Q&A: More ‘State of the Industry’ with SIA’s Kelly Davis
SNEWS sits down with SIA Director of Research Kelly Davis to talk about sales trends, weather predictions, and her retail forecast for the season to come.
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On September 19, 2011, SnowSports Industries America (SIA) officially released its State of the Industry Research video. Providing a compelling new way to broadcast SIA research and overall industry numbers, the video has been a big hit with the trade. SNEWS sat down with SIA Director of Research Kelly Davis to talk about the video, as well as some of her predictions, concerns and hopes for the coming year.
SNEWS: What was the reason for doing the video?
Kelly Davis: We did the video because we’re always looking for new ways to inform the industry and raise awareness of the vast amount of research SIA can offer. And really it has been a success so far. It’s been viewed 1,800 times in the past six days, and the buying groups and Colorado Ski Country have been sending it out to their membership. K2 put it up on their website, and we’ve been getting a good response from all over, so we’re pretty happy with the result. I think with numbers and research especially, if you put that in front of a lot of people on a sheet, they’ll kind of go blank reading it, so this is a way to make it more exciting and really reach people who we might not have reached before. You can bet that with research especially it’s something we’ll do more of in the future.
SNEWS: What’s your forecast for the upcoming season?
KD: There are two things that I am taking about in terms of forecast, and the first is the weather. It looks really good for us right now. You rarely get two La Nina’s in a row, and La Nina is really good for the industry. Most regions in the U.S. did very well last year as far as receiving record or near-record snowfall. I don’t think anyone in Utah, the Sierra or Colorado would argue that they had really good conditions last year. It was a winter that just wouldn’t end, and anytime you do a mathematical analysis of what impacts the industry, weather is always the most important factor. So all things being equal there, I would say you could expect another season like the last one, with up to a 3 to 5 percent increase in sales.
The second thing I look at though is the economy, which is not looking good. When markets are unstable, which they are, or significantly down, which they are, people lose wealth which changes their spending habits. Snowsports participants do tend to be more educated or more well-off, but losing up to 25 percent of your wealth tends to affect your psyche and how you spend as well. Also, suppliers’ production costs have gone up significantly. And they went up after they already booked their orders, which means they are going to have to take a big bite out of their margins for this year. So as far as the weather is concerned, that certainly tempers the good news.
SNEWS: What are you hearing from the early sales reports?
Kelly Davis: The early reports are that the Labor Day sales were good. I don’t have any actual data yet, so it’s all still just hearsay. But I have heard that Labor Day sales were strong, and back to school sales were strong as well. So it sounds as if we’re off to a good start, especially because so much of the inventory that sold at those sales was not carryover. Our research goes from August 1 to March 31st, so we didn’t measure what happened after that. But because of the late season in so many regions the sales did continue. Which means that at the early sales a lot of what was going out was in-line equipment, which is great news. That way units can be flat but dollar sales will still be up, simply because it’s not being sold at closeout prices. It’s a lot better to get 30 to 40 percent margin than 10 to 15.
SNEWS: How well do trends carry over from year to year?
KD: Pretty well. Think about reverse camber in snowboards, for example. It was just a whiff of a trend in 08-09 and accounted for more than half of the market in 2010 to 2011. Trends like that carry over especially when you have two winters where conditions are similar. In skis, I think you can expect the trend to continue in something like reverse camber and fat boards because, not to be Captain Obvious, those are good skis for powder.
SNEWS: Along with the record season for skier visits this past year, it appears that skier days in general have reached a new plateau over the past decade. With the breakthrough year at retail, is there also a possibility of this happening with snowsports sales?
KD: We certainly have been seeing more skier visits, and more participants in the sport. But equipment sales have been fairly flat since the late 90s. We had a peak in late the late 90s largely from the huge innovations in sidecut. But we haven’t seen sales like that in some time. One thing that is affecting that is the airlines are really hosing us in terms of destination skiers because it costs so much to bring your equipment. Because of that we’ve been seeing an increase in rental skis, and will probably begin to see that in snowboard, too.
But the population continues to grow, and we’ve had a lot of meetings lately with other snowsports entities where we are looking at ways to keep growing participation. Two documents we’ve been looking at in particular are the NSAA’s Model for Growth, and a paper SIA just published, Revisiting Growing the Snow Sports Industry. Growing the Snow Sports Industry came out about eleven years ago, and we basically did an update of that. What we are seeing are tremendous opportunities in ways we can engage Gen X’ers and Millennials, but that there are also still ways to engage Baby Boomers, too. Everyone has been rightfully concerned about the rate at which Baby Boomers have been dropping out of the sport because the whole industry was basically built on their dollars. Yet even as they come off the chairlifts, we think there’s an opportunity to get them involved with something like cross-country skiing, but also to come to the mountains because that’s where their families are.
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