2020 Vision

The team industry looks to its future.

As we prepare for the start of a new decade in 2020, Team Insight asked the leading executives in the world of team sports — dealers, associations, reps, manufacturers — for their thoughts on what the next 10 years will bring for the business. What will the team industry look like in 2030? Who will survive and who will disappear? What technology is going to change the game again in the decade of the ‘20s? At our request these intrepid leaders dusted off their crystal balls and provided the insight only their years of experience could predict. Let’s check back in 10 years to see how they did.

Bet on the ‘Fighters’ • Todd Adams, CEO, Sports, Inc.

The independent team dealer footprint might be a smaller today than it was 10 years ago in terms of number of dealers, but the number of quality sales professionals and support staff employed by the independent channel is not smaller. What they are selling to their team and corporate customers is not smaller either.  My bet for the next 10 years will be placed on the independent channel continuing to find plenty of opportunities to grow.  

Our 250 team dealers operating over 350 sales and decoration facilities across the country do not have a problem finding team and corporate customers. Ten years from now they will not have a problem finding plenty of team customers who want and need to do business with them.

Every day brings a new challenge for our members and vendors.  But our members overcome these challenges because they are creative, honest and are a group of fighters. It is their daily goal to win for their customers and this will not change no matter what the next 10 years have in store for the team industry.

Sleepy No More • Dave Elliott, CEO, Augusta Sportswear Brands

Just three years ago, when I accepted the position to lead Augusta Sportswear and entered the industry, I was told that the industry was “sleepy,” relationship-driven, technology-resistant and that it lacked product innovation. Clearly, I was getting bad information as the past three years have been tremendously dynamic.

Manufacturing and dealer consolidation has accelerated, sublimation cost and lead times have reduced dramatically and the practical application of technology is differentiating winners from losers in the marketplace.  

The next several years will be defined by changing consumer expectations, as the “Amazon Effect” continues to shape our expectations and tech-savvy Millennials become the leaders and volunteer base that drives youth sports and the athletic directors that lead school sports. These disruptive forces will continue to accelerate and redefine the industry and there are three key areas where this will be seen most acutely.

1. Product Disruption. Sublimation is growing at an incredible rate. Technology is enabling the development process and prices and lead times will continue to evolve as volumes increase and processes mature.

2. Channel Disruption. Private equity capital has had a fundamental impact on the team channel in the past several years, driving consolidation across both the dealer channel and its manufacturer base. With the dealer channel still highly fragmented, we believe this consolidation trend will continue into the foreseeable future.

3. Digital Disruption. Digital “fanwear store” platforms have been leveraged across the industry and have been a tremendous source of growth for team dealers during the past several years. These platforms will continue to drive significant growth and begin to extend into uniforms and sublimation.

Led by changing customer expectations, the team channel will continue to change at an unprecedented pace over the next several years. It will be dynamic, challenging, exciting and a tremendous amount of fun. Let’s enjoy the ride together.

Bring on the Change • Mark Mertens, Owner/CEO, A4

It’s hard not to be optimistic about the team sports industry. Change is coming faster than ever. Technology, market dynamics, consolidation and variations in consumer taste will continue to drive innovation.

Consumers are expecting more customized experiences across a variety of industries. For team sports, that means giving our customers greater involvement in the design of their uniforms, warm-ups and fan gear. And, doing it in a way that also meets their expectations of quality, delivery and service.

The most important dynamics though will remain unchanged. Americans love team sports and strong products, good service and outstanding values always win the day, even if the way we deliver them continues to evolve.

A4 has always prospered in times of rapid change and we expect the next decade will be no different in that respect.

We love change.  Bring it on.

A Recipe for Team Sports • Jim Baugh, Founder, PHIT America

If team sports are going to grow and thrive in the next decade, we must focus on nurturing the grassroots of physical activity. This approach is necessary if people are going to learn how to play team sports as children and then continue to play team sports as adults. The key to the growth and long-term health of the team sports industry in the U.S. will be our ability to revitalize daily P.E. in our schools.  Believe it or not, less than 50 percent of U.S. high schools offer P.E.  

With this reduction of P.E. in schools, we have generations of kids that can’t throw, catch, run or jump because they have not been taught these skills in school P.E. programs, as was done 20-30 years ago. As a result, these kids have no confidence or desire to try a sport.

More than any other program, P.E. (and recess) are the most influential platforms that help get children physically active and keeps them physically active as adults.  Sadly, in the last 15-20 years, P.E. and recess have been on the decline in U.S. schools. And, as a nation, we are reaping the negative dividends of this de-emphasis on P.E. and recess.  

That’s bad financial news for team dealers and sporting goods retailers. It’s not coincidental that the overall decline in U.S. team sports participation is a mirror image of the cuts in P.E. and recess in our schools. When introduced to exercise and physical activity, children quickly understand the importance and fun of being physically active. They will reap the dividends — two of which are getting physically fit and being a lifelong team sports enthusiast.

In recent months, I have visited schools whose physical activity programs have been expanded, thanks to PHIT America. I have spoken with classroom teachers, P.E. teachers and principals who have given me rave reviews on the impact of PHIT America’s physical activity programs, which are generating higher academic achievement by their students.

I know many in the team sports business will say, “Let’s create baseball players,  football players or soccer players.” My response is that we must first teach kids the basic skills of throwing, catching and the hand-eye skills needed in any sport. Physical education is where this happens. If we rush a child to play a sport, without these basic skills, the child will fail and have no interest in playing.

By nurturing the grassroots of physical activity, we are having a direct impact on the next generation of team sports participants and the next wave of customers for team dealers and sporting goods retailers. Now is the time for everybody in the team sports industry to support physical activity at the grassroots level. And, that can start by working with PHIT America. We have a recipe for success.

A Digital Disruption • Terrence Babilla, President, COO and General Counsel, BSN Sports

While it is difficult for me to forecast what’s going to change in the team industry over the next 10 years. I am confident as to what is not going to change: Customers will always want fast delivery, fair prices, 24/7 availability, transparency of their order flow and peace of mind knowing that their order will arrive on time.  I don’t envision the day when customers ask for higher prices, slower delivery or blind spots in the order process.  

It’s hard not to be optimistic about the team sports industry. Change is coming faster than ever. Technology, market dynamics, consolidation and variations in consumer taste will continue to drive innovation. — Mark Mertens, A4

We are heavily investing in all aspects of the order process and supply chain and are developing tools that will help our sales professionals deliver service.

We will see our industry go through a digital disruption similar to what other industries are experiencing. Think Uber, Amazon, Netflix, and Federal Express. This digital disruption will be a huge cultural shift on the part of team dealers that requires a massive human and financial capital investment, but our future depends on it.

Mind Your Ps • Chad Clark, Sr VP, Cliff Keen Athletic

The past 10 years have seen tremendous change in the team sports industry. Aside from the well-publicized expansion (and retraction) of certain dealers and buying groups, the industry has been through the advent of the modern era of digital and technological advancements in production, marketing and how dealers and manufacturers conduct their day-to-day business.  

So what does the next 10 years hold? While none of us possess a crystal ball, it is safe to say that even more evolution will be taking place. If we look at the four P’s of marketing and analyze these a bit, then I think we can draw a few assumptions.  

Product: Further advancements in fabric technology and textile science will evolve.  The trend right now seems to be going back to a softer, cottony hand on performance fabrics, rather than the smooth yet uncomfortable nature of some of the performance poly fabrics we saw come onto the scene 8-10 years ago. That trend toward softness will continue. But you know how things go full circle? In 10 years, could we be coming back to those “old school performance poly” fabrics?  

Price: Prices keep getting driven down, yet manufacturing costs keep going up. Something has to give here. For some manufacturers, they’re selling certain staple items for at, or near, the same price to dealers that they paid 10 years ago, taking the hit on margins. As costs escalate, prices have to follow.  Pretty simple, really. The challenge for manufacturers is keeping the costs to produce down as much as possible, so that we can keep costs to our dealers down to remain competitive. It’s a tough balance, but in the next 10 years, we’ll continue to see costs increase, and prices will have to follow.

Promotion: The digital advancement and consumer mindset has drastically changed how sporting goods brands (and dealers) have gone to market over the past decade. We now live in the Amazon Age, where consumers think and expect that they can order a product and have a drone drop it on their doorstep within 24 hours. Even a customized product.  As crazy as that sounds, it’s getting to be our reality. so it’s understood that the dealers and brands that can deliver quickly, and exceed customers’ expectations, are the ones that will win out. The ability to market products and services via digital avenues will continue to become even more crucial. How do we reach consumers in this day when everyone is on their smart phones and apps? In the team business, it will be team-centered apps (such as TeamSnap, SportsNgine, etc.) that will no doubt expand their advertising presence. And I think it’ll be along those avenues that dealers and brands will expand their promotion.  

Placement: This is arguably the biggest and most significant change over the last decade. I don’t have to go into all of the dealer consolidation that has taken place. However, it’s safe to say that further consolidation, expansion and retraction will take place. As the consumer mindset continues to evolve towards instant gratification, it’s safe to say that those consumers will show preference to convenience — where can they buy from that is the least amount of work for them? Over the next decade, it is here where dealers and manufacturers will win out.

Touchpoints Wanted • Tim Maloney, President, Time Maloney Sales

It will be a challenging decade for team sports, but it will also offer opportunities for those who are nimble and tech savvy. The consumer, whether the coach or school administrator, will be influenced more and more by marketing, social media and availability of product from different online resources such as Amazon etc.  The influencer will be the players and parents in the team categories. This will put pressure on manufactures to be sure they can reach their target market.

Consolidation in the number of dealers will put pressure on manufacturers to be sure they reach that end consumer with their story. If these manufacturers don’t have access to dealers, it will force them to sell directly to their end customer.

The team dealer will need to continue to develop relationships with coaches and administrators, not only with school calls, but also with social media and electronic contact on a regular basis. Team dealers will need to be open to new ideas and new products as these products will influence the market. Manufacturers will look for their sales representatives to also be brand ambassadors and educators on product as well as selling product.

We will see more consolidation at the manufacturer and team dealer level, along with product available from multiple resources such as ASI companies and online retail. The companies that will succeed are those that have the most touch points with their end consumer, whether direct or through electronic media. As John Maxwell said “Change is inevitable. Growth is optional.”

A Place for Everyone • Karissa Niehoff, Executive Director, National Federation of State High School Associations

Over the next 10 years we will see significant advancements in the world of sport in general, in large part due to technology. Technology will play a role in how athletes are developed regarding fitness, skill development, risk minimization and injury management. Facilities will be designed with athlete performance in mind, including better surfaces and training opportunities. Technology will even enhance the fan experience, whether live or viewing in other locations.

As the world of sport realizes remarkable new capabilities for all shareholders, much of what is central to team sports – and has been for hundreds of years – will still matter. Technology can bring incredible advancements, but team sports will always rely on the successful interaction among people…players with players, players with coaches, everyone with one another.  We are at a critical time in this regard.  

The rapid growth of youth sport programs that are not education-based is causing sport organizations at all levels to pause; to pay attention to a desperate need for coaching education, parent education, risk minimization, concerns about sport specialization and sportsmanship. The efforts to address these things at the youth level are arguably the most important work being done in sport.

If we are committed and collective in our efforts, then 10 years from now team sports will be thriving. Hopefully, young people will participate early, enjoy a variety of experiences and continue playing into adulthood in some team sport capacity.  The elite pipeline will continue to exist and our country’s elite athletes will lead the world in many sports. But most importantly, community fields will be busy, school gymnasiums will be full and recreational facilities will be alive with a place on a team for everyone.

Onward to 100 Years Old • Herb Markwort, Jr., President & CEO, Markwort Sporting Goods Company

The next 3650 days for our team sports industry will be more exciting than ever, but unfortunately we will have to spend more time with our lawyers than in the past decade if we want to survive and prosper. We’ll also have to spend more on customization of our products for our customers.  

As an almost 90-year-old company, getting the family business successfully transitioned to the third generation could be the biggest challenge for the next 10 years. There are fewer and fewer family businesses still operating in team sports, but Markwort Sporting Goods Company intends to be one of them in the year 2030.  Then in 2031 we will pause and quietly celebrate 100 years.

Play More Ball • Abe Key, President/CEO; PONY Baseball & Softball

The youth sports landscape will continue to evolve in the next several decades as single sport specialization becomes the norm. We need to make sure our participants understand the importance of multi-sport participation.

There will continue to be a great deal of competition for the parent dollar from existing and new sports. Baseball and softball should be prepared to provide a fun introductory opportunity for the three and four-year-old market. We should emphasize throwing, hitting and catching in a small, structured, fun teaching environment.

Youth are the Future • Tom Cove, President and CEO, SFIA

Back in 2010, our industry was just climbing out of a major economic recession, social media was a new frontier and e-commerce was considered “innovative.” The past decade was marked by deep fundamental disruption of retail. Although, through it all, team sports participation remains a key element of the American landscape, especially for youth.

The next 3650 days for our team sports industry will be more exciting than ever, but unfortunately we will have to spend more time with our lawyers than in the past decade if we want to survive and prosper. — Herb Markwort, Jr., Markwort Sporting Goods

The industry, as a whole, has changed drastically in the last 10 years, but when it comes to the business of team sports throughout the next decade, we are fairly certain of a few things dealers need to pay attention to.

1. The demise of football? Not quite. Football, as we know it, is still here and it boasts strong participation numbers (especially in high school) and as a spectator sport. Flag football is growing exponentially and likely will be the primary gateway to playing the game for young athletes. The question to monitor is whether eight-year-old flag football players will transition to tackle as they get older.

2. Rugby continues to grow in participation and interest in the U.S., despite the laser focus on contact sports. It remains one of the fastest growing team sports in America. Of note, rugby became an Olympic sport in 2016 and the accompanying media coverage has helped rugby’s growth substantially.

3. Hockey and lacrosse, two other popular contact sports, have strong foundations, but long-term growth depends on their ability to diversify and appeal to a broader spectrum of the population. Both sports have introduced a sport-specific Athlete Development Model (ADM) to attract participants of different ages, skill levels and backgrounds.

4. Baseball is well-positioned to be strong over the next 10 years, mainly due to grassroots efforts led by leagues and governing bodies. MLB’s Play Ball and USA Baseball’s Fun at Bat initiatives are impressive. It would be ideal if other sports mirrored these efforts to grow their own base.

5. Soccer is in a transition period. Participation is dropping and issues of cost, specialization and over-intensity need to be addressed. With that said, the fundamental attractions of soccer remain and the sport will likely return to growth as its issues are resolved.

6. Lastly, much of the growth in team sports over the last 30 years is because more girls and women have started to participate. However, this trend has plateaued, leaving the future of sports participation more dependent on sports’ abilities to evolve and adapt to current and potential athletes. Birth rates in the U.S. are down, so the number of kids available to even play team sports will continue to decline. This places even more urgency to get creative. We need to spend less time on individual skill development and more time on improving the overall athlete and family experience.

The future of the sports industry begins with the youth and youth sports will depend on organizations better serving, and connecting with, the families as a whole. The lifeblood of a youth sports organization is dependent on families, and it’s time the industry reflects that truth.

Partners Become Competitors • Don Leonard, President, Crown Sport Sales

The biggest challenge for our business is the education of the team sales personnel.  Dealers hire people to be team salesmen and train them on their systems, not necessarily product.

Many former coaches are getting into team sales because of their relationships with other coaches and they eventually realize that being a team salesman is not an easy job. The buying groups do a good job of holding seminars to educate the team sales staff and hopefully they will continue to do so. Many reps travel with team sales personnel to help close a sale with a school for uniforms, wall padding, etc. This is an important service that we as reps provide to the team dealer because it helps educate the team sales person and the customer feels confident in dealing with the manufacturer.

On that note, you may see more manufacturers selling direct in the future. In the past, if a dealer did not sell a manufacturer’s products, the manufacturer just opened up a different dealer to distribute their product. Now, there is not another dealer.  With consolidation of the team dealers, there are fewer accounts to which we can sell our products.  

So if a team dealer commits to selling a particular brand, how do the other manufacturers sell their product. That team dealer has become a competitor to the manufacturer. Many team dealers already source their own brand overseas and push their brand over the manufacturers. With the Internet and Amazon, the manufacturer now has access to the consumer. The major shoe companies already sell direct to the consumer on their web sites.  

I hope it doesn’t start happening in the team business, but it might. Many small companies get started selling direct to the consumer and then try to take it to the team dealer, but they still have the Internet as their backup.

As far as the next 5-10 years, just get me to retirement and I’ll let the younger generations worry about that.

A Third-Generation Challenge • Jeff Miller, President, Scholastic Sports Sales

What does the next decade look like for the team sporting goods industry? Every independent dealer is asking himself or herself that same question.  

After this previous decade of constant change, looking into the future is a little scary at best. Vendors are selling direct, giving away free product to end users. The Internet is impacting every business. School budgets are shrinking, less kids are playing sports. All of these are factors that challenge us on a daily basis.  There is also the consolidation of many dealers forming one major competitor.  

Our team business, in upstate New York, is a third-generation family business of 45 years that is faced with the daunting task of trying to predict how we should move forward into the next decade. What a daunting task it is for my three sons, the third generation.

Our hopes are that by being well diversified, and having a strong partnership with Sports Inc. and our membership in NSGA, will help keep us ahead in the game. Each day we strive to provide better personal service to our customers so we can protect our corner of the market and hopefully at the same time take advantage of new opportunities.

There is a big upside. There will always be a strong market for team sports and a need for team dealers to serve that market. To survive, a dealer must be well diversified and at the same time develop a focus on certain niches. We are trying to turn the Internet into a positive by promoting team stores that have been very popular. The growth of these team stores have given a big boost to our business.

The potential for the team sporting goods business in the upcoming decade is limitless, especially with the growth of the team store market. Even though the statistics show a decline in sports participation, there is plenty of business to be had.

As challenging and unpredictable as our industry is, the overall future in team sports holds promise. Our third-generation owners need to adjust daily to the ever-changing landscape, much more than the previous two generations had to. The team sporting goods industry has given great opportunities to three generations of Millers, and we hope that those opportunities continue into the next decade.  Hopefully, some of the old-school ways of selling will resurface and customers will rely on good service and value when purchasing their athletic uniforms, supplies, and equipment.

Matt Carlson, President & CEO • National Sporting Goods Association

What an interesting concept … gaze into the crystal ball and predict the world 10 years down the road. Isn’t that everyone’s secret superpower wish! Impossible to see with certainty, but perhaps one way to get there is to separate between those things that are likely to change and those things that are likely to stay the same. Let’s start with those things that are likely to stay the same …

Sports will continue to unite Americans. We love the games, and deep down we wish the winners well even if they beat our favorite teams. Why? Maybe it’s because we are eternal optimists. It kept us fellow Cubs fans hoping for many decades, only to be rewarded in 2016. We admire the effort and talent it took to become champions and we benchmark ourselves against greatness. We likewise react negatively to cheating — it creates an unfair playing field and leaves us not trusting the results. That will likely stay the same.

As a result, retailers and dealers will continue to react negatively when they perceive competition is unfair. NSGA members don’t fear competition — it’s the unfair competition that doesn’t work. Regardless of the competitive environment, retailers and dealers must convince customers there is benefit to shopping in a multi-brand environment. This requires differentiation and unmatched customer service as a way of bringing value to the table, something retailers and dealers do every day. That will likely stay the same.

What things are likely to change? How about this for a list?

• Private Label and Special Makeup products become more important to retailer and dealer survival.

• Smaller footprint stores and team dealer facilities — less real estate square footage triggering a downturn in commercial real estate values, leading to opportunities to reduce costs or invest.

• Increased technology, used for managing inventory, orders, and Point of Sale, and the data produced by those systems, becomes more cost effective.

• Previously Internet-only sellers will open more brick-and-mortar stores. Shipping costs and returns erode profit margins, forcing them to evolve their model.

Retailers and dealers who connect with their customers in a genuine way are most likely to survive whatever comes their way in the next decade. Suppliers need them to survive as a strategy of self-preservation. We all need each other to be successful. That will stay the same.

Steve Vogelsang, VP–Sales & Marketing • Litania Sports Group

Soon most coaches, athletic directors and team sales reps will be Millennials. We better be adapting now to their work style if we expect to recruit and retain the best sales force, and build effective relationships with our customers. Embrace digital now in all its forms, encourage innovation from your team, provide plenty of feedback, and make sure your team and customers know what your business stands for — successful team dealers will have a defined purpose and strong company culture.

Sports will become increasingly diverse and culturally relevant. Despite massive growth of e-sports, sports and fitness continues to grow and attract new participants. — Steve Vogelsang, Litania Sports Group

Sports will become increasingly diverse and culturally relevant. Despite massive growth of e-sports, sports and fitness continues to grow and attract new participants. Specialization may grow, but so too will athletes willing to try more new and emerging sports.  

Specialty sports growth happens outside of traditional NFHS sports structure. Sport also reflects the increasing diversity of our population. Successful team dealers will be those who adapt and align with this increasingly broad base of sports, coaches, and athletes — wherever they practice and compete.

Sales channel consolidation will accelerate. Fewer team dealers, more sport-specialists, larger team sales organizations, more e-commerce companies selling direct to schools and clubs, and brands increasing their share of direct sales.  Successful team dealers embrace change and are proactive planners.

Relationships matter more than ever. Fewer accounts and fewer brands lead to closer partnerships and strategic collaboration. Successful dealers focus on developing deeper relationships within their customer base as well as the brands they represent. The future looks bright for the effective and adaptive team sports sales reps and the sales organizations fortunate to employ them.

Chuck Overman • Overman & Associates, Inc.

The dealer consolidation has eroded the base for sure. My vendors tell me the team dealer business is flat or worse.

Team dealers and their sales staff need an ongoing educational process to properly service their customers. This process does not exist without good, committed vendor (factory and independent) sales reps. There is no training ground in the sporting goods industry. In the past, the training ground was the team dealers “brick-and-mortar stores. Factories and independent rep groups could hire from the pool of quality entry level reps.

The credit card has allowed smaller, ad specialty type dealers access to some of the team dealer (soft goods mostly) type business.

The technology and online evolution has enabled the online sellers access to some of the school business historically handled by team dealers. Almost all team sales folks use some form of technology, as they should.

All that said, the uniqueness in our team industry is not the products, vendors or brands or the 800-pound gorilla. The uniqueness is the personal relationships formed by the dealer reps with their customers.

The finance guys struggle to understand that the personal relationships do not fit into an algorithm. They also struggle to understand school uniform and equipment sales are done on a rotation basis. The toughest thing team guys do is anniversary sales by account. Simple to see but the technology does not want to understand.

There will be a need for team dealers to do custom uniform, team equipment and decorated business for schools for many years to come. Can we do it better? Sure. Can we be more efficiently? Absolutely, especially if we can get all sides involved to understand the importance of dependable customer service and delivery.

Jonathan Hayden • Chief Managing Officer, Bownet Sports

Amazon.com and more platforms like it will continue to grow, putting more pressure on all retailers, including team dealers and especially on retail items that are not team apparel. Buying groups such will continue to develop new strategies to help their team dealer members stay competitive in this ever-changing marketplace.

And BSN will continue grow and be a strong dealer with their large local sales force as they have for many years.  

Despite this market pressure on the team dealer, there is a silver lining. Teams, clubs and schools rely on locally represented dealers for the most part to select, process and deliver uniforms and equipment. As the technology to process orders via team stores continues to improve the customer experience, team dealers will continue to do well.  

Equipment and retail products may continue to be spread across many platforms, Amazon being the dominant one, but team dealers will be able to be competitive here in many team training item categories like ours.

Team dealers will, in some form, be the key players in the future selling and delivering team uniforms and equipment.

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