With the emergence of video games and, more recently, mobile gadgets such as iPods and cell phones, traditional sporting goods gear has lost some of its buzz.
The industry has been experiencing low single-digit revenue gains for several years, primarily a result of sluggish sports participation rates. A large part of that blame has come down to the arrival of computers and especially video games, which have particularly attracted the younger male.
But a newer trend comes down to "status purchases." While in the past, marquee sneakers, baseball caps, or football jerseys marked a "status buy" for kids, now tech gadgets such as iPods, cell phones and related accessories are the "must haves."
Some retail observers believe the popularity of these tech items are partly underlying recent sales weakness at urban footwear chains, such as Foot Locker and The Finish Line.
"That urban consumer is all over electronics," said Mickey Newsome, chairman and CEO of Hibbett Sporting Goods, a southeastern sporting goods chain, on a recent investor conference call.
But others just worry about the amount of disposable income shifting to electronics from core teen categories such as apparel and footwear.
"Our concern is not so much gas prices or mortgages, it's the other categories vying for the kid dollar," said Kathy Bradley-Riley, senior vice president of merchandising at The Doneger Group, recently at a back-to-school roundtable sponsored by Women's Wear Daily. "The right electronics equipment, the right cell phone, the iPod; there's only a certain amount of dollars to spend, and those categories are getting first preference as opposed to, "Do I have the right shorts?'"
According to Piper Jaffray & Co.'s bi-annual Taking Stock With Teens survey, 79 percent of teens own at least one video game platform and 58 percent answered that they are occasional game players, playing at least monthly. The same survey showed that approximately 82 percent of teens own some form of iPod and 89 percent of students use iTunes.
According to U.S. Cellular statistics, roughly 60 percent of American teenagers own a cell phone and spend an average of an hour a day talking on them. According to market research firm the Yankee Group, 54 percent of eight- to 12-year-olds will have cell phones within the next three years.
Not that the sporting goods industry doesn't occasionally have "must have" product. Under Armour and Volcom are two brands that have clearly captured the younger consumer. But most seem to be missing the "buzz" of these tech gadgets.
Discussion Questions: How can traditional teen categories - such apparel/footwear/sports equipment - recapture some of the "buzz" with younger consumers that tech items appear to be getting? What can they learn from successful tech leaders, such as Apple, in how to reach today's younger consumers?