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Sporting Goods in Australia:<br />

An Industry Snapshot March 2012


ASGA Industry Research.<br />

A snapshot of the sporting goods industry in Australia.<br />

ASGA | Industry Snapshot Research 2


3<br />

Foreword!<br />

The Australian Sporting Goods industry currently faces a <strong>com</strong>plex but exciting set of operating<br />

conditions: a tentatively improving global economy, a historically high dollar, rapid changes in<br />

consumers’ online and offline buying habits and evidence of evolving attitudes and preferences<br />

towards sporting apparel and footwear.<br />

These factors represent strategic challenges but also powerful opportunities for the industry. To<br />

assist members in making the very best decisions, ASGA partnered with Empirica Research to<br />

create this industry report. The chief goal: To create an actionable roadmap for navigating the<br />

current economic/industry conditions and for remaining ahead of the curve in addressing shifts in<br />

the Australian consumer’s needs and preferences.<br />

We invite you to explore the report and hope the findings help to inform your decision making in<br />

the year ahead.<br />

David Neal, Ph.D Brad Kitschke<br />

Anna Coster, M.A. Executive Director<br />

Cassie Govan, Ph.D Australian Sporting Goods Association<br />

Empirica Research <strong>asga</strong>.<strong>com</strong>.<strong>au</strong><br />

empiricaresearch.<strong>com</strong>.<strong>au</strong>


4<br />

<strong>Source</strong>s of data and structure of the report!<br />

The research for this report was conducted between January and March 2012, using two <strong>com</strong>plementary<br />

research methods.<br />

The first was “primary research,” which included the analysis of data from two surveys: The quarterly<br />

ASGA industry member survey and a survey of Australian consumer behaviour and attitudes in the<br />

sporting goods space (survey conducted by Empirica Research, February-March 2012).<br />

We also conducted “secondary research,” which involved a <strong>com</strong>prehensive literature review of existing<br />

government (e.g., ABS) data, recent industry reports, and academic publications.<br />

1. Primary research...<br />

• ASGA industry member survey (quarterly)<br />

• ASGA consumer survey of 1000 Australians, conducted by Empirica<br />

Research (Feb-Mar 2012)<br />

2. Secondary research (i.e., literature review)...<br />

• ABS and other Government Data<br />

• Other industry reports<br />

• Academic literature


5<br />

<strong>Source</strong>s of data and structure of the report<br />

These primary and secondary methods were used to generate data on four key content areas, shown in<br />

the figure below. These content areas make up the four main sections of the report.<br />

1. Macro economic<br />

data<br />

2. Industry sales data<br />

3. Consumer<br />

attitudes and buying<br />

behavior<br />

4. Trends in sports<br />

and exercise<br />

participation<br />

• Secondary: Government data and<br />

industry reports<br />

• Primary: ASGA member survey<br />

• Secondary: Government data<br />

• Primary: ASGA/Empirica consumer<br />

survey<br />

• Secondary research: Industry reports<br />

• Primary: ASGA/Empirica consumer<br />

survey<br />

• Secondary research


6<br />

Report contents!<br />

Section Subsection Page<br />

Macroeconomic conditions 7<br />

Executive summary 8<br />

Global GDP Forecasts 9<br />

Australian dollar 10<br />

Consumer sentiment 11<br />

Business sentiment 12<br />

Labour market 13<br />

Industry metrics 14<br />

ABS data: Sporting equipment 15<br />

Retail sales data 17<br />

Wholesale data 18<br />

Footwear drill down 19<br />

Compression drill down 20<br />

Gold drill down 21<br />

Consumer attitudes and buying behaviour 25<br />

Main exercise segments and brand metrics 27<br />

Purchase destinations and motivations 31<br />

From the track to the streets 43<br />

Consumers and counterfeit sporting goods 49<br />

Trends in Australian sports participation 55<br />

Trends in sport and exercise 56<br />

Concluding remarks 60<br />

About Empirica Research 62


!<br />

Macroeconomic conditions<br />

An overview of key macroeconomic factors impacting the sporting goods industry.<br />

ASGA | Industry Snapshot Research 7


8<br />

Macroeconomic conditions<br />

Executive summary<br />

• Most domestic and global indicators point to a continued, albeit tentative, global recovery<br />

marked by growth rates slightly below historical trend lines.<br />

• Consensus estimates for the AUD suggest it will to continue trade at or above parity with the<br />

USD through 2012.<br />

• Consumer sentiment in Australia, although having made up ground in recent months, sits<br />

close to its historical average of 100.<br />

• Similarly, business sentiment sits close to its historical average. This applies to measures of<br />

(a) business confidence, (b) business conditions, and (c) capacity utilisation.<br />

• Labor market conditions remain “steady,” but Westpac predicts unemployment will rise to<br />

5.75% from current levels (5.2%) over the next 3-6 months.<br />

• Employment in retail trade declined by 20,000 in 2011.<br />

• Predicted growth in the Australian retail sector through 2015 ranges from 4.5% p.a. (Morgan<br />

Stanley) to 3.0% (National Retail Association).


9<br />

Macroeconomic conditions<br />

Global conditions<br />

Consensus forecasts from the IMF, Westpac and NAB point to a tentative recovery in global economic<br />

conditions. The latest GDP forecasts through 2013 for Australia and other key economies are presented<br />

below.<br />

Real GDP %<br />

ann<br />

2007 2008 2009 2010 2011e 2012f 2013f<br />

United States 1.9 -0.3 -3.5 3.0 1.7 1.7 2.1<br />

China 14.2 9.6 9.2 10.3 9.3 7.8 8.7<br />

Japan 2.1 -1.7 -5.7 4.7 -0.8 1.6 2.0<br />

India 10.0 6.2 6.8 10.1 7.0 6.0 8.1<br />

Other East<br />

Asia<br />

6.1 3.2 0.4 7.7 4.3 1.9 4.8<br />

Europe 2.8 0.3 -4.2 1.8 1.5 -1.0 0.3<br />

Australia 4.7 2.5 1.4 2.6 2.0 3.0 3.5<br />

New Zealand 2.8 -0.1 -2.0 1.6 1.6 2.8 3.8<br />

World 5.4 2.8 -0.7 5.1 3.9 2.8 4.0<br />

<strong>Source</strong>: International Monetary Fund and Westpac Economics


10<br />

Macroeconomic conditions<br />

The Australian dollar!<br />

As global growth conditions have improved, the Australian dollar has risen sharply. The<br />

figures below show the AUD’s performance against the Yen, USD, Euro and New Zealand<br />

dollar.<br />

The latest forecasts from Westpac Economics as at February 2012 are that “the Australian<br />

dollar and <strong>com</strong>modity prices are set to fall through to the third quarter of 2012 prior to a<br />

‘recovery’ in the second half.” Their specific 2012 predictions for the AUD are:<br />

Mid 2012 AUD<br />

forecast<br />

End of 2012 AUD<br />

forecast<br />

<strong>Source</strong>: Westpac Economics<br />

• = parity with the USD<br />

• = 1.06 (USD)


11<br />

Macroeconomic conditions<br />

Australian consumer sentiment!<br />

Consumer sentiment in Australia currently rests very close to its long term average level of<br />

100.<br />

<strong>Source</strong>: Melbourne Institute and Westpac Economics<br />

Click here for the latest consumer sentiment data.<br />

Note:<br />

Australian Consumer Sentiment-<br />

Average since 1980 = 100


12<br />

Macroeconomic conditions<br />

Australian business sentiment<br />

<strong>Source</strong>: The NAB Business Survey<br />

• Business conditions measure: Survey<br />

data integrating 3 key variables:<br />

profitability, employment and trading<br />

conditions. Zero point represents<br />

average since 1989.<br />

• Business confidence measure:<br />

“Excluding normal seasonal changes,<br />

how do you expect the business<br />

conditions facing your industry in the<br />

next month to change?” Zero point<br />

represents average since 1989.<br />

• Capacity utilisation measure: 100<br />

percent Utilisation represents<br />

“maximum desirable level of output<br />

given existing capital equipment”.


13<br />

Macroeconomic conditions<br />

Employment<br />

• As of the February 2012 jobs report, unemployment sat at 5.2%. Factoring in lower<br />

participation rates and lower population growth, this figure implies that there has been<br />

no job growth in Australia since the beginning of 2011.<br />

• As a percentage of total employment, the retail and wholesale trade industry remains<br />

close to its average for the last 5 years, accounting for 14.5% of all employment (see<br />

lower left panel).<br />

• However, retail trade lost almost 20,000 jobs in 2011, second only to Agriculture/<br />

forestry/fishing and manufacturing (see lower right panel).<br />

Share of total employment by industry Employment growth in 2011 by industry<br />

<strong>Source</strong>s: ABS, NAB and Westpac Economics<br />

000’s of jobs gained/<br />

lost


!<br />

State of the Industry.<br />

An overview of the Sporting Goods and Apparel industry.<br />

ASGA | Industry Snapshot Research 14


15<br />

ABS data on the Australian sporting goods market<br />

ABS data allow modelling of the sports equipment market, but not apparel and footwear!<br />

• Australian government data (e.g., retail and wholesale trade statistics) typically provide limited<br />

insight for the sporting goods industry. This is bec<strong>au</strong>se the ABS generally does not break out<br />

sporting apparel/footwear from other apparel and footwear categories. However, the Australian<br />

Household Expenditure Survey, conducted every 5 years, provides detailed statistics on sporting<br />

equipment purchases made by Australian households.<br />

• The figure below shows $ spent each year by the average Australian household across sporting<br />

equipment categories for the two most recent periods available (2003/2004 and 2009/2010).<br />

• Across this period, the annual value of the equipment increased by 15%. However, we note that CPI<br />

increased by 19% over this period, indicating an overall decline in the market. This decline may partly<br />

reflect temporary effects of the GFC on discretionary spending.<br />

2003/2004<br />

896 M. p.a.<br />

2009/2010<br />

1.032B p.a. (! 15%)<br />

(note: CPI rose 19%<br />

over this period)


16<br />

Sporting goods industry sales data<br />

The ASGA Industry Member Survey<br />

Highly detailed sales data are available in reports based on ASGA’s quarterly industry member survey.<br />

Members provide detailed information on units and total sales revenues for specific categories of<br />

sports apparel, footwear, and equipment and accessories.<br />

Market analyses based on these data are available to ASGA members on a subscription basis. For more<br />

information about the available data sets, please click here or visit:<br />

http://www.<strong>asga</strong>.<strong>com</strong>.<strong>au</strong>/sample-market-intelligence-surveys<br />

In this section, we provide a top line analysis of key trends from these reports.<br />

Specifically, we present:<br />

1. Quarterly retail sales data: Footwear and apparel<br />

2. Quarterly wholesale data by unit type<br />

3. Footwear drill down<br />

4. Compression drill down<br />

5. Golf drill down


17<br />

ASGA quarterly retail sales trends:<br />

Footwear and apparel<br />

!"##"$%&'<br />

$!!"!!#<br />

($!"!!#<br />

(!!"!!#<br />

'$!"!!#<br />

'!!"!!#<br />

&$!"!!#<br />

&!!"!!#<br />

%$!"!!#<br />

%!!"!!#<br />

$!"!!#<br />

!"!!#<br />

""#$%&!<br />

-,))!<br />

-(&,!<br />

"'($')!<br />

-,)+!<br />

-(+'!<br />

<strong>Source</strong>: ASGA/10 Thousand Feet<br />

"*+$))!<br />

-,(%!<br />

-(&)!<br />

"(+$,*!<br />

-,&&!<br />

-#()!<br />

"(&$&)!<br />

-,)+!<br />

-#'+!<br />

Footwear Sales<br />

Apparel Sales<br />

Total Sales<br />

2 per. Mov. Avg. (Total Sales)<br />

""#$,,!<br />

-,)#!<br />

-(%%!<br />

"*#$+&!<br />

-,(%!<br />

-(&(!<br />

,+,$#&!<br />

-,%(!<br />

-(*#!<br />

"%%$''!<br />

-,)"!<br />

-#*'!


18<br />

ASGA quarterly wholesale trends:<br />

Cut Sporting by unit type and goods $ sold/units industry sold<br />

sales data<br />

$ sold<br />

$ units<br />

/!"!#*#+,-#<br />

.!"!#*#+,-#<br />

$!"!#*#+,-#<br />

'!"!#*#+,-#<br />

%!"!#*#+,-#<br />

)%!!!!!!!#<br />

$"!#+,-#<br />

("!#+,-#<br />

'"!#+,-#<br />

&"!#+,-#<br />

%"!#+,-#<br />

!#<br />

Lifestyle Fashion Non Licensed Branded Licensed Accessories<br />

(($#+!-!./0!<br />

)&$'(!-!./0!<br />

,#$&&!-!./0!<br />

,+$#*!-!./0!<br />

,$&#!./0!<br />

#$,(!./0!<br />

#(#$#%1!<br />

"$(&!./0!<br />

(($+,!-!./0!<br />

%,$"#!-!./0!<br />

(($,,!-!./0!<br />

,$(%!./0!<br />

($&,!./0!<br />

,#$)(!-!./0!<br />

)%+$")1!<br />

"$',!./0!<br />

"%$,%!-!./0!<br />

++$,'!-!./0!<br />

,&$+&!-!./0!<br />

,($+#!-!./0!<br />

,$)(!./0!<br />

#$#*!./0!<br />

"%$,(!-!./0!<br />

++$",!-!./0!<br />

"+$(&!-!./0!<br />

,,$)"!-!./0!<br />

(&$%'!-!./0!<br />

*$,(!-!./0!<br />

)$#(!-!./0!<br />

Lifestyle Fashion Core apparel includes: Track suits, separate pants, jackets, T-Shirts, singlets/tanks, sweat tops and shorts. Non-licensed<br />

brand core apparel includes: Track suits, separate pants, jackets, T-Shirts, singlets/tanks, sweat tops and shorts. Licensed Core apparel<br />

includes: AFL - jumpers & guernseys, NRL - jumpers & guernseys, ARU - jumpers & guernseys, Soccer, NBA and Cricket Australia<br />

Accessories Core apparel includes: Bags, caps and socks<br />

*)+$(,1!<br />

"$"'!./0!<br />

,$,&!./0!<br />

($)+!./0!<br />

,,$)(!-!./0!<br />

*+"$),1!<br />

,$))!./0!<br />

*&*$('1!<br />

,$&&!./0!<br />

,'&$#&1!<br />

,$'!./0!<br />

Note: Data from July 2011<br />

reported quarterly; data<br />

prior to July 2011<br />

reported half-yearly<br />

,)$,)!-!./0!<br />

(+$&)!-!./0!<br />

,$,+!./0!<br />

"$(,!./0!<br />

($&)!-!./0!<br />

+$+%!-!./0!<br />

,,&$%,1!<br />

,$,%!./0!<br />

<strong>Source</strong>: ASGA/10<br />

THOUSAND FEET<br />

<strong>Source</strong>: ASGA/10<br />

THOUSAND FEET


19<br />

ASGA quarterly footwear drill down:<br />

Sales cut by footwear category<br />

Highlighted Footwear Findings (ASGA/ 10 Thousand Feet)<br />

• After decreasing for 3 consecutive quarters (-6% in Jul – Sep 2011 <strong>com</strong>pared to Apr – Jun 201, -7% in Apr – Jun 2011<br />

<strong>com</strong>pared to Jan - Mar 2011, -3% Jan – Mar 2011 <strong>com</strong>pared to Oct – Dec 2010), footwear sales went up 20% in Oct – Dec<br />

2011 <strong>com</strong>pared to Jul – Sep 2011.<br />

• Average selling price was higher in Oct – Dec 2011 than one year before ($49.05 in Oct – Dec 2011 <strong>com</strong>pared to $47.04 in<br />

Oct – Dec 2010).<br />

70.0 $ MIL FY 2010/11 Q3 Jan - Mar FY 2010/11 Q4 Apr - Jun<br />

60.0 $ MIL<br />

50.0 $ MIL<br />

40.0 $ MIL<br />

30.0 $ MIL<br />

20.0 $ MIL<br />

10.0 $ MIL<br />

0<br />

Cross<br />

Training<br />

Running Basketb<br />

all<br />

FY 2011/12 Q1 Jul - Sep FY 2011/12 Q2 Oct - Dec<br />

Court -<br />

Indoor<br />

Court -<br />

Outdoor<br />

Football<br />

-<br />

Moulde<br />

d Sole<br />

Football<br />

- Screw<br />

in Sole<br />

Turf<br />

Shoes<br />

Netball Cleated Ath/<br />

Leisure<br />

Walking Outdoor<br />

FY 2010/11 Q3 Jan - Mar $13,453, $49,062, $2,228,8 $53,256 $1,230,1 $20,886, $278,371 $787,601 $3,372,8 $5,577 $22,714, $2,614,8 $649,068 $134,070 $490,927<br />

FY 2010/11 Q4 Apr - Jun $15,250, $58,551, $2,201,4 $39,341 $664,165 $2,323,0 $54,478 $191,518 $704,012 $12,692 $25,828, $2,299,4 $519,762 $507,639 $258,728<br />

FY 2011/12 Q1 Jul - Sep $12,411, $45,681, $2,557,0 $87,320 $1,461,4 $4,009,4 $20,725 $557,239 $864,441 $62,877 $27,158, $1,711,1 $3,042,8 $994,199 $2,043,2<br />

FY 2011/12 Q2 Oct - Dec $13,431, $59,104, $3,163,1 $79,252 $1,739,8 $12,332, $59,128 $259,747 $1,639,8 $7,106 $26,721, $1,708,0 $1,377,5 $266,792 $1,034,9<br />

Track<br />

and<br />

Field<br />

Sandals


20<br />

ASGA quarterly <strong>com</strong>pression wear drill down<br />

Cut by gender and adult/child<br />

$ sold<br />

$ units<br />

3.0 $ MIL<br />

2.50 $ MIL<br />

2.0 $ MIL<br />

1.50 $ MIL<br />

1.0 $ MIL<br />

500.0K<br />

Thousands<br />

0<br />

120<br />

100<br />

80<br />

60<br />

40<br />

20<br />

0<br />

2.41 $ MIL<br />

108<br />

860.93K<br />

202.36K<br />

34<br />

10.93K<br />

1.07 $ MIL<br />

50<br />

Men ($) Women ($) Children ($)<br />

737.93K<br />

28<br />

24.24K<br />

382.81K<br />

38<br />

747.01K<br />

25<br />

621.40K<br />

13<br />

159.34K<br />

59<br />

945.80K<br />

673.76K<br />

27<br />

12.84K<br />

Note: Jul-Sep 2011 and Oct - Dec 2011 figures in the report are raw data<br />

provided by members and do not include uplift.<br />

250.76K<br />

35<br />

716.59K<br />

27<br />

634.38K<br />

0<br />

Note: Data from July 2011<br />

reported quarterly; data<br />

prior to July 2011<br />

reported half-yearly<br />

64<br />

1.02 $ MIL<br />

24<br />

557.66K<br />

0<br />

<strong>Source</strong>: ASGA/10<br />

THOUSAND FEET<br />

<strong>Source</strong>: ASGA/10<br />

THOUSAND FEET


21<br />

ASGA annual golf drill down (figure 1 of 3)<br />

Cut by product category<br />

Highlighted Golf Findings (ASGA/ 10 Thousand Feet)<br />

• In 2011 golf apparel sales increased 5% <strong>com</strong>pared to 2010. Non-licensed branded products increased (+8.8%) while<br />

accessories dropped (-9.8%).<br />

• In 2011 shoes kept decreasing (-4% <strong>com</strong>pared to 2010) after an -11% drop in 2010 <strong>com</strong>pared to 2009. This 2011 drop was<br />

driven by a decrease in sales of shoes costing $90 or more (-39% <strong>com</strong>pared to 2010) while shoes under $90 sales went<br />

up 16% <strong>com</strong>pared to 2010.<br />

• Graphite Individual golf clubs remain relatively stable <strong>com</strong>pared to 2010, while Steel golf clubs sales are behind in 2011<br />

<strong>com</strong>pared to 2010 (-2%).<br />

• Golf bags dropped 11% in 2011 <strong>com</strong>pared to 2010 while gloves went down 9% <strong>com</strong>pared to 2010.<br />

0!"!#*#+,-#<br />

$!"!#*#+,-#<br />

(!"!#*#+,-#<br />

'!"!#*#+,-#<br />

&!"!#*#+,-#<br />

%!"!#*#+,-#<br />

!#<br />

23456!5775896! 23456!:566;!<br />

23456!;?=@=?A56!B36C!D6A:;!E857?=@=?A56!B36C!D6A:;!F4996!<br />

+$,%!-!./0!<br />

(*$)(!-!./0!<br />

,#$",!-!./0!<br />

*"$')!-!./0!<br />

"&$'(!-!./0!<br />

+$&#!-!./0!<br />

(,$)%!-!./0!<br />

,($'(!-!./0!<br />

#*$&*!-!./0!<br />

"+$%%!-!./0!<br />

,'$,)!-!./0!<br />

(#$",!-!./0!<br />

,#$,"!-!./0!<br />

#'$(#!-!./0!<br />

"#$#"!-!./0!<br />

,'$,+!-!./0!<br />

('$#'!-!./0!<br />

,"$*"!-!./0!<br />

(+$(#!-!./0!<br />

")$'#!-!./0!<br />

,'$)%!-!./0!<br />

"*$*'!-!./0!<br />

,"$'(!-!./0!<br />

(+$")!-!./0!<br />

"*$*+!-!./0!<br />

<strong>Source</strong>: ASGA/10<br />

THOUSAND FEET


22<br />

ASGA annual golf drill down (figure 2 of 3)<br />

Cut by product category<br />

Highlighted Findings (ASGA/ 10 Thousand Feet)<br />

• Golf bags dropped 11% in 2011 <strong>com</strong>pared to 2010 while gloves went down 9% <strong>com</strong>pared to 2010.<br />

1"!#*#+,-#<br />

."!#*#+,-#<br />

0"!#*#+,-#<br />

$"!#*#+,-#<br />

("!#*#+,-#<br />

'"!#*#+,-#<br />

&"!#*#+,-#<br />

%"!#*#+,-#<br />

!#<br />

23456!B63@9;! 23456!:ABB=9;!F9549?! 23456!:ABB=9;!G36657;=:69!<br />

23456!:5B;!G588HIF45>?! 23456!:5B;!F45J! 23456!:5B;!G584!<br />

)$""!-!./0!<br />

,$)&!-!./0!<br />

"$"(!-!./0!<br />

"$*)!-!./0!<br />

,$,&!-!./0!<br />

*$"*!-!./0!<br />

*$&#!-!./0!<br />

,$*&!-!./0!<br />

,$('!-!./0!<br />

,$&,!-!./0!<br />

&""$&(-!1!<br />

#$&+!-!./0!<br />

+$'"!-!./0!<br />

,$,(!-!./0!<br />

,$'!-!./0!<br />

"$',!-!./0!<br />

,$,'!-!./0!<br />

*$&'!-!./0!<br />

)$#(!-!./0!<br />

+)*$'+-!1!<br />

+"($"&-!1!<br />

"$,)!-!./0!<br />

+(($+&-!1!<br />

*$#&!-!./0!<br />

*$%#!-!./0!<br />

+(($&%-!1!<br />

,$",!-!./0!<br />

,$&&!-!./0!<br />

%"'$%)-!1!<br />

#$+'!-!./0!<br />

<strong>Source</strong>: ASGA/10<br />

THOUSAND FEET


23<br />

ASGA annual golf drill down (figure 3 of 3)<br />

Cut by product category<br />

1"!#*#+,-#<br />

."!#*#+,-#<br />

0"!#*#+,-#<br />

$"!#*#+,-#<br />

("!#*#+,-#<br />

'"!#*#+,-#<br />

&"!#*#+,-#<br />

%"!#*#+,-#<br />

!#<br />

23456!;94;!E857


!<br />

Consumer attitudes and behavior in the<br />

sporting goods and attire space<br />

ASGA | Industry Snapshot Research 24


25<br />

The ASGA Sporting Goods Consumer Survey<br />

Overview of the survey<br />

The ASGA Consumer survey was designed and conducted by Empirica Research in February and March<br />

2012. The study was a nationally representative survey of 1000 Australians, oversampling people who<br />

exercise or play sport once or more often each week. Thus, the survey findings closely map onto the<br />

“average Australian sporting goods consumer.”<br />

The survey was designed to address the following core content areas:<br />

1. Core exercise segments: Australians’ main forms of exercise cut by age and gender; brand awareness,<br />

ownership, and loyalty metrics.<br />

2. What, where and why are people buying? Major purchase destinations and motivations.<br />

3. How are Australians attitudes towards sportswear evolving?<br />

4. Counterfeit sporting goods in Australia: Will Australians buy in?


26<br />

The ASGA Sporting Goods Consumer Survey<br />

Sample and Methodology<br />

• The sample was nationally representative across gender and state/territory. Exercisers were<br />

oversampled (90% of the sample exercised once per week or more).<br />

• The survey was conducted in February and March 2012.<br />

• The total sample size was 1000.<br />

GENDER %<br />

Male<br />

Female<br />

50<br />

50<br />

AGE %<br />

18-24<br />

25-34<br />

35-44<br />

45-54<br />

55 or older<br />

23<br />

22<br />

21<br />

18<br />

17<br />

STATE %<br />

NSW 33<br />

VIC 26<br />

QLD 20<br />

WA 8<br />

ACT 1<br />

TAS 2<br />

NT 1<br />

SA 8


Part 1: The lay of the land<br />

!<br />

Segmentation analysis of Australians’ “main form of exercise” and core metrics of<br />

brand awareness, ownership and loyalty.<br />

ASGA | Industry Snapshot Research 27


28<br />

Segmentation analysis: Australians’ main form of exercise<br />

Top 10 forms of exercise cut by gender and age<br />

What is your main form of exercise?<br />

18-24 Years 25-34 Years 35-44Years


29<br />

Segmentation analysis: Australians’ main form of exercise<br />

Top 10 forms of exercise cut by gender and age<br />

What is your main form of exercise?<br />

45-54 Years 55+ Years


30<br />

Brand awareness, ownership and loyalty metrics<br />

Which brands have you heard of? Which brands do you currently own? Which brand is your favourite?<br />

2XU<br />

Adidas<br />

Asics<br />

Black Diamond<br />

Bonds<br />

Brook<br />

BSc<br />

Everlast<br />

Fila<br />

Icebreaker<br />

Katmandu<br />

KSwiss<br />

Lonsdale<br />

Lorna Jane<br />

Lululemon<br />

Merrell<br />

Mountain Designs<br />

Mountain HardWear<br />

New Balance<br />

Nike<br />

North Face<br />

Outdoor Performance<br />

Patagonia<br />

Performax<br />

Puma<br />

Reebok<br />

Running Bare<br />

Russell Athletic<br />

S<strong>au</strong>cony<br />

Skins<br />

Snow Gum<br />

Speedo<br />

Supre<br />

Target<br />

Under Armour<br />

Vibram<br />

0% 25.00% 50.00% 75.00% 100.00%<br />

2XU<br />

Adidas<br />

Asics<br />

Black Diamond<br />

Bonds<br />

Brooks<br />

Everlast<br />

Fila<br />

Icebreaker<br />

Katmandu<br />

KSwiss<br />

Lonsdale<br />

Lorna Jane<br />

Lululemon<br />

Merrell<br />

Mountain Designs<br />

New Balance<br />

Nike<br />

North Face<br />

Outdoor Performance<br />

Performax<br />

Puma<br />

Reebok<br />

Running Bare<br />

Russell Athletic<br />

S<strong>au</strong>cony<br />

Skins<br />

Snow Gum<br />

Speedo<br />

Supre<br />

Target<br />

Under Armour<br />

Vibram<br />

0% 25.00% 50.00% 75.00% 100.00%<br />

2XU<br />

Adidas<br />

Asics<br />

Black Diamond<br />

Bonds<br />

Brooks<br />

Everlast<br />

Fila<br />

Icebreaker<br />

Katmandu<br />

Lonsdale<br />

Lorna Jane<br />

Lululemon<br />

Merrell<br />

Mountain Designs<br />

New Balance<br />

Nike<br />

North Face<br />

Patagonia<br />

Performax<br />

Puma<br />

Reebok<br />

Russell Athletic<br />

S<strong>au</strong>cony<br />

Skins<br />

Speedo<br />

Supre<br />

Target<br />

Under Armour<br />

Other<br />

0% 25.00% 50.00% 75.00% 100.00%


Part 2: Where, what, and why people are<br />

buying?<br />

!<br />

Market share analysis for consumers’ most recent sporting goods purchase;<br />

preferred buying destinations across sporting goods/apparel product categories;<br />

key drivers/motives for buying at each destination<br />

ASGA | Industry Snapshot Research 31


32<br />

Purchase destinations<br />

% of consumers buying at each destination and top 5 market share for each destination<br />

Where did you purchase your most recent clothing item to wear during sports or exercise?<br />

Speciality sports<br />

store:<br />

Destination<br />

48.3%<br />

Market<br />

Share<br />

Rebel Sport 36%<br />

Amart<br />

Allsports<br />

Athletes<br />

Foot<br />

19%<br />

5%<br />

Lorna Jane 4%<br />

Sports Co 3%<br />

Bricks and<br />

mortar:<br />

92.4%<br />

General clothing<br />

store:<br />

44.1%<br />

Destination<br />

KMART<br />

Market<br />

Share<br />

29%<br />

Target 27%<br />

BigW 15%<br />

Myers 4%<br />

Cotton On<br />

Body<br />

2%<br />

Australian site:<br />

3.9%<br />

Destination<br />

Market<br />

Share<br />

oo.<strong>com</strong>.<strong>au</strong> 10%<br />

Amart AllSports 5%<br />

Catch of the Day 5%<br />

Rebel 5%<br />

P<strong>au</strong>l’s 5%<br />

Online<br />

7.6%<br />

OS site:<br />

3.3%<br />

Destination Market<br />

Share<br />

ebay.<strong>com</strong> 26%<br />

wiggle.<strong>com</strong> 16%<br />

Nike 16%<br />

Online, but not<br />

sure where<br />

based:<br />

0.4%


33<br />

Purchase destinations<br />

% of consumers buying at each destination cut by age group<br />

Where did you purchase your most recent clothing item to wear during sports or exercise?<br />

Key finding<br />

• Online buying rates for sports clothing are highest in middle-aged consumers (around 10% among<br />

35-55 years olds), and are lower in younger and older consumers.


34<br />

Purchase destinations<br />

% of consumers buying at each destination and top 5 market share for each destination<br />

Where did you purchase your most recent pair of sneakers?<br />

Destination<br />

Speciality sports<br />

store:<br />

61.3%<br />

Market<br />

Share<br />

Rebel Sports 29%<br />

Amart<br />

Allsports<br />

13%<br />

Athlete’s foot 12%<br />

Footlocker 6%<br />

Nike 4%<br />

Bricks and<br />

mortar:<br />

88.4%<br />

General dept.<br />

store:<br />

27.1%<br />

Destination<br />

Market<br />

Share<br />

k mart 19%<br />

BigW 13%<br />

Target 8%<br />

Haris Scarfe 7%<br />

Myers 6%<br />

pay for less 6%<br />

Australian site:<br />

3.6%<br />

Destination<br />

Market<br />

Share<br />

Ebay 11%<br />

New balance 11%<br />

ozsales.<strong>com</strong>.<strong>au</strong> 11%<br />

Rivers 11%<br />

Online<br />

11.5%<br />

OS site:<br />

6.8%<br />

Destination Market<br />

Share<br />

wiggle.co.uk 17%<br />

Amazon.<strong>com</strong> 11%<br />

Ebay 11%<br />

niketown 11%<br />

Eastbay 8%<br />

Online, but not<br />

sure where<br />

based:<br />

1.1%


35<br />

Purchase destinations<br />

% of consumers buying at each destination cut by age group<br />

Where did you purchase your most recent pair of sneakers?<br />

Key finding<br />

• Online buying rates for sneakers/runners are significantly higher in younger consumers, having<br />

reached 15% among 18-24 year olds (vs. 6% in 55+ consumers)


36<br />

Drill down into online purchasing:<br />

Sporting goods <strong>com</strong>pared to other retail categories<br />

How does Australians’ online purchasing of sporting goods <strong>com</strong>pare to their online purchasing in other<br />

retail categories?<br />

The figure below integrates the Empirica/ASGA survey findings with online purchase rates found in other<br />

retail categories. The estimates for these additional retail categories <strong>com</strong>e from research conducted by<br />

Citibank (2010) and Morgan Stanley (2011).<br />

<strong>Source</strong>s: Empirica Research, Morgan Stanley, Citibank, National Retail Association


37<br />

Drill down into online purchasing:<br />

Sporting goods and the Low Value Threshold<br />

Is the “low value threshold” on imports driving Australians to buy sporting goods from<br />

overseas websites?<br />

• Our survey estimates of Australians’ rates of overseas online purchasing of sporting<br />

goods (3.3% for apparel; 6.8% for footwear) are in line with estimates generated by<br />

analysing air cargo consignments in the “low value” category (LVCs).<br />

• (LVCs are foreign goods imported in consignments that are valued at $1000 AUD<br />

or less and hence avoid GST, customs duties, and other associated fees.)<br />

• According to the Centre for International Economics (CIE, 2011), 7% of air cargo<br />

consignments destined for individual Australian homes are in the “sporting goods”<br />

category.<br />

• We note that an additional 41% of consignments to individuals are in the “textile and<br />

fashion” category. A proportion of this category presumably includes sporting apparel<br />

items.<br />

• Thus, the actual percentage of overseas online purchases in sporting goods/apparel<br />

likely exceeds 7%, and perhaps by a significant margin.<br />

• Ernst and Young estimate that the low value threshold will cost up to 33,400 retail jobs<br />

in Australia through 2015 and will result in forgone GDP of between 3.9b and 6.5b.<br />

<strong>Source</strong>s: CIE (2011) and Ernst and Young (2012)


38<br />

Consumer motives/drivers for buying at each destination<br />

Respondents described where they would buy a variety of sports apparel and footwear items. They then<br />

described why they would buy at their chosen destination. We coded these motives to identify the top<br />

drivers for buying each product type at each destination. These data are presented below…<br />

Top motivations for buying sneakers at each destination…


39<br />

Consumer motives/drivers for buying at each destination<br />

Top motivations for buying <strong>com</strong>pression wear at each destination


40<br />

Consumer motives/drivers for buying at each destination<br />

Top motivations for buying shorts at each destination


41<br />

Consumer motives/drivers for buying at each destination<br />

Top motivations for buying tops at each destination


Consumer motives/drivers for buying at each destination<br />

Top motivations for buying tennis rackets at each destination<br />

42


Part 3: From the track to the streets<br />

!<br />

The shift towards “sportswear as streetwear” – where and for whom is sportswear<br />

acceptable outside the exercise context?<br />

ASGA | Industry Snapshot Research 43


44<br />

Sports attire outside the exercise context<br />

Consumers are be<strong>com</strong>ing more relaxed about “where and when” they wear sports attire in<br />

non-exercise related settings/activities. This attitudinal shift represents a major opportunity<br />

to expand the category. To provide hard metrics on this shift, we measured whether<br />

consumers think it’s “OK” versus “not OK” to wear a range of different sports outfits in a<br />

range of different settings, from doing housework to having coffee with friends.<br />

Key finding<br />

• Compression wear is not accepted outside an exercise context.


45<br />

Sports attire outside the exercise context<br />

Key finding<br />

• Sports shorts and tops readily accepted by consumers outside the exercise context, especially in<br />

the home setting.


46<br />

Sports attire outside the exercise context<br />

Key finding<br />

• Tracksuit readily accepted by female consumers outside the exercise context; acceptance more<br />

mixed among male consumers.


47<br />

Sports attire outside the exercise context<br />

Note: The yoga outfit question was only asked of female respondents<br />

Key finding<br />

• Yoga outfit readily accepted as housewear by female consumers, but not readily accepted as<br />

streetwear.


48<br />

Sports attire outside the exercise context<br />

Gender and age matter!<br />

• The figures below represent averages across all of the non exercise related settings (i.e.,<br />

walking the dog, coffee with friends, housework etc). Thus, a higher score means it’s<br />

more acceptable to wear each outfit when doing non exercise related activities.<br />

• The figures show that age and gender interact.<br />

• As men get older, they see sports attire as more permissible in non-exercise settings.<br />

• As women get older, their attitudes remain relatively stable for most categories, but grow<br />

less permissive for yoga outfits. (Note: this pattern does not apply to <strong>com</strong>pression wear)


Part 3: Counterfeit sporting goods: Will<br />

Australian consumers buy in?<br />

!<br />

Consumer perceptions of counterfeit availability; willingness to buy counterfeit;<br />

cues that signal counterfeit to consumers; attitudes towards greater government<br />

intervention.<br />

ASGA | Industry Snapshot Research 49


50<br />

Counterfeit sportswear<br />

Perceptions of counterfeit availability in Australia<br />

Australian consumers are generally aware that counterfeit sporting goods are available<br />

here. We asked them how likely it is that counterfeit sporting goods are sold at each of the<br />

destinations shown in the figure below…<br />

Key findings:<br />

• Consumers accurately perceive<br />

the presence of counterfeit<br />

sporting goods at Australian<br />

street markets.<br />

• Consumers may underestimate<br />

the presence of counterfeit at<br />

generic online retailers and<br />

generic sports stores.<br />

• Consumers may overestimate<br />

the presence of counterfeit at<br />

major retailers (e.g., Rebel) -<br />

both bricks and mortar and<br />

online.<br />

• Despite awareness of<br />

counterfeit’s presence,<br />

consumers underestimate their<br />

personal exposure to it. (See low<br />

likelihood ratings for “the places<br />

I shop”).


51<br />

Counterfeit sportswear<br />

Willingness to buy counterfeit<br />

Respondents were presented with an image of an<br />

Asics gel runner and were asked to imagine they<br />

found a counterfeit version that they felt was about<br />

the same quality as the real product.<br />

We then asked them what discount from the RRP of<br />

$180 they would need to buy the counterfeit version.<br />

Respondents could also tick “I wouldn’t buy the<br />

counterfeit at any price”<br />

Key findings:<br />

• Overall, only 24% of consumers indicate they<br />

would not be willing to buy the counterfeit Asics<br />

under any level of discount.<br />

• Willingness to buy counterfeit is highest in young<br />

consumers (under 24 years), where less than 15%<br />

wouldn’t buy the counterfeit under any level of<br />

discount.


52<br />

Counterfeit sportswear in Australia<br />

Counterfeit cues – bricks and mortar setting<br />

When buying sporting goods/apparel in a store, what are the main cues that signal the<br />

product might be counterfeit?<br />

(Note: word size indicated frequency of mention by consumers)


53<br />

Counterfeit sportswear in Australia<br />

Counterfeit cues – online<br />

When buying sporting goods/apparel online, what are the main cues that signal the product<br />

might be counterfeit?<br />

(Note: word size indicated frequency of mention by consumers)


54<br />

Counterfeit sportswear in Australia<br />

Counterfeit – general attitudes and policy support<br />

Key findings:<br />

• Consumers view small Australian retailers and<br />

major brands as the major victims of<br />

counterfeit sporting goods (see Figure top<br />

left)<br />

• On average, consumers support stronger<br />

Government action on preventing counterfeit<br />

from entering the country, although not by<br />

large margins (see Figure bottom left).<br />

• A majority support lowering import tariffs,<br />

although the strength of this support is<br />

modest (see Figure bottom left).


!<br />

Trends in sports participation<br />

Participation rates in organised and non-organised sport and exercise<br />

ASGA | Industry Snapshot Research 55


56<br />

Trends in Australian Exercise and Sports Participation<br />

ABS Time Use Studies reveal declining minutes per day spent on sports/exercise!<br />

Activity 1997 2006<br />

Sport and outdoor activity<br />

(mins/day)<br />

Males Females Males Females<br />

33 20<br />

25 17<br />

Total free time (mins/day) 328 304 308 284<br />

Top forms of exercise and % participation in pop. over 15 years<br />

!"#$%&'()*!+(!,"$-(./0(1&%$&.2"/'()(3-.232%.4("5&$56&7("8()#3-$.46.(9:;


Australian participation rates in sport and exercise<br />

57<br />

Percentage and raw numbers of participants: Organised and nonorganised<br />

sports/exercise.<br />

!"#$%&'()*!+(!,"$-(./0(1&%$&.2"/'()(3-.232%.4("5&$56&7("8()#3-$.46.(:;


58<br />

Organised sports and physical activity<br />

Trends over time…<br />

• Over the past decade, the percentage of the<br />

population participating in organised sport<br />

has declined from 27% in 2001 to 26% in<br />

2010.<br />

• Due to population growth however, the raw<br />

number of participants in organised sport<br />

has increased slightly.<br />

• Males’ participation in playing roles has<br />

dropped 3% points in the last decade, to<br />

24%, but has remained stable in females<br />

(20%).<br />

Involved in a<br />

playing role only:<br />

2.95 M (17%)<br />

Involved in a<br />

playing role:<br />

3.82 M (22%)<br />

!"#$%&'()*!+(>/5"45&?&/-(6/(@$A./63&0(!,"$-(./0(BCD36%.4()%256-D(<br />

Involved in<br />

organised sport or<br />

physical activity:<br />

4.52M (26%)<br />

Involved in both a<br />

playing and nonplaying<br />

role:<br />

.87M (5%)<br />

Total Australian<br />

population aged<br />

15 years and over:<br />

17.34 M (100%)<br />

Not involved in<br />

organised sport or<br />

physical activity:<br />

12.82M (74%)<br />

Involved in a nonplaying<br />

role:<br />

1.56M (9%)<br />

Involved in nonplaying<br />

role only:<br />

.69M (4%)


59<br />

Organised sports and physical activity<br />

Quick Facts: The 4.52 million Australians and organised sport are!<br />

• More likely to be involved if they were born in Australia (30% involved) than born in<br />

another English speaking country (25%) or a non-English speaking country (11%).<br />

• More likely to be involved if they’re male (29%) than female (24%)<br />

• Less likely to be involved if they live in a capital city (25%) than outside one (28%)<br />

• More likely to be involved if they’re employed (30%) than unemployed (26%)<br />

• 9% receive some type of payment for their involvement<br />

• Among those in playing roles, 49% are involved for 3-9 hours per week<br />

• Among those in non-playing roles, 41% have <strong>com</strong>pleted a course or qualification relevant<br />

to their role and 60% are involved with school or junior sports


Concluding remarks<br />

!<br />

ASGA | Industry Snapshot Research 60


61<br />

Concluding remarks<br />

ASGA and Empirica Research hope the findings presented here will assist readers in navigating the<br />

Australian sporting goods market in the year ahead.<br />

We invite you to make contact to access additional resources.<br />

For information regarding ASGA’s proprietary market intelligence surveys, or for inquiries about ASGA<br />

membership, please contact::<br />

The Australian Sporting Goods Association<br />

Brad Kitschke - Executive Director<br />

767 Springvale Rd<br />

Mulgrave, VIC<br />

3170<br />

<strong>asga</strong>.<strong>com</strong>.<strong>au</strong><br />

For questions regarding the consumer survey presented in this report, or for other research-related<br />

questions, please contact:<br />

Empirica Research<br />

Dr. David Neal – Founding Partner<br />

david@empiricaresearch.<strong>com</strong>.<strong>au</strong><br />

214 Kerr Street<br />

Fitzroy, VIC<br />

3065<br />

empiricaresearch.<strong>com</strong>.<strong>au</strong>


ABOUT EMPIRICA RESEARCH<br />

!<br />

62


63<br />

About Empirica Research<br />

Empirica injects academic, evidence-based research into <strong>com</strong>mercial projects.<br />

Empirica Research, based in Melbourne and Miami, is a full service consumer and social research firm. We have<br />

diverse range of clients across Australia and the US. We offer tailored research solutions, innovative techniques, and<br />

our unique “Think Tank” of leading marketing professors from around the world.<br />

We maintain strong ties to the academic world, publish in academic journals, and our Founding Directors have PhDs.<br />

Our work is diverse, but our philosophy across these projects is the same: inject academic, evidence-based research<br />

into <strong>com</strong>mercial projects while keeping a clear focus on real-world, actionable insights.<br />

Cassie Govan, Ph.D.<br />

Founding Partner<br />

David Neal, Ph.D.<br />

Founding Partner<br />

empiricaresearch.<strong>com</strong>.<strong>au</strong><br />

Anna Coster, M.A.<br />

Director of Consumer Research


64<br />

Our clients include…


65<br />

Our work has been featured in…


Thank you.<br />

!<br />

ASGA | Industry Snapshot Research 66

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