The global outdoor market will be worth $19.6 bn by 2026, growing at a CAGR of 5.6% from 2018 – 2026, according to Transparency Market Research.
This is a large and fast-growing market and outdoor retailers, such as JD Sports and Decathlon, have benefitted from establishing a strong international presence. We have carried out extensive consumer research in Germany, France, the US and Canada to understand how the outdoor market differs from the UK.
1. Consumer preferences
There are notable differences in Key Purchase Criteria (KPCs) that consumers look for in retailers. The UK consumer is much more price and value-orientated, with 47% of consumers wanting to shop at retailers which offer value for money (compared to 28% in the US).
Consumers in the US and Germany place a higher emphasis on retailers that offer quality products, whilst French consumers express more of a preference to follow the latest trends and prioritise brand desirability and heritage. The difference in KPCs for international markets verses the UK highlights the need to market the brands within retailers differently.
2. Market dynamics
The UK has a low average spend per person on outdoor (£26) and a relatively high sportswear spend per capita (£125). In contrast, Germany has a higher spend per person on outdoor (2.9 times that of the UK) and a low spend on sportswear (0.6 times that of the UK), whilst the US outdoor market is considerably more sports driven (2.5 times that of the UK). It is important for retailers to consider this when thinking about international expansion as it will impact how consumers view outdoor propositions.
3. Channel dynamics
In the UK, the outdoor market is highly consolidated, dominated by a few key retailers with large store networks, including Go Outdoors, Cotswold Outdoor, Snow+Rock and Ellis Brigham.
France is viewed as a challenging market for outdoor brands to penetrate given the dominance of Decathlon and the fragmented nature of the rest of the market due to the high number of independent and regional chains. Developing partnerships with buying groups in fragmented markets can be an effective strategy to gain scale. For example, Intersport represents 618 retailers in France and has a presence in 65 countries.
Online traffic data offers valuable insight into demand for a retailer's products overseas. A peak in international traffic is often the precursor to investment in new market entry. After seeing international traffic to their UK site, Ellis Brigham launched microsites in global languages including Japanese, German and Greek to better serve their expanding customer base. However, factors such as online penetration, channel usage, delivery timescales and localisation must be considered when measuring opportunity.
Online shopping is prevalent in Germany and the US, with Amazon considered as consumers' main retailer for outdoor clothing and equipment (25% and 29% of consumers in Germany and the US respectively have bought from Amazon in the last 3 years). Whilst brands must balance the opportunity marketplaces represent with brand guardianship domestically, the case for marketplace partnership may be stronger internationally, particularly given the lower CAPEX requirements compared to a D2C model.
There are good international opportunities for outdoor retailers, but it is vital that retailers understand the nuances between markets and the opportunity they represent to ensure successful entry.