How could the metaverse affect eCommerce businesses if we experience mass adoption?
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Welcome back to our ongoing blog series, where we delve into various industries and explore the cutting-edge technologies and emerging trends that are driving them forward.
June saw us take a closer look at homeware eCommerce, painting the picture of a growing market that is experiencing a steady digital transformation despite rising living costs and declining house purchases. Before that, we focused on fashion retail.
This time around we are taking to the great outdoors, discussing what the future holds for retailers in a continually growing and competitive market.
In recent years the outdoors retail industry has experienced almost unparalleled demand.
The COVID pandemic’s lockdowns and restrictions prompted a need for alternative activities, fresh air, and mental respite. With limited indoor options, many sought solace in outdoor activities like hiking, cycling and running.
There is no sign of this slowing down, with a 20% revenue increase forecasted across the next four years.
“The revenue in the sports & outdoor segment of the eCommerce market in the United Kingdom was forecast to continuously increase between 2023 and 2027 by 573.2 million GBP (+20.6 percent).” Provided by Statista
So, there needs to be a focus on retention
With so many new customers entering the market, it feels like the most successful outdoors retailers over the coming years will be the ones that are able to convert first-timers into long-term repeat purchasers.
By nurturing a positive shopping experience and establishing a lasting connection with the buyer, these companies can create a loyal customer base that keeps coming back for more, leading to long-term success and sustained business growth.
Leading D2C outdoor brands are leveraging community building to foster a sense of community around their brands.
"Never Stop", the marketing campaign and community initiative by The North Face (the most popular outdoors brand in the United Kingdom) has been a core element of their brand identity for many years.
The campaign typically features inspiring stories of athletes, adventurers, and everyday individuals pushing their limits, conquering challenges, and pursuing their passions. By emphasising the spirit of adventure and encouraging their customers to engage with in-person events at their stores across the country, they are building a community and developing emotional ties to the brand.
Offering an excellent experience
The North Face’s community-building campaign would be futile if they weren’t delivering an exceptional experience to those customers in the first place.
In what is predicted to become an increasingly competitive market, outdoor brands and retailers will also need to get serious about the journey they provide for their customers and the support they give them post-purchase.
Providing outstanding customer service at every touchpoint.
Responding promptly to inquiries, addressing concerns, and going the extra mile to assist customers.
Utilising customer data and purchase history to personalise the shopping experience.
Implementing a loyalty program that rewards customers for repeat purchases
Sending post-purchase follow-up emails expressing gratitude and seeking feedback.
Creating compelling, tailored informational content related to outdoor activities, adventure trips, or product guides.
Using limited-time offers and exclusive promotions to entice customers to return.
Offering a hassle-free returns and exchange process.
Complex stock forecasting driven by the seasons
Changing weather conditions throughout the year means that specific outdoor activities will experience seasonal peaks in demand. For example, we know that running and hiking increase in popularity during the spring and summer seasons, while skiing and snowboarding will experience similar in autumn and winter.
Outdoors retailers face the challenge of avoiding stockouts during peak demand periods, while also preventing excess inventory that may result in financial losses. While this challenge is by no means unique to this industry, there aren’t many that experience such dramatic highs and lows throughout the year.
All-encompassing outdoors retailers such as Decathlon can’t afford to drop the ball when it comes to maintaining the right balance of inventory in line with those rapidly changing customer preferences. Their range spans multiple sports and seasons, so they must operate a fluid process of stocking, replenishment and clearance.
Sport-specific companies like our clients Run and Become and Sigma Sports are tasked with forecasting their busy and quieter periods, scaling back during the winter months so that they do not have to discount stock.
To mitigate these challenges, outdoor retailers often employ data-driven approaches, historical sales data analysis, customer feedback, and the use of advanced forecasting models to make informed decisions about stock levels. It is sure to be an industry that looks to leverage the potential of AI technology over the coming years, as it is tipped to have a significant impact on the ability of technology providers to create better forecasting models and automate elements of stock replenishment.
Additionally, having strong relationships with suppliers and maintaining flexibility in inventory management can help outdoor retailers better navigate the seasonal fluctuations in demand and supply.
Short-term and geographical demand
The demand for outdoor products can be highly variable and unpredictable, especially for products that are directly impacted by weather conditions. Sudden changes in weather patterns can significantly influence customer buying behaviour, making it challenging to forecast stock levels accurately. If climate change produces more volatility in weather, as predicted, then this will only make the task more difficult.
It is also worth noting that outdoor retail stores may cater to customers in various geographic regions, each with its unique weather patterns and seasonal preferences. This diversity further complicates stock forecasting, as different locations may experience peak seasons at different times.
Outdoor brands need an environmental conscience
We know that customers appreciate brands that are socially responsible, and may choose to purchase from them if they are aligned with their values.In few other industries is getting this right as crucial as in the outdoor sector, except perhaps in the beauty industry.
Modern consumers are increasingly conscious of environmental issues and social responsibility but outdoor enthusiasts, in particular, are often hyper-aware and expect the brands they support to share their values. Having a social conscience and green policies helps outdoor brands align with their customers' beliefs, enhancing brand loyalty and attracting eco-conscious consumers.
Patagonia, for example, has created a transparent Environmental & Social Footprint landing page that details their various programs around materials, environmental, social responsibility and supplier locations.
There must be an acknowledgement that outdoor brands rely on nature to supply the playground that makes their products viable. By adopting green policies and promoting sustainable practices, companies like Patagonia are contributing to the preservation of natural environments, ensuring that these pristine locations remain accessible for future generations of outdoor enthusiasts.
This remains a differentiating factor and can significantly enhance a brand's reputation. Customers are more likely to choose a brand known for its commitment to sustainability and social responsibility over one that lacks such initiatives. This differentiation can be a powerful competitive advantage in the market.
“Leading British tent brand Vango is set to launch a new augmented reality technology that will allow customers to view full-size, virtual versions of its products to help inform buying decisions.”
We have mentioned augmented reality in each of the two previous industry focus pieces but it is worth repeating once again: By leveraging this technology, consumers can now explore and interact with products in ways that were once restricted to physical retail experiences.
If you have ever visited a Decathlon or a GoOutdoors before, it will most likely have been a huge retail unit providing the necessary space to display the dozens of tents, awnings and camping equipment. Not to mention the clothing.
As AR technology advances, and is used more regularly by the average consumer, we will likely see the leading outdoors retailers begin to downsize their brick-and-mortar operations in favour of developing their digital experiences.
Sure, there will never be a substitute for the physical experience of stepping foot inside the display tent, but this can easily be compensated for with interactive product walkthroughs that are embedded into the PLP.
Exploring outdoor retail’s relationship with health and fitness
Finally, it is worth acknowledging that the primary reason consumers engage with outdoor activity is that they want to progress their health (physical and mental) and fitness.
This natural link offers a very strong opportunity to foster innovative and meaningful collaborations between brands from the two industries, allowing them to tap into new customer bases, create unique offerings, and enhance their brands’ appeal.
Collaborations can take many forms but common initiatives include co-branded products, co-branded events, social media collaborations and mutual membership/loyalty programs.
Such collaborations can be mutually beneficial, offering opportunities for growth, innovation, and customer engagement. By combining forces, both brands can leverage their unique strengths and reach broader audiences.
However, it's crucial to ensure that the partnership aligns with the brand's identity and values. A well-thought-out collaboration can strengthen brand positioning but it’s essential to carefully assess the potential benefits and risks before entering into any partnership and to choose partners whose values and target audiences are compatible with the outdoor retail brand.
In conclusion, the future of eCommerce in the outdoors sector promises to be a transformative journey, where environmental sustainability takes centre stage, complex stock forecasting optimises challenging inventory management, and immersive shopping experiences revolutionise customer engagement. Embracing these innovations will not only digitally develop the sector but also foster a greener, more informed, and unforgettable shopping adventure for outdoor enthusiasts worldwide.
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