In its annual State of the Sport Series, Running USA
will examine how patterns in corporate, consumer and running behavior
have changed over the last decade and what to expect for the future of
running - both the sport and the industry. Part I looks at the status
of the manufacturing and vendor components of the industry as well as
estimates for the total number of runners. Part II will share demographic
highlights of the first National Runner Survey project conducted by Running
USA and the RRCA in 2007. Part III will examine trends of U.S. road running
events and Part IV will focus on the Largest Races in the country and
the world.
Part I: An Industry Poised for Economic Challenges
Over much of the last decade, the state of the U.S.
Running Industry could be described by an array of percentages - mostly
gains - with frequent use of phrases such as "steady growth"
and "promising future". The second half of 2007 and the first
two quarters of 2008 have provided sobering economic news for the country
as a whole. The running industry is not immune from these negative forces,
but innovative running products and events, new uses for technology and
an understanding of how the runner market has evolved can provide as many
opportunities as challenges.
In SGMA's "2008 State of the Industry Survey",
Running was 4th on the list of "Hottest Sports for Sales Growth in
2008" behind Yoga / Pilates, Fitness Walking and Lacrosse. In interest
of full disclosure, it has been in the top 5 for several years, but the
placement does indicate the potential and / or consistency that sporting
goods industry leaders see in running products.
Runner's World magazine, the industry's largest periodical,
continued its trend of increasing ad sales from year-to-year. The Magazine
Publishers of America reports an annual ad sales total of $72,028,716
for Runner's World in 2007, an 8.2% increase over 2006. During the same
time period, the overall magazine industry averaged a 5.9% increase in
ad sales. In the first half of 2008, magazines overall have experienced
a decrease in ad sales of -3.1% while Runner's World has been able to
increase sales by 8.1%.
Running Footwear
"Running" products were first on SGMA's list for "Top-Selling
Shoe Styles" with an increase of 5.3% from $3.054 billion in 2006
to $3.216 billion in 2007 (SGMA-2). NPD, on the other hand, reported that
consumers said they spent more on low performance shoes in 2007 (average
price of $31.14) than running styles (average price of $41.97). This was
the first time in a number of years that running was not at the top of
that list.
The retail perspective reported by NSGA in the annual
"Sporting Goods Market of 2008" also rang a few warning bells
with a reported 3% decline in the value of running and jogging shoes sold
in 2007 and 3.6% decline in units. See Table 1 below for historical shoe
sales figures and distribution channels.
The running specialty store which is a vital conduit
between manufacturer and core runners had a smaller share of running shoe
sales in 2007. That trend may or may not continue in 2008 and beyond,
but what is undeniable is the future growth of the internet sales channel
which accounted for 8% of the running shoe sales in 2007. Specialty vendors
with the help of manufacturers, events and clubs will need to attract
new participants to ensure that the running pie is bigger. They can also
look for products that are attractive to people who just want to look
like runners. NPD reports that "only about a third of all sportswear
or athletic footwear is purchased with the intent that it will be used
in an active sport."
| Table 1. Jogging & Running
Footwear Sales in U.S.NSGA - 1) (NSGA-1) |
|
|
| |
|
|
|
|
|
1987 |
1997 |
2006 |
2007 |
| Footwear units |
28,120 |
30,431 |
40,642 |
39,184 |
| Footwear Dollars |
1,023,287 |
1,482,294 |
2,259,781 |
2,192,909 |
|
|
|
|
|
| Sales Channels - % of Units |
|
|
|
|
| Department Stores |
18.2% |
14.7% |
19.1% |
19.2% |
| General Sporting Goods |
20.5% |
17.6% |
18.0% |
17.1% |
| Specialty Athletic Footwear |
27.5% |
19.9% |
19.0% |
16.6% |
| Discount Stores |
19.1% |
16.2% |
10.6% |
12.1% |
| Family Footwear |
|
11.7% |
11.2% |
10.7% |
| Online Internet |
|
|
5.4% |
8.6% |
| Factory Outlet |
|
7.3% |
7.0% |
7.4% |
| Specialty Sport Shops |
3.2% |
4.5% |
4.7% |
5.5% |
| Mail Order |
2.6% |
5.2% |
1.8% |
1.1% |
Sports Apparel
The Sporting Goods Market in 2008 (NSGA-1) reports that athletic and sports
clothing purchases totaled $10.83 billion in 2007, an increase of 2% compared
to 2006. Running apparel purchases during the same time period increased
by a whopping 25% ($726.7 million in 2006 to $909 million in 2007). It
will take another year to see if that jump represents a significant change
or just a fluke related to a particular survey panel.
SGMA reported that the most popular apparel items featured
new performance fabrics, technology tie-ins and green materials. The leaders
in those categories are also major players in the running industry - Nike,
Brooks, Under Armour and adidas.
Success of Road Races Attracts Venture Capital
For followers of the sport, it will be no surprise that running events
continued to grow at a healthy rate of 5% for the same events and 4% growth
overall from 8.5 million finishers in 2006 to 8.9 million in 2007 according
to Running USA's Road Running Information Center (RRIC). But one aspect
of running event trends that could not be predicted 10 years ago is the
concept of the road race as a good investment. Over the last 4 decades,
a few successful race producing entities such as Elite Racing and New
York Road Runners have grown organically from a base of volunteer event
managers who loved running to professional organizations that still appear
to understand runners and take their role as caretaker of the sport seriously.
In the last century, the only people thinking you could make money from
producing road races were those who knew nothing about the sport and / or
had professional fundraising experience and understood the power of a
compelling cause associated with a high visibility event.
When Chris Devine, an avid runner, sold several hundred
radio stations and purchased a few pieces of U.S. prime marathon real
estate, it made sense. A fan of the sport was bringing substantial resources
to enhance a sport he loved. Several years and many unhappy creditors
later, the hope for significant positive change was lost. Now in the last
12 months, new venture capitalist groups have emerged to purchase Elite
Racing and several other prominent events, apparently attracted by all
the benefits running fans appreciate as well as healthy participation
numbers and sponsorships. Time will tell whether the combination of investor
pressure and event quality can co-exist.
Is Running Recession Proof?
The annual State of the Sport reports have often described the ability
of running to reinvent itself over the years. With its fitness side, competitive
side and even compassionate side and broad range of activities for every
age and ability, it is indeed the most flexible of sports. The next 18
months will provide another test of how responsive and innovative the
running community can be. The following are trends and factors which should
help running to continue to thrive or at least hold its own compared to
other sports and activities during difficult economic times.
Larger Profits and Race Fields with Smaller Footprints
Running manufacturers like Brooks, Nike, adidas, ASICS and New Balance
are expected to continue to be leaders in developing green policies and
products. And more running events are expected to implement green policies.
[See 2008 Wire # 22, March 16, The
Greening of the Running Industry.] There is evidence that consumers
and participants are responding positively to green efforts and during
this time of rising energy costs the need to reduce the size of our collective
footprints is greater than ever.
Technology Encourages Industry to Run Outside of the Box
It is difficult to keep up with the array of innovative products and services
that are impacting the running experience. In the last 18 months, the
number of new performance fabrics, timing systems for events, GPS systems
and location software, running widgets for desktops and performance improving
shoe designs have increased exponentially. But the innovation that stands
out above the rest is the Nike+ phenomenon. The award winning ad campaign,
social network website and new products that combine music, fitness, competition
and the "world's largest running club" are reinventing the sport.
The success of the Nike+ concept has also demonstrated
how the marketing world has changed. Nike is spending much less on television
ads and still reaching a huge audience. Nike+ also continues to engage
consumers after the initial transaction has occurred, keeping Nike+ runners
motivated to run and encouraging them to share their experience with others.
Nike is committed to supporting and developing the concept further. In
April of 2008, for example, a Nike+ coaching section was added.
Weight Loss is Everyone's Gain
No sport can contribute to the fitness of a nation while minimizing cost
and energy use as much as running. Running's half-brother, fitness walking,
offers the low cost health benefits but not the same potential as a goal-setting
or competitive sport.
Weight loss is one of the top motivating factors cited
by runners in the National Runner Survey (RRIC). In Part II of this series,
we will examine whether this trend is true for both genders or primarily
women. With the popularity of TV shows that introduce us to overweight
and obese individuals, more and more people are viewing weight loss as
a life saving necessity and a worthy goal that should be celebrated. The
running industry should be able to develop more tie-ins with that cause.
An Olympic Year Bounce?
Both New York City last November and Boston in April provided excellent backdrops
for the U.S. Men's and Women's Olympic Marathon Trials respectively. Even
though television coverage was not ideal, the events did their part to
raise the level of media attention. As long as U.S. runners can "distance"
themselves from any hint of drug use, the sport should get a boost from
the Olympics. It's the ideal venue for showcasing the latest performance
apparel and shoes and if history is repeated, young people around the
country will be inspired to become more active.
More Youth Running Programs but Few Youth Products
The proliferation of running-based fitness programs for youth conducted
by running events, running clubs and specialty running stores has been
significant in the last two years. But to truly benefit from this increase
in participation the manufacturers will need to develop products for the
younger runner. Nike is at least experimenting with some interesting concepts
for the teenage runner such as the recently opened multi-branded store
in Phoenix designed by Nike and run by Finish Line that combines training
and running product for the high school male.
Events, stores or clubs without a youth program should
consider starting one. Besides making a contribution to the national fight
against obesity (and the potential health care savings), such programs
provide excellent PR, attract more sponsors, can contribute to the fitness
improvement of the local community and ensure that future customers, club
members and race entrants have a positive experience with the sport when
they are young. Running USA's new youth running portal, RunningRocks.com,
to be launched in August, will provide resources for starting or enhancing
a program.
Are there more Runners now than ever before?
As always, the answer depends on which study you consult. Table 2 below
shows a range of 30.3 million to 41.1 million total runners and 8.1 million
to 16 million 'Frequent' runners. The year-to-year growth trends vary
from +14.9% increase in the Frequent Runner category for participants
who run at least 110 days a year (NSGA-2) from 2006 to 2007 to a -5.4%
decline for the ASD version of Frequent Runners (participated at least
100 days during the year). For Total Runners, SGMA estimates a 6.5% increase
whereas ASD reported a modest decline of -2.2%.
| Table 2. U.S. Running Participation
Numbers for 2007 |
| |
|
2007 |
| SGMA (1) Total Runners |
Run/Jog at least once |
41,064,000 |
| SGMA (1) Core Participants |
Run/Jog 50 days/yr |
24,240,000 |
| SGMA (1) Frequent Runners |
Run/Jog 100+ days/yr |
16,003,000 |
|
|
|
| SGMA (1) Total Trail Runners |
Run on trails at least once |
4,216,000 |
|
|
|
| ASD (1) All Runners |
Run/Jog at least once |
39,563,000 |
| ASD (1) Frequent Runners |
Run/Jog 100+ days/yr |
11,731,000 |
|
|
|
| NSGA (2) All Runners |
Run/Jog 6 days/yr |
30,372,000 |
| NSGA (2) Frequent Runners |
Run/Jog 110+ days/yr |
8,115,000 |
|
|
|
Sources for Part I
SGMA = Sporting Goods Manufacturers Association. (1) = New 2008 SGMA Sports
Research Partnership (with other trade groups - National Golf Foundation,
SnowSports Industries, Tennis Industry Association and Outdoor Industry).
Online survey was given sample of 40,174 people who represent the U.S.
population. (2) = Insight08 State of the Industry. For more information,
go to: SGMA.com
NPD = The NPD Group provides consumer surveys and retail
tracking services for U.S. and European companies. The NPD consumer data
referred to above comes from an online panel of more than 3 million. See
NPD.com.
ASD = American Sports Data Inc. (1) = American Sports
Data 2007 Superstudy of Sports Participation, Volume I. To obtain information
on sports demographic products and services offered, contact Harvey Lauer
at American Sports Data, Inc., 51009 Arrieta Court, Fort Mill, SC 29707
or go to: AmericanSportsData.com
NSGA = National Sporting Goods Association. (1) = NSGA
Sporting Goods Market in 2008 and the Sporting Goods Market with Historical
Data CD, based on retail sales in the U.S. projected from consumer interviews,
(2) = NSGA Sports Participation in 2007, Series I. To obtain information
on any of the NSGA products and services, email: info@nsga.org,
phone (847) 296-6742 or go to: NSGA.org
MPA = Magazine Publishers of America - Magazine ad
revenue year-to-year by magazine title and other publishing stats can
be found on magazine.org.
RRIC = Running USA's Road Running Information Center.
State of the Sport reports, many types of running data and lists of the
Largest Races from past years can be found on RunningUSA.org
in the "Statistics" section. For other questions about running
trends and demographics, contact Ryan Lamppa [ryan@runningusa.org]
or Linda Honikman [rric@runningusa.org].
Ryan Lamppa, Running USA Media Director
(805) 696-6232; Fax = (805) 659-0016
Ryan@RunningUSA.org
www.RunningUSA.org.
Know someone else who's interested in running and triathlon?
