The problem has been well-known for several seasons now. Sales in the sports industry is more heavily dependent on the weather than on general economic development and consumer confidence. Hardly anything has happened thus far.
Industry and retail – “The industry needs to change”
“We need to raise the room temperature for the topic,” says Tobias Gröber, Head of ISPO Group. “Industry and retail need to come together – the industry needs to change.”
Sharing this opinion is the Federal Association of the German Sporting Goods Industry (Bundesverband der Deutschen Sportartikelindustrie, BSI). There, the topic is at the very top of the agenda this year. “The times when the customer made a stockpile for themselves are over,” explains Andy Schimeck, Chairman of the Outdoor technical unit at the BSI and Chief Executive at Marmot.
“We need to get out the situation where products are on shelf so long that they’re already discounted before they match the weather.”
Summer goods in February, winter collections in August
There are two collections each year, summer and winter. In the past few years, it’s become more and more important to agree on and meet early delivery dates – completely regardless of the fact that the customer has evolved in the opposite direction.
Thus, while the winter collections are preferably delivered in full as early as August or even July, the customer isn’t interested in the goods until late fall, at the earliest. The same happens in spring, when light summer items are already coming into businesses in February.
Why is it like this? “Everyone is afraid of early reductions,” is the unanimous answer from the industry. The only way thus far to sell the goods at the regular price is by getting them as early as possible – preferably, long before the red pencils come out.
That would work if the range of goods was tight. But it isn’t. Those times, too, are long since gone. Instead, there are so many goods on the market that the consumer doesn’t run any risk by taking their time to buy.
From their perspective, waiting is only prudent; ultimately, things are being reduced earlier and earlier and to a greater and greater degree. The transparency of the internet forces even the most remote retailers in the mountainous regions to start marking things down earlier and earlier. Even if the season hasn’t even begun there.
Different needs in retail
On top of that are the different needs of retailers. Large retailers need the collection early, to be able to continue producing their catalogs and other promotional measures. In contrast, it’s completely sufficient for small retailers to get the products precisely when they want to shift their business to the new season.
The same applies for the time period when the orders are completed: While the big guys want plan as early as possible and in most cases want to place the orders before their respective trade fairs, classic specialty retail only wants to buy for the coming season when it actually knows what it has in the bank – that is, as late in the season as possible.
The order period is thus becoming longer and longer for brands, and the production time shorter and shorter. In order to still be able to deliver, many brands are producing based on prognoses. Here, too, there is a lot of potential for error.
More delivery dates are necessary
It’s neither attractive for the customer to wait half a year to find the same items in stores, nor is it motivating for the seller to sell these goods after all that time.
Never mind the fact that, with this rigid seasonal policy, there’s hardly the possibility to react quickly to new trends. Fashion shows us how: The offer has to orient itself to the actual demand, and at the same time continue to supply new impulses.
That means that the product range should inspire; it needs to be fun to make impulse buys. That also means moving away from the classic two-collections-per-year way of thinking, and towards more flexibility and more delivery dates, and coordinated color schemes.
“We need to develop a demand-based supply chain,” says Andy Schimeck, and he doesn’t mean that the goal should be twelve collections per year in the sports and outdoor industries. The first step is simply to supplement the two yearly collections by two further delivery dates each.
So, the fall items are to be delivered first, and then in October come the warm winter goods. That frees up the stores. However, there aren’t to be further order dates. “The retailer wouldn’t have any time for that,” Schimeck continues.
However, most manufacturers would have such large collections that they could be restructured into different delivery windows, Schimeck suggests. Multiple delivery windows would also rectify the capital lockup in retail – that, too, is an important argument for it.
Suppliers at the capacity limit
From the point of view of production plants, rectifying production times would be a true blessing. The tendency to ship earlier and earlier is borne on their backs, especially. “Everyone would best like it if everything were on one deadline,” says Gerhard Flatz, Managing Director of KTC Limited in China, which produces for many premium brands in the ski and outdoor sectors.
“But ordering at the end of April and shipping in September – that doesn’t work.” Procuring materials and ingredients alone takes up to three months, including shipping. Only then can the sewing start.
The current delivery practice brings factories to their capacity limits twice per year – while capacity remains open for the rest of the year. A better distribution over the entire year would be very accommodating to plants and their workforces.
Distrust between industry and retail
But where has the project floundered thus far, when the benefits are so clear? “There’s a lack of confidence,” is the answer in many places. There’s a great fear that not all of the parties involved will keep to their agreements. Distrust also rules regarding a closer collaboration between industry and retail.
But collaboration would be necessary to make the collections better. “Thus far it’s been that the industry primarily know its numbers from pure sales, but actual clearance sale figures would be much more important for collection planning,” explains Katrin Voss, Purchaser of Textiles at Sport 2000.
Only retail knows these figures, and it’s reluctant to hand them over, since they play into possible brand verticalization plans. Nevertheless, it’s important that industry and retail work closer together in the future, in order to stay sustainable. All parties involved have to come together and decisions have to be adhered to. The industry is currently working on that intensely.