NSGA Research Newsletter

This monthly newsletter is available for free to NSGA members and those interested in NSGA Research.

NSGA research is available on our website (www.nsga.org). The guest side of our website provides research for non-members of the Association. Additional information is provided for NSGA members by logging in with your membership ID number.

The NSGA Research Newsletter highlights information from NSGA research as well as from other sources. To purchase any of the NSGA research mentioned in the newsletter, please feel free to contact me for more information.

Wishing you a very happy and healthy Thanksgiving,

Dustin

Dustin Dobrin

Director, Research & Information

847-296-6742, ext.117

ddobrin@nsga.org

Driving Impulse Sales at Retail

Effective and successful retailers place great focus on simplifying the shopping experience, including making it easy for shoppers to find the products they are looking for. However, an opportunity that is often overlooked by retailers is the importance of gaining impulse purchases. Impulse sales can have a significant impact on your business results. Below are some examples of ways to maximize the potential of growing your impulse sales.

Maximizing the Potential for Impulse Sales:

Create Effective Category Adjacencies: Understanding cross-participation (i.e. the likelihood of the same person participating in golf if they play tennis) can help you merchandise the proper categories next to each other, resulting in a greater chance of an impulse purchase.

Develop Simple, Eye-Catching Signage: Shoppers typically have to wade through a significant amount of "clutter" within the store (i.e. products, information, or even other shoppers). In addition, the time that the shopper spends within your store is a precious commodity. In-store signage often goes unnoticed or unread. Keep the signage eye-catching and simple!

Properly Position Checkout Area Displays: Position displays further away from the cash register so that shoppers waiting in line can interact with them. Shoppers who approach the cash register typically are already engaged in the payment transaction and are disengaged from displayed products. Your greater opportunity is to focus on the shopper waiting in line.

Focus on High Penetration / High Purchase Frequency Items: In limited (but highly valuable) space such as the checkout area, maximize impulse purchase potential by focusing on items that are typically purchased by large numbers of people (high penetration) and bought with high frequency. Considering that every shopper passes through the checkout area, you do not want to use this valuable space for items that only a niche group of shoppers would purchase with low frequency.

Quick Feedback Question: How successful is your company at generating impulse sales? Please click on your answer below and overall results will be shared in next month's newsletter.

A. Very Successful

B. Successful

C. Somewhat Successful

D. Not Successful

E. Don't Know

Following the examples above can help maximize your potential for impulse sales. If you would like to discuss this topic further or need assistance in identifying ways in which you can measure how well you are driving impulse sales, please contact Dustin Dobrin, Director of Research & Information, at 847-296-6742, ext. 117.

Sports Participation Spotlight: Basketball

As the pro and college basketball seasons kick into high gear, NSGA has been receiving many questions related to the participation rates for basketball. The graph shown below provides a quick snapshot.

As one might expect, participation skews highest among the 7-11 and 12-17 age groups and then typically drops off with age. The one exception is a slight increase in the 25-34 yr. age group.

How does this compare to the past? For the most part, age distribution of participation has remained relatively consistent. Participation among the 25-54 yr. age group has increased at a slightly quicker pace than the rate at which the population is aging, but almost half of participation remains within the 7-17 yr. age group.

October CPI for Sporting Goods Remains Flat

The CPI for Sporting Goods was flat in October (0.0% change. vs. October 2011). This represents the second consecutive month that the CPI for Sporting Goods has been flat. Prior to this consistent declines were being experienced.

Sporting Goods Store Sales Slightly Up in September (U.S. Census Bureau)

Sporting goods store sales increased 0.8% in September according to the most recent Monthly Retail Trade Survey prepared by the U.S. Census Bureau. Year-to-date sales through September are +4.7% vs. a year ago.

Sales for 2011 were $40.9 billion, up 1.7% for the year. That compares to the 6.6% increase in 2010 when sales were $40.2 billion.

U.S. Retail Report from FTI Consulting

Yesterday FTI Consulting, Inc. released its 2012 Retail Report. The report, titled "A Real Cliffhanger," analyzes the state of the retail sector in the United States and finds resilience in consumer spending on goods despite ongoing global economic uncertainty and threats posed by the impending fiscal cliff. Consumer confidence is approximately 25 percent higher entering the 2012 holiday shopping season than it was a year ago. Included among the Retail Report's highlights are the following:

- U.S. Holiday Spending Will Increase 4.5 Percent: The report forecasts a 4.5 percent increase in U.S. holiday spending for 2012 and a growing dominance of online sales during the season. FTI Consulting's industry experts expect fewer instances of extreme price discounts persisting throughout the season this year, a trend that accounted for a substantial portion of 2011's 6.2 percent holiday spending increase, as the bottom line for many large chains did not benefit from such aggressive pricing strategies.

- Online Retail Sales Will Grow by 13.5 Percent in 2013: The online channel has bounced back sharply from the recession and has consistently grown at about three times the rate of store-based sales.

- Some Retail Sectors Still Have a Way to Go: FTI Consulting estimates that if the economic recovery continues at its current pace, it will have taken between five and seven years for sales in many non-essential product categories to reach their pre-recession levels.

- Department Stores - a Mixed Bag:Department stores have been more challenged than any other store category to stay competitive in today's cutthroat retail environment. While several department stores still are struggling, there have been enough turnarounds and encouraging stories to demonstrate that the department store can continue to be a vibrant shopping venue and that the right mix of pricing, service, and selection can produce a winner, even if it's not a luxury chain.

- Online Channel Also Poses a Threat to Retail Real Estate: As the online channel continues to alter the way consumers shop and retail executives approach selling merchandise, a less obvious casualty is retail real estate. The percentage of retail sales taking place in brick-and-mortar stores has been declining at an accelerating rate since 2001 - a period that coincides with the proliferation of online selling. The traditional practice of opening new stores aggressively and tolerating underperforming ones continues to be altered by the success of online selling.

The full report is available at www.fticonsulting.com/ftiretailreport2012. Additional information can also be found at www.fticonsulting.com.

For a full description of NSGA research available, go to the NSGA website, www.nsga.org, and click on Research. NSGA research reports are available to purchase on the NSGA website or by contacting Dustin Dobrin in the NSGA Research Department, (847) 296-6742, ext.117; email: ddobrin@nsga.org.

NSGA: Serving the Sporting Goods Industry Since 1929