8 major obstacles that sporting goods businesses have to meet when selling over the Internet.
The sporting goods and sports equipment industries in the US are worth $18.47B in 2023 and are expected to grow 4.60% year-over-year. Even during the COVID pandemic, when personal isolation was emphasized and close-quarters physical contact was frowned upon, these segments were able to continue thriving VIA the Internet. Naturally, the major players in the market throughout the past two years include none other than Amazon and Walmart, the two largest general retailers in both traditional retail and eCommerce. But what about the other sporting goods industry-specific retailers online? While sporting goods, sports equipment, and outdoor goods are niche markets, they are significantly more accessible to the general public than the more exclusive fields such as high-end fashion and jewelry. Still, sporting goods retailers have their own obstacles to overcome when doing business online and in this piece, we identify the 8 most common ones that trouble both the long-established and brand new entities dealing with sporting goods eCommerce.
eCommerce Challenges of Sporting Goods Internet Businesses
- The definitions of ‘sporting goods’ and ‘outdoor goods’
- Extremely high competition
- Submarkets
- Marketing, advertising, and presentation
- Vendor relations
- Logistics
- High traffic spikes and website stability
- Using an inappropriate or unsuitable eCommerce platform
The Definitions of ‘Sporting Goods’ and ‘Outdoor Goods’
The term ‘sporting goods’ typically refers to recreational athletic or fitness-related products. This includes stick-and-ball sports equipment (bats, balls, gloves, sticks, helmets, armor, exercise equipment, shoes, apparel, and memorabilia). ‘Outdoor goods’ is used to describe products related to outdoor activities such as hiking, biking, mountain biking, fishing, hunting, camping, rock climbing, mountain climbing, and even off-roading. There is, however, a lot of cross-pollination between these two segments as many sports and athletic activities can take place outdoors and this further muddies any intended distinctions between the two. Some retailers will only specifically deal with the standard stick-and-ball sports and athletics while others may choose to encompass any and all types of activity, mixing sports and outdoors together. Then, there’s the definition of what exactly is considered a ‘sport’. Some retailers that deal with baseball, football, basketball equipment may or may not choose to include aspects such as golf, boxing, martial arts, MMA, wrestling, or hockey–and even then, these often go on to have their own dedicated businesses and stores. For outdoors, some retailers will only sell camping, fishing, and hunting equipment while ignoring biking, climbing, trail running, etc. Or, they could include all of the above but leave out off-roading as it can be considered a part of motorsports or powersports. Hunting also intermingles sporting goods, outdoor goods, as well as firearms which, itself, is its own industry. In the end, it depends on the individual business’ plan of operation and which markets they choose to serve. As with any multifaceted industry or field, there are risks, rewards, and pitfalls when choosing to be all-inclusive or exclusive.
Extremely High Competition
As stated earlier, because sporting goods–while a niche market itself–is more accessible to the general public, that means this industry is more likely to be included with general retail and, thus, be marketed by major general retailers like Amazon and Walmart (which is exactly what happened). For an independent retailer, it could prove to be a Sisyphean (though, not entirely impossible) task to even attempt to pose a serious competitive threat against such behemoths. Plus, there are the major brands within the sporting goods industry itself such as Dick’s Sporting Goods and every other independent sporting goods retailer attempting to make it online. Like any business, one needs to carve out their own path and set themselves apart from the competition but the challenge is much greater when the pool of customers–and competitors–is so large.
Submarkets
Sporting goods Internet businesses, even if they choose to sell products from all different athletic disciplines, still have to contend with individual submarkets within the main sporting goods category. In a way, they would be acting somewhat as a general retailer and this diversification could help broaden their customer reach. However, they would need to research which demographics take to which subcategories better than others. Or, if a store chooses to sell only one type of product, a baseball-only store for example, they would still need to identify the regions where baseball is more popular, thus more profitable, as well as which products and product types outperform others. This is the submarket. Most every industry has submarkets and the most successful retailers in said-industry are the ones that put forth the effort to identify their strengths and capitalize on them while reducing their weaknesses. When it comes to sporting goods, however, while it still is a niche or enthusiast’s market, it does have wider acceptance within the general consumer public than in other industries. In addition to the individual sports submarkets, there is also the customer submarkets to consider. Does a company deal with professional athletes, general consumers, or with schools or the education sector? These different customer types can be considered submarkets of the base sports product consumer public.
Marketing, Advertising, and Presentation
Sporting goods customers tend to be more passionate than the typical enthusiast, so marketing efforts in this industry have enough wiggle room to be more bold and brash than the sedate and conservative approach to general retail. This is especially true when dealing with the youth market (The Millennials and Gen-Z), which holds the most buying power of all online shoppers in the US. Sporting goods, of all industries, has the advantage of also being tied into pop culture, which certainly helps attract younger buyers and allows for greater freedoms and flexibilities in which avenues to choose for marketing and advertising such as through social media. Presentation on the website, like any retailer, needs to be shopper-centric. Shoppers that visit websites that make them feel welcome or appeal to positive emotions are more likely to spend more time navigating and, thus, increasing the likelihood of a conversion. This also means that it can be a somewhat safer environment for more aggressive call-to-action features to create purchase urgency in the shopper. Where it gets tricky is being able to balance this loud and brash form of presentation while not appearing unprofessional or amateurish. This is because while reflecting on the fun, outgoing nature of sports activities can attract shoppers, the major general retailers also manage to garner massive sales with their comparatively sterile web layouts (Amazon, however, makes up for this with their immense marketing efforts on just about every advertising medium there is).
Vendor Relations
Sporting goods is just one part of the multibillion-dollar monster that is the sports industry, which also includes professional sports. This means some of the world’s top brands are directly involved in this industry and have the power to dictate its future. Vendor relations in sporting goods can be difficult with certain brands wanting exclusivity rights and specific agreements in place should they choose to do business with a retailer. Many of the biggest sporting goods brands have licensing contracts with teams and even individual personalities to help them secure a foothold over their competition and to maintain this exclusivity, they may opt to have retailers that sell their product also abide by a set of rules and guidelines that may involve specific pricing and specific products available for sale. This can really complicate inventory management and logistics but any retailer wanting to sell x-brand’s product without the threat of legal retaliation, they have no choice but to abide by these rules.
Logistics
As mentioned in the above section, select vendors that have contracts with teams and pro players may subject retailers to similar guidelines to protect their brand. Ergo, inventory management and logistics can differ greatly from purchasing general merchandise from a general supplier. There are more variables in sporting goods than there are in other consumer products segments; new innovations in product that can make totally obsolete a current product, exclusive variants of products sold in select stores/regions/etc., intentional limited production lines. These are just some examples of what can be expected when dealing with sporting goods that can create logistical nightmares. As a retailer that wants to create a satisfied and loyal base of returning customers, such handicaps can arise because of these characteristics that don’t really exist in other industries. Even businesses with the most detailed and organized warehousing structures can be at the mercy of a vendor whose plans can result in unavoidable lost sales.
High Traffic Spikes and Website Stability
Typical retail–both physical store locations and over the Internet–will experience high traffic spikes throughout the year, usually during holidays and changing seasons, culminating in the end-of-year holiday shopping season. In sporting goods, the pro sports seasons also play a part in random traffic spikes, say, if a certain team achieves success throughout a season or a specific sport gains newfound popularity. These can cause a sudden mass influx of new shoppers and visitors to a website. Much like how a physical brick-and-mortar store can get overwhelmed with in-store foot traffic, a website can get overloaded with visitors to the point of temporary collapse. Having a stable website that can accommodate sudden mass traffic spikes is important to a business’ longevity on the Internet and for an industry, such as sporting goods, that can experience a much more frequent occurrence of these traffic spikes, the website needs to be able to support high traffic at any given time–not just during the regular high traffic times of the year.
Using an Inappropriate or Unsuitable eCommerce Platform
Every eCommerce platform does the same thing, but they do it differently; if there was only one solution that solved all problems, there wouldn’t be so many variations on the market. There’s an eCommerce platform for every business size and industry. A seller who chooses a platform that’s too advanced for their needs and too expensive to operate could sacrifice features and functions that would streamline their operations and cut their overhead; just like a seller who chooses a platform that’s too advanced for them. eCommerce newbies or those already in eCommerce but considering other platforms should research what’s available on the market and how each fits their needs. The full-featured SaaS platform BigCommerce will work well for merchants with huge, complex product inventories, high-volume orders, and complete control over their analytics and data. On the other hand, smaller and less-diversified businesses can use Shopify (or similar) to get online (or relaunch their website) quickly. Another option is a headless eCommerce solution like WooCommerce, perfect for retailers selling mostly through social media. It’s important to note that every platform has its own strengths and weaknesses. Businesses should take into account the features and functions, budget, and overall business plan of their eCommerce departments to determine which platform is best. Choosing an eCommerce platform is a huge decision that can make or break your business, so do your research and think it through.