovation of the product, as well as the sustainable elements,” says Neil Stern, senior partner with retail consulting firm McMillanDoolittle in Chicago and author of “Greentailing and Other Revolutions in Retail.” “The message has got to be about value.”
That consumers are continuing to buy items offering a combination of quality and green characteristics bodes well for retailers who've invested time, money and inventory in private label green brands and other green product lines. The 2008 Good Purpose survey from public relations firm Edelman overwhelmingly shows that buyers plan to remain loyal to products that they perceive to have strong social value.
According to survey results, 68 percent of consumers say that even in a recession they would remain faithful to a brand if it supports a good cause; nearly seven in 10 would be prepared to pay more for eco-friendly products.
The results don’t surprise Ron Jarvis, vice president of environmental innovation for Atlanta-based Home Depot. While sales are down overall at Home Depot, its Eco Options label of energy efficient products are outperforming conventional merchandise sales across the board. “We are seeing continued interest in socially conscious products in our stores,” he says. “American consumers still want choices that have less of an impact on the environment.”
Jarvis points out that Home Depot sells non-luxury items that people need to buy, regardless of the economy, which gives the company and its green brand an edge.
“We aren’t selling designer luggage made from recycled material, these home essentials that people need.”
He notes that energy-saving products in particular, such as compact florescent light bulbs, are doing extremely well because they have such an obvious long-term financial and environmental benefit. “Customers may pay a little more up front but they see the payoff down the line,” he says.
Despite this strength, Home Depot is tweaking the marketing message -- and price points -- of its green products. The company has launched a price reduction program across the store, lowering prices on thousands of products to make them more affordable to struggling consumers. The Eco Options line is no exception.
Selling Green Products in Trying Times
Be consistent.
Communicate information about your green offerings across all media, including the website, advertising, catalogs and store shelves.
Show the value.
Consumers won’t buy low-quality products just because they have green attributes. You have to show that they perform as well or better than non-green competitors, ideally at a similar price point.
Make them easy to find.
The days of green products aisles and separate sections for green options in catalogs are over. Green products should be stocked side by side with similar non-green offerings so buyers can make comparisons and purchasing decisions on the spot.
Understand why customers are buying green products.
For many businesses, green choices are made to support certifications and regulations. If you can help them quickly identify products that meet their needs, you are more likely to make the sale.
“Our advertising message is that these products are great for the environment with new lower price,” Jarvis says. The company is also focusing on "opening price points," which spotlight the lowest priced items in a category.
“Consumers are looking for green products that they can afford,” he says. “Focusing on opening price points in our advertising shows them that they don’t have to spend any more than they would on conventional products to buy green.”
This kind of dual message is critical for marketing green products in a down economy, says Stern of McMillanDoolittle. He notes that those retailers who got involved in green branding early on, such as Home Depot, Target and Office Depot, are doing a better job of balancing the environmental message with quality and price.
Communicating the value statement is a key component of successful green marketing, agrees Anne Rodgers, spokesperson for Target in Minneapolis.
“Our focus has always been on value, giving consumers affordable options that enable them to live and work in eco-friendly ways,” she says. “That’s a consistent message for us, whether it’s a good economy or bad.”
Rodgers notes that along with pricing green products to be competitive with other product lines, the company stocks green items, such as its bamboo and organic cotton sheets, next to conventional ones so that consumers can make side-by-side feature and price comparisons.
The company also clearly states the environmental attributes on its packaging and signage to educate consumers about their choices.
“You have to offer an assortment of solutions at different price points so consumers can find multiple ways to be eco-friendly,” she says.
The Green Supply Cabinet
That combination of communication and education is critical to successfully positioning green product lines and establishing the corporate brand as an environmental leader, notes Stern.
“Communication is key,” Stern says. “You have to communicate what you are doing and what the value is to the buyer. And you have to do it consistently across all channels of communication, from the website and advertising down to the store shelves.”
Office Depot offers a vast array of products with environmentally friendly elements, from recycled paper and low toxicity cleaners, to a complete line of private label green brands that can outfit an office from top to bottom. The company’s message and selection is consistent regardless of the economy, which customers have come to rely on, according to Yalmaz Siddiqui, the company’s director of environmental strategy. As a result, the company reports sales of products from its green catalog continue to grow.
“In a tough economy our clients are still looking for environmentally sustainable products that perform, and they know they can find a tremendous range of green items that are price competitive,” he says.
When it comes to product messaging for green products, price and performance are equally as important as the environmental qualities, agrees Stern. “The challenge in promoting green products today is proving their efficacy,” he says. “Consumers want to know if they will work as well as other products.”
Part of Office Depot’s approach to selling green products is recognizing that every buyer has a different idea of the definition. The company focuses its green marketing message primarily on its business customers who are often seeking specific criteria to meet certification requirements or corporate goals. It offers them a choice of 4,300 different products that feature green attributes, such as environmentally preferable furniture, technology, lighting, dishware, cleaning products and printer cartridges.
A core part of its communication strategy is its annual Green Book catalog, which this year features an entire supply cabinet outfitted with green products, along with educational content to help buyers learn more about greening their office in a cost effective manner.
The company works with customers to identify products that meet specific environmental goals or certification requirements, such as federal government mandates to purchase a certain percentage of recycled materials, or LEED specifications for non-toxic products. Once they know what the client needs to accomplish these goals, they help them choose products that best meet those criteria at the desired price point.
Office Depot also help buyers choose products that
can strengthen their purchasing processes while still maintaining cost criteria, such as buying in bulk to improve their environmentally standing.
“Being aware of why our clients purchase green helps us help them identify solutions,” Siddiqui says. This is especially helpful for products that may not otherwise clearly communicate their green value, such as office furniture that features low volatile organic compounds (VOC) in its design, which is a key component for LEED certification.
“We reach out to our suppliers to learn about those attributes then we communicate them to our customers,” he says.
To help customers register their green purchases for LEED certification purposes, and to add further value to working with Office Depot, the company now offers a purchase-tracking tool that records green product purchases in a format that mimics LEED certification documentation requirements.
“It converts their historic spend to the exact template used by the U.S. Green Building Council (USGBC),” Siddiqui says. “It dramatically simplifies the paperwork for buyers because they don’t have to do it themselves.”
Office Depot also publicly honors those who make the biggest effort to buy green products through its annual Green Customer Award ceremony. This year the awards were presented during the USGBC Greenbuild International Conference & Expo to six customers, including law firm DLA Piper, Edelman public relations agency, and New Balance Athletic Shoe Inc.
“The rationale for these awards is partly to recognize customers for green purchasing, and partly to show that we are a seller of green products,” Siddiqui says, noting that at the recent awards ceremony several customers approached him to say they wanted to be on that podium next year – particularly if their competitors were winners. “It’s good recognition for individuals, and it’s an encouragement to other customers to make that transition.”
Whatever green products a company is offering, the message has to be consistent across all methods of communication, and product offerings have to support customer interests in cost, quality and environmental attributes.
“Whether the economy gets worse or better these products are not going away,” says Home Depot’s Jarvis. “Those retailers that carry green products through the hard times will establish themselves as the companies that care about the environment, and consumers will remember that.”
Sarah Fister Gale is a freelance writer based in Chicago.
Showing posts with label sustainable clothing. Show all posts
Showing posts with label sustainable clothing. Show all posts
Monday, March 2, 2009
Friday, December 5, 2008
NPD Holiday 2008 Survey Results Say All Signs Point to Flat to Declining Sales
The NPD Group, Inc., a leading market research company, released the results of its annual survey of consumers’ holiday spending intentions. This year 26% of consumers surveyed told NPD they plan to spend less. In the 2007 survey results, only 18% said they planned to spend less. “This 8% decline illustrates that consumers are already focused on the idea of spending less,” said Marshal Cohen, chief industry analyst, The NPD Group, Inc.
2008 2007 Plan to Spend More 11% 11% Plan to Spend About The Same 63% 70% Plan to Spend Less 26% 18%
"For the first time I am predicting flat to declining sales for the holiday season,” stated Cohen. “With consumers already saying they plan to spend less, stores with lean inventories, those inventories on sale as soon as they hit the floor, and tightening credit both for businesses and consumers, where can growth come from?”
The recent turmoil in the financial markets and the meltdown in the credit sector seem to have had an impact on consumers as they look to pull back on their credit card spending. The number of consumers who tell NPD they will "spend on credit" this year is down 2%. “Consumers will be keeping careful watch on their credit card spending this season,” stated Cohen, “I think many will refrain from purchasing an indulgence or splurge gift, and for the first time in years, may actually cut people from their shopping lists.”
With no “must-have” gift, what will drive consumers into stores this holiday? Sixty percent of consumers surveyed say that either a “special sale price” or “overall value for the price” will influence where they shop this holiday. “Last year we saw GPS systems used by stores as ‘Door-buster’ specials. Where is this holiday’s GPS?” asks Cohen, “So far nothing has surfaced, and in short-order if nothing does, it will be too late.”
The good news is that consumers will still be buying gifts this holiday season. Again this year consumers say Apparel will be the most often gifted item, followed by Toys.
1 Apparel 49% 2 Toys 37% 3 Movies (VHS, DVD) 29% 4 Books 27% 5 Electronics
(TVs, Home Theater Systems/DVD Players/Recorders, Home Audio Products, Satellite Radio, GPS Systems, Cell Phones, Desktop/Laptop Computers, Computer Peripherals, Digital & Video Cameras, MP3 Players) 23% 6 Video Games 22% 7 Accessories
(Bags, Small Personal Accessories, Watches)20% 8 Music 20% 9 Food 17% 10 Fragrances 17%
One cautionary note Cohen sounds, "The Apparel industry is not doing enough to keep their products front and center for consumers. This is the least technically advanced industry these days, add in a lack of color and style changes, and there truly is no excitement being generated, nothing to ignite consumers’ passion. Apparel will be hard pressed to keep its number one ranking as most often given gift.”
There are two items that could emerge as this season’s bright spots. They are Televisions and Sunglasses. This was the last full year for analog TV reception, and NPD research shows consumers may be looking to purchase new digital sets. “With prices at all time lows and not all wanting to deal with signal conversion boxes, we could see some good news here,” said Cohen. The sleeper category for growth this year is Sunglasses. “The younger market is all over them and the bigger the logo the better. They are the most sought after item by young adults and will surely be their most desired gift. Sunglasses will be this year’s handbag,” predicted Cohen.
Current holiday study results indicate that gift cards are not yet “top-of-mind” with consumers. Thirty-eight percent of survey respondents state they will buy a gift card this year; 49% said they purchased one last year. “Keep in mind many consumers don't go out with the intention of getting a gift card but will likely do so when they can’t find an appropriate or affordable gift. And don’t forget those post-holiday promotions. The markdowns could almost double the value of a gift card,” stated Cohen.
Friday, November 28, 2008
Tuesday, November 25, 2008
Did you hear?...Flexible, proactive attitude can keep retailers healthy in down economy
In an article published Nov. 19 in The (Nevada County) Union, a small daily newspaper in Northern California, titled, "Local experts believe downturn has bright spots,"
Craig McGovern, owner of a local arts, crafts and frame store in Grass Valley called Ben Franklin spoke about his success even in recessions.
Ben Franklin has been in business for 35 years and has weathered, by McGovern's count, at least five recessions. How? By being proactive, he said, and by having the flexibility to accept new ideas and try new things.
McGovern recounted how one of his sons came to him with an idea to have the store imprint its name on recycled, reusable shopping bags for customers to take home.
Then, every Wednesday, the store would offer customers 20 percent off everything they could fit into he bags when they brought the bags back into the store.
He admitted being very lukewarm to the idea at first, but said he was willing to try it. The idea not only worked, but it has been so successful the program remains in effect.
Craig McGovern, owner of a local arts, crafts and frame store in Grass Valley called Ben Franklin spoke about his success even in recessions.
Ben Franklin has been in business for 35 years and has weathered, by McGovern's count, at least five recessions. How? By being proactive, he said, and by having the flexibility to accept new ideas and try new things.
McGovern recounted how one of his sons came to him with an idea to have the store imprint its name on recycled, reusable shopping bags for customers to take home.
Then, every Wednesday, the store would offer customers 20 percent off everything they could fit into he bags when they brought the bags back into the store.
He admitted being very lukewarm to the idea at first, but said he was willing to try it. The idea not only worked, but it has been so successful the program remains in effect.
Monday, November 24, 2008
Longer Sustainability Reports Win Awards, Carbon-Intense Companies Report Less
LONDON, UK -- Companies that publish longer environmental reports tend to earn more awards, companies in low carbon-intense sectors put out longer reports and almost all companies fail to define key sustainability terms, according to a study of corporate reports.
Admitting the variety of reporting methods and ways companies present sustainability information presents many limitations, communications consultancy Spada hopes its white paper, Environmental Reporting: Trends in FTSE 100 Sustainability Reports, spurs further research and discussion on sustainability reporting.
"Now is the time to develop a more rigorous consensus on how theseissues should be communicated and appraised in the public domain,"writes Spada managing director Gavin Ingham Brooke and research consultant Ana Catalano in the report.
Spada looked at reports from companies listed in the U.K.'s FTSE 100, examining terms and themes used and the report lengths.
Many corporations do not define important and frequently-used termssuch as sustainability, clean energy and zero carbon.
In the case ofsustainability, 79 companies use that word, but only two define whatsustainability means to them in the first instance.
By using a standard word count as a baseline for how long a page is,Spada calculated that the average report from FTSE 100 companies is 21pages.
Those companies that have won Business in the Community Top 100 awards averaged 25 pages, winners of Global 100 Most Sustainable Corporations averaged 26 pages and Carbon Disclosure Project Leaders averaged 30 pages.
For every 10-page increase in a sustainability report, the odds of acompany winning an award increase 30 percent. However, Spada admitsthat its findings do not mean the length of a report is the sole causeof a company winning an award.
Although Spada questions that heftyreports might be seen as meaning more than smaller, though possibly more substantive, reports, it does not investigate if the quality ofreporting also coincides with report length.
Spada also found that companies in more carbon-intense areas do notc ommunicate as much as companies in lower-carbon areas or companies that are more in the public eye.
Sectors that affect consumers tend to devote more writing toe nvironmental issues than companies with lower public awareness, such as those in metals and other industrial areas.
Utilities and oil and gas companies, though, exhibit a better spread and depth of reporting, Spada says, than companies that face higher regulations or are less known to the public.
Admitting the variety of reporting methods and ways companies present sustainability information presents many limitations, communications consultancy Spada hopes its white paper, Environmental Reporting: Trends in FTSE 100 Sustainability Reports, spurs further research and discussion on sustainability reporting.
"Now is the time to develop a more rigorous consensus on how theseissues should be communicated and appraised in the public domain,"writes Spada managing director Gavin Ingham Brooke and research consultant Ana Catalano in the report.
Spada looked at reports from companies listed in the U.K.'s FTSE 100, examining terms and themes used and the report lengths.
Many corporations do not define important and frequently-used termssuch as sustainability, clean energy and zero carbon.
In the case ofsustainability, 79 companies use that word, but only two define whatsustainability means to them in the first instance.
By using a standard word count as a baseline for how long a page is,Spada calculated that the average report from FTSE 100 companies is 21pages.
Those companies that have won Business in the Community Top 100 awards averaged 25 pages, winners of Global 100 Most Sustainable Corporations averaged 26 pages and Carbon Disclosure Project Leaders averaged 30 pages.
For every 10-page increase in a sustainability report, the odds of acompany winning an award increase 30 percent. However, Spada admitsthat its findings do not mean the length of a report is the sole causeof a company winning an award.
Although Spada questions that heftyreports might be seen as meaning more than smaller, though possibly more substantive, reports, it does not investigate if the quality ofreporting also coincides with report length.
Spada also found that companies in more carbon-intense areas do notc ommunicate as much as companies in lower-carbon areas or companies that are more in the public eye.
Sectors that affect consumers tend to devote more writing toe nvironmental issues than companies with lower public awareness, such as those in metals and other industrial areas.
Utilities and oil and gas companies, though, exhibit a better spread and depth of reporting, Spada says, than companies that face higher regulations or are less known to the public.
Analysts Advise Proceeding With Caution
Industry analysts say cutting costs and managing conservatively are more imperative than ever.
“Right now this is survival mode for everyone,” said Allan Ellinger, senior managing partner of Marketing Management Group.
“While you can’t always control your sales, you should always be able to control your expenses. Every business leader needs to manage his expense structure, and every line item within it, on a daily basis.
You should be going into next year with a sales plan that is extraordinarily conservative, and an expense structure that brings your overhead down so you can maintain your margins and guarantee you can get through the year unscathed and ready...
“Right now this is survival mode for everyone,” said Allan Ellinger, senior managing partner of Marketing Management Group.
“While you can’t always control your sales, you should always be able to control your expenses. Every business leader needs to manage his expense structure, and every line item within it, on a daily basis.
You should be going into next year with a sales plan that is extraordinarily conservative, and an expense structure that brings your overhead down so you can maintain your margins and guarantee you can get through the year unscathed and ready...
Thursday, November 20, 2008
One Percent For the Planet Store
Support the One Percent For The Planet Store by buying environmentally cool products.
The best part about this hat, is another one percent for the planet member makes it. Kind of like the circle of life, kind of...
Visit One Percent For the Planet to find how you can become a member/donate.
Be Environmentally Cool
Head Local
Green Local
The best part about this hat, is another one percent for the planet member makes it. Kind of like the circle of life, kind of...
Visit One Percent For the Planet to find how you can become a member/donate.
Be Environmentally Cool
Head Local
Green Local
Tuesday, November 18, 2008
Signs of the Future? Zion Canyon During the Controlled Burn in November 2008
Bush just gave the okey-dokey to drilling not far from hear.
Do you think this could be a sign of the future?
Gear and equipment for being active may still be bright(er) spot in today’s economy
It used to be said that when the economy got ugly, more people went fishing.
Fast-forward to today’s culture and you might be able to say, instead, when the economy gets sluggish, more people try to get active.
By almost all measures, the U.S. economy is now in a recession. Real estate, banking, and insurance sectors have been badly weakened and are dragging down overall economic activity. Most of the nation’s top retailers reported double-digit declines in October sales in early November, following a weak September and forecasting what could be a grim holiday shopping season.
But consumers, who have sharply cut spending, are still investing some of their discretionary dollars in physical activity of some sort.
“People are spending money,” said John Wilson, general manager of CW-X, which produces active wear such as tights for running, from the bustling New York City Marathon expo the first weekend of November. “When it comes to your sport, you invest. People still want to get out and do their thing.”
While the weakened economy finds consumers hunkering down, delaying big purchases and tightening their belts, the outlook may not be quite as bleak for outdoor sports, fitness retail or health club industries. Citing historical data, economists say the categories may weather the economic downturn.
Get active, stay active
Despite the gloom and doom, sports enthusiasts will continue to support their activities. Cash-strapped consumers may fork over cash for accessories, but forgo big ticket items – or chose ones that cost slightly less. Skiers will still ski, though they may ride chairlifts locally instead of heading off to a destination resort. Health clubs owners may also still people coming in the door.
Of course, retail economists and trend analysts don’t agree on everything: Some simply say retail sports categories will lose less this time around than other sectors. Others are doing their best to forecast, knowing this is a different situation than in the past. Basically, data from previous recessions indicate that sporting goods fare well, said Julia Day, director of sales and marketing for Boulder, Colo.-based Leisure Trends Group.
“People who are active and passionate about their sports won’t stop doing their sports in a downturn,” Day said.
One likely change will come in accessories, she said. They may be favored over big ticket items. If the weather is colder, hats and socks might sell well. Camping accessories such as lights, cooking products and headlamps might move off the store shelves faster than tents and sleeping bags. In the economic slump in 2001, sales of tents, bags and high-end backpacks headed south, Day said. Small fitness items may be the chosen purchase over large equipment.
“Consumers will participate, but less frequently,” she reassured. “They will change habits.”
Day said her market research firm tracks heart rate monitors and GPS devices as both accessories and technology products -- and buyers dig the gadgets. “If it’s new and hot, it sells,” Day said. “If it’s tech and consumers want it, it sells.”
Everything in outdoor retail sales, which tends to be resistant as a category, soared through August, but things changes in September, Day said. However, helping to offset the economic cooling is a trend toward healthier lifestyles.
“One thing we know is if you are active and healthy, you’re going to be happier,” she said. Leisure Trends monitors what if calls a “happiness track.” On it, they find that people who are active and participate in outdoor activities are happiest.
In another recently quarterly report, for example, Target Corp. noted that despite sales declines, fitness and yoga apparel remained strong.
Quality counts
Because cash is tighter, consumers may also be looking for higher quality goods. They want goods that last longer, Day said. Consumers may be leaning toward less of a throw-away economy.
“Consumers might be willing to pay more for quality but buying less,” she said.
One study Leisure Trends conducted on consumer buying intent shows that nearly 70 percent of their most active buyers will be making adjustments in their sports equipment and apparel purchases this year. And quality drove purchase decisions. “Over 92 percent of respondents agree that paying more for a sports product with the expectation it will last longer is their preferable buying strategy.”
Another key amid the gloom: 44 percent claimed they will take part in their favorite activities this fall and winter. And 27 percent they will participate more.
“Sales will go down, but we know that people who are enthusiasts will continue to do their activities. Skiers, for example, will still ski in a down economy, but they’ll ski more locally,” Day said.
Tom Doyle, vice president of information and research at the National Sporting Goods Association (NSGA), supported the view that there won’t be a huge drop in sporting goods equipment sales. Doyle has charted consumer purchases of equipment and footwear over the last 20 years. His research indicates fairly healthy sales even during slumps.
“My general observation is that consumer purchases of sporting goods flatten or decline slightly, less than 2 percent, in recessionary times,” Doyle said.
“A decline is likely to come in units, but will likely be offset to some degree by higher prices. I would expect to see any declines to be in the purchase of high-ticket items over the next several quarters.”
Doyle predicted the current economic crunch will create “a slackening, but it isn’t a huge disaster” for retailers.
He noted that treadmill sales did not drop off in 2001, but some other big ticket items such as backpacks and sleeping bags did, and they did not bounce back until 2004.
“It takes awhile for consumers to regain confidence,” after a recession, he said.
Maybe it’s the stress induced by job market conditions or plummeting stocks, but apparently consumers still find their way to health clubs.
Club membership leveling off
Health club memberships nationwide have leveled off since 2004 – the first year without a jump in several -- but haven’t fallen, according the International Health, Racquet & Sportsclub Association (IHRSA). Total health club memberships at the close of 2007 numbered 41.5 million, IHRSA said. That is statistically about the same as the 2004 number of 41.3 million.
Taking a long-term view, the health club industry expects strong 2008 performance despite the economic picture, said IHRSA spokesman Rosemary Lavery. The industry has seen 41 percent growth in total number of members since 1998, she said.
“While the economy has been enduring some difficulty,” Lavery said in an email, “the health club industry looks to the following positives for growth: the increase in industry revenue numbers on the non-dues services, the importance of exercise as overweight and obesity rates continue to rise, and the correlation between chronic disease and health care costs.”
Several factors can affect club membership levels, and there are indications the fitness movement remains strong. Major marathons continue to sell out and new runs are added every year. Anecdotally, one vendor at the recent New York City marathon said running enthusiasts were “crazy” there, and that “people are spending money. People still want to get out and do their thing,” he said.
Running specialty store franchiser Fleet Feet Inc., based in Carrboro, N.C., recently logged its best quarter in the company’s 32-year history. Retail sales shot up to $24.8 million, up 16.5 over third quarter 2007. Year-to-date sales were up 17.8 percent through September 2008.
That kind of business performance wouldn’t surprise market researchers at the Leisure Trends Group.
“During a downturn, people will still go for a hike. Running and trail running also does well,” said the firm’s Day. “All it takes is a good pair of shoes.”
--Stuart Glascock
Fast-forward to today’s culture and you might be able to say, instead, when the economy gets sluggish, more people try to get active.
By almost all measures, the U.S. economy is now in a recession. Real estate, banking, and insurance sectors have been badly weakened and are dragging down overall economic activity. Most of the nation’s top retailers reported double-digit declines in October sales in early November, following a weak September and forecasting what could be a grim holiday shopping season.
But consumers, who have sharply cut spending, are still investing some of their discretionary dollars in physical activity of some sort.
“People are spending money,” said John Wilson, general manager of CW-X, which produces active wear such as tights for running, from the bustling New York City Marathon expo the first weekend of November. “When it comes to your sport, you invest. People still want to get out and do their thing.”
While the weakened economy finds consumers hunkering down, delaying big purchases and tightening their belts, the outlook may not be quite as bleak for outdoor sports, fitness retail or health club industries. Citing historical data, economists say the categories may weather the economic downturn.
Get active, stay active
Despite the gloom and doom, sports enthusiasts will continue to support their activities. Cash-strapped consumers may fork over cash for accessories, but forgo big ticket items – or chose ones that cost slightly less. Skiers will still ski, though they may ride chairlifts locally instead of heading off to a destination resort. Health clubs owners may also still people coming in the door.
Of course, retail economists and trend analysts don’t agree on everything: Some simply say retail sports categories will lose less this time around than other sectors. Others are doing their best to forecast, knowing this is a different situation than in the past. Basically, data from previous recessions indicate that sporting goods fare well, said Julia Day, director of sales and marketing for Boulder, Colo.-based Leisure Trends Group.
“People who are active and passionate about their sports won’t stop doing their sports in a downturn,” Day said.
One likely change will come in accessories, she said. They may be favored over big ticket items. If the weather is colder, hats and socks might sell well. Camping accessories such as lights, cooking products and headlamps might move off the store shelves faster than tents and sleeping bags. In the economic slump in 2001, sales of tents, bags and high-end backpacks headed south, Day said. Small fitness items may be the chosen purchase over large equipment.
“Consumers will participate, but less frequently,” she reassured. “They will change habits.”
Day said her market research firm tracks heart rate monitors and GPS devices as both accessories and technology products -- and buyers dig the gadgets. “If it’s new and hot, it sells,” Day said. “If it’s tech and consumers want it, it sells.”
Everything in outdoor retail sales, which tends to be resistant as a category, soared through August, but things changes in September, Day said. However, helping to offset the economic cooling is a trend toward healthier lifestyles.
“One thing we know is if you are active and healthy, you’re going to be happier,” she said. Leisure Trends monitors what if calls a “happiness track.” On it, they find that people who are active and participate in outdoor activities are happiest.
In another recently quarterly report, for example, Target Corp. noted that despite sales declines, fitness and yoga apparel remained strong.
Quality counts
Because cash is tighter, consumers may also be looking for higher quality goods. They want goods that last longer, Day said. Consumers may be leaning toward less of a throw-away economy.
“Consumers might be willing to pay more for quality but buying less,” she said.
One study Leisure Trends conducted on consumer buying intent shows that nearly 70 percent of their most active buyers will be making adjustments in their sports equipment and apparel purchases this year. And quality drove purchase decisions. “Over 92 percent of respondents agree that paying more for a sports product with the expectation it will last longer is their preferable buying strategy.”
Another key amid the gloom: 44 percent claimed they will take part in their favorite activities this fall and winter. And 27 percent they will participate more.
“Sales will go down, but we know that people who are enthusiasts will continue to do their activities. Skiers, for example, will still ski in a down economy, but they’ll ski more locally,” Day said.
Tom Doyle, vice president of information and research at the National Sporting Goods Association (NSGA), supported the view that there won’t be a huge drop in sporting goods equipment sales. Doyle has charted consumer purchases of equipment and footwear over the last 20 years. His research indicates fairly healthy sales even during slumps.
“My general observation is that consumer purchases of sporting goods flatten or decline slightly, less than 2 percent, in recessionary times,” Doyle said.
“A decline is likely to come in units, but will likely be offset to some degree by higher prices. I would expect to see any declines to be in the purchase of high-ticket items over the next several quarters.”
Doyle predicted the current economic crunch will create “a slackening, but it isn’t a huge disaster” for retailers.
He noted that treadmill sales did not drop off in 2001, but some other big ticket items such as backpacks and sleeping bags did, and they did not bounce back until 2004.
“It takes awhile for consumers to regain confidence,” after a recession, he said.
Maybe it’s the stress induced by job market conditions or plummeting stocks, but apparently consumers still find their way to health clubs.
Club membership leveling off
Health club memberships nationwide have leveled off since 2004 – the first year without a jump in several -- but haven’t fallen, according the International Health, Racquet & Sportsclub Association (IHRSA). Total health club memberships at the close of 2007 numbered 41.5 million, IHRSA said. That is statistically about the same as the 2004 number of 41.3 million.
Taking a long-term view, the health club industry expects strong 2008 performance despite the economic picture, said IHRSA spokesman Rosemary Lavery. The industry has seen 41 percent growth in total number of members since 1998, she said.
“While the economy has been enduring some difficulty,” Lavery said in an email, “the health club industry looks to the following positives for growth: the increase in industry revenue numbers on the non-dues services, the importance of exercise as overweight and obesity rates continue to rise, and the correlation between chronic disease and health care costs.”
Several factors can affect club membership levels, and there are indications the fitness movement remains strong. Major marathons continue to sell out and new runs are added every year. Anecdotally, one vendor at the recent New York City marathon said running enthusiasts were “crazy” there, and that “people are spending money. People still want to get out and do their thing,” he said.
Running specialty store franchiser Fleet Feet Inc., based in Carrboro, N.C., recently logged its best quarter in the company’s 32-year history. Retail sales shot up to $24.8 million, up 16.5 over third quarter 2007. Year-to-date sales were up 17.8 percent through September 2008.
That kind of business performance wouldn’t surprise market researchers at the Leisure Trends Group.
“During a downturn, people will still go for a hike. Running and trail running also does well,” said the firm’s Day. “All it takes is a good pair of shoes.”
--Stuart Glascock
LIned Up at Alta For Another Record Breaking Year?
IT WILL HAVE TO BE ANOTHER GREAT SNOW YEAR
AND IT WILL TAKE A LOT OF TRAVELERS IN A TOUGH
ECONOMY TO CREATE LINES LIKE THIS - GOOD TO BE A
LOCAL!!
Tuesday, November 11, 2008
Recycling at the Ski Swap
Nov 7-9, Basin Recreation Center - Park City, UT
Recycling at its best. Very old, old, somewhat new, brand new! This was the range of goods you could find at the 38th Annual Park City Ski Swap.
I am sure with this economy their will be newer and newer "used" equipment that people are looking to sell and get some greenbacks for.
Talk about the greenback - a new breakout from the consolidation.
Check out Into the Markets for more education on the financial markets!
Recycling at its best. Very old, old, somewhat new, brand new! This was the range of goods you could find at the 38th Annual Park City Ski Swap.
I am sure with this economy their will be newer and newer "used" equipment that people are looking to sell and get some greenbacks for.
Talk about the greenback - a new breakout from the consolidation.
Check out Into the Markets for more education on the financial markets!
Green Word of the Day
Sustainable Development
Economic, social and environmental development that is harmonized for the good of all interests.
Development that meets the needs of the present without compromising the ability of future generations to meet their own needs - from the Brundtland Report "Our Common Future" - The United Nations uses this definition.
Is the concept of growth and depleting non-renewable resources mutually exclusive?
Be Environmentally Cool
Head Local
Green Local
Economic, social and environmental development that is harmonized for the good of all interests.
Development that meets the needs of the present without compromising the ability of future generations to meet their own needs - from the Brundtland Report "Our Common Future" - The United Nations uses this definition.
Is the concept of growth and depleting non-renewable resources mutually exclusive?
Be Environmentally Cool
Head Local
Green Local
Consumer Reports: 76 Percent of Consumers Plan to Cut Back on Holiday Spending
YONKERS, N.Y. -- 'Tis the season to tighten the belt on holiday spending for many Americans this year.
Over three-quarters (76%) of Americans plan to cut back on spending on traditional holiday expenses such as gifts, travel, entertaining, decorations, charitable giving, holiday cards, and tipping, according to a new Consumer Reports Holiday Shopping Poll.
Full results of the poll are available at www.ConsumerReports.org.
Consumer Reports Holiday Shopping Poll also found that some consumers will be starting the holiday season with leftover holiday debt. Six percent of Americans -- some 12 million consumers -- are still carrying debt from last winter's holiday season.
Among the holiday spending cutbacks, 59 percent said they will be giving fewer gifts, and nearly half (49%) will be cutting their travel plans.Who is most likely to be left off the holiday gift list?
Among consumers scaling back on gifts, most (84%) were willing to cut back on buying for themselves. But the family pooch may still get a treat or two. Only 23 percent of respondents plan to cut back on gifts for their pets this season -- far fewer than those willing to cut back on buying for friends and families (40%), service providers (30%) or co-workers (29%).
Release of Consumer Reports' Holiday Shopping Poll coincides with the launch of the "Tightwad Tod" Blog on www.ConsumerReports.org/TightwadTod.
For shoppers looking for great ways to save this holiday season, Consumer Reports' Tightwad, Tod Marks is the guy. Every day, Tod will blog on the news that affects the pocketbook, great buys for the holidays and those offers that sound too good to be true."Being a tightwad doesn't mean you're a cheapskate -- it just means you spend your money wisely, and have more to spend on the things you really want this holiday season," said Tod Marks, senior project editor, Consumer Reports and "Tightwad Tod" blogger.
The Consumer Reports Holiday Shopping Poll also finds:Shopping Season 2008: Off to a slow start-- Similar to the 2007 holiday shopping season, 2008 is expected to getoff to a slow start.
Only 29 percent of consumers have started theirshopping. Only about half (45%) of consumers anticipate they will bedone buying gifts by the second week in December. Approximately 24percent say they will push their holiday shopping right up to December24th. About 5 percent of consumers don't plan to complete theirshopping until after the holidays.
No humbug for the holidays: Consumers remain optimistic-- Despite all the budgeting and cutbacks, consumers remain optimisticthat their holiday will be as enjoyable as in year's past. Themajority (88%) expect their holidays to be at least as happy as lastyear, including 28 percentage points who expect to be even happierthan last year.
Making a list and checking it twice: Holiday Budgets-- If you want to control your spending over the holidays, considermaking a budget before you begin to shop. You won't be alone; thisyear 59 percent of consumers plan to make a budget -- an increase ofmore than 17 percent from the year before.-- Making a budget is the easy part, sticking to it proves harder formany shoppers. Of the 39 percent of consumers who made a budget lastyear, only 45 percent stayed on it while, nearly as many (44%) wentover budget last year. Only about 3 percent went way over budget.--
This holiday season may see an increase in the usage of cash.Twenty-one percent plan to use cash moreover half plan to rely less oncredit cards (51%). The change is especially evident in young peopleages 18-34 -- who have tended to favor credit in the past.Is it always better to give than receive? Not if it's socks!
-- The number one gift consumers are planning to buy for the 2008 holidayseason is clothing (69%). But, that was the category of gifts receivedin 2007 that triggered the most disappointment among recipients (39%).Forty-seven percent of men said they were disappointed to receivevarious types of clothing for the 2006 holidays including themost-hated socks.
-- The number two gift consumers are planning to give for 2008 is giftcards (66%), followed by toys (62%), cash (61%), electronics (47%),jewelry (40%), pet toys (31%) and small appliances (24%). Toys seem tobe making a comeback this season after last years recalls when only49% of consumers had planned to purchase toys.
-- Consumers planning to give electronic gifts on a whole have declinedfrom last season from 53 to 47 percent this year, despite the factthat it remains the most wanted gift for both men (26%) and women(14%). Women also were equally interested in gift cards (14%),followed by jewelry (13%), and money (12%).
-- Gift-givers may still want to opt for electronic gifts; ConsumerReports poll found that it's the gift people would most like toreceive (20%). Mp3 players or iPods (18%) remain strong at the top ofthe most wanted electronics, and video games, which fell back lastseason, are back on top (18%).
-- Among those who plan to give money or cash as a gift this year, nearlyone-quarter (23%) plan to give it less frequently than they did lastyear.-- Does that gift look familiar? Re-gifting is on the rise. Nearlyone-third of respondents (31%) admitted to re-gifting a present lastyear. This is up from 25 percent in 2006. The most likely suspectsare still women (38 %). Only 24% of men admitted to ever re-gifting,which is about the same as last year.The gift that keeps on taking: Gift Cards
-- Gift cards continue to be a popular choice among shoppers, 66 percentof respondents plan on buying gift cards, up from 62 percent in 2007.Gift cards are second only to clothing (69%) for the 2008 holidayseason.-- For the 2007 holidays, 62 percent of respondents received a gift card,which is up 6 percentage points from the previous year. Nearly a yearlater, 25 percent of the gift card recipients have not used one ormore of these cards. Among consumers with unredeemed cards from lastseason, 57% have two or more.
-- The gift card is a gift that keeps on taking 58 percent of consumersspend more than the amount of the card when they go to redeem thegift.-- Time continues to be the most common reason gift cards have not beenredeemed. Well over half (54%) of consumers indicate not having thetime was the reason for unused cards. This was followed by they forgotabout it (38%) and can't find anything they want (35%).
Over three-quarters (76%) of Americans plan to cut back on spending on traditional holiday expenses such as gifts, travel, entertaining, decorations, charitable giving, holiday cards, and tipping, according to a new Consumer Reports Holiday Shopping Poll.
Full results of the poll are available at www.ConsumerReports.org.
Consumer Reports Holiday Shopping Poll also found that some consumers will be starting the holiday season with leftover holiday debt. Six percent of Americans -- some 12 million consumers -- are still carrying debt from last winter's holiday season.
Among the holiday spending cutbacks, 59 percent said they will be giving fewer gifts, and nearly half (49%) will be cutting their travel plans.Who is most likely to be left off the holiday gift list?
Among consumers scaling back on gifts, most (84%) were willing to cut back on buying for themselves. But the family pooch may still get a treat or two. Only 23 percent of respondents plan to cut back on gifts for their pets this season -- far fewer than those willing to cut back on buying for friends and families (40%), service providers (30%) or co-workers (29%).
Release of Consumer Reports' Holiday Shopping Poll coincides with the launch of the "Tightwad Tod" Blog on www.ConsumerReports.org/TightwadTod.
For shoppers looking for great ways to save this holiday season, Consumer Reports' Tightwad, Tod Marks is the guy. Every day, Tod will blog on the news that affects the pocketbook, great buys for the holidays and those offers that sound too good to be true."Being a tightwad doesn't mean you're a cheapskate -- it just means you spend your money wisely, and have more to spend on the things you really want this holiday season," said Tod Marks, senior project editor, Consumer Reports and "Tightwad Tod" blogger.
The Consumer Reports Holiday Shopping Poll also finds:Shopping Season 2008: Off to a slow start-- Similar to the 2007 holiday shopping season, 2008 is expected to getoff to a slow start.
Only 29 percent of consumers have started theirshopping. Only about half (45%) of consumers anticipate they will bedone buying gifts by the second week in December. Approximately 24percent say they will push their holiday shopping right up to December24th. About 5 percent of consumers don't plan to complete theirshopping until after the holidays.
No humbug for the holidays: Consumers remain optimistic-- Despite all the budgeting and cutbacks, consumers remain optimisticthat their holiday will be as enjoyable as in year's past. Themajority (88%) expect their holidays to be at least as happy as lastyear, including 28 percentage points who expect to be even happierthan last year.
Making a list and checking it twice: Holiday Budgets-- If you want to control your spending over the holidays, considermaking a budget before you begin to shop. You won't be alone; thisyear 59 percent of consumers plan to make a budget -- an increase ofmore than 17 percent from the year before.-- Making a budget is the easy part, sticking to it proves harder formany shoppers. Of the 39 percent of consumers who made a budget lastyear, only 45 percent stayed on it while, nearly as many (44%) wentover budget last year. Only about 3 percent went way over budget.--
This holiday season may see an increase in the usage of cash.Twenty-one percent plan to use cash moreover half plan to rely less oncredit cards (51%). The change is especially evident in young peopleages 18-34 -- who have tended to favor credit in the past.Is it always better to give than receive? Not if it's socks!
-- The number one gift consumers are planning to buy for the 2008 holidayseason is clothing (69%). But, that was the category of gifts receivedin 2007 that triggered the most disappointment among recipients (39%).Forty-seven percent of men said they were disappointed to receivevarious types of clothing for the 2006 holidays including themost-hated socks.
-- The number two gift consumers are planning to give for 2008 is giftcards (66%), followed by toys (62%), cash (61%), electronics (47%),jewelry (40%), pet toys (31%) and small appliances (24%). Toys seem tobe making a comeback this season after last years recalls when only49% of consumers had planned to purchase toys.
-- Consumers planning to give electronic gifts on a whole have declinedfrom last season from 53 to 47 percent this year, despite the factthat it remains the most wanted gift for both men (26%) and women(14%). Women also were equally interested in gift cards (14%),followed by jewelry (13%), and money (12%).
-- Gift-givers may still want to opt for electronic gifts; ConsumerReports poll found that it's the gift people would most like toreceive (20%). Mp3 players or iPods (18%) remain strong at the top ofthe most wanted electronics, and video games, which fell back lastseason, are back on top (18%).
-- Among those who plan to give money or cash as a gift this year, nearlyone-quarter (23%) plan to give it less frequently than they did lastyear.-- Does that gift look familiar? Re-gifting is on the rise. Nearlyone-third of respondents (31%) admitted to re-gifting a present lastyear. This is up from 25 percent in 2006. The most likely suspectsare still women (38 %). Only 24% of men admitted to ever re-gifting,which is about the same as last year.The gift that keeps on taking: Gift Cards
-- Gift cards continue to be a popular choice among shoppers, 66 percentof respondents plan on buying gift cards, up from 62 percent in 2007.Gift cards are second only to clothing (69%) for the 2008 holidayseason.-- For the 2007 holidays, 62 percent of respondents received a gift card,which is up 6 percentage points from the previous year. Nearly a yearlater, 25 percent of the gift card recipients have not used one ormore of these cards. Among consumers with unredeemed cards from lastseason, 57% have two or more.
-- The gift card is a gift that keeps on taking 58 percent of consumersspend more than the amount of the card when they go to redeem thegift.-- Time continues to be the most common reason gift cards have not beenredeemed. Well over half (54%) of consumers indicate not having thetime was the reason for unused cards. This was followed by they forgotabout it (38%) and can't find anything they want (35%).
September Outdoor Sales Mixed Bag, Buoyed by Accessory and Internet
Overall September numbers reported in the most recent edition of The Outdoor Topline Report, produced for Outdoor Industry Association (OIA) by the Leisure Trends Group are a mixed bag as September saw one of the worst economic crisis in recent history affect all types of consumer spending.
The Commerce Department reported overall personal spending dropped .3 percent in September, the largest drop since June 2004.According to The Outdoor Topline Report, core outdoor retailers saw sales in all three channels (specialty, chain, and internet)* total $351M this month, 2% above September 2007. Unit sales for all three channels increased 5% for the same period.
But specialty stores posted a decline for the first time since October 2007.Channel & Category BreakdownBreaking down the September sales by store channel, chain store sales totaled $174M, gaining 6% in units and 4% in dollars compared to the same month last year.
Independent outdoor specialty stores sold $111M, a 5% decline from September 2007. Unit sales also dropped 5% for the period. Outdoor internet merchants were not slowed down by the economy at all.
In September, the entire outdoor internet channel brought in $67M, increasing sales by 20% in units and 11% in dollars compared to September 2007. Similar to findings in other industries, core outdoor shoppers seemed reluctant to buy big-ticket items such as tents, sleeping bags, packs, instruments and sport racks.
However, lower-priced camping equipment accessory categories gained 15% in units and 8% in dollars helping buoy overall outdoor sales.Apparel and footwear were mixed, with outwear and sportswear remaining flat, boots and shoes made modest gains and sandals declined.Following the accessory trend, apparel and footwear accessories saw healthy increases compared to last September.
Look for accessories and small-ticket items to gain traction in a soft economy. PaddlesportsAll paddle product sales from all three channels (specialty, chain, internet) totaled $26M in September, down 13% from September 2007. Unit sales decreased 8% for the same period. Paddle specialty stores had sales of $20M this month, suffering a 17% decline in units and a 15% decline in dollars. Total chain paddlesport sales reached $4.5M, down 3% from September 2007.
The internet channel saw September sales increase 14% in units but decrease 7% in dollars with $1.8M in total sales.
Year-to-date, all paddlesport sales from all three channels totaled $327M, down 1% from the same period in 2007.Big-ticket paddlesport items saw the largest declines in September. Boats and paddles lost sales in each of the three distribution channels, while accessories and apparel saw sales increase in chain and internet stores.
August & September Sales CombinedSeptember sales numbers alone miss a key factor in sales growth. A large portion of revenue in August and September occurs during the traditional Labor Day Sales. In 2007, Labor Day Sales were mostly counted in September, while this year’s sales gave August the boost because of the calendar.
Looking at August and September together, all products in all stores grew 8% in units and 7% in dollars. Equipment increased 6% and 5% in units and dollars, respectively. Equipment accessories grew 16% and 13% respectively and apparel grew 5% and 4%. Footwear dropped 10% in units but grew 5% in dollars
The Commerce Department reported overall personal spending dropped .3 percent in September, the largest drop since June 2004.According to The Outdoor Topline Report, core outdoor retailers saw sales in all three channels (specialty, chain, and internet)* total $351M this month, 2% above September 2007. Unit sales for all three channels increased 5% for the same period.
But specialty stores posted a decline for the first time since October 2007.Channel & Category BreakdownBreaking down the September sales by store channel, chain store sales totaled $174M, gaining 6% in units and 4% in dollars compared to the same month last year.
Independent outdoor specialty stores sold $111M, a 5% decline from September 2007. Unit sales also dropped 5% for the period. Outdoor internet merchants were not slowed down by the economy at all.
In September, the entire outdoor internet channel brought in $67M, increasing sales by 20% in units and 11% in dollars compared to September 2007. Similar to findings in other industries, core outdoor shoppers seemed reluctant to buy big-ticket items such as tents, sleeping bags, packs, instruments and sport racks.
However, lower-priced camping equipment accessory categories gained 15% in units and 8% in dollars helping buoy overall outdoor sales.Apparel and footwear were mixed, with outwear and sportswear remaining flat, boots and shoes made modest gains and sandals declined.Following the accessory trend, apparel and footwear accessories saw healthy increases compared to last September.
Look for accessories and small-ticket items to gain traction in a soft economy. PaddlesportsAll paddle product sales from all three channels (specialty, chain, internet) totaled $26M in September, down 13% from September 2007. Unit sales decreased 8% for the same period. Paddle specialty stores had sales of $20M this month, suffering a 17% decline in units and a 15% decline in dollars. Total chain paddlesport sales reached $4.5M, down 3% from September 2007.
The internet channel saw September sales increase 14% in units but decrease 7% in dollars with $1.8M in total sales.
Year-to-date, all paddlesport sales from all three channels totaled $327M, down 1% from the same period in 2007.Big-ticket paddlesport items saw the largest declines in September. Boats and paddles lost sales in each of the three distribution channels, while accessories and apparel saw sales increase in chain and internet stores.
August & September Sales CombinedSeptember sales numbers alone miss a key factor in sales growth. A large portion of revenue in August and September occurs during the traditional Labor Day Sales. In 2007, Labor Day Sales were mostly counted in September, while this year’s sales gave August the boost because of the calendar.
Looking at August and September together, all products in all stores grew 8% in units and 7% in dollars. Equipment increased 6% and 5% in units and dollars, respectively. Equipment accessories grew 16% and 13% respectively and apparel grew 5% and 4%. Footwear dropped 10% in units but grew 5% in dollars
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