Sportswear struggles to overcome inventory issues
By Kathryn Wortley, Laura Syrett, Andreia Nogueira
Market and economic instability continue to disorientate supply and demand for sportswear, creating volatile inventory conditions for industry players. Does technology hold the answer?
Contents
New challenges beyond Covid
Retail crime rise adding to pressures
Optimising channels to shift stock
Pressures to adopt responsive manufacturing strategies
Foot Locker
Adidas
Is connected, intelligent and analytical tech the key?
Japan champions RFID technology
A perfect storm for Western tech investment?
Key takeaways
The international sportswear industry is trying to develop new strategies, often using ultramodern technology to deal with ongoing inventory challenges, overstocking and demand volatility, which have been particularly intense in recent years.
In a January 2024 report, Time to move: Sporting goods 2024, New York, US-based global management consulting firm McKinsey & Co and the Berne, Switzerland-based World Federation of the Sporting Goods Industry (WFSGI) noted that sportswear companies “continued to struggle with inventories” in 2023, largely due to overstocking because “anticipated demand failed to materialise” [1].
So, while 2024 sees the segment more optimistic on performance, thanks to “an improving market environment and new consumer preferences,” 2024 still poses challenges for managing sportswear inventory due to “supply-demand imbalances in the recent period,” the report continued.
“Many variables are changing at one time – Covid-19-related shutdowns, supply chain disruptions, geopolitical uncertainty and inflation. Getting into this season, most brands and retailers built up too much inventory, so 2024 is therefore going to be a little bit of a clean-up year,” said Hugo Maurstad, managing partner and chairman of Oslo, Norway-based sports and leisure-focused venture capital firm Monte Rosa Capital, in the report.
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