The Coming Battle of Category Killers?

Post Covid, there are so many things to look for in the evolution of outdoor retailing. Will the shopping trends of the pandemic continue after the vaccine? Will there be a pent-up demand for outdoor gear and clothing? Will the digital transformation continue at an accelerated pace? Will adventure travel change?

One thing I am really curious about is the potential battle of outdoor retailing “category killers.”

In his 2005 book, Category Killers: The Retail Revolution and Its Impact on Consumer Culture, Robert Spector wrote about the emergence of retailers that seek to dominate a distinct category of merchandise and wipe out the competition. Think about retailers such as Home Depot, Best Buy, Barnes & Noble, Office Depot, Pet-smart and Toys’ Us. Sixteen years later, we see that these companies did not necessarily “kill” the competition and in some cases they themselves have struggled against changing consumer trends and the growth of Amazon. Nonetheless, these “killers” did disrupt their industries and went a long way in hurting the Mom & Pop stores and regional chains in their segments. Many small book stores and pet shops struggled to survive.

With some recent developments, I am curious if we may not be seeing a coming battle in the outdoor industry. REI has been slowly building market share since they expanded beyond a single store in Seattle and began expanding across the country in the 1970s. As they moved from more outdoor oriented towns to the broader US in general, they began to dominate the outdoor realm. (Let’s not forget their ill-timed and fated foray into Tokyo.) Other interesting signs are emerging.

One developments as of late was the acquisition of Moosejaw in 2017 by Walmart. At the time, the company had only 10 stores along with a major e-commerce business. Walmart was not so much looking to open and operate a nationwide chain of outdoor stores as to expand their own e-commerce reach in specialty retailing. Regardless, Moosejaw has expanded their store footprint since then.

Backcountry.com announced the opening of two brick & mortar stores in the mountain towns of Park City, Utah and Boulder Colorado. They are saying that they will provide a unique experience to their shoppers. With the backing of their e-commerce juggernaut, Backcountry is well positioned to expand well beyond these initial two markets.

Dick’s Sporting Goods which seems to have emerged from the demise of Sports Authority, Galyan’s, Oshmans and the like to be one of the major player in team and athletic sports related goods. They announced last December that they were looking to exit firearm sales and shed their Field & Stream brand. They appear to be putting energy into a new concept store called Public Lands. As their outgoing CEO at the time Ed Stack said, “We think there’s a real opportunity from people getting outdoors, camp, hike, bike, kayaking, fishing, it will be different than what you would see with REI and carve out a different niche, but we’re really excited about this. The research we’ve done about this. We think there is a real opportunity in the marketplace.”

We are even starting to see competition from abroad coming to the US. Decathlon Sports, the world’s largest sporting goods retailer, is headquartered in France and operates over 1647 stores in 57 countries. They core of the merchandise is their own house brands where they produce under 20 different labels. They say their goal is to make sports accessible to all by creating real value at true cost. They have opened 2 laboratory stores in the Bay area to learn about the US market and gain exposure. Jack Wolfskin of Germany runs over 500 stores worldwide and recently opened a store in Park City.

Bass Pro Shop, a rod & gun superstore bought up their major national competition, Cabela’s late 2016. They further announced buying Sportsman’s Warehouse, a strong regional player, in December of 2020.

All of these events may be early indicators of a potential gathering storm. In the coming months, I will explore each of these events a bit more in depth. Check back.

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