How important is effective logistics management for a sports brand? The short answer is very much.
The world of retail has changed over the past few years. Then the Covid-19 pandemic happened, fast-tracking the transformation sports brand market. The pandemic and the subsequent lockdowns made people across the world more conscious of leading an active and healthy lifestyle — in the comfort of their own homes.
Another transformation that comes with it is the fast rise of e-commerce. From social media to social commerce and the rise of several shopping apps, people are now preferring the convenience of shopping at home.
The particularities of the sports brand industry
Seasonal demand and fast-paced technology
Seasonal demand and technology needed for a particular sport are the main driving factors of logistics for sports brands. These are also the main challenge when it comes to supply chain management.
Seasonal demand may mean different meanings in the world of sports. It may mean seasons of the year. An example would be the demand for winter sports apparel during the Winter Olympics. Another is swimwear demand in the summer season. There are also the yearly competition seasons. They vary to different sports as well as host countries. This means the more diverse a brand offers, in terms of sports catered, the more the brand needs to adapt its collection according to seasons. It has to be ready for every cup, international tournament, playoff, and final.
Professional athletes are the main brand influencers in the world of sports. They propel the market into fast-paced action by wearing the latest in sports apparel and equipment. By wearing or using the brand, celebrity athletes — whether international or local — create trends among loyal fans. This results in a demand. Brands have to handle and be adaptable to these dynamics. Hence, logistics for sports brands must address this with flexibility, product availability, and express delivery. Putting your brand ahead of the momentum will gain you, customers.
Your primary customer base is amateur athletes and just about anyone who is a fan of a particular sport. Unlike in professional sports, they are your constant customer base regardless of the sports season. Nothing would stop them from playing all year round. They are also drivers for product diversity: different sports mean different particular logistical needs.
To adapt primarily means to have a good “nose” on the demand. This is something you’ll gain if you do seasonal demand forecasting. What comes after is planning a strategy that considers the supply chain flow in logistics. The goal is to anticipate consumer trends and meet the demand head-on.
The digital turn is the new normal
The Covid-19 pandemic took the digital turn to e-commerce as a full pivot. It closed the gap between social media and commerce. Facebook, Instagram, and TikTok, among others, now have store platforms to be enjoyed by both sellers, big and small, as well as consumers among the younger generation. Particularly in TikTok, the rising star in e-commerce platforms is TikTok shop where influencers are marketers as well.
The new digital marketplace reshaped the logistics for sports brands. New distribution avenues and changes in the supply chain are formed. Although this is nothing novel, what exists pre-pandemic only became more buffed, asserting their significance among consumers. This has caused gaps between major sports goods industry players. Profits mostly funnel to the most popular international brands. Nonetheless, today is also a period of brand diversity on the level of specialty sports brands each catering to a variety of sports niches.
Trends and outlook in logistics for sports brands
In the competitive world of sports apparel and accessories, staying ahead of the game is a challenge. One of the main competitive advantages comes from effective logistics management for your brand. Effective logistics management means convenience for customers and profit for your brand.
However, strategic logistics for sports brands nowadays will always come from understanding the dynamic relationship between consumer engagement, upcoming trends, marketing, and sales. Robust planning refers to a good outlook on the entire retail landscape. The notable trends are discussed below.
Here are some of the trends to look out for according to McKinsey & Company:
- 70-85% of buyers are continuing their “stay-at-home” fitness or sports regimen post-pandemic.
- More than 80% of potential buyers use online platforms.
- Around 45% of 2021 sales came from online e-commerce platforms even when the malls and grocery stores are slowly recovering.
Consumers in the age of social commerce
Consumer attitudes and behavior are transformed along with logistics in this dawn of social commerce. The pandemic made a wake-up call on the importance of an active and healthy lifestyle. Social media is rich with content regarding sports and fitness lifestyles. Influencer review and promote products, reaching a wide reach of social media brand followers. One aspect of note is that the majority of these followers are from the younger age bracket eager on spending their hard-won salaries. Complimentary to this trend is the shift from gyms and other sports venues to at-home fitness and sports as well as social media interest communities.
Social media is now rising fast as the new digital marketplace platform. The key to success in this landscape is the ability to convert engagement to sale conversion. The effective way to do this is to learn how to foster and develop communities around certain interests or needs. In other words, you have to build a digital ecosystem where the consumers themselves become the promoters of your products through their content or viral trend challenges, or hashtags.
In response to the times, there are many digital platforms developed at our disposal. These range from website shops, specialized apps for particular brands, social media store platforms, and even the good old newsletter format in emails. The latest format to be established is social media live-streaming. They are all the rave in Asia whether on Facebook, Instagram, or even Tiktok.
The direct-to-consumer (DTC) business approach
Ever since the world has been shifting to the new normal, we have seen the re-opening of physical stores. Nonetheless, the digital turn is here to stay especially when it is made possible for brands to directly reach out to customers. This developed into what is now known as the direct-to-consumer (DTC) business model. Simply put, DTC is a retail model that skips having to go through retailers such as Target or Walmart and sends the products straight to consumers with the help of a brand-owned digital platform.
The outlook for the DTC model is looking rosy. According to research done by eMarketer, it is expected, just in the US alone, for e-commerce DTC sales to reach over $180 billion in 2023 and over $210 billion in 20241.
The advantages in store for anyone opting for a DTC model are promising. First off, people prefer to buy products directly from the brands themselves. A Google-led survey in 2021 reflects this consumer behavior trend. Online shoppers have a positive opinion of individual brand quality 68% of the time and believe that reaching out directly to the brand is a more personalized experience 61% of the time2.
The direct in the DTC also means that you, as the business owner, have a direct hand in major business decisions. In this model, it is up to your preference on marketing, logistics, and sales of products. This reduces the complications in your supply chain as the part where you ship out to retailers is skipped over. By having control over the processes, you can avoid running out of inventory, provide fast to customers, and lessen delays.
Another advantage is full control over the customer experience. You design the whole shopping experience and product introduction. Here, what you achieve is customer loyalty by satisfying their needs. The nice thing about this is that since you do business directly with customers, you’ll be able to get customer data directly. With this information at hand, you can gather insight and build a marketing strategy from direct experience.
Profitable opportunities up ahead
The sports apparel and equipment industry is experiencing continuous growth. There were setbacks, as with any industry during 2020, nonetheless, it wasn’t impeded overall by the challenges that the pandemic brought upon the world. During the new normal, it continues to be a profitable field and is even increasingly so. In the industry forecast and analysis titled Sports Equipment and Apparel Market Research done by Allied Market Research, the sports apparel, and equipment market will triple in value in just ten years. From $340.6 billion in 2020, it has the potential to reach $930.5 billion by 20314. This information is all you need to know that it is about time to play it big for great rewards later.
In the interest of profitability, logistics for sports brands is a crucial factor in making it big. As supply chains become more globalized and segmented, the need for timely and in-full delivery becomes more necessary. Some retailers have compliance programs that encourage on-time delivery to distribution centers. Additionally, consumer satisfaction for on-time and in-full deliveries will provide more value to your brand products.
Money is lost when your product doesn’t arrive at your customer’s doorstep when they need it. Worse still, you’ll lose your loyal customers due to late deliveries. In the US, stockouts went to 20% in 2021; consequently, a whopping 79% of consumers opt to try new brands after their usual product went unavailable, incurring $82 billion worth of missed opportunities5. That is a $524 million loss every week. On the reverse, you can get a piece of the pie, so to speak, when it comes to the expected annual revenue of the sporting goods industry. The expected annual revenue is projected to be worth $340.6 billion with an expected $6.55 billion projected revenue within a week.
Challenges for a sports brand and the need for great logistics.
The particularities, trends, and even forecasting all point out the crucial role of logistics for sports brands. As for the state of international logistics itself, there are also trends and challenges that one must consider ahead in preparation.
There are shipping trends for the past two years that are expected to carry on this 2023. There are challenges that brands must anticipate and solve in terms of the international supply chain. We have to take into account the logistical issues that have arisen since we have been recovering from the pandemic. Some of these are the rise in raw material and transportation costs, production line jams in different regions, and demand fluctuations. All of these are happening while consumers are expecting quick and easy deliveries.
Given the current situation and consumer-end demands, one must be adept enough to plan and agile enough to be adaptable whenever changes suddenly happen. Now take a look at this ideal scenario:
- Sporting apparel and equipment are shipped on time from production to you.
- Marketing campaigns are planned and launched in coordination with the arrival of products.
- Proper tracking of consumer behavior and trends is easy through reliable and accessible technology.
- The market demand is handled with rigor and flexibility regardless of the challenges that may come.
These are just some of the good things that could happen as a consequence of having the right combination of a good logistical strategy, accurate demand forecasting, and reliable supply chain fulfillment.
The question is, what makes great logistics for a sports brand provider? It collaborates with you every step of the way. Service here equates to close consultation: determining weak spots focused on better performance at lower costs, and with an experienced approach to addressing the complexities of today’s supply chain network. Access to up-to-date logistics and shipping technology is a big plus.
Going back to the main question raised at the beginning, becoming a brand that reaches wide and instantly all starts with a reliable logistics partner. A good business perspective is to treat logistics for sports brand as an investment that have fruitful returns. Looking at it simply as an expense will not take your brand anywhere in the highly competitive market. A sound logistical plan means better organizational performance which, in turn, translates to a healthy retailer-to-customer relationship.
