The World Federation of Sporting Goods Industry (WFSGI) and McKinsey & Company have teamed up to present the second annual Sporting Goods Industry Report – “Sporting Goods 2022 – The New Normal is here.”. This second edition of our report reviews the trends presented in last year’s edition and dives deeper into a selection of these trends most relevant for a new reality in 2022.

The report is presented in multiple forums, including WFSGI–McKinsey webinars, Global Sports Week 2022.This article summarizes some of the report’s findings.

2021 was a great year for the sporting goods industry, which performed the rare feat in tough economic circumstances of returning to pre-COVID-19 levels of growth. During 2020, sporting goods industry executives were preoccupied with responding to consumer shifts, the digital leap, and industry disruptions. In 2021, these trends have continued, in some cases accelerated, or taken interesting new turns. With many people still working from home, athleisure has gained further ground, reflecting new attitudes to workwear. Increased health awareness has given many people a new perspective on sports that needs to be addressed. Ecommerce has thrived, as consumers continued to shop online, even as lockdown measures have been eased. Digital forms of individual or community-based exercise/physical activity have become the norm and open new possibilities for sporting goods companies. Meanwhile, sustainability is more important than ever, with the COP26 summit emphasizing the need for companies to raise the bar as they seek to differentiate their offerings including levers like carbon footprint offsetting

At the beginning of the pandemic, with a few exceptions sporting goods companies saw much lower sales and narrower margins. These shifts led to a bifurcation in performance. 

Prior to COVID-19, the majority of listed players posted 8-15 percent EBIT margins and 5-10 percent annual sales growth. In 2020, a few specialized players were able to pull clear, with margins and sales growth soaring to higher than 15 percent. Still, most sporting goods companies continued to deliver above-average economic profits.2021 brought a broad recovery. On a global level, the sportswear market is expected to recover to 98 percent of its pre-COVID-19 sales by the end of 2021, fueled by consumers in China (23 percent growth compared with 2020) and the US (15 percent). Overall, 14 percent year-on-year growth in 2021 will be more than double the average annual growth rate (CAGR) between 2015 and 2019 (5 percent).

Exhibit 1

Exhibit 2

This second edition of our report confirms the trends presented in last year’s edition and dives into a selection of those taking interesting new turns. These will shape the industry’s fortunes through 2022. 

Our research suggests five key themes that reflect the current state of play: The continuing growth of digital, an acceleration in sustainability, a closer connection between social media and commerce, the reshaping of distribution channels, and an imperative for new supply chain strategies. None of these trends are new, but over the past year they have become even more important. They have widened the gap between various industry players, with economic profits increasingly concentrated. The implication is that some industry players must speedily adapt their business models. In each topic, we present strategies that may support them in doing so

Exhibit 3

i. Evolving attitudes and behaviors: In the future, Consumers will be active in different ways, amid rising health awareness and a greater commitment to digital, community-led exercise—often away from traditional sporting venues but also as part of traditional gym-based exercise. Looking at future spending, younger generations and consumers in India, China, and the US are more optimistic than older generations and consumers in other geographies, and sporting goods is one of the categories in which they plan to splurge, a positive indication that the 2021 tailwinds will continue also in 2022 – at least for those players that keep up with increasing consumer expectations.

ii. From social media to social commerce and digital ecosystems: The hype around social media continues to grow, with influencers and digital communities enabling a closer connection with commerce that leading players are actively driving. Companies that make this connection between engagement and sales smooth and natural were able to significantly boost sales and even build digital consumer engagement ecosystems spanning from brand.com to own apps to own stores and using the generated data to inform areas like product development and demand planning. Also, social keeps evolving in its form and shapes: Livestreaming as a promoting and shopping channel has established itself in Asia and is expected to expand around the world. Early adopters among sporting goods players are entering the metaverse arena and positioning themselves. Others are expected to follow suit.

iii. The sustainability imperative: COVID-19 and COP26 have boosted sustainability awareness. As expectations increase, the bar for companies to differentiate themselves is rising fast. Companies will focus even more on sustainable materials, circular business models, and helping consumers make choices that reflect their values.

vi. The future of channels: 2021 has proven the importance of digital channels even as stores re-opened. We observed players shift towards DTC, online, and consolidating their retail partner model., In 2022, we expect players maneuvering to make the most of their strengths. Some will prioritize DTC (new players) and continue to focus their partner model on strategic partners (larger players) while those affected  seek to establish a clear edge for brands (retailers), and others seek to capture the opening left in these channels (smaller brands). Many players will repurpose physical locations as experience- and service-driven elements of an omnichannel offering.

Exhibit 4

v. Solving the supply chain puzzle: Demand volatility, production bottlenecks, rising raw material and transport costs, as well as logistics chaos are causing turmoil in global supply chains. At the same time, the rise of online has created higher expectations for faster and more convenient delivery. Players will want to strategically review their supply chains so that they are better prepared for an uncertain future.

Exhibit 5

The new normal in sporting goods is likely to become even more established in 2022, with uncertainty becoming the new reality. In this challenging environment, there will be both risks and opportunities. As they seek out routes to high performance, the most successful players are likely to be those that adapt flexibly and align boldly with new trends as they emerge.

Download Sporting goods 2022: The new normal is here, the full report on which this article is based (PDF–XXMB).

Sabine Becker is an associate partner in McKinsey’s Zurich office, where Alexander Thiel is a partner. Achim Berg is a senior partner in McKinsey’s Frankfurt office. Sajal Kohli is a senior partner in McKinsey’s Chicago office. Other key contributors: Jessica Genta (project manager, Zurich), Lukas Baumgartner (project manager, Geneva), Olga Ostromecka (senior analyst, Wroclaw), Karin Ringvold (project manager, Zurich).

The authors would like to thank all members of WFSGI and the McKinsey community for their contribution to development of the 2022 Sporting Goods report and the many industry experts who generously shared their perspectives during interviews.