The Digital Future for Sporting Goods, Hunting & Firearms Retail
The widely held theory that North American brick and mortar retail businesses are in the midst of a catastrophic slump is both illusory and explained predominately by many failing businesses’ inability to adapt to growth in e-commerce sales and address the changing needs of their customers. E-commerce transactions made up 8.3% of total retail sales in 2016, which represents approximately $102.7 billion (US), up from 7.3% in 2015. Despite the growth in e-commerce sales, only 17% of businesses in the retail industry have an e-commerce enabled website and 71% of those businesses have no plans to develop e-commerce capabilities in the future. What these kinds of numbers are suggesting is that e-commerce capability and establishing a strong online storefront are essential components to survival in the retail industry. If you fail to establish a robust online brand, you won’t be in business five years from now.
Looking past the popular gloomy sentiment regarding North American brick and mortar retailers, we see a general economic climate that is encouraging. Backed by solid GDP growth and improving income inequality, paired with low unemployment and interest rates, North American economic performance is relatively robust. Consumers are ready and able to spend money, and sporting goods is one if the faster growing retail sectors in North America. Total sales have been growing steadily since 2010, reaching $46.5 billion in the US in 2015, up 6% from the previous year.
What does this mean for the independent sporting goods retailer?
Change is happening and it doesn’t ask permission. Consumers are becoming more savvy and demanding higher levels of service and better price points from independent retailers that can compete with larger retailers such as Dick’s, Walmart, Bass Pro Shops, and REI. Besides purchasing power, what the large retailers have that small retailers don’t are user-friendly e-commerce capabilities and strong online brands paired with social media marketing. Consumers take advantage of online convenience to research products and make decisions about purchases using their smartphones.
This is not a death-sentence for brick and mortar sporting goods retailers. As many as 49% of consumers surveyed still state that not being able to touch, feel, and try out a product before purchase is their least favorite aspect of online shopping. Furthermore, 34% of consumers are more likely to favor a local retailer for their final purchase.
The challenges for independent sporting goods retailers are:
- 1) Making price and product information readily available to local customers to drive in-store traffic.
- 2) Building an appealing online brand and developing a strong social media presence that highlights the best aspects of your products and services, nurturing a community of loyal customers.
- 3) Boosting search engine rankings and delivering a simple and user-friendly online shopping service to customers who are unable, or prefer not to, visit the physical store.
The leading reasons for why consumers shop where they do are still very simple. Price remains the number one factor for consumer behavior with 60% of shoppers naming it is their single biggest reason for purchasing decisions. The second most important factor influencing consumer behavior in retail is brand trust at 32%, which is an area that independent sporting goods retailers can seize on as an opportunity. Independent retailers can use the importance of brand trust to their advantage because of their higher levels of expertise, potential for better customer service, and the opportunity to create a community of loyal customers with shared interests and values. The consumer experience purchasing an expensive sporting goods item from a friendly, independently-run retailer with high levels of expertise and customer service is remarkably more positive than purchasing the same item at a Walmart. The challenge for independent retailers is to re-create that same experience for the online consumer.
For sporting goods purchases, physically handling a product before buying it is still important to the average consumer. While 43% of the sporting goods shoppers prefer to research potential purchases online, 46% of consumers still prefer to purchase their sporting goods products in store. While nothing can compare to the experience for a consumer of holding a product in their hands, there are ways that smart retailers can use an effective online platform to replicate the touch and feel of a product and encourage potential customers to purchase online or visit the physical store. For example, an effective online platform can provide:
- Appealing images of products
- Product reviews
- Side-by-side comparisions
- Customer testimonials
- Video product demonstrations
In the same way that many of us filter media content using review sources like the Tomatometer from Rotten Tomatoes, consumers are heavily influenced in their behavior by online reviews of products and services. In North America 38% of consumers are influenced in their purchases by product reviews found online and 67% say that social media reviews and comments influence their shopping behavior. Using their superior expertise, it is important for independent retailers to provide detailed information online about their products and services, as well as cultivate a strong social media brand with positive reviews from satisfied customers. Prospective customers of potentially expensive sporting goods items will be doing their research and will seek brands and retail outlets that they can trust. Building an online storefront with strong support from intelligent social media marketing and positive customer reviews is key to establishing a community of loyal customers for your business.
The most common shopping activities online via smartphones are still product research and checking prices. Consumers can be influenced directly to visit your retail outlet by the quality of information regarding your products and services that can be found easily online. Furthermore, 22% of consumers shop online on a monthly basis, and 54% of those consumers actually buy products online weekly or monthly. Not only is it important for your business to create a robust brand presence online to attract customers to your store, it is increasingly important for your business to create a simple and effective online shopping service for customers who would prefer to stay home.
Rather than being intimidated by the challenges of e-commerce, smaller and independently owned retailers would be wise to embrace the digital platform. Like all other retail products, sporting goods sales are growing faster online than in stores, particularly with younger consumers. Walmart’s online sales are expected to grow 20-30% annually over the next few years, while Dick’s online sales alone jumped 39% between 2010 and 2015. There is no reason why smart, ambitious, and savvy independent retailers can’t take their slice of the pie from sales growth in e-commerce. A strong online brand will not only improve sales in brick and mortar retail outlets, but provide tremendous opportunity for growth through e-commerce sales. Any retail outlet looking to tap into the growth of a strong North American sporting goods market would be wise to transfer as much as 80% of their marketing budget into the digital arena. By creating a modernized website that is e-commerce enabled, developing a consistent social media presence to engage and attract customers, and working diligently to boost search engine rankings – any sporting goods retailer can give themselves a fighting chance to survive and grow in an increasingly digital marketplace.
E-commerce & Firearms: Why you should be selling guns online
As the debate regarding gun control in America dominates the headlines, guns continue to fly off the shelves as American gun manufacturers are making record amounts of guns to satisfy the demands of an industry that is continuing to grow year after year. Heavy media coverage of gun-related incidents has only increased consumer appetites for firearms as law-abiding gun owners feel the pressure to stock up before regulations tighten. Despite the news cycle, North Americans continue to purchase guns for hunting, recreation and self-defense with an increase in sales to seniors 60 years of age and older, as well as a strong market for gun buyers between the ages of 25 and 45. Estimates of gun ownership in the United States start at 35% of the population, with 1 in 5 Americans owning 10 guns or more. In Canada, it is estimated that there are 30.8 guns per 100 people. In short, North America is a still a robust marketplace for guns, with plenty of potential for e-commerce sales.
Currently in the United States, online gun sales account for only 2% of total sales. That number is a staggeringly low compared to e-commerce statistics in almost any other retail sector, but it still represents approximately 5.4 million firearms. That’s a lot of guns. The opportunity in firearm e-commerce for independent North American sporting goods retailers is two-fold. Most importantly, there is an absolutely massive pile of money up for grabs when online gun sale statistics inevitably climb to levels comparable with every other retail sector. Furthermore, the largest North American gun retailers are facing unprecedented sociopolitical pressures to either restrict gun sales in light of recent gun-related tragedies, or leave the market of selling firearms altogether. In the United States, Dick’s and Walmart have both enacted self-imposed restrictions prohibiting sales of firearms to customers under the age of 21. Dick’s has gone as far as stating that their stores will no longer sell “assault-style” rifles such as AR-15’s. As large retail chains like Dick’s and Walmart restrict themselves according to the political climate, opportunity is created for smaller retailers to pick up the slack and attract new customers seeking to purchase firearms like AR-15 rifles.
Not only are sociopolitical factors creating opportunity for smaller retailers, but large chains’ inability or unwillingness to sell guns online has contributed to such relatively low numbers of online gun sales. Cabelas became the first large retailer to create an e-commerce platform for firearms and has been rewarded with online sales in the hundreds of millions. Cabelas is one of only 6 retailers in the top 1000 online retailers that offers an option to purchase firearms online. Walmart and Bass Pro Shops stop short of offering the option to purchase guns online, with Walmart going so far as to state that “Walmart has never sold firearms online and has no plans to in the future.” Any attempts by large retailers to expand gun-related sales operations seem destined to end up immediately on the CNN news ticker and the front page of every newspaper. Independent retailers face no such pressure to restrict themselves and can seize the opportunity to grow.
North American gun sales through e-commerce seems to be stuck in the digital stone age. There is a very real opportunity for sporting goods retailers in the market of selling firearms to modernize their online presence to participate in and profit from selling guns online. Not only does a website give your business the ability to sell your goods online, but it creates an opportunity to reach more potential customers to visit your physical store. However, selling firearms online is a more complicated process than say, setting up an e-commerce platform for selling t-shirts, so it is important to find the right help. Investing in a web design firm that is familiar with the gun industry can help establish not only a desirable online brand, but help to navigate restrictions, payment platforms, and shipping issues in order to create an e-commerce platform that runs smoothly for your business.
The digital future does not have to be a dark cloud for traditional retailers. A simple commitment to embracing the digital platform paired with a modest financial investment can ensure the survival and future success of any independently owned and operated sporting goods retailer.