The World Federation of the Sporting Goods Industry (WFSGI) has shared the outcomes of its industry survey, conducted over the last four months in order to provide key insights for businesses and organisations to manage the Covid crisis, and inform future decisions.
Responses to the survey indicate the sporting goods industry is starting to adapt to a ‘new normal’ four months on from the introduction of lockdowns and factory closures around the world, although a challenging business environment remains.
From a manufacturing perspective, there seems little change on the demand front compared to last month, with 25% of respondents not facing any decreasing orders. The situation in North America appears to be more challenging compared to last month, however, with more businesses than last month facing supply chain disruption than last month.
Positively, only half of respondents still face material shortage, a considerable improvement compared to June, while more than half of companies are no longer challenged by labour shortages. Firms seem to have adapted to social distancing measures and travel and public transportation restrictions are less of an issue, according to the survey.
Looking ahead, the pandemic is still forecasted to have an impact on 86% of respondents businesses, which is a slight increase compared to last month. Still, nearly a third of respondents expect their business to decrease by 50%, with Europe and North American businesses remaining mostly concerned as over 70% expect less business. Half of respondents believe their business will need more than a year to recover from the impacts of the pandemic.
From a retail perspective, increasing online sales remain the favoured option to mitigate the effects of the pandemic, with 76% of respondents considering this measure to help their business. Meanwhile, flexibility remains the most important requirement for 90% of brand companies, with efficiency overtaking stability in importance.
Significantly, only 4% of participating businesses do not foresee any changes in their supply chain at all, with just shy of 30% more respondents considering lean and adaptive supply chain transformation in July than in June. More than two thirds of participating firms are considering rethinking their sourcing priorities, with a growing trend of local-to-local sourcing becoming more attractive.
In terms of market trends, the survey revealed environmentally friendly products still top the list, with companies no longer attaching the same importance to price point centric trends, which was the most important option in May, but is now the least expected trend. A medical change is also noted with regard to functional driven trends; it is the second most important trend this month, compared to being the least important trend in recent surveys.
According to the industry, while outdoor remains the most prevalent sport cycling is closing the lines, reflective of a Covid-induced bike boom in many countries around the world.
“I am pleased to learn that there is considerable improvement when it comes to supplying the sector with goods and available labour forces,” said WFSGI President and CFO, Robbert de Kock. “Also, globally speaking the demand has slightly improved. But times remain challenging especially for the sporting goods business in the Americas where the globally positive logistics and supply trends are not mirrored.
“It seems that our industry slowly adapted to the new normal as less companies consider social distancing measures or working from home are having an impact on their workforce. Similarly, a decreasing number of respondents are challenged by legal measures.”
De Kock noted that while it is promising that respondents are more optimistic than in previous months regarding the recovery of their business, it is crucial to note that businesses expect they will need substantially longer to recover as the pandemic goes on.