The sporting goods industry has indicated a stable growth in the past six years, with increasing competitiveness, developing regional markets and franchising, and increasing interest in sports. As of early 2020, Russia’s sports goods market was estimated at RUR 167 bln ($2.7 bln), while the global one stood at $368 bln.
The situation changed drastically in March of 2020. Amidst the pandemic, over 10,000 stores were forced to suspend operations due to the introduction of restrictive measures and the lockdown. Yet, the lockdown restrictions led to consumers’ demand considerably shifting towards comfortable clothes and casual sportswear. The trend was particularly strengthened by workers and students’ shift to remote-work mode.
Trend for healthy lifestyle
Today, practicing key principles of healthy lifestyle is not solely a trend but a necessity for battling viruses. Marketplaces observe a considerable increase in consumers’ interest for sporting goods, with sales of sportswear and accessories soaring by 30% in the past year, and growing further.
Many brands are aware that the demand vector has drastically changed and will not come back, and are now choosing to produce more comfortable casual clothes. Companies will be successful and relevant only in case they adopt policies of green business, convenience of goods, and conscious consumption.
Consumer activities have shifted towards online platforms, which we think was naturally expected. It should be noted that representatives of Generation Z will become primary consumers by 2025–2030, while by 2040, interests will be dictated by Generation Y. The newly emerged brands now have to make a greater effort to develop their websites and boost social media presence, and test the waters to sell their products on marketplaces.
Today, the majority of consumers (60%) are millennials, and their amount will only grow to 75% in the years to come. We should focus on a client of the future: man of the digital era who will show little interest in global brands but will make choice based on usefulness of the purchase, delivery speed, and service convenience.
It is important to keep finger on the pulse of consumers’ behavior as well as its particular trends, and predict its potential changes. Those market players that have failed to adapt to digitization risk falling behind their competitors for good, with little chance of catching up — but those who will be able to operate in the new reality will win consumers’ love.
Consumers’ market price sensitivity
New realities have changed consumers’ attitude towards formation of prices for sporting goods. Five years ago, companies targeted upper-income consumers. Back then, the trend for healthy lifestyle was just emerging in Russia; only 20% of citizens with stable income and aged between 25 and 35 showed interest in buying sportswear. Today, customers have changed; this has led to brands expanding the range of products which now include goods for middle-income citizens. In addition, domestic brands boosted their presence in the Russian sporting market, and now they can compete with popular foreign sportswear brands.
What to expect from consumers in 2022
We can see two obvious shifts: customers’ approach to future purchases and factors that influence buying decisions. In both cases, apps and marketplaces have proven their multipurposeness and convenience for boosting loyal consumer attitude towards brands, and now serve as a key factor of a company’s success. In this regard, efforts should be taken to boost online presence for communicating with clients. As to digital innovations, global trends should be monitored as regards the use of various online channels that enter the Russian market. This is necessary for fast adaptation to new opportunities as well as to consumers’ behavior.
What should companies do to stimulate consumer loyalty?
From our experience, we can offer several major tools for many companies to use in order to stay afloat and be successful:
- Communicate with clients on a constant basis. Your company’s team must have a clear idea of client demands through collecting information via online channels.
- Follow trends in technology innovations to implement them in your business project.
- Staff members should know how to use internet tools for developing your online platform.
- Pursue a personalized approach. Know your clients and learn more about their demands and requirements to offer a personalized product.
- Boost direct-to-consumer channels: this will allow you to establish contacts with new partners in the industry.
- Create a product based on the environmentally-friendly production process and sustainable development.
- Increase supply chain transparency and seek new partners that would be able to meet ever-changing consumer demands.
By Vitaly Tsygankov, General Director, Forward