David Mudd, Business Intelligence Manager Outdoor Industry Association
OIA Quarterly Update on Trends, Q2 2012 What Do They Mean To You?
Presenter
Presentation Notes
Hello everyone and welcome to the OIA Outdoor University update on trends and what they mean to you. This is the first in a quarterly series of updates on consumer, market and outdoor industry trends that impact your business. Thanks for taking time from your busy schedule to join me today. I’m David Mudd, business intelligence manager at Outdoor Industry Association, and I’ll be your captain on this fast-paced journey.
:08 Pinterest – the fastest growing social network ever
:16 Looking ahead at back to school + mea culpa
:20 Q&A
:25 Conclude
Agenda
Presenter
Presentation Notes
Here is our agenda – I’ll do my best to get you back to work by 25 after the hour. Should you have any questions during the webinar, type them in using the Questions pane on your Gotowebinar panel, and I’ll try to address them during the session, or during Q&A at the end. So without further ado, let’s jump right in to our first agenda item – outdoor product sales.
• May looking strong: +11.7 percent YOY for four-week
period ending May 26 (full May available 6/6)
• Footwear + 5.0 percent
• Apparel + 20.2 percent
• Hardgoods + 15.4 percent
• Good news following difficult April: - 5.6 percent
• Footwear - 8.0 percent
• Apparel - 4.3 percent
• Hardgoods - 4.7 percent
Tough April, solid May
Source: www.oiavantagepoint.com
Presenter
Presentation Notes
The outdoor product sales data you see here is from our OIA VantagePoint sales reporting platform. Full results for fiscal May will be available at oiavantagepoint.com tomorrow, but I’ve pulled data for the last four fiscal weeks, the period that ended on Saturday, May 26th. As you can see, outdoor products sales for the period I’ve tracked in May rebounded from a lousy April – up a strong 11.7 percent. Before we get too excited, though, its important to remember that April had two big strikes against it, both weather related. The first was that a lot of sales were pulled forward into February and March this year due to unseasonably warm and dry weather. The second was the very difficult comparisons to April 2011, when winter was still in full force across a lot of the US. That said, in both April and May, consumers kept on spending in the specialty channels. In both months, Independent Specialty stores (those with less than 20 doors) and Chain Specialty (those with 20 or more doors) were among the strongest channels tracked in OIA VantagePoint. One reason for some short-term optimism may be falling gas prices, just in time for the summer driving season.
Gas prices peaked in late April, when the national average for a gallon of gas peaked at $3.90 a gallon. As of yesterday, June 4th, the national average was down to $3.61, a decline of 7.4 percent in a matter of weeks. The gas price gurus at the Energy Information Administration forecast that gas prices will remain steady through the end of the year. This is certainly good news, but does the price of gas really impact outdoor sales?
Here I’ve graphed the value of outdoor product sales and the cost of the gallon of gas for the last twelve months. Outdoor product sales are in blue, while gas is in green. Seasonality is obvious in both outdoor sales, with our Labor Day, holiday and Memorial Day spikes, but also evident with gas prices as cost declines in fall and winter. But what’s interesting about this chart is the distance between the peaks and valleys - which I’ve marked here in red and the regularity with which even a minimal drop in gas prices corresponds with an uptick in sales.
So in June 2011 gas prices dipped about ten cents and outdoor sales rose. The same happened around Labor Day. Then we got really lucky. Gas prices hit their twelve month low right around the holidays, falling more than fifty cents a gallon from summertime highs. But does any of this imply causation? Probably not, but it does suggest mild correlation. So what does this mean to you? Well, sometimes its better to be lucky than good. This charts suggests we were lucky last year, but I believe there are to things perennially in our favor. First, gas prices generally decline in fall/winter and spike again in spring/summer (the feds require costly reformulation prior to the summer driving season) which can favor our sales cycles. Personally I wouldn’t worry about gas prices until they approach psychologically impactful levels like $4.50 or $5.00 a gallon. That plus media scares can keep consumers out of stores. The other arrow in our quiver can come out prices reach those scary levels, that is the benefits of close to home outdoor recreation. By the way, if you’d like a quick and easy way to track the indicators that impact your outdoor business, try out the new OIA Data Dashboard. Spend just ten minutes each month here, and you'll leave with a better grasp on outdoor product sales, where economic indicators are heading, and get a briefing on a key consumer trend.
As of today this is a static page that we update around mid-month. It will, however, evolve from this beta version to become more visual, more interactive and more customizable. This is a member-only benefit, and member feedback will drive future upgrades, so please help us improve the Data Dashboard by providing your feedback and suggestions. This concludes the shameless plug portion of the presentation.
• Fastest growing social network ever: 10 million users in
nine months
• Users create online collections of their favorite images
and refers them back to the original source of the image.
Why do I keep hearing about Pinterest?
Presenter
Presentation Notes
Following its March 2010 launch, it garnered 10 million users in just nine months. The best way to describe it would be that it is a photo sharing site, where all of the photos are things you have discovered on the web, and you feel like sharing why you like it with others. Also, each of the photos has a link back to where you can read more about and in many cases purchase it on the web. Users create online collections of their favorite images and refers them back to the original source of the image. Simply put, is why the social media site is a potential goldmine for retailers.
But these stats don’t mean that the site has limited appeal – quite the contrary, as the number of male users has steadily increased in the last year. There is also a male version of Pinterest called Gentlemint. If you have a product that you want to position as well, manly, Gentlemint may be a good place to start.
• In its infancy, Pinterest drives more traffic to e-commerce
sites than Google+, LinkedIn and MySpace combined
• Pinterest users report following 9.3 retail companies
• 6.9 retailers on Facebook
• 8.5 retailers via Twitter
• Users nearly twice as likely to purchase as Facebook
users
• But how does Pinterest make money?
So what?
Presenter
Presentation Notes
How does Pinterest make money? They aren’t saying for sure, but this businessinder.com article speculates on one ingenious possible business model. Pinterest gives people a place to share things they like. Many of those things have a link back to where you can purchase them on the web. If Pinterest takes your shared link and adds an affiliate tag to it, they could be getting an affiliate commission every time someone purchases something after seeing it recommended on Pinterest. In this example, let’s say one of pinned images is for a book, with a shared shared link to Amazon.com for the book. If Pinterest adds their affiliate tag to the link, then Pinterest collects a percentage of the purchase.
• NRF Back-to-school Headquarters • not yet updated for 2012
• NPD Back-to-school Spending Intentions • not yet available for 2012
Back-to-school + mea culpa
Presenter
Presentation Notes
Teen Vogue magazine is promoting the new event as a national day of shopping for its 1 million readers and in their late high school and early college years. We all know about the media and marketing success of Black Friday. When the term "Cyber Monday” was coined by National Retail Federation during the 2005 holiday season, it was met with some skepticism. The back-to-school shopping season is the second largest after the winter holidays, generating an estimated $68.8 billion in sales, according to the National Retail Federation. Could this blossom in a few years to fill the summertime media void that often hits in August. Consumers are becoming increasingly interested in event-based shopping. There is a segment of consumer who think it’s a blast to be up all night on Black Friday, in three or four stores through the early hours. Of course if back-to-school Saturday doesn’t provide anything of value consumers will not respond.
