Overview of the Endurance Sports Market in a Covid-19 Climate.
In the current COVID-19 climate, social distancing and self-isolation government rulings have become the norm across most of Europe, South East Asia and the Americas. Most advertising spends are currently on a pause, alongside ‘business as usual’ advertising communications messaging.
Supply chain logistical concerns mean the virus is having an impact on both warehouse closures and in some cases further eCommerce demand. It’s now becoming increasingly difficult to get certain products to market and fulfil these orders. China has experienced this first-hand across their huge manufacturing economy. The overall consensus is that Europe will follow suit and begin to feel these effects more so in the next few months.
We have seen a significant period of transition with major sports apparel brands: Nike, Adidas, Reebok, Lululemon and Under Armour, to name a few. Shutting stores temporarily has become an ethical obligation, with some brands such as Patagonia temporarily pausing online operations to protect the safety of their team. It is possible this could extend even further to many other brands digital eCommerce platforms, if supply chain issues continue and COVID-19 is not contained. This would have an even bigger impact on advertising and PR budgets going forward.
Brands may reduce advertising spends in Q2 & Q3 2020 as they struggle to mitigate economic losses, whilst also being careful not to exacerbate further pressures on demand. The need to reallocate budgets from advertising plans to implement across new supply chain strategies most likely will come into play.
If by Q3 COVID-19 stabilises – and further self-isolation is avoided in the near future – this will allow consumers more freedom of movement and help sports retail markets bounce back, ensuring less of a significant loss.
Additionally, we have experienced the mass cancellation or postponement of high-profile events in the running and cycling sectors, including counterpart trade shows. Events affected range from the NCAA (National Collegiate Athletic Association) cancelling its March Madness tournament (estimated to have generated US$655.1m ad revenue in 2019, according to Ad Age), to events closer to our direct business vertical, such as the London Marathon, MDS and local events including parkrun and the Bournemouth and Brighton Half-Marathons. The scheduled summer Olympics in Tokyo has been postponed to 2021, following the decision of several participating countries to opt out of competing. Lord Coe (Britain’s most senior Olympic figure and president of the IAAF) identified several factors behind this decision, such as fairness of competition, risk of injury, and the emotional wellbeing of competitors.
What This Means for Sports Brands.
With the majority of sports apparel and tech brands producing most of their stock in Asia, these brands will be feeling the effect of disjointed manufacturing, supply chain issues and warehouse closures. Multinational corporations such as Nike, Adidas, Under Armour etc have the reactive capability to juggle budgets and guarantee that alternative supply chain logistics are met. However, with controls being placed on public gatherings and increased self-isolation measures, it’s likely overall sports apparel sales will take a dip, with fewer consumers heading to gyms or outside as much to participate in sports.
Although, this could go another way; with the latest UK government advice now only allowing those out of the home to fulfil urgent tasks, one of which is exercising once a day. Could this mean society will continue to spend on sportswear to regain some form of normality and “identity” whilst participating in exercise outdoors in “public”?
Ultimately, we still live in what remains to be a fashionably conscious environment. This seems farfetched given the circumstances, yet for multinational sports brands, it’s unlikely a revenue drop from declining sales would overtly impact their business model, allowing them to stay afloat during this time. However, smaller sports apparel brands such as SAYSKY, Ciele and Tracksmith, without that corporate financial safety blanket to catch them if they fall, will be hoping for a spike in athleisurewear popularity and sales to ensure they survive.
The Olympics in Tokyo would have allowed for an advertising boost in spend and a growth in particular sports popularity. However, following the mass cancellation of events around the world, a larger domino effect may be experienced. This could result in a decline in certain sports trending such as athletics and running, amongst new sports which were due to be implemented (Climbing and Surfing). With the lack of endorsements from apparel brands and decreased viewing rates of key events which usually help bring these verticals into the mainstream, endurance sports categories will take a hit the most. This would hugely hinder the growing endurance market – a lack of investment and innovation could lead to a potentially stagnant industry with reduced participation and talent coming through.
It will be interesting to see how quickly the sports sectors and advertisers react to finding new ways of engaging with their audiences and showing solidarity in the current climate. Brands will need to ensure they keep up with the rest of the media industry and tactical shifts in eCommerce markets. There is a clear urgency for proactivity around alternative promotional strategies to navigate those conversations brands have already established with their audiences – they’ll now need to align to a newfound position going forward.
Even though brands have a chance to add value within the current market, by utilising their voice and reach, most brands are standing still, waiting. Business as usual messaging can be seen, alongside reduced advertising budgets as the norm. Majority of brands seem to recognise the impact they could have here; however, not many are willing to take a strong position just yet and instead remain empathetically sensitive to the situation.
If you would like to read up further on this topic, the team at Freestak have written a thorough report on the endurance sports market, which you can download in full here.
How We Can Help.
Our platform of >1,500 endurance and outdoors sports content creators (all over Europe and in the USA) can help spread your message effectively. Our team can help you select them, and they can help you with content ideation, strategy or simply spreading the word for you. You could have a campaign live in less than 24hrs, and see results on your analytics dashboard soon after.
We intend to keep monitoring the situation in our sectors and will publish updates to the report regularly. If you have any comments or questions, we’d love to hear from you. Drop us a line at firstname.lastname@example.org