Sporting Goods Industry
Executive Summary The sporting goods retailers range from national large-format stores in which customers can buy just about any equipment and apparel they need for any sporting events and seasons, to local specialty stores that only resell used sporting equipment or specialize in selling equipment and apparel for one specific sport. Because the industry is so fragmented, we define our industry as the national big-format sporting goods retailer industry, which includes stores that only sell, not buy and resell a wide range of sporting equipment and apparel for most sports and for all season. This definition excludes discount stores, such as Wal-Mart and Target, or department stores, such as Macy’s and …show more content…
According to DataMonitor’s “Sport Equipments in the United States,” there exists a growing trend of big name manufacturers, such as Nike and North Face, cutting out “middle-man” retailers by selling their manufactured products directly to the end consumers through their own retail outlets. Not only do these suppliers and manufacturers are able to distribute goods through their brand retail outlets, but today’s technological advancements allow them to take advantages of the internet by selling directly to end-consumers through their own internet websites. A consumer can conveniently go to Nike.com or K2.com to do a quick research of what the person is looking to buy. With a click of a button, the person can charge the product on his/her credit card, and the product is delivered to that consumer in a few days. This trend of suppliers and manufacturers becoming direct competitors of sports retailers shrinks the market share of each individual firm in the sporting goods retail industry by adding more players into the playing field. The end result is the decrease in firm’s profitability caused by the shrinking market share.
A report done by John Cronin for the Tiger Valuation Services indicates that there is a growing trend of retailers shifting their focuses more towards the superstore-type structure (Dick’s