State Of The Industry: More than four-million snowboarding now

The Rider’s Perspective

According to American Sports Data (ASD), the number of snowboarding participants in the United States passed the four-million mark this season and snowboarding continued to be one of the fast-growing sports in terms of participation. With 4,189,000 Americans now boarding, the sport has seen a 33-percent rise in the number of participants.

ASD also discovered the number of frequent snowboarders (who go fifteen or more days) is at 556,000, indicating a 24-percent increase. Significant growth was also seen in the number of new boarders (up 34 percent) and number of aficionados who selected the sport as their favorite activity (up 105 percent).

This 33-percent rise in total participants follows the NSGA report of last year stating the sport rose 32.5 percent. Indeed, snowboarding continues to grow and few believe that it will stop growing for at least several more years.

With continued growth, snowboarding is steadily gaining on skiing. According to the ASD report, snowboarding is now 34 percent the size of the skiing population (skiing had 12.4-million participants in 1997). In 1996, that ratio was 23 percent. Among six to eleven year olds, the ratio is at 42 percent; it’s 46 percent in the teenage group; and among eighteen to 24 year olds the ratio is at 77 percent. In the older demographic, the ratio is lower, primarily because most skiers fall into these categories. And yet, this older crossover demographic is where snowboarding continues to experience high growth.

The growth in snowboarding for the last year was generated almost exclusively by those aged eighteen to 34, as the number of snowboarders aged 25 to 34 surged by 207 percent and the eighteen to 24 age group posted a 94-percent gain.

Average frequency of participation was eight days during the year. The report estimates that two-million individuals went snowboarding fewer than five times in 1997, while roughly nine percent participated 25 times or more.

Males continue to outnumber females in the snowboarding population by a roughly 80-percent to 20-percent margin. Males average nine days a year, while women average five days per season.

The Resort’s Perspective

Snowboarding represented 21.2 percent of the total skier visits at resorts across the United States, according to the National Ski Areas Association preliminary report of the Kottke National End Of Season Survey ’97/98. With this figure, snowboarding showed a twenty-percent growth rate from ’96/97, and has had a compound annual rate of growth of 20.7 percent since ’94/95.

Total Alpine-resort visits in ’97/98 increased by approximately 2.5 percent to an estimated 53.8-million visits, up from 52.5-million visits in ’96/97. Full estimates will be released later this summer, after all the U.S. ski resorts close.

Snowboarding continued its momentum through this past season. Based on preliminary data, snowboarding represented 21.2 percent of the total area visits this season. Last year, in comparison, the same respondents to the Kottke study reported 17.6 percent snowboarders.

On a region-to-region basis, the Northeast reported 18.8-percent snowboarders, up from 15.1 percent last year. In the Southeast, the number was 19.2 percent, up from 14.3, while the Midwest jumped to 23.4 percent from 19.6 percent. The Rocky Mountain region saw the growth go to 17.1 percent, up from 15.1 percent, and the Pacific West was the highest at 30 percent, up from 24.4 percent the year before.

Obviously, snowboarding represents a significant segment of the ski industry not only in visits generated, but in lesson participation and equipment rentals as well. Shifts are also occurring in the demographic characteristics of snowboarders. Rider profiles are becoming more diverse, reflecting the increasing tendency of traditional Alpine skiers to crossover and participate full-time or part of the time in snowboarding. As individuals, snowboarders continue to be more active rticipants, riding more days per season at the resorts on average than do their Alpine skier counterparts.

The Manufacturer’s Perspective

Despite increases in participation, the snowboarding industry is still awash in excess capacity and brands. In a non-scientific study on North American sell-through at the retail level conducted by SNOWboarding Business, it appears as if the top six brands control roughly 65 percent of unit market share. The next seven brands control more than sixteen percent. This leaves more than 60 board brands fighting for such a slim piece of the unit-share pie that many industry players openly wonder what their prospects for survival are.

In this overall competitive situation, expect to see dozens of brands ceasing operation or merging with one another, with the ensuing market-share shift primarily favoring the top-tier players. (See Power And Risk this issue for more information on how the consolidation is affecting manufacturers.)

Excess capacity and production have lowered the margins and selling prices of boards nearly across the entire industry. However, these commodity pressures have been less severe in the boot, binding, and outerwear markets.

Snowboarding outerwear retains its appeal in the non-snowboarding fashion world, and the improving technologies in boots and bindings (especially step-ins) have given consumers a reason to upgrade each season. However, even in the rapidly growing step-in market there are troubles looming. With more than eleven noncompatible systems on the market, the entire niche seems ripe for a housecleaning.

Brands traditionally associated with the Alpine ski industry continue to make inroads into the snowboarding market and will put increasing pressure on snowboard-only brands because of their distribution policies and diverse product offering. However, because of the unique marketing nature of snowboarding the industry will still be dominated by non-ski-related brands.

The excess inventory situation appears to be less severe than anticipated in some parts of the world, and manufacturers say they aren’t overbuilding. However, while some factories have closed because of the consolidation, overall capacity has remained more or less steady.

The Retail Perspective

Those retailers who weathered the rough seas of the ’96/97 season appeared to be breathing easier this year, according to our third-annual SNOWboarding Business Retailer Survey. Sell through and inventory levels showed a marked improvement last season compared to ’96/97.

The survey was sent out to more than 650 specialty snowboard retailers across the country. The response rate was approximately eleven percent.

Sixty-six percent of retailers reported inventory levels were about right or lower than expected at the end of the ’97/98 season, compared to 47 percent at the end of ’96/97.

Sell-through for retailers reporting season-end inventory levels as about rightorlower than expectedwas 79 percent, compared to 61 percent from retailers who said inventory levels were higher than expected.

Surprisingly, the number of brands retailers carry and retailers’ use of in-season reordering did not significantly change between the ’96/97 and ’97/98 seasons. Slightly more than 70 percent of retailers made in-season orders totaling twenty percent of their entire snowboard buy during those seasons.

For next season, 48 percent of the responding retailers said they plan to order closeout boards. On average, those retailers plan to buy 22 percent of their board inventory through closeouts. The primary brand mentioned for these orders was Burton, with Ride a distant second.

Step-in bindings continue to gain momentum at snowboard shops. Last year step-ins represented sixteen percent of binding sales. This year retailers reported more than 23 percent of binding sales were step-ins. However, some retailers definitely had an anti-step-in bias and at least ten retailers reported that they refused to carry step-ins at all. (See the Retailer’s Speak sidebar for other interesting result for our ’97/98 retailer survey with trendline data from the ’96/97 survey as well).

According to the SnowSports Industries America (SIA) Retail Audit, while snowboard sales continue to suffer domestically due to oversupply of product on the worldwide market, almost all other segments of the snowboard market are growing quickly. In specialty stores, there was a three-percent decline in the number of boards sold, while boots were up 43 percent, step-in bindings were up 90 percent, snowboard tops up 44 percent in units, and bottoms up 104 percent.

In chain stores, the number of boards sold was up 150 percent, while boots were up 53 percent, step-in bindings up 114 percent, tops up 103 percent, and bottoms up a whopping 214 percent for the 1997/98 season over the 1996/97 selling period.

While chain-store sales growth continues to outpace specialty stores, approximately 75 percent of the total hardgoods volume and 71 percent of the softgoods volume remains in specialty stores, although those numbers are slowly coming down.

Compared to ski equipment, where 50 percent of hardgoods and 65 percent of apparel is sold in specialty shops, snowboarding is still holding on to the specialty store reputation.

While there seems to be a slow shift to chain-store sales and the board market seems soft, overall there were gains in each category of the snowboard hardgoods market in the ’97/98 season compared to the ’96/97 season. According to the SIA, a total of 252,000 snowboards were sold on the U.S. market last season, up from 214,000 the previous. There were 298,000 boots sold compared to 205,000 the year before, and 278,000 bindings sold compared to 229,000 the year before.ilers reported that they refused to carry step-ins at all. (See the Retailer’s Speak sidebar for other interesting result for our ’97/98 retailer survey with trendline data from the ’96/97 survey as well).

According to the SnowSports Industries America (SIA) Retail Audit, while snowboard sales continue to suffer domestically due to oversupply of product on the worldwide market, almost all other segments of the snowboard market are growing quickly. In specialty stores, there was a three-percent decline in the number of boards sold, while boots were up 43 percent, step-in bindings were up 90 percent, snowboard tops up 44 percent in units, and bottoms up 104 percent.

In chain stores, the number of boards sold was up 150 percent, while boots were up 53 percent, step-in bindings up 114 percent, tops up 103 percent, and bottoms up a whopping 214 percent for the 1997/98 season over the 1996/97 selling period.

While chain-store sales growth continues to outpace specialty stores, approximately 75 percent of the total hardgoods volume and 71 percent of the softgoods volume remains in specialty stores, although those numbers are slowly coming down.

Compared to ski equipment, where 50 percent of hardgoods and 65 percent of apparel is sold in specialty shops, snowboarding is still holding on to the specialty store reputation.

While there seems to be a slow shift to chain-store sales and the board market seems soft, overall there were gains in each category of the snowboard hardgoods market in the ’97/98 season compared to the ’96/97 season. According to the SIA, a total of 252,000 snowboards were sold on the U.S. market last season, up from 214,000 the previous. There were 298,000 boots sold compared to 205,000 the year before, and 278,000 bindings sold compared to 229,000 the year before.