Sports have been one of the most debated topics in the past two years. The central role of sport activities around the world, from amateurs to professionals, has been at the centre of heated discussions following the pandemic and its consequences on physical and mental health. Large scale events across many disciplines have witnessed radical changes at times, as national or global competitions went on without the public, with athletes and their staff that in some cases were fully isolated in what came to be known as “bubbles”. At the same time, recreational sports such as jogging or cycling went through a rollercoaster with a big initial halt during the first half of 2020, only to come back much stronger once people became free to circulate again.
As a consequence, the whole sport industry experienced serious challenges, as significant shifts in consumer behaviour tested its resilience levels. This led to uncertainty regarding the sales of tickets for sport events, clothing and equipment, and training courses, affecting both large organizations and smaller local enterprises. Regardless of such difficult moments, the industry seems to have bounced back quite strongly, at a point in time where several disciplines are also changing due to greater attention to technological innovation, sustainable practices, and inclusion.
All these factors make the sport industry a significant case study for sector-wide resilience in the face of a major disruptive event. This is even more relevant considering that sports can be vulnerable to several types of risk in many different aspects. An event could suffer from a logistics disruption, including the transport of equipment as well as people, whether they are athletes or the public. In addition, intense and persistent climate events can change consumer behaviour, as people might switch from outdoor to indoor sports. Another interesting facet is the way consumers interact with retailers; for instance, during the pandemic many resorted to e-commerce, and those organizations that were readier to make the switch from physical to online stores benefitted the most.
On this note, it is worth mentioning the case of Decathlon, a major French sport retailer that operates globally. Decathlon understood the needs of their consumers both during and after the pandemic, adopting a more localised approach where online services are more integrated with physical support. The retailer’s app offers complementary videos that show how to best utilize and set up the equipment the customers buy, while providing experts’ guides and the chance to write a review. Furthermore, the company is starting to offer repair services, which work towards a more sustainable approach towards the purchase of goods. Overall, this is a great example of how to adjust to major disruption – the pandemic – by integrating both technology and a more responsible attitude towards waste reduction.
The case of the sports industry is particularly interesting because it involves both negative and positive disruptions. While the former are right in front of our eyes (e.g.: Covid-19), the latter are sometimes hard to see. For instance, a change in consumer behaviour is disruptive but it could also turn into an opportunity if organizations act upon it. In the sports industry there are several emerging trends that executives should not overlook, such as the increasing popularity of athleisure, which consists of wearing casual clothing in formal occasions. This has led several brands to create specific lines of clothing for those who want to use sportswear to go to an event or even to the office, showing a great example of how to adjust to market trends and stay relevant.
It is also interesting to zoom in on the blending between the physical and virtual world of sports. For instance, the combination of technologies such as augmented reality (AR) and virtual reality (VR) at live sport events is redesigning the experience of the audience. At the same time, a new market for virtual collectibles is developing, as online communities have started to trade non-fungible tokens (NFTs) representing athletes. NFTs are traded in cryptocurrency, which adds another layer of complexity of the industry. Perhaps this may end affecting the type of currency used also for other services, such as betting or streaming services.
It is hard to predict now what the sports industry will look like in the medium to long term, due to its multiple facets and trends. Thus far, it is fair to argue that the market recovered well after the initial shocks deriving from the pandemic, showing sector-wide resilience and a positive outlook on the future. This goes to show once more that being resilient needs to be a strategic asset, and not just a responsive quality. Whenever entering a new market or adjusting to a new trend, it is important that organizations perform activities such as horizon scanning exercises, risk – and opportunity – assessments, and review their business impact analyses. Furthermore, it is of the utmost importance to avoid losing touch with the market; if there is a shift in consumer behaviour then retailers must change accordingly. As in many aspects of resilience, accepting the possibility of change, whether positive or negative, is the first step towards staying relevant.
Author: Gianluca Riglietti
If you liked this article, you might also want to read this one.
