Bigger is beautiful seemed to be the underlying message from the Surf Industry Manufacturer's Association (SIMA) as it unveiled its latest U.S. retail study from market research firm Leisure Trends. Right on time for the nation's annual mid-summer surf obsession in the media, with penguins at Pipeline on the big screen and John from Cincinnati levitating on HBO, "Findings indicate that the surf industry, which has grown from $6.52 billion in 2004 to $7.48 billion in 2006 (an increase of 14.5%), is nowhere near slowing down."
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Added SIMA's Executive Director, Sean Smith in the same press release: "Several years ago, when the surf industry began exploding, naysayers hypothesized that the industry could plateau, largely because surfing was going mainstream with corporate giants like Target and Abercrombie cashing in on the popularity of the surf culture. The reality is that those companies helped surf brands get smarter about distribution and marketing, and that's why they continue to grow."
None of which, of course, indicates that surfing itself is expanding at the same rate as its "lifestyle" brands, which is a consolation to lots of surfers feeling the pinch of already overcrowded lineups. But with surfing and skateboarding brought under SIMA's industry umbrella, apparel being by far its biggest category and the general apparel industry total retail figures showing annual growth of around only four percent, it does show that the "surfing industry" is out-performing the nation's mainstream market--although that is a worth a mind-boggling total of $180-plus billions per year.
Behind the headline spin of the SIMA survey, there are some fascinating factoids:
* Skate stores showed almost 19% growth in sales while surf shops reported eight percent
* The Western states are the source of 50% of sales and the West Coast for a whopping 41 percent
* So-called "core" surf and skate stores racked up a combined $5.51 billion of the 2006 total industry sales of $7.48 billion
* Skateboards represented 60 percent of 2006 hardgoods sales while surfboards were just 17 percent of the total, although up from 11.6 percent in 2004
* Surfboard fins were three percent of sales, small perhaps, but doubling the size of that category in just two years
* 80 percent of the surf-focused stores also carried skateboard product. By contrast only one in five skate stores (20 percent) carry surf-related gear
Real surfers interested in the health of the surfboard industry, as opposed to the surfwear fashion business, will find other interesting info in this survey report: nearly 75 percent of all surfboards sold in 2006 were of traditional handmade construction (both polyurethane/polyester and polystyrene/epoxy) with shortboards accounting for 45 percent of the total, longboards 33 percent and hybrids 22 percent. Just over 70 percent of all boards sold were U.S.-made. Some 29 percent were imported but that figure represents only a three percent increase in imports since 2004. These numbers suggest that the surfboard makers weathered the Clark foam meltdown of December 2005 better than some Chicken Little alarmists had predicted and that having cornered about a third of the market, the growing number of imported brands are now competing more with each other than with traditional makers. The next SIMA survey will be likely more telling of that dynamic.
Other bullet points from SIMA's retail survey:
* Brand Penetration: Retailers have more brand choices but are carrying fewer brands and product categories
* Internet Sales: While only 23% of core retailers use Internet/Catalog sales, those who use it have seen an increase averaging 29.5%
* Footwear: Overall shoe sales are down but sandals sales are up to over $300 million - an increase of over $50 million since 2004
* Apparel: Largest product category ($1.8 billion) with an increase of 9.9% in sales in 2006. Men's boardshorts have continued to see strong growth as well
* Wetsuits: While wetsuits represent a small percent of core sales, dollars are up 30% due to price points
* Accessories: This high-margin business (which includes sunglasses, watches, bags, hats and belts) saw slight sales growth of 4.3%. The make-up of what contributes to accessory sales is shifting, with the sunglass category contribution up 9% from 2004 while all other category contributions remained flat
* Hard Goods: Sales are up over 24%, from $901 million in 2004 to $1.12 billion in 2006
And how does the surf industry compare in size with others? Golf equipment in 2006 generated some $6 billion in sales, but that doesn't include its "lifestyle" clothing. Shipments of tennis racquets and balls are up by some nine percent this year versus last. The entire U.S. core market for surf and skate at retail adds up to less than Nike's 2006 U.S. income and the sporting titan earns $15 billion a year worldwide--that's revenue, not retail. Just how big is beautiful remains in the eyes of the beholder.
Even so, where is all this growth coming from?
The 2006 SIMA Retail Distribution Study cites several factors contributing to the growth of the surf industry, including: the mainstream popularity of the surf lifestyle; the capitalization on the purchasing power of women; and brand diversification. But key findings indicate that what is largely fueling growth is the surf industry's loyalty to its core distribution channels.
"The minute a brand is in secondary retail distribution channels, its cool factor and authentic reason to exist is challenged," said Dick Baker, president of SIMA. "Maintaining authenticity to core surf customers by distributing through surf and skate shops is what's helping to keep surf brands cool and relevant."
With a quarter of total sales coming from "other channels"--military exchanges, department stores and specialty chains--keeping it "core" is clearly a challenge. SIMA's study informs that there are now just over 5,000 core surf and skate stores across the country, a 6.5 percent increase since 2004, and that core stores can now be found in every state in the nation. Exactly 402 stores were surveyed for the statistically significant sample study.
Skate-focused shops accounted for 2.85 billion in sales last year and surf-focused shops sold $2.65 billion. But surf shops posted a two-year increase of 7.7 percent in sales, while skate shop sales saw 18.3 percent growth. None of this is really surprising since there are an estimated 12 million skateboarders in the U.S. (according to the Outdoor Industry Association), compared with perhaps 2.5 million surfers and bodyboarders. But it does mean that SIMA is fortunate in being able roll on skate's wheels when it is spinning industry increases.
So, what is a core store? The conventional wisdom that a truly "core" surf or skate shop must stock equipment--surfboards and/or skateboards--no longer holds water (or is not as concrete) as once was the case. For a kernel of real perspective about what constitutes core, Shark's Surf Shop in Lawrence, Kansas, provides a unique example. This shop is in a college town in the heart of country and, Toto, it's about as far away from the beach as you can be. Established in 1989, Shark's does have some surfboards, but they're strictly for display, not for sale, and it carries no skateboards either. But it does a roaring trade in "lifestyle" clothing, footwear and accessories, although manager Angie Knight admits that unsure customers sometimes ask "is this brand surf or skate?"
Contacted independently of SIMA's survey, Knight says most of her clientele see the product in Shark's Surf Shop in terms of fashion, not function: "The only surfing that goes on around here is on the Internet," she jokes, adding that her younger customers especially--those of Junior High or High School age--are aware of some high-profile surfers like Kelly Slater, although she suspects that's because they're more tuned in to MTV and web celebs than they are to ASP. But Knight is hip to the trends and her regular visits to the West Coast trade shows keep the store up to date with the latest look and the newest names. "There's a fashion forward, artistic trend right now, " she says. "It's not so much big logo driven. The days of wanting to look like a walking billboard are over."
The store's own logo, meanwhile, is a surfer's silhouette amid waves of wheat blowing in the wind. Adds Knight: "I wish I had a dime for everyone who walks in here and asks, 'What's a surf shop doing out here in the middle of Kansas?'"
But she's not counting on that small change to grow the business.
This was taken from http://www.surfline.com/surfnews/2007_07_26_sima.cfm
How weird is blogging? I mean the idea of Riders was to have a magazine based website that offered a free avenue for viewers and contributors to have easy access to reading and participating in a home grown magazine. This blog style was actually an idea thrown together by Nic Reeves (aka Phoam). It means that any contributor you see in the side bar actually has access to publish their own stories, tips or pictures as they see fit, without the intervention of an editor. It also mean that like this issue the cover is made and the stories are live as they happen.
For me the music I listen to is as important to my surfing as to what sort of waves I’m going to get. Music selection sets the tempo for my session, wrong tempo for the waves and I’m kooking it.
